VARIABLE LIFE ACCOUNT B OF AETNA LIFE INSURANCE & ANNUITY CO, S-6EL24, 1997-05-16

VARIABLE LIFE ACCOUNT B OF AETNA LIFE INSURANCE & ANNUITY CO
S-6EL24, 1997-05-16

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As filed with the Securities and Exchange Registration No.
Commission on May 16, 1997 Registration No. 811-4536

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2

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Variable Life Account B of Aetna Life Insurance and Annuity Company

Aetna Life Insurance and Annuity Company

151 Farmington Avenue, RE4A, Hartford, Connecticut 06l56
(Complete Address of Depositor's Principal Executive Offices)

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Julie E. Rockmore, Counsel
Aetna Life Insurance and Annuity Company
151 Farmington Avenue, RE4A, Hartford, Connecticut 06l56
(Name and Complete Address of Agent for Service)
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It is proposed that the public offering will commence as soon as practicable
after effectiveness of this filing.

The securities being registered hereby are interests under variable life
insurance policies or certificates. Pursuant to Rule 24f-2 under the Investment
Company Act of 1940, Registrant has registered an indefinite number of
securities under the Securities Act of 1933. Registrant filed a Rule 24f-2
Notice for the fiscal year ended December 31, 1996 on February 28, 1997.

The Registrant hereby amends this Registration Statement on such dates as may be
necessary to delay its effective date until the Registrant shall file a further
amendment which specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933 or until the Registration Statement shall become effective on such
date as the Commission, acting pursuant to Section 8(a), may determine.

<PAGE>

VARIABLE LIFE ACCOUNT B
OF
AETNA LIFE INSURANCE AND ANNUITY COMPANY

Cross Reference Sheet

N-8B-2
Item No. Part 1 (Prospectus)
<C> <S>

1 Cover Page; The Separate Account; The Company
2 Cover Page; The Separate Account; The Company
3 Not Applicable
4 Cover Page; The Company; Additional Information - Distribution of the Policy;
5 The Separate Account; The Company
6 The Separate Account; The Company
7 Not Applicable
8 Financial Statements
9 Additional Information - Legal Matters
10 The Separate Account; Charges and Fees; Policy Choices; Policy Values; Policy Rights;
Additional Information
11 Allocation of Premiums - Fund Additions, Deletions or Substitutions; Policy Choices
12 Cover Page; Allocation of Premiums - The Funds
13 Charges & Fees; Additional Information - Distribution of the Policy
14 Policy Values; Additional Information; Miscellaneous Policy Provisions
15 Policy Summary; Allocation of Premiums; Policy Choices; Policy Values
16 Policy Summary; Allocation of Premiums - The Funds; Policy Values
17 Policy Rights
18 Allocation of Premiums; Policy Choices; Policy Rights; Tax Matters
19 Additional Information - Reports to Policy Owners
20 Not Applicable
21 Policy Rights - Policy Loans
22 Not Applicable
23 Directors & Officers

<PAGE>

24 Not Applicable
25 The Company
26 Charges and Fees
27 The Company
28 Directors & Officers
29 The Company
30 Not Applicable
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Additional Information - State Regulation
36 Not Applicable
37 Not Applicable
38 Additional Information - Distribution of the Policy
39 The Company
40 Charges and Fees
41 The Company
42 Director and Officers
43 Financial Statements
44 Policy Values; Financial Statements
45 Not Applicable
46 The Separate Account; Policy Values
47 The Separate Account; Policy Choices; Policy Values
48 Not Applicable
49 Not Applicable
50 The Separate Account
51 Cover Page; Policy Choices
52 The Separate Account; Allocation of Premiums - Fund Additions, Deletions or Substitutions

<PAGE>

53 Tax Matters
54 Not Applicable
55 Not Applicable
56 Not Applicable
57 Not Applicable
58 Not Applicable
59 Financial Statements
</TABLE>

<PAGE>

Variable Life Account B

Aetna Life Insurance and Annuity Company
151 Farmington Avenue
Hartford, Connecticut 06156
800-334-7586

Prospectus Dated , 1997

Flexible Premium Variable Life Insurance Policy on the Lives of Two Insureds

The Policy offered in connection with this Prospectus is the AetnaVest Estate
Protector II Policy, a flexible premium variable life insurance policy on the
lives of two Insureds (the "Policy") issued and underwritten by Aetna Life
Insurance and Annuity Company (the "Company"). The Policy is intended to provide
life insurance and pay a benefit, as described in this Prospectus, upon
surrender, maturity or Second Death. The Policy is designed to allow flexible
premium payments, Policy Loans, Partial Surrenders, a choice of two Death
Benefit Options and account values that may be invested on either a fixed or
variable or a combination of fixed and variable basis. Net Premiums may be
allocated to Variable Life Account B, the Fixed Account, or both Accounts. The
Variable Options support the benefits provided by the variable portion of the
Policy. The Fund Account Value in each Variable Option is not guaranteed and
will vary with the investment performance of the associated Fund. Net Premiums
allocated to the Fixed Account will accumulate at rates of interest We
determine. Such rates will not be less than 4% a year. Net Premiums allocated to
Variable Life Account B must be allocated to one or more of the Variable Options
We make available. Sufficient premiums must be paid to continue the Policy in
force or to qualify for the Guaranteed Death Benefit. Premium reminder notices
will be sent for Planned Premiums and for premiums required to continue the
Policy in force. The Policy may be reinstated.

The Policy has a free look period during which You may return the Policy or
rescind an increase in the Specified Amount. (See Right of Policy Examination)

This Prospectus also describes the Variable Options used to fund the Policy
through Variable Life Account B (the "Separate Account"). The Variable Options
are: Aetna Variable Fund; Aetna Income Shares; Aetna Variable Encore Fund; Aetna
Investment Advisers Fund, Inc.; Aetna Ascent Variable Portfolio; Aetna
Crossroads Variable Portfolio; Aetna Legacy Variable Portfolio; Aetna Variable
Index Plus Portfolio; Alger American Small Capitalization Portfolio; American
Century Variable Portfolios, Inc.--American Century VP Capital Appreciation
(formerly "TCI Growth"); Fidelity VIP Equity-Income Portfolio; Fidelity VIP
II--Contrafund Portfolio; Janus Aspen Series--Aggressive Growth Portfolio,
Balanced Portfolio, Growth Portfolio, Short-Term Bond Portfolio and Worldwide
Growth Portfolio; and Scudder Variable Life Investment Fund--International
Portfolio Class A Shares (collectively, the "Funds"). Unless specifically
mentioned, this Prospectus only describes the Variable Options.

Not all Funds may be available under all Policies or in all jurisdictions. The
Statement of Additional Information ("SAI") for any of the Funds may be obtained
by calling (800) 334-7586.

Replacing existing insurance or supplementing an existing flexible premium
variable life insurance policy with the Policy may not be to your advantage.

THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUSES OF
THE FUNDS. BOTH THIS PROSPECTUS AND THE UNDERLYING FUND PROSPECTUSES SHOULD BE
READ AND RETAINED FOR FUTURE REFERENCE.

THIS PROSPECTUS AND OTHER INFORMATION ABOUT VARIABLE LIFE ACCOUNT B REQUIRED TO
BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION CAN BE FOUND IN THE SEC'S
WEB SITE AT http://www.sec.gov.

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

<PAGE>

Table
of Contents

<TABLE>
<S> <C>
Definitions ................................................... iv
Policy Summary ................................................ 1
The Separate Account .......................................... 1
Charges & Fees ................................................ 2
Charges & Fees Assessed Against Premium ..................... 2
Charges & Fees Assessed Against the Total Account Value ...... 2
Charges & Fees Assessed Against the Separate Account ......... 3
Charges Assessed Against the Underlying Funds ............... 4
Charges Deducted Upon Surrender .............................. 5
Allocation of Premiums ....................................... 6
The Funds ................................................... 6
Investment Advisers of the Funds ........................... 7
Mixed and Shared Funding; Conflicts of Interest ............ 8
Fund Additions, Deletions or Substitutions .................. 8
Fixed Account ................................................ 8
Policy Choices ................................................ 9
Premium Payments ............................................. 9
Guaranteed Death Benefit .................................... 10
No Lapse Coverage .......................................... 10
Death Benefit Options ....................................... 10
Transfers and Allocations to Funding Options ............... 11
Telephone Transfers .......................................... 11
Automated Transfers (Dollar Cost Averaging) .................. 11
Policy Values ................................................ 12
Total Account Value .......................................... 12
Accumulation Unit Value .................................... 12
Maturity Value ............................................. 12
Surrender Value ............................................. 12
Policy Rights ................................................ 13
Full Surrenders ............................................. 13
Partial Surrenders .......................................... 13
Paid-Up Nonforfeiture Option ................................. 13
Grace Period ................................................ 14
Reinstatement of a Lapsed Policy ........................... 14
Coverage Beyond Maturity .................................... 14
Right to Defer Payment ....................................... 15
Policy Loans ................................................ 15
Policy Changes ............................................. 15
Right of Policy Examination ................................. 17
Supplemental Benefits ....................................... 17
Death Benefit ................................................ 17
Policy Settlement ............................................. 18
Settlement Options .......................................... 18
The Company ................................................... 19
Directors & Officers .......................................... 19
</TABLE>

<PAGE>

<TABLE>
<S> <C>
Additional Information .......................................... 21
Reports to Policyowners ....................................... 21
Right to Instruct Voting of Fund Shares ..................... 21
Disregard of Voting Instructions .............................. 21
State Regulation ............................................. 22
Legal Matters ............................................... 22
The Registration Statement ................................... 22
Distribution of the Policy .................................... 22
Independent Auditors .......................................... 23
Tax Matters ................................................... 23
General ...................................................... 23
Federal Tax Status of the Company ........................... 23
Life Insurance Qualification ................................ 23
General Rules ................................................ 24
Modified Endowment Contracts ................................. 24
Diversification Standards .................................... 25
Investor Control ............................................. 25
Other Tax Considerations .................................... 25
Miscellaneous Policy Provisions ................................. 26
The Policy ................................................... 26
Payment of Benefits .......................................... 26
Suicide and Incontestability ................................ 26
Protection of Proceeds ....................................... 27
Nonparticipation ............................................. 27
Changes in Owner and Beneficiary; Assignment .................. 27
Misstatement as to Age and/or Sex ........................... 27
Performance Reporting and Advertising ........................ 27
Illustrations of Death Benefit, Total Account Values and
Surrender Value ............................................. 28
Financial Statements of the Separate Account .................. S-1
Financial Statements of the Company ........................... F-1
</TABLE>

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

THE PURPOSE OF THIS VARIABLE LIFE INSURANCE POLICY IS TO PROVIDE INSURANCE
PROTECTION. LIFE INSURANCE IS A LONG-TERM INVESTMENT. POLICYOWNERS SHOULD
CONSIDER THEIR NEED FOR INSURANCE COVERAGE AND THE POLICY'S LONG-TERM INVESTMENT
POTENTIAL. NO CLAIM IS MADE THAT THE POLICY IS ANY WAY SIMILAR OR COMPARABLE TO
AN INVESTMENT IN A MUTUAL FUND.

iii

<PAGE>

Definitions

Accumulation Unit: A unit used to measure the value of the Policyowner's
interest in each applicable Variable Option. An Accumulation Unit is used to
calculate the value of the variable portion of the Policy before the election of
a Settlement Option.

Additional Premiums: Any premiums paid in addition to Planned Premiums.

Amount at Risk: The Death Benefit divided by 1.0032737, minus the Total Account
Value on that date before computing the monthly deductions for the Cost of
Insurance for this Policy.

Annuitant: A person who receives annuity payments.

Annuity: A series of payments for life or for a definite period.

Attained Age: Issue Age of the Insured increased by the number of Policy Years
elapsed.

Basic Monthly Premium: The amount of premium to assure that the Policy remains
in force for a period of at least 5 Policy Years beginning on the Issue Date or
the Issue Date of an Increase even if the Surrender Value is insufficient to
satisfy the current Monthly Deduction.

Company: Aetna Life Insurance and Annuity Company.

Cost of Insurance: A charge related to the Company's expected mortality cost for
Your basic insurance coverage under the Policy, not including any supplemental
benefit provision that You may elect through a Policy rider. It is equal to the
Amount at Risk multiplied by a monthly Cost of Insurance rate.

Death Benefit: The amount described in the Policy Choices section which is
payable on the date of the Second Death, subject to all provisions contained in
the Policy.

Death Benefit Options: Either of the two methods for determining the Death
Benefit.

Fixed Account: A non-variable funding option available on the Policy that
guarantees a minimum interest rate of 4% per year.

Fixed Account Value: The non-loaned portion of the Policy's Total Account Value
attributable to the non-variable portion of the Policy. The Fixed Account Value
is part of the general assets of the Company.

Full Surrender: A Policy right whereby You may terminate the Policy in exchange
for payment of its Full Surrender Value.

Full Surrender Value: Equals the Total Account Value on the date of surrender
less any Surrender Charge, less the Loan Account Value and less any accrued
interest.

Fund(s): One or more of the underlying variable funding options available under
the Policy (as described in this Prospectus). Each of the Funds is an open-end
management investment company (mutual fund) whose shares are purchased by the
Separate Account to fund the benefits provided by the policy.

<PAGE>

Grace Period: The 61-day period beginning on the Monthly Deduction Day on which
the Policy's Surrender Value is insufficient to cover the current Monthly
Deduction. The Policy will lapse without value at the end of the 61-day period
unless a sufficient payment is received by the Company.

Guaranteed Death Benefit: A provision of the Policy which assures that the
Policy will stay in force, even if the Total Account Value is insufficient to
cover the current Monthly Deductions. The Guaranteed Death Benefit is available
to the younger Insured's Attained Age 100.

Guaranteed Death Benefit Premium: The amount of premium that must be paid to
assure that the Policy remains in force until the younger Insured's Attained Age
100.

Home Office: The Company's principal executive offices at 151 Farmington Avenue,
Hartford, Connecticut 06156.

Insureds: The two persons on whose lives the Policy is issued.

Issue Age: The age of each Insured on his/her birthday nearest to the Policy's
Issue Date.

Issue Date: The effective date on which coverage begins under the Policy.

Loan Account Value: The sum of all unpaid Policy Loans. The amount necessary to
repay Policy Loans in full is the Loan Account Value plus any accrued interest.

Loan Value: Is 90% of the sum of the Fixed Account Value and the Separate
Account Value.

Maturity Date: The Policy Anniversary on which the younger Insured reaches
Attained Age 100.

Maturity Value: The Total Account Value on the Maturity Date, less the amount
necessary to repay any Policy Loans in full, including interest.

Monthly Deduction: A charge assessed against the Total Account Value which
includes the Cost of Insurance, a monthly administrative charge and any charges
for supplemental benefit riders. Monthly Deductions begin on the Issue Date and
occur on each Monthly Deduction Day thereafter.

Monthly Deduction Day: The first Monthly Deduction Day is the Issue Date.
Monthly Deduction Days occur each month thereafter on the same day as the Issue
Date.

Net Premium: The Net Premium is equal to the amount of the premium paid less the
deduction for Premium Load.

Net Single Premium: The amount required to purchase a guaranteed benefit
assuming the Policy's Total Account Value is allocated to the Fixed Account,
using the Insureds' Attained Ages and premium classes. The Net Single Premium is
determined using guaranteed interest of 4% per year and guaranteed maximum Cost
of Insurance rates.

Partial Surrenders: The amount You can receive in cash by surrendering a part of
the Policy.

<PAGE>

Planned Premiums: Premiums We agree to bill.

Policy: The life insurance contract described in this Prospectus, under which
flexible premium payments are permitted and the Death Benefit may and Total
Account Values will vary with the investment performance of the Fund(s).

Policy Loan: The amount received by borrowing from the Total Account Value.

Policyowner: The person or persons having rights to the benefits under the
Policy; referred to as "You".

Policy Year/Policy Anniversary: The first Policy Year is the 12 month period
beginning on the Issue Date. Your Policy Anniversary is equal to the Issue Date
plus 1 Year, 2 Years, etc.

Premium Loads: A charge assessed against the premium to cover certain expenses
associated with start-up and maintenance costs of the Policy.

Second Death: Death of the Surviving Insured.

SEC: Securities and Exchange Commission.

Separate Account: A separate account established by Aetna Life Insurance and
Annuity Company for the purpose of funding the Policy: Variable Life Account B.

Separate Account Value: The portion of the Policy's Total Account Value
attributable to the variable portion of the Policy.

Settlement Option(s): The method by which payment may be made to a beneficiary
due from a Death Benefit or upon the Full Surrender of the Policy.

Specified Amount: The amount chosen by the Policyowner at application and used
in determining the Death Benefit. It may be increased or decreased as described
in this Prospectus.

Surrender Charge: An amount retained by the Company upon the Full or Partial
Surrender of the Policy.

Surrender Value: The amount You can receive in cash by surrendering the Policy.

Surviving Insured: The Insured living after the first death.

Total Account Value: The sum of the Fixed Account Value, the Separate Account
Value and the Loan Account Value.

Valuation Date: The date and time at which the Accumulation Unit Value of a
variable investment option is calculated. Currently, this calculation occurs
after the close of business of the New York Stock Exchange on any normal
business day, Monday through Friday, that the New York Stock Exchange is open.

Valuation Period: The period of time from when the Company determines the
Accumulation Unit Value of a variable investment option until the next time it
determines such unit value. Currently, the calculation occurs after the close of
business of the New York Stock Exchange on any normal business day, Monday
through Friday, that the New York Stock Exchange is open.

<PAGE>

Variable Account Value: The Accumulation Unit Value for a Variable Option
multiplied by the number of Accumulation Units for that Variable Option
credited to the Policy.

Variable Option: One or more of the variable funding options available under
the Policy (as described in this Prospectus).

We, Our, Us, Company: Aetna Life Insurance and Annuity Company, its successors,
or assigns.

Written Request: A request in writing, in a form satisfactory to Us and received
by Us at the Home Office.

vii

<PAGE>

Policy Summary

The Policy offered in connection with this Prospectus is a flexible premium
variable life insurance policy issued on the lives of two Insureds. The Policy
is intended to provide life insurance and pay a benefit (subject to adjustment
under the Policy's Age and/or Sex, Suicide and Incontestability, and Grace
Period provisions) upon surrender, maturity or Second Death. The Policy is
designed to allow flexible premium payments, Policy Loans, Partial Surrenders, a
choice of two Death Benefit Options and account values that may be either fixed
or variable or a combination of fixed and variable.

Charges and fees will be assessed against premium payments, the Total Account
Value, the Separate Account, the underlying Funds and upon surrender. These
charges and fees are described within this Prospectus.

You must purchase Your variable life insurance policy from a registered
representative. The Policy, the initial application on the Insureds, any
subsequent applications and any riders constitute the entire contract.

At the time of application, You must choose a Death Benefit Option, decide on
the amount of premium We agree to bill and determine how to allocate Net
Premiums. You may elect to supplement the benefits afforded by the Policy
through the addition of riders We make available.

The proceeds payable upon the Second Death are based on the Death Benefit Option
chosen. Under Option 1 the Death Benefit would be the greater of the Specified
Amount or a percentage of the Total Account Value. Under Option 2, the Death
Benefit would be the greater of the Specified Amount plus the Total Account
Value on the date of death or a percentage of the Total Account Value.

Although the Policy is designed to allow flexible premiums, sufficient premiums
must be paid to continue the Policy in force to the Maturity Date or to qualify
for a Guaranteed Death Benefit. Premium reminder notices will be sent for
Planned Premiums and for premiums required to continue the Policy. Should Your
Policy lapse, it may be reinstated.

Net Premiums may be allocated to the Separate Account, the Fixed Account or both
Accounts. Net Premiums allocated to the Separate Account must be allocated to
one or more Variable Options and allocations must be in whole percentages. The
variable portion of the Policy is supported by the Variable Options you choose
and will vary with the investment performance of the associated Fund. Net
Premiums allocated to the Fixed Account will accumulate at rates of interest We
determine. Such rates will not be less than 4% a year.

The Separate Account

The Separate Account established for the purpose of providing Variable Options
to fund the Policy is Variable Life Account B. Amounts allocated to the Separate
Account are invested in the Funds. Each of the Funds is an open-end management
investment company (mutual fund) whose shares are purchased by the Separate
Account to fund the benefits provided by the Policy. The Funds currently
available under the Separate Account, including their investment objectives and
their investment advisers, are described in this Prospectus. Complete
descriptions of the Funds' investment objectives and restrictions and other
material information relating to an investment in the Funds are contained in the
prospectuses for each of the Funds which are delivered with this Prospectus.

Variable Life Account B was established pursuant to a June 18, 1986, resolution
of the Board of Directors of the Company. Under Connecticut Insurance Law, the
income, gains or losses of the Separate Account is credited without regard to
the other income, gains or losses of the Company. These assets are held for the
Company's variable life insurance policies. Any and all distributions made by
the Funds with respect to shares held by the Separate Account will be reinvested
in

<PAGE>

additional shares at net asset value. The assets maintained in the Separate
Account will not be charged with any liabilities arising out of any other
business conducted by the Company. The Company is, however, responsible for
meeting the obligations of the Policy to the Policyowner.

No stock certificates are issued to the Separate Account for shares of the Funds
held in the Separate Account. Ownership of Fund shares is documented on the
books and records of the Funds and of the Company for the Separate Account.

The Separate Account is registered with the SEC as a unit investment trust under
the Investment Company Act of 1940 and meets the definition of separate account
under the federal securities laws. Such registration does not involve any
approval or disapproval by the Commission of the Separate Account or the
Company's management or investment practices or policies. The Company does not
guarantee the Separate Account's investment performance.

Charges & Fees

Charges & Fees Assessed Against Premium

Premium Load

Before a premium is allocated to the Policy's Total Account Value, a percentage
of the premium is deducted to cover certain expenses associated with start-up
and maintenance costs of the Policy. These expenses include a current sales load
of 4.65% up to the Guaranteed Death Benefit Premium and 1.65% of the excess
(never to exceed 6.65% of all premiums), a current 2.1% state premium tax charge
and a current 1.25% federal income tax charge. The state premium tax charge
reimburses the Company for taxes it pays to states and municipalities in which
the Policy is sold. The amount of tax assessed by a state or municipality may be
more or less than the charge. The federal income tax charge reimburses the
Company for its increased federal tax liability under the federal tax laws. The
Company has determined that these state and federal tax charges are reasonable
in relation to its tax liability, but reserves the right to increase these tax
charges due to changes in the state or federal tax laws that increase the
Company's tax liability. The total current Premium Load is equal to 8.00% up to
the Guaranteed Death Benefit Premium and 5% of the excess.

Charges & Fees Assessed Against the Total Account Value

Charges and fees assessed against the Total Account Value will be deducted from
the Separate Account Value and the Fixed Account Value in the same proportion
that these values bear to the sum of the Fixed Account Value and the Separate
Account Value on the date of the deduction. This is accomplished by liquidating
Accumulation Units and withdrawing the value of the liquidated Accumulation
Units from each Variable Option in the same proportion as their respective
values have to the sum of Your Fixed Account and Separate Account Values. (See
Accumulation Units)

Transfers within Accounts

You may transfer all or part of each Fund to any other Fund or to the Fixed
Account Value at any time. We reserve the right to charge an administrative fee
of $25 for each transfer over 12 transfers per year and limit the number of
Funds you may elect over the lifetime of the Policy to 17.

Monthly Deductions

The Monthly Deduction includes the Cost of Insurance, a Policy fee, a monthly
administrative expense charge and any charges for Supplementary Benefits.
Monthly Deductions begin on the Issue Date, even if the Issue Date is earlier
than the date the application is signed, and occur on each Monthly Deduction Day
thereafter. If the Policy's issuance is delayed due to underwriting
requirements, the charges will not be assessed until the underwriting is
complete and the application for the Policy is approved. (See Premium Payments)

<PAGE>

Cost of Insurance

The Cost of Insurance charge is related to the Company's expected mortality cost
for Your basic insurance coverage under the Policy, not including any
supplemental benefit provisions that You may elect through a Policy rider. The
Cost of Insurance charge is equal to the Amount at Risk multiplied by a monthly
Cost of Insurance rate. The Cost of Insurance rate is variable and is based on
both Insureds' issue ages, sex (where permitted by law), number of Policy Years
elapsed and premium class. Because the Total Account Value and, under certain
circumstances, the Death Benefit of the Policy may vary from month to month, the
Cost of Insurance charge may also vary on each Monthly Deduction Day. In
addition, You should note that the Cost of Insurance charge is related to the
difference between the Death Benefit payable under the Policy and the Total
Account Value of the Policy. An increase in the Total Account Value or a
decrease in the Death Benefit may result in a smaller Cost of Insurance charge
while a decrease in the Total Account Value or an increase in the Death Benefit
may result in a larger cost of insurance charge.

The Cost of Insurance rate for standard risks will not exceed those based on the
1980 Commissioners Standard Ordinary Mortality Tables (1980 Tables). Substandard
risks will have monthly deductions based on Cost of Insurance rates which may be
higher than those set forth in the 1980 Tables. A table of guaranteed maximum
Cost of Insurance rates per $1,000 of the Amount at Risk will be included in
each Policy. The Monthly Cost of Insurance rates may be adjusted by Us from time
to time. Adjustments will be on a class basis and will be based on Our estimates
for future factors such as mortality, investment income, expenses, and the
length of time Policies stay in force. Any adjustments will be made on a
nondiscriminatory basis.

Policy Fee and Monthly Administrative Expense Charge

The Monthly Deduction amount also includes a current Policy fee of $32.50 a
month during the first Policy Year and $7.50 a month during subsequent Policy
Years (We reserve the right to charge $39.00 a month during the first Policy
Year and $14 a month during subsequent Policy Years). The Monthly Deduction
amount also includes a current administrative expense charge of $0.08 a month
per $1,000 of Specified Amount up to a maximum of $400 for Policy Years 1
through 5 and $0.05 a month per $1,000 of Specified Amount up to a maximum of
$250 for Policy Years 6 through 10. Separate and identical administrative
expense charges, durations and maximums apply to any increase in Specified
Amount, but the charges and maximums are based on the number of years from the
date of increase. We reserve the right to charge $0.08 a month per $1,000 of
Specified Amount up to maximums of $400 for the basic administrative expense
charge and $400 for increases regardless of the numbers of Policy Years or years
from date of increase. These charges are for items such as underwriting and
issuance, premium billing and collection, policy value calculation,
confirmations and periodic reports.

Charges for Supplemental Benefits

If You elect any supplemental benefits through adding riders to the Policy, a
supplemental benefits charge will be included in the Monthly Deduction amount.
The amount of the charge will vary depending upon the actual supplemental
benefits selected and is described on each applicable Policy rider.

Charges & Fees Assessed Against the Separate Account

Mortality and Expense Risk Charge

A mortality and expense risk charge will be deducted from the Separate Account
Value to compensate the Company for the aggregate mortality and expense risks
assumed in connection with the Policy. The mortality risk assumed by the Company
is that Insureds, as a group, may live for a shorter period of time than
estimated and that the Company will, therefore, pay a Death Benefit before
collecting a sufficient Cost of Insurance charge. The expense risk assumed is
that expenses incurred in issuing and administering the Policies and operating
the Separate Account will be greater than the administrative charges estimated
for such expenses.

<PAGE>

The mortality and expense risk charge will be deducted daily and currently
equals an annual rate of 0.90% of the average daily net assets of the Separate
Account during Policy Years 1 through 10, 0.50% beginning in Policy Year 11 or,
if later, at the younger Insured's Attained Age 65, and 0.25% beginning in
Policy Year 21 or, if later, at the younger Insured's Attained Age 75. The
Company reserves the right to increase or decrease the mortality and expense
risk charge if it believes that circumstances have changed so that current
charges are no longer appropriate. However, in no event will the charge exceed
0.90% of average daily net assets on an annual basis.

The Separate Account is not subject to any taxes. However, if taxes are assessed
against the Separate Account, We reserve the right to assess taxes against the
Separate Account Value.

Charges Assessed Against the Underlying Funds

The following table illustrates the investment advisory fees, other expenses and
total expenses paid by each of the Funds as a percentage of average net assets
based on figures for the year ended December 31, 1996:

<TABLE>
<CAPTION>
Investment
Advisory Fees1 Other Expenses Total Fund
(after expense (after expense Annual
reimbursement) reimbursement) Expenses
<S> <C> <C> <C>
Aetna Variable Fund(2) 0.50% 0.06% 0.56%
Aetna Income Shares(2) 0.40% 0.08% 0.48%
Aetna Variable Encore Fund(2) 0.25% 0.10% 0.35%
Aetna Investment Advisers Fund, Inc.(2) 0.50% 0.08% 0.58%
Aetna Ascent Variable Portfolio(2) 0.60% 0.15% 0.75%
Aetna Crossroads Variable Portfolio(2) 0.60% 0.15% 0.75%
Aetna Legacy Variable Portfolio(2) 0.60% 0.15% 0.75%
Aetna Variable Index Plus Portfolio(2) 0.35% 0.15% 0.50%
Alger American Small Capitalization Portfolio 0.85% 0.03% 0.88%
American Century VP Capital Appreciation
(formerly "TCI Growth")(3) 1.00% 0.00% 1.00%
Fidelity VIP Equity-Income Portfolio(4) 0.51% 0.07% 0.58%
Fidelity VIP II Contrafund Portfolio(4) 0.61% 0.13% 0.74%
Janus Aspen Aggressive Growth Portfolio(5) 0.72% 0.04% 0.76%
Janus Aspen Balanced Portfolio(5) 0.79% 0.15% 0.94%
Janus Aspen Growth Portfolio(5) 0.65% 0.04% 0.69%
Janus Aspen Short-Term Bond Portfolio(5) 0.47% 0.19% 0.66%
Janus Aspen Worldwide Growth Portfolio(5) 0.66% 0.14% 0.80%
Scudder International Portfolio Class A Shares 0.86% 0.19% 1.05%
</TABLE>

(1) Certain of the unaffiliated Fund advisers reimburse the Company for
administrative costs incurred in connection with administering the Funds as
variable funding options under the Policy. These reimbursements are paid out
of the investment advisory fees and are not charged to investors.

(2) The Company provides administrative services to the Fund and assumes the
Fund's ordinary recurring direct costs under an Administrative Services
Agreement. The new Administrative Services Agreement became effective on May
1, 1996 for Aetna Variable Fund, Aetna Income Shares, Aetna Variable Encore
Fund, Aetna Investment Advisers Fund, Inc., Aetna Ascent Variable Portfolio,
Aetna Crossroads Variable Portfolio, and Aetna Legacy Variable Portfolio.
Therefore, for these Funds the "Other Expenses" shown are not based on
actual figures for the year ended December 31, 1996, but reflect the fee
payable under that Agreement. The Administrative Services Agreement was in
effect for Aetna Variable Index Plus Portfolio since its inception.
Effective August 1, 1996, Investment Advisory Fees were increased for Aetna
Variable Fund, Aetna Income Shares, Aetna Investment Advisers Fund, Inc.,
Aetna Ascent Variable Portfolio, Aetna Crossroads Variable Portfolio, and
Aetna Legacy Variable Portfolio. The Advisory Fees shown above are not based
on actual figures for the year ended December 31, 1996, but reflect the
increased Investment Advisory Fees.

(3) The Portfolio's investment adviser pays all expenses of the Portfolio except
brokerage commissions, taxes, interest, fees and expenses of the
non-interested person directors (including counsel fees) and extraordinary
expenses. These expenses have historically represented a very small
percentage (less than 0.01%) of total net assets in a fiscal year.

<PAGE>

(4) A portion of the brokerage commissions that certain funds pay was used to
reduce expenses. In addition, certain funds have entered into arrangements
with their custodian and transfer agent whereby interest earned on
uninvested cash balances was used to reduce custodian and transfer agent
expenses. Including these reductions, the total operating expenses would
have been 0.56% for Equity Income Portfolio and 0.71% for Contrafund
Portfolio.

(5) The fees and expenses shown above are based on gross expenses of the Shares
before expense offset arrangements for the fiscal year ended December 31,
1996. The information for each Portfolio is net of fee waivers or reductions
from Janus Capital. Fee reductions for the Aggressive Growth, Balanced,
Growth, and Worldwide Growth Portfolios reduce the management fee to the
level of the corresponding Janus retail fund. Other waivers, if applicable,
are first applied against the management fee and then against other
expenses. Without such waivers or reductions, the Management Fee, Other
Expenses and Total Fund Annual Expenses would have been 0.79%, 0.04% and
0.83% for Aggressive Growth Portfolio; 0.92%, 0.15% and 1.07% for Balanced
Portfolio; 0.79%, 0.04% and 0.83% for Growth Portfolio; 0.65%, 0.19% and
0.84% for Short-Term Bond Portfolio; and 0.77%, 0.14% and 0.91% for
Worldwide Growth Portfolio, respectively. Janus Capital may modify or
terminate the waivers or reductions at any time upon at least 90 days'
notice to the Portfolio's Board of Trustees.

For further details on each Fund's expenses please refer to that Fund's
prospectus. Additional copies of each Fund's prospectus and the Statement of
Additional Information for each Fund may be obtained free of charge by calling
(800)-334-7586.

Charges Deducted Upon Surrender

If, during the first 20 Policy Years, the Policy is totally surrendered or
lapses, or a Partial Surrender reduces the Specified Amount, a Surrender Charge
will be deducted from the Total Account Value. This charge is imposed in part to
recoup distribution expenses and in part to recover certain first year
administrative costs. The maximum Surrender Charges are included in each Policy
and are in compliance with each state's nonforfeiture law.

The maximum Surrender Charge, as specified in the Policy, is based on the
Specified Amount. It also depends on the Issue Age, risk classification and, in
most states, sex of the Insureds.

If You increase the Specified Amount, a new Surrender Charge will be applicable,
in addition to the then existing Surrender Charge. This charge will be effective
on the Issue Date for the increase and remain in effect for twenty years.
Supplemental Policy Specifications will be sent to You once the change is
complete and will reflect the maximum additional Surrender Charge in the Table
of Maximum Surrender Charges.

Any decrease in the Specified Amount will not reduce the original or any
additional Surrender Charge.

Surrender Charges on Full and Partial Surrenders

All applicable surrender Charges are imposed on Full surrenders.

A proportional percentage of all Surrender Charges is imposed on Partial
Surrenders. The proportional percentage is the amount of the net Partial
Surrender divided by the sum of the Separate Account Value and the Fixed Account
Value less full Surrender Charges. When a Partial Surrender is made, any
applicable remaining Surrender Charges will be reduced in the same proportion. A
transaction charge of $25 may be made against the Separate Account for each
Partial Surrender. (See Partial Surrenders)

<PAGE>

Allocation of Premiums

You may allocate all or a part of Your Net Premiums to the Funds currently
available through the Separate Account in connection with the Policy and/or You
may allocate all or a part of Your Net Premiums to the Fixed Account.

The Funds

The Separate Account currently invests in shares of the Funds listed below. Net
Premiums applied to the Separate Account will be invested in the Funds in
accordance with the selection made by the Policyowner. Funds may be added or
withdrawn as permitted by applicable law. We reserve the right to limit the
total number of Funds You may elect to 17 over the lifetime of the Policy.
Shares of the Funds are not sold directly to the general public. Each of the
Funds is available only through the purchase of variable annuities or variable
life insurance policies. (See Mixed and Shared Funding)

The investment results of the Funds, whose investment objectives are described
below, are likely to differ significantly. There is no assurance that any of the
Funds will achieve their respective investment objectives. Investment in some of
the Funds involves special risks, which are described in their respective
prospectuses. You should read the prospectuses for the Funds and consider
carefully, and on a continuing basis, which Fund or combination of Funds is best
suited to Your long-term investment objectives. Except where otherwise noted,
all of the Funds are diversified, as defined in the Investment Company Act of
1940.

[bullet] Aetna Variable Fund seeks to maximize total return through investments
in a diversified portfolio of common stocks and securities convertible
into common stocks.(1)

[bullet] Aetna Income Shares seeks to maximize total return, consistent with
reasonable risk, through investments in a diversified portfolio
consisting primarily of debt securities.(1)

[bullet] Aetna Variable Encore Fund seeks to provide high current return,
consistent with preservation of capital and liquidity, through
investment in high-quality money market instruments. An investment in
this Fund is neither insured nor guaranteed by the U.S. Government. (1)

[bullet] Aetna Investment Advisers Fund, Inc. is a manged Fund which seeks to
maximize investment return consistent with reasonable safety of
principal by investing in one or more of the following asset classes:
stocks, bonds and cash equivalents based on the Company's judgment of
which of those sectors or mix thereof offers the best investment
prospects.(1)

[bullet] Aetna Generation Portfolios, Inc.--Aetna Ascent Variable Portfolio
seeks to provide capital appreciation by allocating its investments
among equities and fixed income securities. Aetna Ascent is managed for
investors who generally have an investment horizon exceeding 15 years,
and who have a high level of risk tolerance. See the Fund's prospectus
for a discussion of the risks involved.(1)

[bullet] Aetna Generation Portfolios, Inc.--Aetna Crossroads Variable Portfolio
seeks to provide total return (i.e., income and capital appreciation,
both realized and unrealized) by allocating its investments among
equities and fixed income securities. Aetna Crossroads is managed for
investors who generally have an investment horizon exceeding 10 years
and who have a moderate level of risk tolerance. (1)

[bullet] Aetna Generation Portfolios, Inc.--Aetna Legacy Variable Portfolio
seeks to provide total return consistent with preservation of capital
by allocating its investments among equities and fixed income
securities. Aetna Legacy is managed for investors who generally have an
investment horizon exceeding five years and who have a low level of
risk tolerance.(1)

[bullet] Aetna Variable Portfolios, Inc.--Aetna Variable Index Plus Portfolio
seeks to outperform the total return performance of publicly traded
common stocks represented by the S&P 500.(1)

[bullet] Alger American Fund--Alger American Small Capitalization Portfolio
seeks long-term capital appreciation. Except during temporary defensive
periods, the Portfolio invests at least 65% of its total assets in
equity securities of com-

<PAGE>

panies that, at the time of purchase of such securities, have total
market capitalization within the range of companies included in the
Russell 2000 Growth Index, ("Russell Index") and the S&P SmallCap 600
Index ("S&P Index") updated quarterly. At March 31, 1997, the range of
market capitalization of the companies in the Russell Index was $10
million to $1.94 billion; the range of market capitalization of the
companies in the S&P Index at that date was $32 million to $2.58
billion. The combined range was $10 million to $2.58 billion.(2)

[bullet] American Century Variable Portfolios, Inc.--American Century VP Capital
Appreciation (formerly TCI Portfolios, Inc.--TCI Growth) seeks capital
growth. The Fund seeks to achieve its objective by investing in common
stocks (including securities convertible into common stocks) and other
securities that meet certain fundamental and technical standards of
selection and, in the opinion of the Fund's investment manager, have
better than average potential for appreciation.(3)

[bullet] Fidelity Investments' Variable Insurance Products Fund--Equity-Income
Portfolio seeks reasonable income by investing primarily in
income-producing equity securities. In choosing these securities, the
Fund will also consider the potential for capital appreciation.(4)

[bullet] Fidelity Investments' Variable Insurance Products Fund II--Contrafund
Portfolio seeks maximum total return over the long term by investing
its assets mainly in equity securities of companies that are
undervalued or out-of-favor.(4)

[bullet] Janus Aspen Series--Aggressive Growth Portfolio is a non-diversified
portfolio that seeks long-term growth of capital. The Portfolio pursues
its investment objective by normally investing at least 50% of its
equity assets in securities issued by medium sized companies.
Medium-sized companies are those whose market capitalizations fall
within the range of companies in the S&P MidCap 400 Index, which as of
December 30, 1996 included companies with capitalizations between
approximately $192 million and $6.5 billion, but which is expected to
change on a regular basis.(5)

[bullet] Janus Aspen Series--Balanced Portfolio seeks long-term capital growth
consistent with preservation of capital and balanced by current income.
The Portfolio pursues its investment objective by, under normal
circumstances, investing 40%-60% of its assets in securities selected
primarily for their growth potential and 40%-60% of its assets in
securities selected primarily for their income potential.(5)

[bullet] Janus Aspen Series--Growth Portfolio seeks long-term growth of capital
consistent with the preservation of capital. The Portfolio pursues its
investment objective by investing in common stocks of a large number of
issuers of any size.(5)

[bullet] Janus Aspen Series--Short-Term Bond Portfolio seeks as high a level of
current income as is consistent with preservation of capital. The
Portfolio pursues its investment objective by investing primarily in
short- and intermediate-term fixed income securities.(5)

[bullet] Janus Aspen Series--Worldwide Growth Portfolio seeks long-term growth
of capital consistent with the preservation of capital. The Portfolio
pursues its investment objective primarily through investments in
common stocks of foreign and domestic issuers.(5)

[bullet] Scudder Variable Life Investment Fund--International Portfolio Class A
Shares seeks long term growth of capital primarily through diversified
holdings of marketable foreign equity investments.(6)

Investment Advisers of the Funds:

(1) Aetna Life Insurance and Annuity Company (adviser); Aeltus Investment
Management, Inc. (sub-adviser)

(2 Fred Alger Management, Inc.

(3) American Century Investment Management, Inc.

(4) Fidelity Management & Research Company

(5) Janus Capital Corporation

(6) Scudder, Stevens & Clark, Inc.

Some of the above Funds may use instruments known as derivatives as part of
their investment strategies, as described in their respective prospectuses. The
use of certain derivatives such as inverse floaters and principal only debt
instru-

<PAGE>

ments may involve higher risk of volatility to a Fund. The use of leverage in
connection with derivatives can also increase risk of losses. See the prospectus
for the Fund for a discussion of the risks associated with an investment in
those Funds. You should refer to the accompanying prospectuses of the Funds for
more complete information about their investment policies and restrictions.

Mixed and Shared Funding; Conflicts of Interest

Shares of the Funds are available to insurance company separate accounts which
fund variable annuity contracts and variable life insurance policies, including
the Policy described in this Prospectus. Because Fund shares are offered to
separate accounts of both affiliated and unaffiliated insurance companies, it is
conceivable that, in the future, it may not be advantageous for variable life
insurance separate accounts and variable annuity separate accounts to invest in
these Funds simultaneously, since the interests of such Policyowners or
contractholders may differ. Although neither the Company nor the Funds currently
foresees any such disadvantages either to variable life insurance or to variable
annuity Policyowners, each Fund's Board of Trustees/Directors has agreed 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 in
response thereto. If such a conflict were to occur, one of the separate accounts
might withdraw its investment in a Fund. This might force that Fund to sell
portfolio securities at disadvantageous prices.

Fund Additions, Deletions or Substitutions

The Company reserves the right, subject to compliance with appropriate state and
federal laws, to add additional Fund(s) or cease to make Fund shares available
under the Policy prospectively. The Company may substitute shares of one Fund
for shares of another Fund if, among other things, (a) it is determined that a
Fund no longer suits the purpose of the Policy due to a change in its investment
objectives or restrictions; (b) the shares of a Fund are no longer available for
investment; or (c) in the Company's view, it has become inappropriate to
continue investing in the shares of the Fund. Substitution may be made with
respect to both existing investments and the investment of any future premium
payments. However, no substitution of securities will be made without prior
notice to Policyowners, and without prior approval of the SEC or such other
regulatory authorities as may be necessary, all to the extent required and
permitted by the Investment Company Act of 1940 or other applicable law.

Fixed Account

Interests in the Fixed Account have not been registered with the SEC in reliance
upon exemptions under the Securities Act of 1933, as amended. However,
disclosure in this Prospectus regarding the Fixed Account may be subject to
certain generally applicable provisions of the federal securities laws relating
to the accuracy and completeness of the statements. Disclosure in this
Prospectus relating to the Fixed Account has not been reviewed by the SEC.

The Fixed Account is a fixed funding option available under the Policy. The
Company guarantees a minimum interest rate on amounts in the Fixed Account and
assumes the risk of investment gain or loss. The investment gain or loss of the
Separate Account or any of the Funds does not affect the Fixed Account Value.

The Fixed Account is secured by the general assets of the Company. The general
assets of the Company include all assets of the Company other than those held in
separate accounts sponsored by the Company or its affiliates. The Company will
invest the assets of the Fixed Account in those assets chosen by the Company, as
allowed by applicable law. Investment income of such Fixed Account assets will
be allocated by the Company between itself and those policies participating in
the Fixed Account.

The Company guarantees that, at any time, the Fixed Account Value will not be
less than the amount of the Net Premiums allocated to the Fixed Account, plus
interest at an annual rate of not less than 4%, less the amount of any Partial
Surrenders, Policy Loans or Monthly Deductions.

<PAGE>

Policy Choices

Premium Payments

The Policy is a flexible premium life insurance policy in that the Policyowner
has the right to decide when to make premium payments and in what amounts. Your
Policy provides various premium levels at which You may make payments. They are
the Planned Premium, Basic Monthly Premium and the Guaranteed Death Benefit
Premium. The amount of each of Your premium levels will be shown in Your Policy.
Alternatively, You may make any other premium payments You wish as Additional
Premiums. (See Guaranteed Death Benefit)

Payment of the Basic Monthly Premium, Guaranteed Death Benefit Premium, Planned
Premiums, or Additional Premiums in any amount will not, except as noted below,
guarantee that Your policy will remain in force. Conversely, failure to pay
Basic Monthly Premiums, Planned Premiums or Additional Premiums will not
necessarily cause Your Policy to lapse. Not paying Your Guaranteed Death Benefit
Premium will, however, cause the Guaranteed Death Benefit to terminate. Also,
not paying the Basic Monthly Premium will cause the No Lapse Coverage not to be
applicable. (See Guaranteed Death Benefit and No Lapse Coverage)

Planned Premiums are those premiums You request and We agree to bill on an
annual, semiannual or quarterly basis. Pre-authorized automatic monthly check
payments may also be arranged. Planned Premium due dates are measured from the
Issue Date. The Planned Premium is also due on the Issue Date. You may request
as Your Planned Premium for Your Policy the Basic Monthly Premium or the
Guaranteed Death Benefit Premium. Currently, there is no minimum Planned
Premium.

You may increase Your Planned Premium at any time by submitting a Written
Request to us or by paying Additional Premium. We may require evidence of
insurability if the Additional Premium or the new Planned Premium during the
current Policy Year would increase the difference between the Death Benefit and
the Total Account Value. If satisfactory evidence of insurability is requested
and not provided, We will refund the increase in premium without interest and
without participation of such amounts in the Funds.

Premiums paid in excess of the Planned Premium or an increase in Your Planned
Premium may cause the Policy to be classified as a "Modified Endowment Contract"
for federal income tax purposes. (See Tax Matters)

At the time You apply for a Policy, if You have paid at least the amount equal
to Your Basic Monthly Premium prior to the Issue Date and have answered
favorably certain questions relating to each Insured's health, a temporary
insurance agreement (where approved for use and subject to certain maximums)
will be provided.

Under limited circumstances, We may backdate a Policy, upon request, by
assigning an Issue Date earlier than the date the application is signed but no
earlier than six months prior to state approval of the Policy. Backdating may be
desirable, for example, so that You can purchase a particular Policy Specified
Amount for lower Cost of Insurance Rates based on a younger insurance age. For a
backdated Policy, You must pay the premium for the period between the Issue Date
and the date the application is received at the Home Office. Backdating of Your
Policy will not affect the date on which Your premium payments are credited to
the Separate Account and You are credited with Accumulation Units. You cannot be
credited with Accumulation Units until Your Net Premium is actually deposited in
the Separate Account. (See Accumulation Units)

The initial premium equal to at least your Basic Monthly Premium should be made
by check or money order and made payable to the Company and given to the agent
with Your application. After the first premium payment, all premiums

<PAGE>

must be sent directly to our Home Office and will be deemed received when
actually received at the Home Office. All Your premium payments, including Your
first premium payment, will be allocated as You have directed, and amounts
allocated to the Funds will be credited to your Policy at the Accumulation Unit
Value computed on the Valuation Date following receipt of your premium at the
Home Office. (See Right of Policy Examination)

You may reallocate Your future premium payments at any time by Your request to
us. Allocations must be changed in whole percentages. The change will be
effective as of the date of the next premium payment after You notify Us. We
will send You confirmation of the change. (See Transfers and Allocations to
Funding Options)

Guaranteed Death Benefit

The Guaranteed Death Benefit provision assures that the Policy will not lapse if
certain premiums are paid when due. As long as there are no outstanding Policy
Loans, have been no Partial Surrenders and all the Guaranteed Death Benefit
premiums due since the Issue Date are paid on or before each Monthly Deduction
Day, the Policy will not lapse even if the Surrender Value is insufficient to
satisfy the current Monthly Deductions. If on a Monthly Deduction Day, all or
part of the applicable Guaranteed Death Benefit premiums have not been paid, You
will have 61 days from the Monthly Deduction Day to pay the amount of the
applicable Guaranteed Death Benefit premiums due. Failure to do so will cause
the corresponding Guaranteed Death benefit to terminate. The Guaranteed Death
Benefit is available to the younger Insured's Attained Age 100. The Guaranteed
Death Benefit assures that Your Policy will not lapse prior to the younger
Insured's Attained Age 100. The premium for this Guaranteed Death Benefit is the
Guaranteed Death Benefit Premium.

The Guaranteed Death Benefit may not be available in all circumstances and is
only available in those states where it is approved. Once terminated, the
Guaranteed Death Benefit provision cannot be reinstated.

No Lapse Coverage

The Policy will not terminate within the 5-year period after its Issue Date or
the Issue Date of any increase if sufficient premiums have been paid. The Policy
will not terminate if on any Monthly Deduction Day within that period the sum of
premiums paid within that period equals or exceeds (a) the sum of the Basic
Monthly Premiums for each Policy Month from the start of the period, including
the current month; plus (b) any Partial Surrenders; plus (c) any increase in the
Loan Account Value since the start of the period.

If on any Monthly Deduction Day within the 5-year period the sum of premiums
paid is less than the sum of items (a), (b) and (c) above and the Total Account
Value is less than the Monthly Deduction the Policy will enter the Grace Period.
Additional premiums payments must be paid to prevent the termination of the
Policy. (See Grace Period)

After the 5-year period expires, on each Monthly Deduction Day, the Surrender
Value must be greater than the Monthly Deduction to prevent activation of the
Grace Period provision of the Policy, unless the Guaranteed Death Benefit is in
force. (See Guaranteed Death Benefit and Grace Period)

Death Benefit Options

At the time of purchase, You must choose between the two available Death Benefit
Options. The amount payable upon the Second Death is based upon one of the
following Death Benefit Options You choose.

Under Option 1 the Death Benefit will be the greater of: (a) the Specified
Amount or (b) a percentage of the Total Account Value. This Percentage is 1
divided by the Net Single Premium per dollar of Specified Amount.

Under Option 2 the Death Benefit will be the greater of: (a) the Specified
Amount plus the Total Account Value on the date of death or (b) a percentage of
the Total Account Value. This percentage is 1 divided by the Net Single Premium
per dollar of Specified Amount. Option 2 provides a varying Death Benefit which
increases or decreases over time, depending upon the amount of premium paid and
the investment performance of the Fund(s) You choose.

Under both Option 1 and Option 2, the Death Benefit may be affected by Partial
Surrenders. The Death Benefit payable under either Option will be reduced by the
amount necessary to repay the Loan Account Value in full and, if the Policy is
within the Grace Period, any payment required to keep the Policy in force. (See
Partial Surrenders)

<PAGE>

Transfers and Allocations to Funding Options

At any time prior to the Maturity Date, You may transfer all or part of each
Fund Account Value to any other Fund or to the Fixed Account Value at any time.
Funds may be transferred between the Funds or from the Funds to the Fixed
Account. We reserve the right to charge an administrative fee of $25 for more
than 12 transfers per year.

Within the forty-five days following the Policy Anniversary, You may request a
transfer of a portion of the Fixed Account Value to one or more of the Funds.
This type of transfer is allowed only once within this forty-five day period,
and We must receive Your request at the Home Office within the forty-five day
period. The transfer will be effective on the Valuation Date that Your request
is received by the Home Office. The amount of such transfer cannot exceed 25% of
the Fixed Account Value. However, if the Fixed Account Value is less than or
equal to $500, the transfer amount may equal the full Fixed Account Value.

Accumulation Units for each Variable Option will be added to or subtracted from
Your Separate Account Value, based on each Variable Option's Accumulation Unit
Value computed on the next Valuation Date following our receipt of your request
for transfer. A dollar amount will be added to or subtracted from the Fixed
Account Value according to the terms of Your request for transfer. You should
carefully consider current market conditions and each Fund's investment policies
and related risks before allocating money to the Funds. (See Premium Payments
and Accumulation Units)

Telephone Transfers

You may request a transfer of Account Values either in writing or by telephone.
In order to make telephone transfers, a written telephone transfer authorization
form must be completed by the Policyowner and returned to the Company at its
Home Office. Once the form is processed, the Policyowner may request a transfer
by telephoning the Company at 800-334-7586. All transfers must be in accordance
with the terms of the Policy.

Transfer instructions are currently accepted on each Valuation Date. Once
instructions have been accepted, they may not be rescinded; however, new
telephone instructions may be given on the following day. If the transfer
instructions are not in good order, the Company will not execute the transfer
and You will be notified.

We will use reasonable procedures, such as requiring identifying information
from callers, recording telephone instructions, and providing written
confirmation of transactions, in order to confirm that telephone instructions
are genuine. Any telephone instructions which We reasonably believe to be
genuine will be Your responsibility, including losses arising from any errors in
the communication of instructions. As a result of this procedure, the
Policyowner will bear the risk of loss. If the Company does not use reasonable
procedures, as described above, it may be liable for losses due to unauthorized
instructions.

Automated Transfers (Dollar Cost Averaging)

Dollar Cost Averaging describes a system of investing a uniform sum of money at
regular intervals over an extended period of time. Dollar Cost Averaging is
based on the economic fact that buying a security with a constant sum of money
at fixed intervals results in acquiring more of the item when prices are low and
less of it when prices are high.

You may establish automated transfers of Fund Account Values on a monthly or
quarterly basis from the Aetna Variable Encore Fund to any other Fund or to the
Fixed Account through Written Request or other method acceptable to the Company.
You must have a minimum of $5,000 allocated to the Aetna Variable Encore Fund in
order to enroll in the Dollar Cost Averaging program. The minimum automated
transfer amount is $50 per month. There is no additional charge for the program.
You may start or stop participation in the Dollar Cost Averaging program at any
time, but You must give the Company at least 30 days' notice to change any
automated transfer instructions that are currently in place. The Company
reserves the right to suspend or modify automated transfer privileges at any
time.

Before participating in the Dollar Cost Averaging program, You should consider
the risks involved in switching between investments available under the Policy.
Dollar Cost Averaging requires regular investments regardless of fluctuating
price levels, and does not guarantee profits or prevent losses. Therefore, You
should carefully consider market conditions and each Fund's investment policies
and related risks before electing to participate in the Dollar Cost Averaging
Program.

<PAGE>

Policy Values

Total Account Value

Once Your Policy has been issued, each Net Premium allocated to a Variable
Option of the Separate Account is credited in the form of Accumulation Units of
the Variable Option based on that Variable Option's Accumulation Unit Value.
Each Net Premium will be credited to Your Policy at the Accumulation Unit
Value(s) computed on the next Valuation Date following our receipt of the
premium at Our Home Office following the Issue Date of the Policy. The number of
Accumulation Units credited is determined by dividing the Net Premium by the
value of an Accumulation Unit computed after the premium is received and
accepted by Us. Since each Variable Option has a unique Accumulation Unit Value,
if You have elected a combination of Variable Options You will have Accumulation
Units credited to Your Separate Account Value for each Variable Option.

The Total Account Value of Your Policy is determined by: (a) multiplying the
total number of Accumulation Units credited to the Policy for each applicable
Variable Option by its appropriate current Accumulation Unit Value; (b) if You
have elected a combination of Variable Options, totaling the resulting value;
and (c) adding any values attributable to the Fixed Account and any values
attributable to the Loan Account Value.

The number of Accumulation Units credited to a Policy will not be changed by any
subsequent change in the value of an Accumulation Unit. The number is increased
by subsequent contributions to or transfers into a Variable Option, and
decreased by charges and withdrawals from that Variable Option.

The Fixed Account Value reflects amounts allocated to the general account
through payment of premiums or transfers from the Separate Account. Amounts
allocated to the Fixed Account Value are guaranteed; however there is no
assurance that the Separate Account Value of the Policy will equal or exceed the
Net Premiums paid and allocated to the Separate Account.

You will be advised at least annually as to the number of Accumulation Units
which remain credited to the Policy, the current Accumulation Unit Values, the
Separate Account Value, the Fixed Account Value, and the Total Account Value.

Accumulation Unit Value

The value of an Accumulation Unit is determined on the Valuation Date. A
Valuation Period is the time from one Valuation Date to the next Valuation Date.
The value of an Accumulation Unit for any Valuation Period is determined by
multiplying the value of an Accumulation Unit for the immediately preceding
Valuation Period by the net investment factor for the current period for the
appropriate Variable Option. The net investment factor equals the net investment
rate plus 1.0. The net investment rate is determined separately for each
Variable Option as follows:

The net investment rate equals (a) the net assets of the Variable Option held in
Variable Life Account B at the end of a Valuation Period; minus (b) the net
assets of the Variable Option held in Variable Life Account B at the beginning
of that Valuation Period, adjusted by any taxes or provisions for taxes
attributable to the operation of Variable Life Account B; divided by (c) the
value of the Variable Option's Accumulation Units held in Variable Life Account
B at the beginning of the Valuation Period; minus (d) a daily charge for
mortality and expense risk expenses.

Maturity Value

The Maturity Value of the Policy is the Total Account Value less the Loan
Account Value less any unpaid accrued interest.

Surrender Value

The Surrender Value of the Policy is the amount You can receive in cash by
surrendering the Policy. All or part of the Surrender Value may be applied to
one or more of the Settlement Options described in this Prospectus or in any
manner to which We agree and that We make available. (See Charges Deducted Upon
Surrender)

<PAGE>

Policy Rights

Full Surrenders

By Written Request, You may surrender the Policy for its Full Surrender Value at
any time before the Maturity Date while one or both Insureds is alive. All
insurance coverage under the Policy will end on the date of the Full Surrender.
The Full Surrender Value will equal (a) the Total Account Value on the date of
surrender; less (b) the Surrender Charge; less (c) the Loan Account Value plus
any accrued interest. We will require return of the Policy. (See Right to Defer
Payment, Policy Settlement and Payment of Benefits)

Partial Surrenders

By Written Request, You may, at any time after the expiration of the Right of
Policy Examination, partially surrender the Policy. A Partial Surrender Charge
will be deducted from the amount of the Total Account Value which is
surrendered. The minimum amount of any Partial Surrender after any Partial
Surrender charge is applied is $500. We may also charge an administrative fee of
$25.

The Partial Surrender charge will be in proportion to the Surrender Charge that
would apply to a Full Surrender. The proportion will be computed as the amount
of the net Partial Surrender divided by the sum of the Fixed Account Value and
the Separate Account Value less the Full Surrender Charge. When the Partial
Surrender is made, any future Surrender Charge will be reduced in the same
proportion.

The Partial Surrender Charge, and the net amount surrendered will reduce the
Policy's values as described in the Charges Deducted Upon Surrender section.

If the Death Benefit Option for the Policy is Option 1, a Partial Surrender will
reduce the Total Account Value, Death Benefit, and Specified Amount. The
Specified Amount and Total Account Value will be reduced by equal amounts.
However, We will not allow a Partial Surrender if the Specified Amount will be
reduced below the minimum Specified Amount of $500,000.

If the Death Benefit Option for the Policy is Option 2, a Partial Surrender will
reduce the Total Account Value and the Death Benefit. The Specified Amount will
not be reduced.

If the Death Benefit for the Policy is determined as the Total Account Value
divided by the Net Single Premium, the Partial Surrender may not reduce the
Specified Amount.

A reduction in the Specified Amount will cause a reduction in the required
premiums for the Guaranteed Death Benefit. The future premium required to
maintain the Guaranteed Death Benefit will be based on the new Specified Amount.

If, at the time of a Partial Surrender, Your Total Account Value is attributable
to the Separate Account and the Fixed Account, the Surrender Charge, the
transaction charge and the amount paid to You upon the Partial Surrender will be
deducted from the Separate Account Value and the Fixed Account Value in the same
proportion as these values bear to the sum of the Fixed Account Value and the
Separate Account Value on the date of the deduction. This is accomplished by
liquidating Accumulation Units and withdrawing the value of the liquidated
Accumulation Units from each Variable Option in the same proportion as their
respective values have to the sum of Your Fixed Account and Separate Account
Values. (See Right to Defer Payment, Policy Changes and Payment of Benefits)

Paid-Up Nonforfeiture Option

By Written Request, You may elect, at any time before the Maturity Date, to
continue the Policy as paid-up life insurance.

<PAGE>

an interest rate of 4.0% compounded annually. However, the Specified Amount of
the paid-up insurance cannot exceed the Death Benefit under the Policy as of the
effective date of the paid-up insurance. Any excess Surrender Value will be
refunded to You.

Full and Partial Surrenders and Policy Loans, as described in this Prospectus,
will be allowed if the Policy is continued in force as paid up insurance.

Proceeds payable under this option upon death or maturity will equal the
Specified Amount less debt of the paid up insurance. (See Tax Matters)

Grace Period

If the Surrender Value is insufficient to satisfy a Monthly Deduction on the
Monthly Deduction Day, We will allow You 61 days of grace for payment of an
amount sufficient to continue coverage. We may require payment of the amount
necessary to keep the Policy in force for the current month plus two additional
months.

Written notice will be mailed to Your last known address, according to Our
records, not less than 61 days before termination of the Policy. This notice
will also be mailed to the last known address of any assignee of record.

During the days of grace the Policy will stay in force. If the Second Death
occurs during the days of grace, We will deduct an amount required to keep the
Policy in force from the Death Benefit.

If payment is not made within 61 days after the Monthly Deduction Day, the
Policy will terminate without value at the end of the Grace Period. The
termination will be effective on the Monthly Deduction Day for the first unpaid
Monthly Deduction.

Reinstatement of a Lapsed Policy

If the Policy terminates as provided in its Grace Period benefit, it may be
reinstated. To reinstate the Policy, the following conditions must be met:

- -- The Policy has not been fully surrendered.

- -- You must apply for reinstatement within 5 years after the date of termination
and before the Maturity Date.

- -- We must receive evidence of insurability, satisfactory to Us, on each
Insured.

- -- We must receive a premium payment sufficient to keep the Policy in force for
the current month plus two additional months.

Supplemental Benefits will be reinstated only with Our consent. (See Grace
Period and Premium Payments)

Coverage Beyond Maturity

Prior to the younger Insured's Attained Age 100, you may elect to continue
coverage beyond the Maturity Date provided the Policy is in force on the
Maturity Date. If elected, on the Maturity Date no proceeds will be paid and the
Separate Account Value of the Policy will be transferred to the Fixed Account
where it will continue to earn interest as described in the Policy (extra
benefit riders terminate at the younger Insured's Attained Age 100). Monthly
Deduction amounts will continue to be deducted, with a Cost of Insurance rate
equal to zero. Only payments required to keep the Policy in force will be
accepted beyond the Maturity Date.

The Policy may be subject to certain adverse tax consequences when continued
beyond the Maturity Date.

All rights and benefits as described in the Policy will be available before the
Second Death, and Proceeds will be payable on the Second Death.

Coverage beyond the Maturity Date may not be available in all states.

<PAGE>

Right to Defer Payment

Payments of any Separate Account Value will be made within 7 days after Our
receipt of Your Written Request. However, the Company reserves the right to
suspend or postpone the date of any payment of any benefit or values for any
Valuation Period (1) when the New York Stock Exchange is closed (except holidays
or weekends); (2) when trading on the Exchange is restricted; (3) when an
emergency exists as determined by the SEC so that disposal of the securities
held in the Funds is not reasonably practicable or it is not reasonably
practicable to determine the value of the Funds' net assets; or (4) during any
other period when the SEC, by order, so permits for the protection of security
holders. For payment from the Separate Account in such instances, We may defer
payment of Full Surrender and Partial Surrender Values, any Death Benefit in
excess of the current Specified Amount, and any portion of the Loan Value.

Payment of any Fixed Account Value may be deferred for up to six months, except
when used to pay amounts due Us.

Policy Loans

We will grant loans at any time after the expiration of the Right of Policy
Examination and before the Maturity Date. The amount of the loan will not be
more than the Loan Value. Unless otherwise required by state law, the Loan Value
for this Policy is 90% of the sum of the Fixed Account Value and the Separate
Account Value less the Surrender Charge applicable at the time of the loan.

The amount of the loan will be transferred out of the Fixed Account and Separate
Account Values in proportion to the value of the Fixed Account and each Variable
Option. The loan amount increases the Loan Account Value. The loan may be repaid
in full or in part at any time prior to the Maturity Date as long as this Policy
is in force and one or both Insureds is alive. The amount necessary to repay all
loans in full is the Loan Account Value plus any accrued interest. Loan
repayments will be allocated to the Fixed Account Value and the Separate Account
Value in the same proportion in which the loan was taken. The Loan Account Value
will be reduced by payments You identify as loan repayments. All other payments
will be considered premium payments.

The amount of interest earned on the Loan Account Value and the amount of
interest charged to You on a loan depends on whether the loan is considered
preferred. A preferred loan is a loan beginning in the 11th Policy Year or upon
the younger Insured's Attained Age 65, whichever is later, and on each Policy
Anniversary thereafter, that is taken from the Separate Account Value. The
interest rate charged on the preferred loan is 4.5%, and the interest rate
credited to the Loan Account Value is 4%.

For all other loans, the loan interest rate charged is 8%. The Loan Account
Value will earn interest at the guaranteed rate of 4%; however, We may credit
interest in excess of this rate.

Interest is due and payable on the next Policy Anniversary, the date this Policy
ends or upon full repayment of the Loan Account Value. Any interest not paid
when due will be added to the Loan Account Value on the Policy Anniversary and
will itself bear interest on the same terms.

An outstanding loan amount will decrease the Surrender Value available under the
Policy. For example, if a Policy has a Surrender Value of $10,000, You may take
a loan of 90% or $9,000, leaving a new Surrender Value of $1,000. If a loan is
not repaid, it will permanently decrease the Surrender Value which could cause
the Policy to lapse. In addition, the Death Benefit will be decreased because of
an outstanding Policy Loan. Furthermore, even if the loan is repaid, the amount
of the Death Benefit and the Policy's Surrender Value may be permanently
affected since the Loan Account Value is not credited with the investment
experience of the Funds.

Policy Changes

You may make changes to Your Policy, as described below, by submitting a Written
Request to Our Home Office. Supplemental Policy Specifications and/or a notice
confirming the change will be sent to You once the change is completed.

<PAGE>

Increase in Specified Amount

Increases will be allowed at any time while this Policy is in force while both
Insureds are alive subject to the following conditions. The increase may be
rescinded by You within 10 days of receipt of the supplemental Policy
Specifications or notice of the right to rescind the increase, whichever is
later.

- -- Satisfactory evidence of insurability on both Insureds will be required.

- -- The Issue Date for any increase will be shown in the supplemental Policy
Specifications.

- -- The minimum increase is $10,000.

- -- The Surrender Value immediately after an increase must be at least three
times the sum of (a) the most recent Monthly Deduction from the Total Account
Value and (b) the Specified Amount of the increase multiplied by the
applicable Cost of Insurance Rate divided by 1000.

- -- An increase in the Specified Amount will increase the Surrender Charge.

- -- The 5-year period as described in the No Lapse Coverage provision will
restart on the Issue Date of the increase.

- -- The Basic Monthly Premium and the Guaranteed Death Benefit Premium will be
adjusted when the Specified Amount is increased.

Decrease in Specified Amount

You may decrease the Specified Amount of this Policy after the 5th Policy Year,
however:

- -- We will not allow a decrease in the Specified Amount if the Specified Amount
would be reduced below the minimum Specified Amount of $500,000.

- -- For a decrease in the Specified Amount, the Issue Date will be the Monthly
Deduction Day on or next following the date on which Your Written Request is
received.

- -- The decrease will reduce any past increases in the reverse order in which
they occurred.

- -- The Basic Monthly Premium and Guaranteed Death Benefit Premium will be based
on the new Specified Amount.

- -- There will be no change in the Surrender Charge.

Change in Death Benefit Option

Any change in the Death Benefit Option is subject to the following conditions:

- -- If the change decreases the Specified Amount below the minimum of $500,000,
We will increase the Specified Amount to $500,000.

- -- The change will take effect on the Monthly Deduction Day on or next following
the date on which Your Written Request is received.

- -- There will be no change in the Surrender Charge.

- -- Evidence of insurability may be required.

- -- Changes from Option 1 to 2 will be allowed at any time while this Policy is
in force. The Specified Amount will be reduced to equal the Specified Amount
less the Total Account Value at the time of the change. In certain
circumstances, the change may result in loss of the assurance that the
Guaranteed Death Benefit Premium will keep the Policy in force to the younger
Insured's Attained Age 100.

- -- Changes from Option 2 to 1 will be allowed at any time while this policy is
in force. The new Specified Amount will be increased to equal the Specified
Amount plus the Total Account Value as of the date of the change.

(See Surrender Charge and Right of Policy Examination)

<PAGE>

Right of Policy Examination

The Policy has a free look period during which You may examine the Policy. If
for any reason You are dissatisfied, it may be returned to Aetna or its
representative within 10 days of receipt of the Policy or 10 days after Aetna
mails notice of right to cancel, whichever is later. Return the Policy to
Aetna, Individual Life Insurance, at 151 Farmington Avenue, Hartford,
Connecticut 06156. Upon its return, the Policy will be deemed void from its
beginning. The amount refunded will be (a) the difference between payments made
and amounts allocated to Variable Life Account B plus (b) the value of amount
allocated to Variable Life Account B on the date the returned contract is
received by Aetna plus (c) any charges made under this Policy's terms on the
amounts allocated to Variable Life Account B or (d) where required by State law,
the entire payment made.

The Right of Policy Examination also applies to Increases in the Specified
Amount. The increase may, for any reason, be rescinded by You within 10 days of
receipt of the Supplemental Policy Specifications and/or notice of the right to
rescind the increase, whichever is later.

Supplemental Benefits

The supplemental benefits currently available as riders to the Policy include
the following (may not be available in all states):

[bullet] Disability Benefit Rider--provides for a credit of the benefit amount
described in the Policy in the event of the total disability of the
covered Insured.

[bullet] Split Option Amendment Rider--allows You, upon election, to exchange
the Policy for two individual policies, one on each Insured named in
the Policy, subject to the terms of the rider.

The exercise of the option provided by this Rider may have tax
consequences. You should consult a competent tax advisor if you are
considering purchasing this rider or exercising its option.

[bullet] Four Year Term Rider--provides non-participating term insurance for the
first four Policy Years. The benefit amount described in the Policy
increases the Policy's Death Benefit.

Other riders for supplemental benefits may become available under the Policy
from time to time. The charges for each of these riders are illustrated in Your
Policy.

Death Benefit

The Death Benefit under the Policy will be paid in a lump sum unless You or the
beneficiary have elected that it be paid under one or more of the Settlement
Options.

Payment of the Death Benefit may be delayed if the Policy is being contested.
You may elect a Settlement Option for the beneficiary and deem it irrevocable.
You may revoke or change a prior election. The beneficiary may make or change an
election within 90 days of the Second Death, unless You have made an irrevocable
election. The beneficiary who has elected Settlement Option 1 may elect another
option after the Second Death.

All or part of the Death Benefit may be applied under one of the Settlement
Options, or such options as We may choose to make available in the future.

If the Policy is assigned as collateral security, We will pay any amount due the
assignee in a lump sum. Any excess Death Benefit due will be paid as elected.

(See Right to Defer Payment and Policy Settlement)

<PAGE>

Policy Settlement

Proceeds in the form of Settlement Options are payable by the Company upon the
death of the Surviving Insured or upon Full Surrender or upon maturity and may
be paid in a lump sum, in whole or in part, under any of the Settlement Options
available under the Policy.

A Written Request may be made to elect, change or revoke a Settlement Option
before payments begin under any Settlement Option. This request will take effect
upon its filing at our Home Office. If no Settlement Option has been elected by
You when the Death Benefit becomes payable to the beneficiary, that beneficiary
may make the election.

The first variable Settlement Option payment will be as of the tenth Valuation
Period following Our receipt of the properly-completed election form.

Settlement Options are funded by Variable Annuity Account B, a separate account
of the Company established in 1976 in accordance with the insurance laws of the
State of Connecticut. Variable Annuity Account B was formed for the purpose of
segregating assets attributable to the variable portion of the variable annuity
contracts and variable life settlement options from the Company's other assets.
Variable Annuity Account B is registered as a unit investment trust under the
Investment Company Act of 1940, and meets the definition of separate account
under the federal securities laws. A Variable Annuity Account B prospectus will
be provided in connection with selecting a Settlement Option.

Settlement Options

The following Settlement Options are available under the Policy:

Option 1--Payment of interest on the sum left with Us.

Option 2--Payments for a stated number of years, but no more than thirty.

Option 3--Payments for the lifetime of the Annuitant. If also chosen, We will
guarantee payments for 60, 120, 180, or 240 months.

Option 4--Life Income Based Upon the Lives of Two Payees -- an annuity will be
paid during the joint lifetimes of two Annuitants. Payments will continue until
both Annuitants have died. When this option is chosen, a choice must be made of:

a) 100% of the payment to continue after the first death;

b) 662/3% of the payment to continue after the first death;

c) 50% of the payment to continue after the first death;

d) Payments for a minimum of 120 months, with 100% of the payment to continue
after the first death; or

e) 100% of the payment to continue to the survivor if the survivor is the
original payee, and 50% of the payment to continue to the survivor if the
survivor is the second payee.

In most states, no election may be made that would result in a first payment of
less than $25 or that would result in total yearly payments of less than $120.
If the value of the Policy is insufficient to elect an option for the minimum
amount specified, a lump-sum payment must be elected.

Calculation of Settlement Option Values

The value of the Settlement Options will be calculated as set forth in the
Policy.

<PAGE>

The Company

The Aetna Life Insurance and Annuity Company is a stock life insurance company
organized under the insurance laws of the State of Connecticut in 1976. Through
a merger, it succeeded to the business of Aetna Variable Annuity Life Insurance
Company (formerly Participating Annuity Life Insurance Company organized in
1954). The Company is engaged in the business of issuing life insurance policies
and annuity contracts in all states of the United States. The Company is a
wholly owned subsidiary of Aetna Retirement Holdings Inc., which is in turn a
wholly owned subsidiary of Aetna Retirement Services, Inc. and an indirect
wholly owned subsidiary of Aetna Inc.

The Company is registered as a broker-dealer under the Securities Exchange Act
of 1934 and is a member of the National Association of Securities Dealers. As
such it serves as the principal underwriter for the securities offered hereunder
and also acts as the principal underwriter for Variable Annuity Accounts B, C
and G (separate accounts of the Company registered as unit investment trusts),
and Variable Annuity Account I (a separate account of Aetna Insurance Company of
America registered as a unit investment trust). Additionally, the Company is
registered as an investment adviser under the Investment Advisers Act of 1940
and, as such, is the investment adviser for Aetna Variable Fund, Aetna Income
Shares, Aetna Variable Encore Fund, Aetna Investment Advisers Fund, Inc., Aetna
GET Fund, Aetna Series Fund, Inc., Aetna Generation Portfolios, Inc. and Aetna
Variable Portfolios, Inc. The Company is also the depositor of Variable Annuity
Accounts B, C and G.

Directors & Officers

<PAGE>

<TABLE>
<CAPTION>
Name and Address* Position with Company Business Experience During Past 5 Years
- ------------------- ------------------------------------- ------------------------------------------------------
<S> <C> <C>
Gail P. Johnson Director and Vice President Vice President, Service and Retain Customers
(since February 1996); Vice President, Defined
Benefit Services (September 1994--February
1996); Vice President, Plan Services, Pensions and
Financial Services (December 1992--September
1994); Managing Director, Business Strategy (July
1991--December 1992).
John Y. Kim Director and Senior Vice President President (since December 1995), Aeltus
Investment Management, Inc.; Chief Investment
Officer (since May 1994), Aetna Life and Casualty
Company; Managing Director (September 1993--
April 1994), Mitchell Hutchins Institutional
Investors (New York, New York); Vice President
and Senior Portfolio Manager (October 1991--
August 1993), Aetna Services, Inc. (formerly Aetna
Life and Casualty Company).
Shaun P. Mathews Director and Vice President Vice President, Products Group (since February
1996); Senior Vice President, Strategic Markets and
Products (February 1993--February 1996); Senior
Vice President, Mutual Funds (March 1991--
February 1993), Aetna Life Insurance and Annuity
Company.
Glen Salow Director and Vice President Vice President, Information Technology (since
February 1996), Vice President, Information
Technology, Investments and Financial Services
(February 1995--February 1996); Vice President,
Investment Systems (1992--1995); AIT -- Aetna
Life Insurance and Annuity Company; Senior Vice
President (December 1986--August 1992),
Lehman Brothers.
Creed R. Terry Director and Vice President Vice President, Select and Manage Markets
(since February 1996), Market Strategist (August
1995--February 1996), Aetna Life Insurance and
Annuity Company; President (1991--1995),
Chemical Technology Corporation (a subsidiary of
Chemical Bank).
Kirk P. Wickman Vice President, General Counsel Vice President, General Counsel and Secretary
and Secretary (since November 1996), Aetna Life Insurance and
Annuity Company; Vice President and Counsel
(June 1992--November 1996), Aetna Life
Insurance Company.
Deborah Koltenuk Vice President and Treasurer, Vice President, Investment Planning and Financial
Corporate Controller Reporting (April 1996 to July 1996), Aetna Life
Insurance Company; Vice President, Investment
Planning and Financial Reporting (October 1994
to April 1996) Aetna Life Insurance Company,
The Aetna Casualty and Surety Company and
The Standard Fire and Insurance Company.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Name and Address* Position with Company Business Experience During Past 5 Years
- -------------------- --------------------------- ---------------------------------------------
<S> <C> <C>
Frederick D. Kelsven Vice President and Chief Director of Compliance (January 1985 to
Compliance Officer September 1996), Nationwide Life Insurance
Company.
</TABLE>

* The address of all Directors and Officers listed is 151 Farmington Avenue,
Hartford, Connecticut.

These individuals may also be directors and/or officers of other affiliates
of the Company.

Directors, officers and employees of the Company are covered by a blanket
fidelity bond in the amount of $60 million issued by Aetna Casualty and Surety
Company.

Additional Information

Reports to Policyowners

The Company will maintain all records relating to the Separate Account. At least
once in each Policy Year, the Company will send You a statement containing the
following information:

(1) A statement of changes (including a statement of monthly deductions and
investment results and any interest earnings for the report period) in the
Total Account Value and Surrender Value since the prior report or since the
Issue Date, if there has been no prior report;

(2) Surrender Value, Death Benefit, and any Loan Account Value as of the Policy
Anniversary; and

(3) a projection of the Total Account Value, Loan Account Value and Surrender
Value as of the succeeding Policy Anniversary.

If any portion of Your Total Account Value is allocated to the Separate Account,
You will receive such additional periodic reports as may be required by the SEC.
Some state laws require additional reports; these requirements vary from state
to state.

Right to Instruct Voting of Fund Shares

In accordance with our view of present applicable law, We will vote the shares
of each of the Funds held in the Separate Account in accordance with
instructions received from Policyowners having a voting interest in the Funds.
Policyowners having such an interest will receive periodic reports relating to
the Fund, proxy material and a form for giving voting instructions. The number
of shares which You have a right to vote will be determined as of a record date
established by the Fund. The number of votes that You are entitled to direct
with respect to a Fund will be determined by dividing the portion of Your Total
Account Value attributable to that Fund by the net asset value of one share in
the Fund. Voting instructions will be solicited by written communication at
least 14 days before such meeting.

The votes will be cast at meetings of the shareholders of the Fund and will be
based on instructions received from Policyowners. However, if the Investment
Company Act of 1940 or any regulations thereunder should be amended or if the
present interpretation thereof should change, and as a result We determine that
We are permitted to vote the shares of the Fund in our own right, We may elect
to do so.

Fund shares for which no timely instructions are received and Fund shares which
are not otherwise attributable to Policyowners will be voted by Us in the same
proportion as the voting instructions which are received for all Policies
participating in each Fund through the Separate Account.

Disregard of Voting Instructions

When required by state insurance regulatory authorities, We may disregard voting
instructions if the instructions require that the shares be voted so as to cause
a change in the sub-classification or investment objectives of a Fund or to
approve or disapprove an investment advisory contract for a Fund. In addition,
We may disregard voting instructions initiated

<PAGE>

by a Policyowner in favor of changes in the investment policy or the investment
adviser of the Fund if We reasonably disapprove of such changes.

A change would be disapproved only if the proposed change is contrary to state
law or prohibited by state regulatory authorities or if We determine that the
change would have an adverse effect on the Separate Account if the proposed
investment policy for a Fund would result in overly speculative or unsound
investments. In the event that We do disregard voting instructions, a summary of
that action and the reasons for such action will be included in the next annual
report to Policyowners.

State Regulation

With the exception of Guam, Puerto Rico and the Virgin Islands, the Policy will
be offered for sale in all jurisdictions where the Company is authorized to do
business and where the Policy has been approved by the appropriate Insurance
Department or regulatory authorities.

The Company is subject to regulation and supervision by the Insurance Department
of the State of Connecticut, which periodically examines its affairs. The
Company is also subject to the insurance laws and regulations of all
jurisdictions where it is authorized to do business. We are required to submit
annual statements of our operations, including financial statements, to the
insurance departments of the various jurisdictions in which We do business, for
the purposes of determining solvency and compliance with local insurance laws
and regulations.

Legal Matters

The Company knows of no material legal proceedings pending to which either the
Separate Account or the Company is a party or which would materially affect the
Separate Account. The legal validity of the securities described in the
prospectus has been passed on by Counsel for the Company.

The Registration Statement

A Registration Statement under the Securities Act of 1933 has been filed with
the SEC relating to the offering described in this Prospectus. This Prospectus
does not include all of the information set forth in the Registration Statement,
certain portions of which have been omitted pursuant to the rules and
regulations of the SEC. The omitted information may be obtained at the SEC's
principal office in Washington, D.C., upon payment of the SEC's prescribed fees.

Distribution of the Policy

The Company will serve as underwriter of the securities offered hereunder as
defined by the federal securities laws. The Company is registered as a
broker-dealer with the SEC and is a member of the National Association of
Securities Dealers, Inc. The Company will contract with one or more registered
broker-dealers, including broker-dealers affiliated with it ("Distributors"), to
offer and sell the Policies. The Company may also offer and sell policies
directly. All persons selling the Policies will be registered representatives of
the Distributors, and will also be licensed as insurance agents to sell variable
life insurance.

The Company may also contract with independent third party broker-dealers who
will act as wholesalers by assisting the Company in finding broker-dealers to
offer and sell the Policies. These parties may also provide training, marketing
and other sales related functions for the Company and other broker-dealers and
may provide certain administrative services to the Company in connection with
the Policies. The Company may pay such parties compensation based on premium
payments for the Policies purchased through broker-dealers selected by the
wholesaler. In addition, some sales personnel may receive various types of
non-cash compensation as special sales incentives, including trips and
educational and/or business seminars. Supervisory and other management personnel
of the Company may receive compensation that will vary based on the relative
profitability to the Company of the funding options you select. Funding options
that invest in Funds advised by the Company or its affiliates are generally more
profitable to the Company.

Salespersons and their supervising broker-dealers will be compensated for sales
of the Policy on a commission and service fee basis. Commissions will equal 50%
of the sum of the first-year premiums up to a premium amount ("target

<PAGE>

premium") established by the Company and 3% for that part of the sum that is
greater than the target premium. Commissions will equal 3% of any additional
premiums paid during Policy Years 2 through 10. In the event of an increase in
Specified Amount, the commission will equal 47% of the target premium for the
additional Specified Amount and 3% for premiums paid until the tenth year from
the increase. In addition, certain production, persistency and managerial
bonuses, as well as expense allowances, may be paid.

Independent Auditors

KPMG Peat Marwick LLP, CityPlace II, Hartford, Connecticut, are the independent
auditors for the Separate Account and for the Company. The services provided to
the Separate Account include primarily the examination of the Separate Account's
financial statements and the review of filings made with the SEC.

Tax Matters

General

The following is a discussion of the federal income tax considerations relating
to the Policy. This discussion is based on the Company's understanding of
federal income tax laws as they now exist and are currently interpreted by the
Internal Revenue Service ("IRS"). These laws are complex, and tax results may
vary among individuals. A person or persons contemplating the purchase of or the
exercise of elections under the Policy described in this Prospectus should seek
competent tax advice.

Federal Tax Status of the Company

The Company is taxed as a life insurance company in accordance with the Internal
Revenue Code of 1986, as amended ("Code"). For federal income tax purposes, the
operations of each Separate Account form a part of the Company's total
operations and are not taxed separately, although operations of each Separate
Account are treated separately for accounting and financial statement purposes.

Both investment income and realized capital gains of the Separate Account (i.e.,
income, capital gains and dividends distributed to the Separate Account by the
Funds) are reinvested without tax since the Code does not impose a tax on the
Separate Account for these amounts. The Company reserves the right, however, to
make a deduction for such taxes should they be imposed with respect to such
items in the future.

Life Insurance Qualification

Section 7702 of the Code includes a definition of life insurance for tax
purposes. These rules place limits on the relationship between the death benefit
and the account value. If necessary, we will increase your death benefit in
order to maintain compliance with Section 7702. An increase in death benefit may
be a "material change" and may trigger a test to determine whether the Policy
has become a "Modified Endowment Contract" (See--Tax Matters--Modified Endowment
Contracts). An increase in death benefit will also trigger an increase in Cost
of Insurance charges. The Secretary of the Treasury has been granted authority
to prescribe regulations to carry out the purposes of Section 7702, and proposed
regulations governing mortality charges were issued in 1991. The Company
believes that the Policy meets the statutory definition of life insurance. As
such, and assuming the diversification standards of Section 817(h) (discussed
below) are satisfied, then except in limited circumstances (a) death benefits
paid under the Policy should generally be excluded from the gross income of the
beneficiary for federal income tax purposes under Section 101(a)(1) of the Code,
and (b) a Policyowner should not generally be taxed on the cash value under a
Policy, including increments thereof, prior to actual receipt. The principal
exceptions to these rules are corporations that are subject to the alternative
minimum tax, and thus may be subject to tax on increments in the Policy's Total
Account Value, and Policyowners who acquire a Policy in a "transfer for value"
and thus can become subject to tax on the portion of the Death Benefit which
exceeds the total of their cost of acquisition and subsequent premium payments.

<PAGE>

The Company intends to comply with any future final regulations issued under
Sections 7702 and 817(h) of the Code, and therefore reserves the right to make
such changes as it deems necessary to ensure such compliance. Any such changes
will apply uniformly to affected Policyowners and will be made only after
advance written notice.

General Rules

Upon the surrender or cancellation of any Policy, whether or not it is a
Modified Endowment Contract, the Policyowner will be taxed on the Surrender
Value only to the extent that it exceeds the gross premiums paid less prior
untaxed withdrawals. The amount of any unpaid Policy Loans will, upon surrender,
be added to the Surrender Value and will be treated for this purpose as if it
had been received.

Assuming the Policy is not a Modified Endowment Contract, the proceeds of any
Partial Surrenders are generally not taxable unless the total amount received
due to such surrenders exceeds total premiums paid less prior untaxed Partial
Surrender amounts. However, Partial Surrenders made within the first 15 Policy
Years may be taxable in certain limited instances where the Surrender Value plus
any unpaid Policy debt exceeds the total premiums paid less the untaxed portion
of any prior Partial Surrenders. This result may occur even if the total amount
of any Partial Surrenders does not exceed total premiums paid to that date.

Loans received under the Policy will ordinarily be considered indebtedness of
the Policyowner, and assuming the Policy is not considered a Modified Endowment
Contract, Policy Loans will not be treated as current distributions subject to
tax. Generally, amounts of loan interest paid by individuals will be considered
nondeductible "personal interest."

Modified Endowment Contracts

A class of contracts known as "Modified Endowment Contracts" has been created
under Section 7702A of the Code. The tax rules applicable to loan proceeds and
proceeds of a Partial Surrender of any Policy that is considered to be a
Modified Endowment Contract will differ from the general rules noted above.

A contract will be considered a Modified Endowment Contract if it fails the
"7-pay test." A Policy fails the 7-pay test if, at any time in the first seven
Policy Years, the amount paid into the Policy exceeds the amount that would have
been paid had the Policy provided for the payment of seven (7) level annual
premiums. In the event of a distribution under the Policy, the Company will
notify the Policyowner if the Policy is a Modified Endowment Contract.

Each Policy is subject to testing under the 7-pay test during the first seven
Policy Years and for the seven Policy Years following the time a material change
takes effect. A material change, for these purposes, includes the exchange of a
life insurance policy for another life insurance policy or the conversion of a
term life insurance policy into a whole life or universal life insurance policy.
In addition, an increase in the future benefits provided constitutes a material
change unless the increase is attributable to (1) the payment of premiums
necessary to fund the lowest Death Benefit payable in the first seven Policy
Years or (2) the crediting of interest or other earnings with respect to such
premiums. A reduction in death benefits during the first seven Policy Years, or
after the seventh year where the reduced death benefit is lower than the lowest
death benefit provided during the first seven years, may also cause a Policy to
be considered a Modified Endowment Contract.

If the Policy is considered to be a Modified Endowment Contract, the proceeds of
any Partial Surrenders, any Policy Loans and most assignments will be currently
taxable to the extent that the Policy's Total Account Value immediately before
payment exceeds gross premiums paid (increased by the amount of loans previously
taxed and reduced by untaxed amounts previously received). These rules may also
apply to Policy Loans or Partial Surrender proceeds received during the two-year
period prior to the time that a Policy becomes a Modified Endowment Contract. If
the Policy becomes a Modified Endowment Contract, it may be aggregated with
other Modified Endowment Contracts purchased by You from the Company (and its
affiliates) during any one calendar year for purposes of determining the taxable
portion of withdrawals from the Policy.

<PAGE>

A penalty tax equal to 10% of the amount includable in income will apply to the
taxable portion of the proceeds of any Policy Surrender or Policy Loan received
by any Policyowner of a Modified Endowment Contract who is not an individual.
Taxable policy distributions made to an individual who has not reached the age
of 591/2 will also be subject to the penalty tax unless those distributions are
attributable to the individual becoming disabled, or are part of a series of
equal periodic payments made not less frequently than annually for the life or
life expectancy of such individual (i.e., an annuity).

Diversification Standards

Section 817(h) of the Code provides that separate account investments (or the
investments of a mutual fund, the shares of which are owned by separate accounts
of insurance companies) underlying the Policy must be "adequately diversified"
in accordance with Treasury regulations in order for the Policy to qualify as
life insurance. The Treasury Department has issued regulations prescribing the
diversification requirements in connection with variable contracts. The Separate
Account, through the Funds, intends to comply with these requirements.

Investor Control

In certain circumstances, owners of variable contracts may be considered the
owners for federal income tax purposes of the assets of the separate account
used to support their contracts. In those circumstances, income and gains from
separate account assets would be includable in the variable contractowner's
gross income. In several rulings published prior to the enactment of Section
817(h), the IRS stated that a variable contractowner will be considered the
owner of separate account assets if the contractowner possesses incidents of
ownership in those assets, such as the ability to exercise investment control
over the assets. The Treasury Department has also announced, in connection with
the issuance of regulations under Section 817(h) concerning diversification,
that those regulations "do not provide guidance concerning the circumstances in
which investor control of the investments of a segregated asset account may
cause the investor (i.e., You), rather than the insurance company, to be treated
as the owner of the assets in the account." This announcement also stated that
guidance would be issued by way of regulations or rulings on the "extent to
which policyholders may direct their investments to particular Funds without
being treated as owners of the underlying assets." As of the date of this
Prospectus, no such guidance has been issued.

The ownership rights under the Policy are similar to, but different in certain
respects from those described by the IRS in pre-Section 817(h) rulings in which
it was determined that Policyowners were not owners of separate account assets.
For example, a Policyowner has additional flexibility in allocating premium
payments and account values. While the Company does not believe that these
differences would result in a Policyowner being treated as the owner of a pro
rata portion of the assets of the Separate Account, there is no regulation or
ruling of the IRS that confirms this conclusion. In addition, the Company does
not know what standards will be set forth, if any, in the regulations or rulings
which the Treasury Department has stated it expects to issue. The Company
therefore reserves the right to modify the Policy as necessary to attempt to
prevent a Policyowner from being considered the owner of a pro rata share of the
assets of the Separate Account.

Other Tax Considerations

Business-owned life insurance may be subject to certain additional rules.
Section 264(a)(1) of the Code generally prohibits employers from deducting
premiums on policies covering officers, employees or other financially
interested parties where the employer is a beneficiary under the Policy.
Additions to the Policy's Total Account Value may also be subject to tax under
the corporation alternative minimum tax provisions. In addition, Section
264(a)(4) of the Code limits the Policyowner's deduction for interest on loans
taken against life insurance covering the lives of officers, employees, or
others financially interested in the Policyowner's trade or business. Under
current tax law, interest may generally be deducted on an aggregate total of
$50,000 of loans per covered life only with respect to life insurance policies
covering each officer, employee or others who may have a financial interest in
the Policyowner's trade or business, and are considered key persons.

<PAGE>

Generally, a key person means an officer or a 20 percent owner. However, the
number of key persons will be limited to the greater of (a) 5 individuals, or
(b) the lesser of 5 percent of the total officers and employees of the tax payor
or 20 individuals. Deductible interest for these contracts will be capped based
on applicable Moody's Corporate Bond Rate.

Depending on the circumstances, the exchange of a policy, a change in the
Policy's Death Benefit Option, a Policy Loan, a Full or Partial Surrender, a
change in Ownership or an assignment of the Policy may have federal income tax
consequences. In addition, federal, state and local transfer, estate,
inheritance and other tax consequences of policy ownership, premium payments and
receipt of policy proceeds depend on the circumstances of each Policyowner or
beneficiary. Any person concerned about these tax implications should consult a
competent tax adviser before initiating any transaction.

Misc. Policy Provisions

The Policy

The Policy which You receive, the application You make when You purchase the
Policy, any applications for any changes approved by Us and any riders
constitute the whole contract. Copies of all applications are attached to and
made a part of the Policy.

Application forms are completed by the applicants and forwarded to the Company
for acceptance. Upon acceptance the Policy is prepared, executed by duly
authorized officers of the Company, and forwarded to You.

We reserve the right to make a change in the Policy; however, we will not change
any terms of the Policy beneficial to You. Only the President, Executive Vice
President or the Corporate Secretary may agree to a change in the Policy, and
then only in writing.

Payment of Benefits

All benefits are payable at Our Home Office. We may require submission of the
Policy before We grant Policy Loans, make changes or pay benefits.

Suicide and Incontestability

Suicide Exclusion

In most states, if one or both Insureds die by suicide, while sane or insane,
within 2 years from the Issue Date of this Policy, this Policy will end and We
will pay:

1. the difference between payments made and amounts allocated to the Separate
Account; plus

2. the Separate Account Value; plus

3. any charges made under this Policy's terms on the Separate Account Value;
less

4. the sum of:

(a) the Loan Account Value transferred from the Fixed Account Value; plus

(b) the interest due on the Loan Account Value; plus

(d) any interest earned on the Loan Account Value transferred to the
Separate Account Value.

In most states, if one or both Insureds die by suicide while sane or insane,
within 2 years from the Issue Date of any increase in coverage, We will pay only
the Monthly Deductions for the increase in coverage.

<PAGE>

In most states, if one or both Insureds die by suicide while sane or insane,
more than 2 years from the Issue Date of this Policy but within 2 years from the
Issue Date of any increase in coverage, We will pay:

1. the Proceeds on death for any coverage in effect more than 2 years from the
Issue Date of this Policy; plus

2. the Monthly Deductions for the increase in coverage.

All amounts will be calculated as of the date of the suicide.

Incontestability

In most states, with respect to statements made in the initial application or
any Subsequent Application for each Insured: We will not contest this Policy
after it has been in force during the lifetime of each Insured for 2 years from
its Issue Date.

In most states, with respect to statements made in any subsequent application
for one or both Insureds: We will not contest coverage relating to subsequent
applications after coverage has been in force during the lifetime of each
Insured for 2 years from the Issue Date of such coverage or from the effective
date of any reinstatement.

If this Policy is contested, Your rights or the Beneficiary's rights may be
affected.

Protection of Proceeds

To the extent provided by law, the proceeds of the Policy are subject neither to
claims by a beneficiary's creditors nor to any legal process against any
beneficiary.

Nonparticipation

The Policy is not entitled to share in the divisible surplus of the Company. No
dividends are payable.

Changes in Owner and Beneficiary; Assignment

Unless otherwise stated in the Policy, You may change the Policyowner and the
beneficiary, or both, at any time while the Policy is in force. A request for
such change must be made in writing and sent to the Company at the Home Office.
After We have agreed, in writing, to the change, it will take effect as of the
date on which Your Written Request was signed.

The Policy may also be assigned. No assignment of a Policy will be binding on Us
unless made in writing and sent to Us at our Home Office. The Company will use
reasonable procedures to confirm that the assignment is authentic, including
verification of signature. Otherwise, We are not responsible for the validity of
any assignment. The rights of the Policyowner and the interest of the
beneficiary will be subject to the rights of any assignee of record.

Misstatement as to Age and/or Sex

If the age and/or the sex of one or both Insureds is misstated, the amount of
the Death Benefit will be adjusted to reflect the coverage that would have been
purchased by the most recent pre-Maturity Date Monthly Deduction at the correct
age and/or sex.

Performance Reporting and Advertising

From time to time, the Company may report different types of historical
performance for the Variable Options of the Separate Account available under the
Policy. The Company may report the average annualized total returns of the Funds
over various time periods. Such returns will reflect an annual reduction for
investment management fees and fund expenses, but not deductions at the separate
account or policy level for mortality and expense risk charges and policy
expenses, which, if included, would reduce performance. The Company will
accompany the returns of the Funds with at least one of the following: (i)
returns of the variable options for the same periods as shown for the Funds,
which will include, in addition to deduction for investment management fees and
Fund expenses, deductions under the Separate Account for the mortality and
expense risk charge of 0.90%, but not other charges under the policy; or (ii) an
illustration of Total Account Value and Surrender Values as of the performance
reporting date for hypothetical Insureds of a given age, sex, underwriting
classification, premium level and policy amount. Such illustrations will assume
for each Variable Option that 100% of each Net Premium was allocated to that
option. The illustrations of the Surrender Value will assume

<PAGE>

that all Fund charges, the mortality and expense risk charge and all other
Policy charges are deducted, including Premium Loads, Cost of Insurance charges,
administrative charges, Policy fees and Surrender Charges. The illustrations of
the Total Account Value will assume that all such charges except the Surrender
Charge are deducted.

We may also distribute sales literature that compares the percentage change in
the net asset values of the Funds or in Accumulation Unit Values for any of the
Variable Options to established market indices such as the Standard & Poor's 500
Stock Index and the Dow Jones Industrial Average or to the percentage change in
values of other mutual funds or variable options that have investment objectives
similar to the Fund or Variable Option being compared.

Illustrations of Death Benefit, Total Account Values and Surrender Values

The following pages provide a hypothetical illustration of how the Death
Benefit, Total Account Values, and Surrender Values of a Policy can change over
time for a Policy issued to two opposite gender 65-year old Insureds if the
investment return on the assets held in each Fund were a uniform, gross, annual
rate of 0%, 6%, and 12%, respectively, and are based upon a number of
assumptions.

There are two pages of values. One page illustrates the assumption that the
Guaranteed Maximum Cost of Insurance rates and other charges at guaranteed rates
are charged in all years. The other page illustrates the assumption that the
current scale of Cost of Insurance rates and other charges at current rates are
charged in all years. The Cost of Insurance rates vary by age and sex (where
permitted by state law).

The values shown in these illustrations vary according to assumptions used for
charges and gross rates of investment returns. The actual investment returns
experienced by the Policy and the charges deducted may be higher or lower than
those illustrated. The charges reflected on the first page consist of the
maximum allowable charges under the Policy, including 0.90% for mortality and
expense risks in all Policy Years and 10.00% for Premium Loads (assuming no
change in state premiums and federal tax laws); the first page also reflects
0.72% for expenses of the Funds based on the allocation described below. The
charges reflected on the second page consist of the current charges imposed
under the Policy, including 0.90% for mortality and expense risks in Policy
Years 1 through 10, 0.50% for mortality and expense risks in Policy Years 11
through 20, 0.25% for mortality and expense risks in Policy Years 21 and later,
and 8% for Premium Loads; the second page also reflects 0.72% for Fund expenses
based on the allocation described below. The charge for Fund expenses reflected
in the illustrations assumes that Total Account Values have been allocated
equally among all funds and represent a fixed average of the investment advisory
fees and other expenses charged by each of the Funds.

After deduction of these amounts, the illustrated gross annual investment rates
of return of 0%, 6%, and 12% correspond to approximate net annual rates of
- -1.62%, 4.38%, and 10.38%, respectively, during the first 10 Policy Years,
- -1.22%, 4.78%, and 10.78%, respectively, during Policy Years 11 through 20, and
- -0.97%, 5.03%, and 11.03%, respectively, thereafter on a current basis. On a
guaranteed basis, the illustrated gross annual investment rates of return of 0%,
6%, and 12% correspond to approximate net annual rates of -1.62%, 4.38%, and
10.38%, respectively.

The Death Benefit, Total Account Values, and Surrender Values would be different
from those shown if the gross annual investment rates of return averaged 0%, 6%,
and 12% over a period of years, but fluctuated above and below those averages
for individual Policy Years. The illustrations also assume that premiums are
paid as indicated, no Policy Loans are made, no increases or decreases in
Specified Amount are requested, no Death Benefit Option changes, and no Partial
Surrenders are made.

The hypothetical values shown in the tables do not reflect any Separate Account
charges for federal income taxes, since We are not currently making such
charges. However, such charges may be made in the future, and in that event, the
gross annual investment rate of return would have to exceed 0%, 6%, or 12% by an
amount sufficient to cover the tax charges in order to produce the Death
Benefit, Total Account Values, and Surrender Values illustrated.

<PAGE>

Upon request, We will provide a comparable personalized illustration based upon
the age, sex (if necessary), and underwriting classification of the proposed
Insureds, including the Specified Amount and premium requested, the proposed
frequency of premium payments and any available riders requested. A fee of $25
may be charged for each such illustration. The hypothetical gross annual
investment return assumed in such an illustration will not exceed 12%.

<PAGE>

FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
ON THE LIVES OF TWO INSUREDS
FEMALE AND MALE ISSUE AGE 65 PREFERRED NONSMOKER RISK
$30,330 ANNUAL GUARANTEED DEATH BENEFIT PREMIUM
FACE AMOUNT $1,000,000
DEATH BENEFIT OPTION 1
GUARANTEED CHARGES

Premiums Death Benefit
Accumulated Gross Annual Investment
at Return of
5% Interest -------------------------------------
Year Per Year Gross 0% Gross 6% Gross 12%
- ------ -------------- ----------- ----------- ------------
1 31847 1000000 1000000 1000000
2 65285 1000000 1000000 1000000
3 100396 1000000 1000000 1000000
4 137262 1000000 1000000 1000000
5 175972 1000000 1000000 1000000

6 216617 1000000 1000000 1000000
7 259294 1000000 1000000 1000000
8 304106 1000000 1000000 1000000
9 351157 1000000 1000000 1000000
10 400562 1000000 1000000 1000000

15 687202 1000000 1000000 1071859
20 1053035 1000000 1000000 1640877
25 1519941 1000000 1000000 2370026
30 2115845 1000000 1000000 3300419

Total Account Value Cash Surrender Value*
Annual Investment Return of Annual Investment Return of
------------------------------------ ------------------------------------
Year Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12%
- ------ ----------- ----------- ------------ ----------- ----------- -----------
1 25164 26747 28331 0 0 0
2 49592 54329 59258 5032 9769 14698
3 72882 82362 92626 30332 39812 50076
4 94933 110757 128591 54423 70247 88081
5 115636 139416 167333 77216 100996 128913

6 134844 168211 209043 98554 131921 172753
7 152369 196978 253925 118239 162848 219795
8 167947 225491 302191 136017 193561 270261
9 181240 253463 354088 151540 223763 324388
10 191849 280576 409950 164409 253136 382510

15 188192 392201 774259 172612 376621 758679
20 5010 418826 1307140 5010 418826 1307140
25 0 163864 2019090 0 163864 2019090
30 0 0 2980501 0 0 2980501

Assumes no Policy loan has been made. Guaranteed cost of insurance rates
assumed. Maximum mortality and expense risk and administrative expense charges.

If premiums are paid more frequently than annually, the Death Benefit could be,
and the Account Values and Surrender Values would be, less than those
illustrated.

These investment results are illustrative only and should not be considered a
representation of past or future investment results.

Actual investment results may be more or less than those shown and will depend
on a number of factors including the Policyowner's allocations, and the Fund's
rates of return. The Total Account Value and Surrender Value for a Policy would
be different from those shown if the actual investment rates of return averaged
0%, 6%, and 12% over a period of years, but fluctuated above or below those
averages for individual Policy Years. No representations can be made that these
rates of return will definitely be achieved for any one year or sustained over a
period of time.

*The Cash Surrender Values reflect the application of the maximum Surrender
Charge under the Contract and allowed in most states. The Surrender Charge may
be limited to a lower amount in certain states.

<PAGE>

6 216617 1000000 1000000 1000000
7 259294 1000000 1000000 1000000
8 304106 1000000 1000000 1000000
9 351157 1000000 1000000 1000000
10 400562 1000000 1000000 1000000

15 687202 1000000 1000000 1271283
20 1053035 1000000 1029350 2128617
25 1519941 1000000 1381587 3485340
30 2115845 1000000 1778403 5549141

Total Account Value Cash Surrender Value*
Annual Investment Return of Annual Investment Return of
------------------------------------ ------------------------------------
Year Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12%
- ------ ----------- ----------- ------------ ----------- ----------- -----------
1 25838 27460 29083 0 0 0
2 50931 55788 60842 6371 11228 16282
3 74877 84602 95131 32327 42052 52581
4 97577 113816 132117 57067 73306 91607
5 118924 143337 171995 80504 104917 133575

6 139593 173873 215809 103303 137583 179519
7 159988 205864 264371 125858 171734 230241
8 180112 239385 318204 148182 207455 286274
9 199970 274512 377891 170270 244812 348191
10 219567 311328 444079 192127 283888 416639

15 322343 536615 918313 306763 521035 902733
20 404318 819992 1695679 404318 819992 1695679
25 444419 1177012 2969257 444419 1177012 2969257
30 406852 1606017 5011248 406852 1606017 5011248

Assumes no Policy loan has been made. Current cost of insurance rates assumed.
Current mortality and expense risk and administrative expense charges.

If premiums are paid more frequently than annually, the Death Benefit could be,
and the Account Values and Surrender Values would be, less than those
illustrated.

These investment results are illustrative only and should not be considered a
representation of past or future investment results.

<PAGE>

FINANCIAL STATEMENTS

VARIABLE LIFE ACCOUNT B

Index

Statement of Assets and Liabilities...................................S-2
Statements of Operations and Changes in Net Assets....................S-4
Condensed Financial Information.......................................S-5
Notes to Financial Statements.........................................S-7
Independent Auditors' Report..........................................S-11

S-1
<PAGE>

Variable Life Account B

Statement of Assets and Liabilities - December 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investments, at net asset value: (Note 1)
Aetna Variable Fund; 2,867,163 shares (cost $85,576,983) .................................................. $ 92,871,626
Aetna Income Shares; 1,044,098 shares (cost $13,369,967) .................................................. 13,179,787
Aetna Variable Encore Fund; 689,138 shares (cost $8,985,791) .............................................. 9,092,185
Aetna Investment Advisers Fund, Inc.; 1,044,556 shares (cost $14,407,610) ................................. 15,791,541
Aetna Ascent Variable Portfolio; 43,217 shares (cost $529,733) ............................................ 545,378
Aetna Crossroads Variable Portfolio; 10,326 shares (cost $123,882) ........................................ 123,692
Aetna Legacy Variable Portfolio; 1,241 shares (cost $13,943) .............................................. 13,963
Alger American Small Capitalization Portfolio; 319,875 shares (cost $12,914,026) .......................... 13,086,083
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio; 632,915 shares (cost $12,213,929) .............................................. 13,310,213
Growth Portfolio; 162,252 shares (cost $4,757,662) ...................................................... 5,052,529
Overseas Portfolio; 28,255 shares (cost $494,386) ....................................................... 532,327
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio; 83,295 shares (cost $1,275,209) ................................................ 1,410,186
Contrafund Portfolio; 417,373 shares (cost $6,180,807) .................................................. 6,911,690
Janus Aspen Series:
Aggressive Growth Portfolio; 529,766 shares (cost $9,413,853) ........................................... 9,662,927
Balanced Portfolio; 242,000 shares (cost $3,331,182) .................................................... 3,574,345
Growth Portfolio; 462,582 shares (cost $6,608,169) ...................................................... 7,174,647
Short-Term Bond Portfolio; 383,937 shares (cost $3,801,075) ............................................. 3,827,848
Worldwide Growth Portfolio; 510,038 shares (cost $9,042,860) ............................................ 9,915,136
Scudder Variable Life Investment Fund -
International Portfolio; 801,151 shares (cost $9,370,711) ............................................... 10,615,255
TCI Portfolios, Inc. - Growth Fund; 633,059 shares (cost $6,629,436) ...................................... 6,482,525
-------------
NET ASSETS (cost $209,041,214) .............................................................................. $ 223,173,883
=============

Net assets represented by:

Policyholders' account values: (Notes 1 and 5)
Aetna Variable Fund:
Policyholders' account values ........................................................................... $ 92,871,626
Aetna Income Shares:
Policyholders' account values ........................................................................... 13,179,787
Aetna Variable Encore Fund:
Policyholders' account values ........................................................................... 9,092,185
Aetna Investment Advisers Fund, Inc.:
Policyholders' account values ........................................................................... 15,791,541
Aetna Ascent Variable Portfolio:
Policyholders' account values ........................................................................... 545,378
Aetna Crossroads Variable Portfolio:
Policyholders' account values ........................................................................... 123,692
Aetna Legacy Variable Portfolio:
Policyholders' account values ........................................................................... 13,963
Alger American Small Capitalization Portfolio:
Policyholders' account values ........................................................................... 13,086,083
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio:
Policyholders' account values ........................................................................... 13,310,213
Growth Portfolio:
Policyholders' account values ........................................................................... 5,052,529
Overseas Portfolio:
Policyholders' account values ........................................................................... 532,327
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio:
Policyholders' account values ........................................................................... 1,410,186
Contrafund Portfolio:
Policyholders' account values ........................................................................... 6,911,690
</TABLE>

S-2
<PAGE>

Variable Life Account B

Statement of Assets and Liabilities - December 31, 1996 (continued):

<TABLE>
<S> <C>
Janus Aspen Series:
Aggressive Growth Portfolio:
Policyholders' account values ............................................................................ $ 9,662,927
Balanced Portfolio:
Policyholders' account values ............................................................................ 3,574,345
Growth Portfolio:
Policyholders' account values ............................................................................ 7,174,647
Short-Term Bond Portfolio:
Policyholders' account values ............................................................................ 3,827,848
Worldwide Growth Portfolio:
Policyholders' account values ............................................................................ 9,915,136
Scudder Variable Life Investment Fund - International Portfolio:
Policyholders' account values ............................................................................ 10,615,255
TCI Portfolios, Inc. - Growth Fund:
Policyholders' account values ............................................................................ 6,482,525
-------------

$223,173,883
=============
</TABLE>

See Notes to Financial Statements

S-3
<PAGE>

Variable Life Account B

Statements of Operations and Changes in Net Assets

<TABLE>
<CAPTION>
Year Ended December 31,
1996 1995
------------- -------------
<S> <C> <C>
INVESTMENT INCOME:
Income: (Notes 1, 3 and 5)
Dividends ........................................................ $ 13,813,478 $ 12,965,237
Expenses: (Notes 2 and 5)
Valuation Period Deductions ...................................... (1,905,137) (1,149,801)
------------- -------------
Net investment income ............................................... 11,908,341 11,815,436
------------- -------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:

Net realized gain on sales of investments: (Notes 1, 4 and 5)

Proceeds from sales ............................................... 29,656,908 28,828,178
Cost of investments sold .......................................... 26,434,292 25,993,679
------------- -------------
Net realized gain ............................................... 3,222,616 2,834,499
Net unrealized gain (loss) on investments: (Note 5)
Beginning of year ................................................. 4,391,574 (4,407,131)
End of year ....................................................... 14,132,669 4,391,574
------------- -------------
Net change in unrealized gain ................................... 9,741,095 8,798,705
------------- -------------
Net realized and unrealized gain on investments ..................... 12,963,711 11,633,204
------------- -------------
Net increase in net assets resulting from operations ................ 24,872,052 23,448,640
------------- -------------
FROM UNIT TRANSACTIONS:
Variable life premium payments ...................................... 101,416,302 44,310,537
Sales and administrative charges deducted by the Company ............ (3,032,151) (1,381,985)
Premiums allocated to the fixed account ............................. (3,127,437) (3,260,098)
------------- -------------
Net premiums allocated to the variable account .................. 95,256,714 39,668,454
Transfers to the Company for monthly deductions ..................... (15,491,673) (11,297,188)
Redemptions by contract holders ..................................... (4,154,465) (3,238,332)
Transfers on account of policy loans ................................ (3,783,533) (2,076,373)
Other ............................................................... (40,991) 41,863
------------- -------------
Net increase in net assets from unit transactions (Note 5) ...... 71,786,052 23,098,424
------------- -------------
Change in net assets ................................................ 96,658,104 46,547,064
NET ASSETS:
Beginning of year ................................................... 126,515,779 79,968,715
------------- -------------
End of year ......................................................... $ 223,173,883 $ 126,515,779
============= =============
</TABLE>

S-4
<PAGE>

Variable Life Account B

Condensed Financial Information - Year Ended December 31, 1996

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Value Increase(Decrease) Units
Per Unit in Value of Outstanding Reserves
Beginning End of Accumulation at End At End
of Year Year Unit of Year of Year
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Aetna Variable Fund:
Aetna Vest $28.351 $34.932 23.21% 1,517,474.5 $53,008,643
Aetna Vest II 15.831 19.507 23.21% 794,275.5 15,493,624
Aetna Vest Plus 13.301 16.389 23.21% 1,323,444.4 21,689,765
Aetna Vest Estate Protector 10.000 11.675 16.75% (2) 11,748.7 137,170
Corporate Specialty Market 12.016 14.805 23.21% 171,723.7 2,542,424
- --------------------------------------------------------------------------------------------------------------------------------
Aetna Income Shares:
Aetna Vest $21.305 $21.850 2.56% 279,436.3 6,105,721
Aetna Vest II 14.324 14.691 2.56% 67,932.7 997,974
Aetna Vest Plus 11.470 11.764 2.56% 132,814.7 1,562,403
Aetna Vest Estate Protector 10.000 10.452 4.52% (2) 17.0 177
Corporate Specialty Market 11.071 11.354 2.56% 397,512.3 4,513,512
- --------------------------------------------------------------------------------------------------------------------------------
Aetna Variable Encore Fund:
Aetna Vest $15.891 $16.577 4.32% 165,067.7 2,736,269
Aetna Vest II 11.616 12.117 4.32% 17,257.4 209,105
Aetna Vest Plus 10.917 11.388 4.32% 277,635.4 3,161,633
Aetna Vest Estate Protector 10.000 10.333 3.33% (2) 55,176.3 570,162
Corporate Specialty Market 10.444 10.895 4.32% 221,672.3 2,415,016
- --------------------------------------------------------------------------------------------------------------------------------
Aetna Investment Advisers Fund, Inc.:
Aetna Vest $15.390 $17.547 14.02% 106,202.5 1,863,538
Aetna Vest II 15.561 17.742 14.02% 228,951.9 4,062,177
Aetna Vest Plus 13.050 14.880 14.02% 393,635.7 5,857,138
Corporate Specialty Market 11.361 12.954 14.02% 309,462.5 4,008,688
- --------------------------------------------------------------------------------------------------------------------------------
Aetna Ascent Variable Portfolio:
Aetna Vest $10.000 $11.828 18.28% (2) 3,460.3 40,930
Aetna Vest II 10.000 11.828 18.28% (2) 2,054.0 24,295
Aetna Vest Plus 10.000 11.828 18.28% (2) 40,593.4 480,153
- --------------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads Variable Portfolio:
Aetna Vest $10.000 $11.474 14.74% (2) 99.8 1,145
Aetna Vest Plus 10.000 11.474 14.74% (2) 10,665.0 122,368
Aetna Vest Estate Protector 10.000 11.487 14.87% (2) 15.6 179
- --------------------------------------------------------------------------------------------------------------------------------
Aetna Legacy Variable Portfolio:
Aetna Vest Plus $10.000 $11.118 11.18% (2) 1,255.9 13,963
- --------------------------------------------------------------------------------------------------------------------------------
Alger American Small Capitalization Portfolio:
Aetna Vest $15.562 $16.051 3.14% 77,047.6 1,236,667
Aetna Vest II 15.563 16.052 3.14% 52,282.1 839,239
Aetna Vest Plus 15.555 16.043 3.14% 381,746.1 6,124,522
Aetna Vest Estate Protector 10.000 9.982 (0.18%) (2) 21,147.3 211,085
Corporate Specialty Market 12.799 13.201 3.14% 354,114.8 4,674,570
- --------------------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund :
Equity-Income Portfolio:
Aetna Vest $10.000 $10.871 8.71% (2) 6,532.8 71,015
Aetna Vest II 10.000 10.871 8.71% (2) 2,200.1 23,916
Aetna Vest Plus 10.000 10.871 8.71% (2) 118,798.4 1,291,404
Aetna Vest Estate Protector 10.000 10.883 8.83% (2) 10,991.4 119,619
Corporate Specialty Market 11.058 12.512 13.14% 943,466.6 11,804,259
- --------------------------------------------------------------------------------------------------------------------------------
Growth Portfolio:
Corporate Specialty Market $9.911 $11.255 13.56% 448,921.8 5,052,529
- --------------------------------------------------------------------------------------------------------------------------------
Overseas Portfolio:
Corporate Specialty Market $10.029 $11.241 12.09% 47,354.8 532,327
- --------------------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio:
Corporate Specialty Market $10.596 $12.022 13.46% 117,298.4 1,410,186
- --------------------------------------------------------------------------------------------------------------------------------
Contrafund Portfolio:
Aetna Vest $10.000 $11.525 15.25% (2) 17,996.4 207,415
Aetna Vest II 10.000 11.525 15.25% (2) 3,659.1 42,173
Aetna Vest Plus 10.000 11.525 15.25% (2) 80,966.3 933,168
Aetna Vest Estate Protector 10.000 11.538 15.38% (2) 10,537.3 121,585
Corporate Specialty Market 10.322 12.396 20.10% 452,333.3 5,607,349
- --------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth Portfolio:
Aetna Vest $15.114 $16.153 6.87% 55,921.6 903,288
Aetna Vest II 15.114 16.153 6.87% 35,775.8 577,877
Aetna Vest Plus 15.114 16.153 6.87% 221,641.2 3,580,130
Aetna Vest Estate Protector 10.000 9.797 (2.03%) (2) 15,306.0 149,948
Corporate Specialty Market 11.340 12.120 6.87% 367,315.7 4,451,684
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

S-5
<PAGE>

Variable Life Account B

Condensed Financial Information - Year Ended December 31, 1996 (continued):

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------

Value Increase(Decrease) Units
Per Unit in Value of Outstanding Reserves
Beginning End of Accumulation at End At End
of Year Year Unit of Year of Year
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balanced Portfolio:
Aetna Vest $12.142 $13.966 15.02% 6,502.2 $ 90,808
Aetna Vest II 12.237 14.075 15.02% 4,206.4 59,204
Aetna Vest Plus 12.136 13.960 15.02% 124,211.8 1,733,938
Aetna Vest Estate Protector 10.000 11.101 11.01% (2) 3,134.9 34,800
Corporate Specialty Market 10.643 12.242 15.02% 135,240.2 1,655,595
- -------------------------------------------------------------------------------------------------------------------------------
Growth Portfolio:
Aetna Vest $12.704 $14.898 17.27% 30,969.1 461,370
Aetna Vest II 12.692 14.884 17.27% 65,830.7 979,838
Aetna Vest Plus 12.674 14.863 17.27% 234,144.3 3,480,132
Aetna Vest Estate Protector 10.000 10.857 8.57% (2) 1,608.1 17,459
Corporate Specialty Market 10.430 12.232 17.27% 182,790.8 2,235,848
- -------------------------------------------------------------------------------------------------------------------------------
Short-Term Bond Portfolio:
Aetna Vest $10.967 $11.289 2.94% 595.3 6,721
Aetna Vest II 10.955 11.277 2.94% 751.0 8,469
Aetna Vest Plus 10.925 11.247 2.94% 17,621.2 198,177
Corporate Specialty Market 10.094 10.468 3.71% (1) 345,277.1 3,614,481
- -------------------------------------------------------------------------------------------------------------------------------
Worldwide Growth Portfolio:
Aetna Vest $12.809 $16.364 27.75% 75,637.0 1,237,686
Aetna Vest II 12.813 16.368 27.75% 50,270.3 822,823
Aetna Vest Plus 12.797 16.348 27.75% 279,744.3 4,573,155
Aetna Vest Estate Protector 10.000 11.811 18.11% (2) 10,429.7 123,180
Corporate Specialty Market 10.964 13.459 22.76% (3) 234,655.4 3,158,292
- -------------------------------------------------------------------------------------------------------------------------------
Scudder Variable Life Investment Fund -
International Portfolio:
Aetna Vest $12.798 $14.543 13.63% 164,419.0 2,391,112
Aetna Vest II 12.719 14.453 13.63% 48,351.0 698,823
Aetna Vest Plus 12.648 14.373 13.63% 360,050.5 5,174,856
Aetna Vest Estate Protector 10.000 10.898 8.98% (2) 4,363.0 47,548
Corporate Specialty Market 10.598 12.043 13.63% 191,221.6 2,302,916
- -------------------------------------------------------------------------------------------------------------------------------
TCI Portfolios, Inc. - Growth Fund:
Aetna Vest $13.248 $12.534 (5.39%) 84,078.3 1,053,865
Aetna Vest II 13.307 12.590 (5.39%) 29,273.6 368,568
Aetna Vest Plus 13.126 12.419 (5.39%) 361,778.0 4,492,803
Aetna Vest Estate Protector 10.000 9.511 (4.89%) (2) 29.2 278
Corporate Specialty Market 12.005 11.358 (5.39%) 49,922.3 567,011
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Notes to Condensed Financial Information:

(1) - Reflects less than a full year of performance activity. Funds were first
received in this option during February 1996.

(2) - Available for investment less than 1 year, contract commenced operations
during March 1996.

(3) - Reflects less than a full year of performance activity. Funds were first
received in this option during March 1996.

See Notes to Financial Statements

S-6
<PAGE>

Variable Life Account B

Notes to Financial Statements - December 31, 1996

1. Summary of Significant Accounting Policies

Variable Life Account B ("Account") is a separate account established by
Aetna Life Insurance and Annuity Company and is registered under the
Investment Company Act of 1940 as a unit investment trust. The Account is
sold exclusively for use with variable life insurance product contracts as
defined under the Internal Revenue Code of 1986, as amended.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect amounts reported therein. Although actual results could differ
from these estimates, any such differences are expected to be immaterial to
the net assets of the Account.

a. Valuation of Investments

Investments in the following Funds are stated at the closing net asset value
per share as determined by each fund on December 31, 1996:

Aetna Variable Fund Janus Aspen Series:
Aetna Income Shares [bullet]Aggressive Growth Portfolio
Aetna Variable Encore Fund [bullet]Balanced Portfolio
Aetna Investment Advisers Fund, Inc. [bullet]Growth Portfolio
Aetna Ascent Variable Portfolio [bullet]Short-Term Bond Portfolio
Aetna Crossroads Variable Portfolio [bullet]Worldwide Growth Portfolio
Aetna Legacy Variable Portfolio Scudder Variable Life
Alger American Small Investment Fund -
Capitalization Portfolio International Portfolio
Fidelity Investments Variable Insurance TCI Portfolios, Inc. - Growth
Products Fund: Fund
[bullet]Equity-Income Portfolio
[bullet]Growth Portfolio
[bullet]Overseas Portfolio
Fidelity Investments Variable Insurance
Products Fund II:
[bullet]Asset Manager Portfolio
[bullet]Contrafund Portfolio

b. Other

Investment transactions are accounted for on a trade date basis and dividend
income is recorded on the ex-dividend date. The cost of investments sold is
determined by specific identification.

c. Federal Income Taxes

The operations of the Account form a part of, and are taxed with, the total
operations of Aetna Life Insurance and Annuity Company ("Company") which is
taxed as a life insurance company under the Internal Revenue Code of 1986, as
amended.

2. Valuation Period Deductions

Deductions by the Account for mortality and expense risk charges are made in
accordance with the terms of the policies and are paid to the Company.

S-7
<PAGE>

Variable Life Account B

Notes to Financial Statements - December 31, 1996 (continued):

3. Dividend Income

On an annual basis the Funds distribute substantially all of their taxable
income and realized capital gains to their shareholders. Distributions paid
to the Account are automatically reinvested in shares of the Funds. The
Account's proportionate share of each Fund's undistributed net investment
income (distributions in excess of net investment income) and accumulated net
realized gain (loss) on investments is included in net unrealized gain (loss)
on investments in the Statements of Operations and Changes in Net Assets.

4. Purchases and Sales of Investments

The cost of purchases and proceeds from sales of investments other than
short-term investments for the years ended December 31, 1996 and December 31,
1995 aggregated $113,349,117 and $29,656,908 and $71,231,087 and $28,828,178,
respectively.

S-8
<PAGE>

Variable Life Account B

Notes to Financial Statements - December 31, 1996 (continued):

5. Supplemental Information to Statements of Operations and Changes in Net
Assets - Year Ended December 31, 1996

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Valuation Proceeds Cost of Net
Period from Investments Realized
Dividends Deductions Sales Sold Gain (Loss)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Aetna Variable Fund: $ 9,712,578 $ (991,737) $ 5,373,083 $ 4,466,494 $ 906,589
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Income Shares: 810,294 (121,325) 1,564,483 1,544,041 20,442
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Variable Encore Fund: 477,308 (71,555) 9,490,775 9,560,169 (69,394)
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Investment Advisers Fund, Inc.: 1,201,085 (127,990) 1,717,127 1,435,761 281,366
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Ascent Variable Portfolio: 18,222 (1,210) 127,981 124,671 3,310
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads Variable Portfolio: 2,462 (91) 1,317 1,263 54
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Legacy Variable Portfolio: 671 (36) 503 486 17
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Alger American Small Capitalization
Portfolio: 33,925 (93,143) 2,003,029 1,400,608 602,421
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable
Insurance Products Fund:
Equity-Income Portfolio: 19,619 (57,181) 625,427 574,716 50,711
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Growth Portfolio: 85,627 (30,149) 243,345 245,938 (2,593)
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Overseas Portfolio: 14,172 (4,004) 478,644 450,003 28,641
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable
Insurance Products Fund II:
Asset Manager Portfolio: 62,788 (13,383) 981,022 966,124 14,898
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Contrafund Portfolio: 10,199 (36,829) 353,531 314,886 38,645
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth Portfolio: 79,809 (68,571) 1,171,119 858,482 312,637
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Balanced Portfolio: 70,301 (23,444) 452,062 367,517 84,545
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Growth Portfolio: 140,964 (46,593) 808,709 590,651 218,058
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Short-Term Bond Portfolio: 84,482 (17,596) 424,360 415,377 8,983
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Worldwide Growth Portfolio: 105,214 (49,874) 1,127,422 777,300 350,122
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Scudder Variable Life Investment Fund -
International Portfolio: 173,534 (85,922) 1,752,475 1,537,715 214,760
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
TCI Portfolios, Inc. - Growth Fund: 710,224 (64,504) 960,494 802,090 158,404
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Total Variable Life Account B $ 13,813,478 $ (1,905,137) $ 29,656,908 $ 26,434,292 $ 3,222,616
====================================================================================================================================
</TABLE>

S-9
<PAGE>

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Net Unrealized Net
Gain (Loss) Net Increase(Decrease) Net Assets
--------------------- Change in In Net Assets ---------------------------
Beginning End Unrealized from Unit Beginning End
of Year of Year Gain (Loss) Transactions of Year of Year
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aetna Variable Fund: $ 65,391 $ 7,294,643 $ 7,229,252 $ 5,056,913 $ 70,958,031 $ 92,871,626
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Income Shares: 189,278 (190,180) (379,458) 2,798,667 10,051,167 13,179,787
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Variable Encore Fund: 138,935 106,394 (32,541) 3,268,179 5,520,188 9,092,185
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Investment Advisers Fund, Inc.: 1,031,584 1,383,931 352,347 4,815,033 9,269,700 15,791,541
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Ascent Variable Portfolio: 0 15,645 15,645 509,411 0 545,378
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads Variable Portfolio: 0 (191) (191) 121,458 0 123,692
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Legacy Variable Portfolio: 0 20 20 13,291 0 13,963
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Alger American Small Capitalization
Portfolio: 595,950 172,057 (423,893) 7,688,994 5,277,779 13,086,083
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable
Insurance Products Fund:
Equity-Income Portfolio: 28,202 1,096,283 1,068,081 11,810,807 418,176 13,310,213
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Growth Portfolio: (36,211) 294,867 331,078 3,470,007 1,198,559 5,052,529
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Overseas Portfolio: 21,923 37,941 16,018 (102,302) 579,802 532,327
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable
Insurance Products Fund II:
Asset Manager Portfolio: 47,435 134,978 87,543 298,650 959,690 1,410,186
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Contrafund Portfolio: 10,253 730,883 720,630 5,090,135 1,088,910 6,911,690
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth Portfolio: 376,606 249,074 (127,532) 5,949,433 3,517,151 9,662,927
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Balanced Portfolio: 60,589 243,163 182,574 2,648,699 611,670 3,574,345
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Growth Portfolio: 196,848 566,478 369,630 3,974,072 2,518,516 7,174,647
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Short-Term Bond Portfolio: 6,078 26,773 20,695 3,383,696 347,588 3,827,848
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Worldwide Growth Portfolio: 227,523 872,277 644,754 7,436,957 1,427,963 9,915,136
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Scudder Variable Life Investment Fund-
International Portfolio: 431,463 1,244,544 813,081 2,808,258 6,691,544 10,615,255
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
TCI Portfolios, Inc. - Growth Fund: 999,727 (146,911) (1,146,638) 745,694 6,079,345 6,482,525
PolicyHolders' account values
- ------------------------------------------------------------------------------------------------------------------------------------
Total Variable Life Account B $ 4,391,574 $ 14,132,669 $ 9,741,095 $ 71,786,052 $126,515,779 $223,173,883
====================================================================================================================================
</TABLE>

S-10
<PAGE>

Independent Auditors' Report

The Board of Directors of Aetna Life Insurance and Annuity Company and
Policyholders of Variable Life Account B:

We have audited the accompanying statement of assets and liabilities of Aetna
Life Insurance and Annuity Company Variable Life Account B (the "Account") as of
December 31, 1996, and the related statements of operations and changes in net
assets for each of the years in the two-year period then ended, and condensed
financial information for the year ended December 31, 1996. These financial
statements and condensed financial information are the responsibility of the
Account's management. Our responsibility is to express an opinion on these
financial statements and condensed financial information based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and condensed
financial information are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1996, by correspondence with the custodian. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements and condensed financial information
referred to above present fairly, in all material respects, the financial
position of Aetna Life Insurance and Annuity Company Variable Life Account B as
of December 31, 1996, the results of its operations and the changes in its net
assets for each of the years in the two-year period then ended, and condensed
financial information for the year ended December 31, 1996 in conformity with
generally accepted accounting principles.

KPMG Peat Marwick LLP

Hartford, Connecticut
February 14, 1997

S-11
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBIDIARIES

Index to Consolidated Financial Statements

Page

Independent Auditors' Report F-2

Consolidated Financial Statements:

Consolidated Statements of Income for the Years Ended
December 31, 1996, 1995 and 1994 F-3

Consolidated Balance Sheets as of December 31, 1996
and 1995 F-4

Consolidated Statements of Changes in Shareholder's Equity
for the Years Ended December 31, 1996, 1995 and 1994 F-5

Consolidated Statements of Cash Flows for the Years
Ended December 31, 1996, 1995 and 1994 F-6

Notes to Consolidated Financial Statements F-7

F-1
<PAGE>

Independent Auditors' Report

The Shareholder and Board of Directors
Aetna Life Insurance and Annuity Company:

We have audited the accompanying consolidated balance sheets of Aetna Life
Insurance and Annuity Company and Subsidiaries as of December 31, 1996 and 1995,
and the related consolidated statements of income, changes in shareholder's
equity and cash flows for each of the years in the three-year period ended
December 31, 1996. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Aetna Life Insurance
and Annuity Company and Subsidiaries as of December 31, 1996 and 1995, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1996, in conformity with generally accepted
accounting principles.

/s/ KPMG Peat Marwick LLP

Hartford, Connecticut
February 4, 1997

F-2
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Consolidated Statements of Income
(millions)

Years Ended December 31,
--------------------------------
1996 1995 1994
---- ---- ----

Revenue:
Premiums $133.6 $212.7 $191.6
Charges assessed against policyholders 396.5 318.9 279.0
Net investment income 1,045.6 1,004.3 917.2
Net realized capital gains 19.7 41.3 1.5
Other income 45.4 42.0 10.3
------- ------- -------
Total revenue 1,640.8 1,619.2 1,399.6
------- ------- -------

Benefits and expenses:
Current and future benefits 968.6 997.2 921.5
Operating expenses 342.2 310.8 225.7
Amortization of deferred policy
acquisition costs 69.8 48.0 31.5
Severance and facilities charges 61.3 -- --
------- ------- -------
Total benefits and expenses 1,441.9 1,356.0 1,178.7
------- ------- -------

Income before income taxes 198.9 263.2 220.9

Income taxes 57.8 87.3 75.6
------- ------- -------
Net income $141.1 $175.9 $145.3
======= ======= =======

See Notes to Consolidated Financial Statements.

F-3
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Consolidated Balance Sheets
(millions, except share data)

December 31,
-------------------------
1996 1995
---- ----
Assets
- ------

Investments:
Debt securities, available for sale:
(amortized cost: $12,539.1 and $11,923.7) $12,905.5 $12,720.8
Equity securities, available for sale:
Non-redeemable preferred stock
(cost: $107.6 and $51.3) 119.0 57.6
Investment in affiliated mutual funds
(cost: $77.3 and $173.4) 81.1 191.8
Common stock (cost: $0.0 and $6.9) 0.3 8.2
Short-term investments 34.8 15.1
Mortgage loans 13.0 21.2
Policy loans 399.3 338.6
--------- ---------
Total investments 13,553.0 13,353.3

Cash and cash equivalents 459.1 568.8
Accrued investment income 159.0 175.5
Premiums due and other receivables 26.6 37.3
Deferred policy acquisition costs 1,515.3 1,341.3
Reinsurance loan to affiliate 628.3 655.5
Other assets 33.7 26.2
Separate Account assets 15,318.3 10,987.0
--------- ---------
Total assets $31,693.3 $27,144.9
========= =========

Liabilities and Shareholder's Equity
- -------------------------------------

Liabilities:
Future policy benefits $3,617.0 $3,594.6
Unpaid claims and claim expenses 28.9 27.2
Policyholders' funds left with the Company 10,663.7 10,500.1
--------- ---------
Total insurance reserve liabilities 14,309.6 14,121.9
Other liabilities 354.7 257.2
Income taxes:
Current 20.7 26.2
Deferred 80.5 169.6
Separate Account liabilities 15,318.3 10,987.0
--------- ---------
Total liabilities 30,083.8 25,561.9
--------- ---------

Shareholder's equity:
Common stock, par value $50 (100,000 shares
authorized; 55,000 shares issued and
outstanding) 2.8 2.8
Paid-in capital 418.0 407.6
Net unrealized capital gains 60.5 132.5
Retained earnings 1,128.2 1,040.1
--------- ---------

Total shareholder's equity 1,609.5 1,583.0
--------- ---------

Total liabilities and shareholder's equity $31,693.3 $27,144.9
========= =========

See Notes to Consolidated Financial Statements.

F-4
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Consolidated Statements of Changes in Shareholder's Equity
(millions)

Years Ended December 31,
-----------------------------------
1996 1995 1994
---- ---- ----

Shareholder's equity, beginning of year $1,583.0 $1,088.5 $1,246.7

Capital contributions 10.4 -- --

Net change in unrealized capital gains (losses) (72.0) 321.5 (303.5)

Net income 141.1 175.9 145.3

Other changes (49.5) -- --

Common stock dividends declared (3.5) (2.9) --
-------- -------- --------
Shareholder's equity, end of year $1,609.5 $1,583.0 $1,088.5
======== ======== ========

See Notes to Consolidated Financial Statements.

F-5
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Consolidated Statements of Cash Flows
(millions)

Years Ended December 31,
-------------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income $141.1 $175.9 $145.3
Adjustments to reconcile net income to net
cash (used for) provided by operating activities:
Decrease (increase) in accrued investment income 16.5 (33.3) (17.5)
Decrease in premiums due and other receivables 1.6 25.4 1.3
Increase in policy loans (60.7) (89.9) (46.0)
Increase in deferred policy acquisition costs (174.0) (177.0) (105.9)
Decrease in reinsurance loan to affiliate 27.2 34.8 27.8
Net increase in universal life account balances 243.2 393.4 164.7
(Decrease) increase in other insurance
reserve liabilities (211.5) 79.0 75.1
Net increase in other liabilities and other assets 3.1 13.0 52.5
Decrease in income taxes (26.7) (4.5) (10.3)
Net accretion of discount on investments (68.0) (66.4) (77.9)
Net realized capital gains (19.7) (41.3) (1.5)
Other, net 1.1 -- (1.0)
-------- -------- --------
Net cash (used for) provided by operating activities (126.8) 309.1 206.6
-------- -------- --------

Cash Flows from Investing Activities:
Proceeds from sales of:
Debt securities available for sale 5,182.2 4,207.2 3,593.8
Equity securities 190.5 180.8 93.1
Mortgage loans 8.7 10.7 --
Limited partnership -- 26.6 --
Investment maturities and collections of:
Debt securities available for sale 885.2 583.9 1,289.2
Short-term investments 35.0 106.1 30.4
Cost of investment purchases in:
Debt securities available for sale (6,534.3) (6,034.0) (5,621.4)
Equity securities (118.1) (170.9) (162.5)
Short-term investments (54.7) (24.7) (106.1)
Mortgage loans -- (21.3) --
Limited partnership -- -- (25.0)
Other, net (17.6) -- --
-------- -------- --------
Net cash used for investing activities (423.1) (1,135.6) (908.5)
-------- -------- --------

Cash Flows from Financing Activities:
Deposits and interest credited for investment contracts 1,579.5 1,884.5 1,737.8
Withdrawals of investment contracts (1,146.2) (1,109.6) (948.7)
Additional capital contributions 10.4 -- --
Dividends paid to shareholder (3.5) (2.9) --
-------- -------- --------
Net cash provided by financing activities 440.2 772.0 789.1
-------- -------- --------

Net (decrease) increase in cash and cash equivalents (109.7) (54.5) 87.2
Cash and cash equivalents, beginning of year 568.8 623.3 536.1
-------- -------- --------

Cash and cash equivalents, end of year $459.1 $568.8 $623.3
======== ======== ========

Supplemental cash flow information:
Income taxes paid, net $85.5 $92.8 $85.9
======== ======== ========

See Notes to Consolidated Financial Statements.
</TABLE>

F-6
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements

1. Summary of Significant Accounting Policies

Aetna Life Insurance and Annuity Company and its wholly owned subsidiaries
(collectively, the "Company") is a provider of financial services and life
insurance products in the United States. The Company has two business
segments: financial services and individual life insurance.

Financial services products include annuity contracts that offer a variety
of funding and payout options for individual and employer-sponsored
retirement plans qualified under Internal Revenue Code Sections 401, 403,
408 and 457, and non-qualified annuity contracts. These contracts may be
deferred or immediate ("payout annuities"). Financial services also include
investment advisory services, financial planning and pension plan
administrative services.

Individual life insurance products include universal life, variable
universal life, traditional whole life and term insurance.

Basis of Presentation

The consolidated financial statements include Aetna Life Insurance and
Annuity Company and its wholly owned subsidiaries, Aetna Insurance Company
of America and Aetna Private Capital, Inc. Aetna Life Insurance and Annuity
Company is a wholly owned subsidiary of Aetna Retirement Holdings, Inc.
("HOLDCO"). HOLDCO is a wholly owned subsidiary of Aetna Retirement
Services, Inc., whose ultimate parent is Aetna Inc. ("Aetna").

The consolidated financial statements have been prepared in accordance with
generally accepted accounting principles. Certain reclassifications have
been made to 1995 and 1994 financial information to conform to the 1996
presentation.

Future Application of Accounting Standards

Financial Accounting Standard ("FAS") No. 125, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities, was
issued in June 1996. This statement provides accounting and reporting
standards for transfers of financial assets and extinguishments of
liabilities. Transactions covered by this statement would include
securitizations, sales of partial interests in assets, repurchase
agreements and securities lending. This statement requires that after a
transfer of financial assets, an entity would recognize any assets it
controls and liabilities it has incurred. An entity would not recognize
assets when control has been surrendered or liabilities have been
satisfied. Portions of this statement are effective for each of 1997 and
1998 financial statements and early adoption is not permitted. The Company
does not expect adoption of this statement to have a material effect on its
financial position or results of operations.

F-7
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

1. Summary of Significant Accounting Policies (Continued)

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from reported results
using those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, money market instruments
and other debt issues with a maturity of 90 days or less when purchased.

Investments

All of the Company's debt and equity securities are classified as available
for sale and carried at fair value. These securities are written down (as
realized capital losses) for other than temporary declines in value.
Unrealized capital gains and losses related to available for sale other
than amounts allocable to experience rated contractholders, are reflected
in shareholder's equity, net of related taxes.

Fair values for debt and equity securities are based on quoted market
prices or dealer quotations. Where quoted market prices or dealer
quotations are not available, fair values are measured utilizing quoted
market prices for similar securities or by using discounted cash flow
methods. Cost for mortgage-backed securities is adjusted for unamortized
premiums and discounts, which are amortized using the interest method over
the estimated remaining term of the securities, adjusted for anticipated
prepayments.

Purchases and sales of debt and equity securities are recorded on the trade
date.

The investment in affiliated mutual funds primarily represents an
investment in the Aetna Series Fund, Inc., a retail mutual fund which has
been seeded by the Company, and is carried at fair value.

Mortgage loans and policy loans are carried at unpaid principal balances,
net of impairment reserves. Sales of mortgage loans are recorded on the
closing date.

Short-term investments, consisting primarily of money market instruments
and other debt issues purchased with a maturity of 91 days to one year, are
considered available for sale and are carried at fair value, which
approximates amortized cost.

F-8
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

1. Summary of Significant Accounting Policies (Continued)

Futures contracts are carried at fair value and require daily cash
settlement. Changes in the fair value of futures contracts that qualify as
hedges are deferred and recognized as an adjustment to the hedged asset or
liability. Deferred gains or losses on such futures contracts are amortized
over the life of the acquired asset or liability as a yield adjustment or
through net realized capital gains or losses upon disposal of an asset.
Changes in the fair value of futures contracts that do not qualify as
hedges are recorded in net realized capital gains or losses. Hedge
designation requires specific asset or liability identification, a
probability at inception of high correlation with the position underlying
the hedge, and that high correlation be maintained throughout the hedge
period. If a hedging instrument ceases to be highly correlated with the
position underlying the hedge, hedge accounting ceases at that date and
excess gains and losses on the hedging instrument are reflected in net
realized capital gains or losses.

Swap agreements which are designated as interest rate risk management
instruments at inception are accounted for using the accrual method.
Accordingly, the difference between amounts paid and received on such
agreements is reported in net investment income. There is no recognition in
the Consolidated Balance Sheets for changes in the fair value of the
agreement.

Deferred Policy Acquisition Costs

Certain costs of acquiring insurance business are deferred. These costs,
all of which vary with and are primarily related to the production of new
and renewal business, consist principally of commissions, certain expenses
of underwriting and issuing contracts, and certain agency expenses. For
fixed ordinary life contracts, such costs are amortized over expected
premium-paying periods (up to 20 years). For universal life and certain
annuity contracts, such costs are amortized in proportion to estimated
gross profits and adjusted to reflect actual gross profits over the life of
the contracts (up to 20 years).

Deferred policy acquisition costs are written off to the extent that it is
determined that future policy premiums and investment income or gross
profits are not adequate to cover related losses and expenses.

Insurance Reserve Liabilities

Future Policy Benefits include reserves for universal life, immediate
annuities with life contingent payouts and traditional life insurance
contracts. Reserves for universal life contracts are equal to cumulative
deposits less charges and withdrawals plus credited interest thereon.
Reserves for immediate annuities with life contingent payouts and
traditional life insurance contracts are computed on the basis of assumed
investment yield, mortality, and expenses, including a margin for adverse
deviations. Such assumptions generally vary by plan, year of issue and
policy duration. Reserve interest rates range from 2.25% to 12.00%.
Investment yield is based on the Company's experience. Mortality and
withdrawal rate assumptions are based on relevant Aetna experience and are
periodically reviewed against both industry standards and experience.

F-9
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

1. Summary of Significant Accounting Policies (Continued)

Policyholders' Funds Left With the Company include reserves for deferred
annuity investment contracts and immediate annuities without life
contingent payouts. Reserves on such contracts are equal to cumulative
deposits less charges and withdrawals plus credited interest thereon (rates
range from 4.00% to 7.00%), net of adjustments for investment experience
that the Company is entitled to reflect in future credited interest.
Reserves on contracts subject to experience rating reflect the rights of
contractholders, plan participants and the Company.

Unpaid claims for all lines of insurance include benefits for reported
losses and estimates of benefits for losses incurred but not reported.

Premiums, Charges Assessed Against Policyholders, Benefits and Expenses

For universal life and certain annuity contracts, charges assessed against
policyholders' funds for the cost of insurance, surrender charges,
actuarial margin and other fees are recorded as revenue in charges assessed
against policyholders. Other amounts received for these contracts are
reflected as deposits and are not recorded as revenue. Life insurance
premiums, other than premiums for universal life and certain annuity
contracts, are recorded as premium revenue when due. Related policy
benefits are recorded in relation to the associated premiums or gross
profit so that profits are recognized over the expected lives of the
contracts. When annuity payments begin under contracts with life contingent
payouts that were initially investment contracts, the accumulated balance
in the account is treated as a single premium for the purchase of an
annuity, reflected as an offsetting amount in both premiums and current and
future benefits in the Consolidated Statements of Income.

Separate Accounts

Assets held under variable universal life and variable annuity contracts
are segregated in Separate Accounts and are invested, as designated by the
contractholder or participant under a contract, in shares of Aetna Variable
Fund, Aetna Income Shares, Aetna Variable Encore Fund, Aetna Investment
Advisers Fund, Inc., Aetna GET Fund, the Aetna Series Fund Inc., or the
Aetna Generation Funds (collectively, "Funds"), which are managed by the
Company, or other selected mutual funds not managed by the Company.

Separate Accounts assets and liabilities are carried at fair value except
for those relating to a guaranteed interest option. Since the Company bears
the investment risk where the contract is held to maturity, the assets of
the Separate Account supporting the guaranteed interest option are carried
at an amortized cost of $515.6 million for 1996 (fair value $523.0 million)
and $322.2 million for 1995 (fair value $343.9 million). Reserves relating
to the guaranteed interest option are maintained at fund value and reflect
interest credited at rates ranging from 4.10% to 8.00% in 1996 and 4.50% to
8.38% in 1995.

F-10
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

1. Summary of Significant Accounting Policies (Continued)

Separate Accounts assets and liabilities are shown as separate captions in
the Consolidated Balance Sheets. Deposits, investment income and net
realized and unrealized capital gains and losses of the Separate Accounts
are not reflected in the Consolidated Statements of Income (with the
exception of realized capital gains and losses on the sale of assets
supporting the guaranteed interest option). The Consolidated Statements of
Cash Flows do not reflect investment activity of the Separate Accounts.

Income Taxes

The Company is included in the consolidated federal income tax return of
Aetna. The Company is taxed at regular corporate rates after adjusting
income reported for financial statement purposes for certain items.
Deferred income tax expenses/benefits result from changes during the year
in cumulative temporary differences between the tax basis and book basis of
assets and liabilities.

F-11
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

2. Investments

Debt securities available for sale as of December 31, 1996 were as follows:
<TABLE>
<CAPTION>

Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- ------ -----
(millions)
<S> <C> <C> <C> <C>
U.S. government and government
agencies and authorities $ 1,072.4 $ 20.5 $ 4.5 $ 1,088.4

States, municipalities and political
subdivisions 6.0 1.2 -- 7.2

U.S. corporate securities:
Financial 2,143.4 43.1 9.7 2,176.8
Food & fiber 198.2 4.6 1.3 201.5
Healthcare & consumer products 735.9 20.2 6.3 749.8
Media & broadcast 274.9 7.0 2.8 279.1
Natural resources 187.7 4.5 0.4 191.8
Transportation & capital goods 521.9 22.0 1.8 542.1
Utilities 448.8 14.8 2.8 460.8
Other 141.5 3.0 -- 144.5
--------- --------- --------- ---------
Total U.S. corporate securities 4,652.3 119.2 25.1 4,746.4

Foreign Securities:
Government 758.6 36.0 5.7 788.9
Utilities 187.8 16.1 -- 203.9
Other 945.5 30.9 6.3 970.1
--------- --------- --------- ---------
Total foreign securities 1,891.9 83.0 12.0 1,962.9

Residential mortgage-backed securities:
Pass-throughs 792.2 78.3 3.1 867.4
Collateralized mortgage obligations 2,227.8 94.9 13.7 2,309.0
--------- --------- --------- ---------
Total residential mortgage-
backed securities 3,020.0 173.2 16.8 3,176.4

Commercial/Multifamily mortgage-
backed securities 1,008.7 24.8 5.6 1,027.9

Other asset-backed securities 887.8 10.7 2.2 896.3
--------- --------- --------- ---------

Total Debt Securities $12,539.1 $ 432.6 $ 66.2 $12,905.5
========= ========= ========= =========
</TABLE>

F-12
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

2. Investments (Continued)

Debt securities available for sale as of December 31, 1995 were as follows:
<TABLE>
<CAPTION>

States, municipalities and political
subdivisions 41.4 12.4 -- 53.8

U.S. Corporate securities:
Financial 2,764.4 110.3 2.1 2,872.6
Food & fiber 310.8 20.8 0.6 331.0
Healthcare & consumer products 766.0 59.2 0.2 825.0
Media & broadcast 191.7 10.0 -- 201.7
Natural resources 186.9 12.6 0.2 199.3
Transportation & capital goods 602.4 46.7 0.2 648.9
Utilities 454.4 27.8 1.0 481.2
Other 119.9 10.2 -- 130.1
--------- --------- --------- ---------
Total U.S. corporate securities 5,396.5 297.6 4.3 5,689.8

Foreign securities:
Government 316.4 26.1 2.0 340.5
Utilities 236.3 32.9 269.2
Other 749.9 60.5 3.5 806.9
--------- --------- --------- ---------
Total foreign securities 1,302.6 119.5 5.5 1,416.6

Residential mortgage-backed securities:
Pass-throughs 556.7 99.2 1.8 654.1
Collateralized mortgage obligations 2,383.9 167.6 2.2 2,549.3
--------- --------- --------- ---------
Total residential mortgage-
backed securities 2,940.6 266.8 4.0 3,203.4

Commercial/multifamily mortgage-
backed securities 741.9 32.3 0.2 774.0

Other asset-backed securities 961.2 35.5 0.5 996.2
--------- --------- --------- ---------

Total Debt Securities $11,923.7 $ 811.6 $ 14.5 $12,720.8
========= ========= ========= =========

</TABLE>

F-13
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

2. Investments (Continued)

At December 31, 1996 and 1995, net unrealized appreciation of $366.4
million and $797.1 million, respectively, on available for sale debt
securities included $288.5 million and $619.1 million, respectively,
related to experience rated contracts, which were not reflected in
shareholder's equity but in Future Policy Benefits and Policyholders' Funds
Left With the Company.

The amortized cost and fair value of debt securities for the year ended
December 31, 1996 are shown below by contractual maturity. Actual
maturities may differ from contractual maturities because securities may be
restructured, called, or prepaid.

Amortized Fair
Cost Value
--------- -----
(millions)
Due to mature:
One year or less $ 424.4 $ 425.7
After one year through five years 2,162.4 2,194.2
After five years through ten years 2,467.4 2,509.6
After ten years 2,568.4 2,675.4
Mortgage-backed securities 4,028.7 4,204.3
Other asset-backed securities 887.8 896.3
--------- ---------
Total $12,539.1 $12,905.5
========= =========

The Company engages in securities lending whereby certain securities from
its portfolio are loaned to other institutions for short periods of time.
Collateral, primarily cash, which is in excess of the market value of the
loaned securities, is deposited by the borrower with a lending agent, and
retained and invested by the lending agent to generate additional income
for the Company. The market value of the loaned securities is monitored on
a daily basis with additional collateral obtained or refunded as the market
value fluctuates. At December 31, 1996 and 1995, the Company had loaned
securities (which are reflected as invested assets) with a market value of
approximately $444.7 million and $264.5 million, respectively.

At December 31, 1996 and 1995, debt securities carried at $7.6 million and
$7.4 million, respectively, were on deposit as required by regulatory
authorities.

The carrying value of non-income producing investments was $0.9 million and
$0.1 million at December 31, 1996 and 1995, respectively.

The Company did not have any investments in a single issuer, other than
obligations of the U.S. government, with a carrying value in excess of 10%
of the Company's shareholder's equity at December 31, 1996.

F-14
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

2. Investments (Continued)

Included in the Company's total debt securities were residential
collateralized mortgage obligations ("CMOs") supporting the following:
<TABLE>
<CAPTION>

1996 1995
---- ----
Fair Amortized Fair Amortized
Value Cost Value Cost
----- ---- ----- ----
(millions)
<S> <C> <C> <C> <C>
Total residential CMOs (1) $2,309.0 $2,227.8 $2,549.4 $2,383.9
======== ======== ======== ========
Percentage of total:
Supporting experience rated products 84.2% 85.3%
Supporting remaining products 15.8% 14.7%
-------- --------
100.0% 100.0%
======== ========
</TABLE>

(1) At December 31, 1996 and 1995, approximately 71% and 81%,
respectively, of the Company's residential CMO holdings were backed by
government agencies such as GNMA, FNMA, FHLMC.

There are various categories of CMOs which are subject to different degrees
of risk from changes in interest rates and, for nonagency-backed CMOs,
defaults. The principal risks inherent in holding CMOs are prepayment and
extension risks related to dramatic decreases and increases in interest
rates resulting in the repayment of principal from the underlying mortgages
either earlier or later than originally anticipated.

At December 31, 1996 and 1995, approximately 68% and 79%, respectively, of
the Company's CMO holdings were in planned amortization class ("PAC") and
sequential structure tranches, which are subject to less prepayment and
extension risk than other types of CMO instruments. At December 31, 1996
and 1995, approximately 3% of the Company's CMO holdings were in the
interest-only ("IOs") and principal-only ("POs") tranches, which are
subject to more prepayment and extension risks than other types of CMO
instruments. Remaining CMO holdings are in other tranches that have
prepayment and extension risks which fall between the degree of risk
associated with PACs and sequentials, and IOs and POs.

F-15
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

2. Investments (Continued)

Investments in available for sale equity securities were as follows:

Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---- ---------- ---------- -----
(millions)
1996
Equity Securities $ 184.9 $ 16.3 $ 0.8 $ 200.4
======= ======= ======= =======
1995
Equity Securities $ 231.6 $ 27.2 $ 1.2 $ 257.6
======= ======= ======= =======

3. Financial Instruments

Estimated Fair Value

The carrying values and estimated fair values of certain of the Company's
financial instruments at December 31, 1996 and 1995 were as follows:
<TABLE>
<CAPTION>

1996 1995
------------------ -----------------
Carrying Fair Carrying Fair
Value Value Value Value
----- ----- ----- -----
(millions)
<S> <C> <C> <C> <C>
Assets:
Mortgage loans $ 13.0 $ 13.2 $ 21.2 $ 21.9
Liabilities:
Investment contract liabilities:
With a fixed maturity $ 1,014.1 $ 1,028.8 $ 989.1 $ 1,001.2
Without a fixed maturity 9,649.6 9,427.6 9,511.0 9,298.4
</TABLE>

Fair value estimates are made at a specific point in time, based on
available market information and judgments about the financial instrument,
such as estimates of timing and amount of future cash flows. Such estimates
do not reflect any premium or discount that could result from offering for
sale at one time the Company's entire holdings of a particular financial
instrument, nor do they consider the tax impact of the realization of
unrealized gains or losses. In many cases, the fair value estimates cannot
be substantiated by comparison to independent markets, nor can the
disclosed value be realized in immediate settlement of the instrument. In
evaluating the Company's management of interest rate, price and liquidity
risks, the fair values of all assets and liabilities should be taken into
consideration, not only those presented above.

F-16
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

3. Financial Instruments (Continued)

The following valuation methods and assumptions were used by the Company in
estimating the fair value of the above financial instruments:

Mortgage loans: Fair values are estimated by discounting expected mortgage
loan cash flows at market rates which reflect the rates at which similar
loans would be made to similar borrowers. The rates reflect management's
assessment of the credit quality and the remaining duration of the loans.

Investment contract liabilities (included in Policyholders' Funds Left With
the Company):

With a fixed maturity: Fair value is estimated by discounting cash flows at
interest rates currently being offered by, or available to, the Company for
similar contracts.

Without a fixed maturity: Fair value is estimated as the amount payable to
the contractholder upon demand. However, the Company has the right under
such contracts to delay payment of withdrawals which may ultimately result
in paying an amount different than that determined to be payable on demand.

Off-Balance-Sheet and Other Financial Instruments (including Derivative
Financial Instruments)

The Company uses off-balance-sheet and other financial instruments
primarily to manage portfolio risks, including interest rate,
prepayment/call, credit, price, and liquidity risks. In 1996, Treasury
futures contracts were used to manage interest rate risk in the Company's
bond portfolio and stock index futures contracts were used to manage price
risk in the Company's equity portfolio. In 1996 and 1995, interest rate
swaps and forward commitments to enter into interest rate swaps,
respectively, were also used to manage interest rate risk in the Company's
bond portfolio.

Futures Contracts:

Futures contracts represent commitments to either purchase or sell
underlying assets at a specified future date. Futures contracts trade on
organized exchanges and, therefore, have minimal credit risk. Cash
settlements are made daily based on changes in the prices of the underlying
assets. There were no futures contracts open as of December 31, 1996 and
1995.

F-17
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

3. Financial Instruments (Continued)

Interest Rate Swaps:

Under interest rate swaps, the Company agrees with other parties to
exchange interest amounts calculated by reference to an agreed notional
principal amount. Generally, no cash is exchanged at the outset of the
contract and no principal payments are made. A single net payment is
usually made by one counterparty at each due date or upon termination of
the contract. The Company would be exposed to credit-related losses in the
event of nonperformance by counterparties to financial instruments,
however, the Company controls its exposure to credit risk through credit
approvals, credit limits and regular monitoring procedures. The credit
exposure of interest rate swaps is represented by the fair value (market
value) of contracts with a positive fair value (market value) at the
reporting date. There were no interest rate swap agreements open as of
December 31, 1996. At December 31, 1995, the Company had an open forward
swap agreement with a notional amount of $100.0 million and a fair value of
$0.1 million.

During 1995, the Company received $0.4 million for writing call options on
underlying securities. The Company did not write any call options in 1996.
As of December 31, 1996 and 1995, there were no option contracts
outstanding.

The Company also had investments in certain debt instruments with
derivative characteristics, including those whose market value is at least
partially determined by, among other things, levels of or changes in
domestic and/or foreign interest rates (short or long term), exchange
rates, prepayment rates, equity markets or credit ratings/spreads. The
amortized cost and fair value of these securities, included in the debt
securities portfolio, as of December 31, 1996 was as follows:

Amortized Fair
Cost Value
---- -----
(millions)

Residential collateralized mortgage obligations $ 2,227.8 $ 2,309.0
Principal-only strips (included above) 44.5 53.3
Interest-only strips (included above) 10.3 22.8
Other structured securities with derivative
characteristics (1) 126.3 129.2

(1) Represents non-leveraged instruments whose fair values and credit risk
are based on underlying securities, including fixed income securities
and interest rate swap agreements.

F-18
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

4. Net Investment Income

Sources of net investment income were as follows:
1996 1995 1994
---- ---- ----
(millions)

Debt securities $ 945.3 $ 891.5 $ 823.9
Preferred stock 5.9 4.2 3.9
Investment in affiliated mutual funds 14.3 14.9 5.2
Mortgage loans 2.2 1.4 1.4
Policy loans 18.4 13.7 11.5
Reinsurance loan to affiliate 44.1 46.5 51.5
Cash equivalents 29.4 38.9 29.5
Other 2.1 8.4 6.7
-------- -------- --------
Gross investment income 1,061.7 1,019.5 933.6
Less investment expenses (16.1) (15.2) (16.4)
-------- -------- --------
Net investment income $1,045.6 $1,004.3 $ 917.2
======== ======== ========

Net investment income includes amounts allocable to experience rated
contractholders of $787.6 million, $744.2 million and $677.1 million for
the years ended December 31, 1996, 1995 and 1994, respectively. Interest
credited to contractholders is included in Current and Future Benefits.

5. Dividend Restrictions and Shareholder's Equity

The Company paid $3.5 million in cash dividends to HOLDCO in 1996. In 1995,
the Company dividended $2.9 million in the form of two of its subsidiaries,
Systematized Benefits Administrators, Inc. and Aetna Investment Services,
Inc., to Aetna Retirement Services, Inc. (the Company's former parent).

The amount of dividends that may be paid to the shareholder in 1997 without
prior approval by the Insurance Commissioner of the State of Connecticut is
$71.1 million.

The Insurance Department of the State of Connecticut (the "Department")
recognizes as net income and shareholder's capital and surplus those
amounts determined in conformity with statutory accounting practices
prescribed or permitted by the Department, which differ in certain respects
from generally accepted accounting principles. Statutory net income was
$57.8 million, $70.0 million and $64.9 million for the years ended December
31, 1996, 1995 and 1994, respectively. Statutory capital and surplus was
$713.6 million and $670.7 million as of December 31, 1996 and 1995,
respectively.

As of December 31, 1996 the Company does not utilize any statutory
accounting practices which are not prescribed by state regulatory
authorities that, individually or in the aggregate, materially affect
statutory capital and surplus.

F-19
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

6. Capital Gains and Losses on Investment Operations

Realized capital gains or losses are the difference between the carrying
value and sale proceeds of specific investments sold.

Net realized capital gains on investments were as follows:

1996 1995 1994
---- ---- ----
(millions)

Debt securities $ 11.1 $ 32.8 $ 1.0
Equity securities 8.6 8.3 0.2
Mortgage loans -- 0.2 0.3
-------- -------- -------
Pretax realized capital gains $ 19.7 $ 41.3 $ 1.5
======== ======= =======
After tax realized capital gains $ 13.0 $ 25.8 $ 1.0
======== ======= =======

Net realized capital gains of $53.1 million and $61.1 million for 1996 and
1995, respectively, and net realized capital losses of $29.1 million for
1994, allocable to experience rated contracts, were deducted from net
realized capital gains (losses) and an offsetting amount was reflected in
policyholder funds' left with the Company. Net unamortized gains were $53.3
million and $7.3 million at December 31, 1996 and 1995, respectively.

Changes to the mortgage loan valuation reserve and writedowns on debt
securities for other than temporary declines in value are included in net
realized capital gains (losses) and amounted to $(3.3) million, $3.1
million and $1.1 million, of which $(3.2) million, $2.2 million and $0.8
million were allocable to experience rated contractholders, for the years
ended December 31, 1996, 1995 and 1994, respectively. There was no
valuation reserve for mortgage loans at December 31, 1996 or at December
31, 1995.

Proceeds from the sale of available for sale debt securities and the
related gross gains and losses were as follows:

1996 1995 1994
---- ---- ----
(millions)

Proceeds on Sales $5,182.2 $4,207.2 $3,593.8
Gross gains 24.3 44.6 26.6
Gross losses 13.2 11.8 25.6

F-20
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

6. Capital Gains and Losses on Investment Operations (Continued)

Changes in shareholder's equity related to changes in unrealized capital
gains (losses), (excluding those related to experience rated
contractholders), were as follows:

1996 1995 1994
---- ---- ----
(millions)

Debt securities $ (100.1) $ 255.9 $ (242.1)
Equity securities (10.5) 27.3 (13.3)
Limited partnership -- 1.8 (1.8)
-------- -------- --------
(110.6) 285.0 (257.2)

Deferred income taxes (See Note 8) (38.6) (36.5) 46.3
-------- -------- --------
Net change in unrealized
capital gains (losses) $ (72.0) $ 321.5 $ (303.5)
======== ======== ========

Net unrealized capital gains allocable to experience rated contracts of
$245.2 million and $43.3 million at December 31, 1996 and $515.0 million
and $104.1 million at December 31, 1995 are reflected on the Consolidated
Balance Sheets in Policyholders' Funds Left With the Company and Future
Policy Benefits, respectively, and are not included in shareholder's
equity.

Shareholder's equity included the following unrealized capital gains
(losses), which are net of amounts allocable to experience rated
contractholders, at December 31:

1996 1995 1994
---- ---- ----
(millions)
Debt securities
Gross unrealized capital gains $101.7 $179.3 $ 27.4
Gross unrealized capital losses (23.8) (1.3) (105.2)
------ ------ --------
77.9 178.0 (77.8)
Equity securities
Gross unrealized capital gains 16.3 27.2 6.5
Gross unrealized capital losses (0.8) (1.2) (7.9)
------ ------ --------
15.5 26.0 (1.4)
Limited Partnership -- -- --
Gross unrealized capital gains -- -- --
Gross unrealized capital losses -- -- (1.8)
------ ------ --------
-- -- (1.8)

Deferred income taxes (See Note 8) 32.9 71.5 108.0
------ ------ --------

Net unrealized capital gains (losses) $ 60.5 $132.5 $(189.0)
====== ====== ========

F-21
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

7. Severance and Facilities Charges

Severance and facilities charges during 1996, as described below, included
the following (pretax):
<TABLE>
<CAPTION>

Vacated
Asset Leased Corporate
(Millions) Severance Write-Off Property Other Allocation Total
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Financial Services $ 29.1 $ 1.0 $ 1.3 $ 1.7 $ -- $ 33.1
Individual Life Insurance 12.5 0.4 0.5 0.8 -- 14.2
Corporate Allocation -- -- -- -- 14.0 14.0
---------------------------------------------------------------
Total Company $ 41.6 $ 1.4 $ 1.8 $ 2.5 $ 14.0 $ 61.3
- --------------------------------------------------------------------------------------------
</TABLE>

In the third quarter of 1996, the Company recorded a $30.7 million after
tax ($47.3 million pretax) charge principally related to actions taken or
expected to be taken to improve its cost structure relative to its
competitors. The severance portion of the charge is based on a plan to
eliminate 702 positions (primarily customer service, sales and information
technology support staff). The facilities portion of the charge is based on
a plan to consolidate sales/service field offices.

In addition to the above charge, Aetna recorded a facilities and severance
charge in the second quarter of 1996, primarily as a result of actions
taken or expected to be taken to reduce the level of corporate expenses and
other costs previously absorbed by Aetna's property-casualty operations.
The cost allocated to the Company associated with this charge was $9.1
million after tax ($14.0 million pretax).

The activity during 1996 within the severance and facilities reserve
(pretax, in millions) and the number of positions eliminated related to
such actions were as follows:

Reserve Positions
---------------------------------------------------------------------------
Beginning of year $ -- --
Severance and facilities charges 47.3 702
Corporate Allocation 14.0 --
Actions taken (1) (13.4) (178)
-------------------------------
End of year $ 47.9 524
---------------------------------------------------------------------------

(1) Includes $8.0 million of severance-related actions and $4.1 million of
corporate allocation-related actions.

The Company's severance actions are expected to be substantially completed
by March 31, 1998. The corporate allocation actions and the vacating of the
leased office space are expected to be substantially completed in 1997.

F-22
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

8. Income Taxes

The Company is included in the consolidated federal income tax return and
combined Connecticut and New York state income tax returns of Aetna. Aetna
allocates to each member an amount approximating the tax it would have
incurred were it not a member of the consolidated group, and credits the
member for the use of its tax saving attributes used in the consolidated
returns.

Income taxes for the years ended December 31, consist of:

1996 1995 1994
---- ---- ----
(millions)
Current taxes (benefits):
Income Taxes:
Federal $ 50.9 $ 82.9 $ 78.7
State 3.7 3.2 4.4
Net realized capital gains (losses) 25.3 28.5 (33.2)
------ ------ ------
79.9 114.6 49.9
------ ------ ------
Deferred taxes (benefits):
Income Taxes:
Federal (3.5) (14.4) (8.0)
Net realized capital gains (losses) (18.6) (12.9) 33.7
------ ------ ------
(22.1) (27.3) 25.7
------ ------ ------
Total $ 57.8 $ 87.3 $ 75.6
====== ====== ======

Income taxes were different from the amount computed by applying the
federal income tax rate to income before income taxes for the following
reasons:

1996 1995 1994
---- ---- ----
(millions)

Income before income taxes $198.9 $263.2 $220.9
Tax rate 35% 35% 35%
------ ------ ------
Application of the tax rate 69.6 92.1 77.3
------ ------ ------
Tax effect of:
State income tax, net of federal benefit 2.4 2.1 2.9
Excludable dividends (8.7) (9.3) (8.6)
Other, net (5.5) 2.4 4.0
------ ------ ------
Income taxes $ 57.8 $ 87.3 $ 75.6
====== ====== ======

F-23
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

8. Income Taxes (Continued)

The tax effects of temporary differences that give rise to deferred tax
assets and deferred tax liabilities at December 31 are presented below:

1996 1995
---- ----
(millions)
Deferred tax assets:
Insurance reserves $ 344.6 $ 290.4
Unrealized gains allocable to
experience rated contracts 100.8 216.7
Investment losses 7.5 7.3
Postretirement benefits other
than pensions 27.0 7.7
Deferred compensation 25.0 18.9
Pension 7.6 5.7
Other 29.3 9.2
------- -------
Total gross assets 541.8 555.9

Deferred tax liabilities:
Deferred policy acquisition costs 482.1 433.0
Market discount 6.8 4.4
Net unrealized capital gains 133.7 288.2
Other (0.3) (0.1)
------- -------
Total gross liabilities 622.3 725.5
------- -------
Net deferred tax liability $ 80.5 $ 169.6
======= =======

Net unrealized capital gains and losses are presented in shareholder's
equity net of deferred taxes. Valuation allowances are provided when it is
not considered more likely than not that deferred tax assets will be
realized. As of December 31, 1996 and 1995, no valuation allowances were
required for unrealized capital gains and losses.

The "Policyholders' Surplus Account," which arose under prior tax law, is
generally that portion of a life insurance company's statutory income that
has not been subject to taxation. As of December 31, 1983, no further
additions could be made to the Policyholders' Surplus Account for tax
return purposes under the Deficit Reduction Act of 1984. The balance in
such account was approximately $17.2 million at December 31, 1996. This
amount would be taxed only under certain conditions. No income taxes have
been provided on this amount since management believes the conditions under
which such taxes would become payable are remote.

F-24
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

8. Income Taxes (Continued)

The Internal Revenue Service ("Service") has completed examinations of the
consolidated federal income tax returns of Aetna through 1990. Discussions
are being held with the Service with respect to proposed adjustments.
Management believes there are adequate defenses against, or sufficient
reserves to provide for, any such adjustments. The Service has commenced
its examinations for the years 1991 through 1994.

9. Benefit Plans

Employee Pension Plans - The Company, in conjunction with Aetna, has
noncontributory defined benefit pension plans covering substantially all
employees. The plans provide pension benefits based on years of service and
average annual compensation (measured over 60 consecutive months of highest
earnings in a 120-month period). Contributions are determined using the
Projected Unit Credit Method and, for qualified plans subject to ERISA
requirements, are limited to the amounts that are tax-deductible. As of
December 31, 1996, Aetna's accrued pension cost has been allocated to its
subsidiaries, including the Company, under an allocation based on eligible
salaries. Data on a separate company basis regarding the proportionate
share of the projected benefit obligation and plan assets is not available.
The accumulated benefit obligation and plan assets are recorded by Aetna.
As of the measurement date (i.e., September 30), the accumulated plan
assets exceeded accumulated plan benefits. Allocated pretax charges to
operations for the pension plan (based on the Company's total salary cost
as a percentage of Aetna's total salary cost) were $4.3 million, $6.1
million and $5.5 million for the years ended December 31, 1996, 1995 and
1994, respectively.

Employee Postretirement Benefits - In addition to providing pension
benefits, Aetna currently provides health care and life insurance benefits,
subject to certain caps, for retired employees. A comprehensive medical and
dental plan is offered to all full-time employees retiring at age 50 with
15 years of service or at age 65 with 10 years of service. Retirees are
generally required to contribute to the plans based on their years of
service with Aetna. The costs to the Company associated with the Aetna
postretirement plans for 1996, 1995 and 1994 were $1.8 million, $1.4
million and $1.0 million, respectively.

As of December 31, 1996, Aetna transferred to the Company approximately
$77.7 million of accrued liabilities, primarily related to the pension and
postretirement benefit plans described above, that had been previously
recorded by Aetna. The after tax amount of this transfer (approximately
$50.5 million) is reported as a reduction in retained earnings.

Agent Pension Plans - The Company, in conjunction with Aetna, has a
non-qualified pension plan covering certain agents. The plan provides
pension benefits based on annual commission earnings. As of the measurement
date (i.e., September 30), the accumulated plan assets exceeded accumulated
plan benefits.

F-25
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

9. Benefit Plans (Continued)

Agent Postretirement Benefits - The Company, in conjunction with Aetna,
also provides certain postretirement health care and life insurance
benefits for certain agents. The costs to the Company associated with the
agents' postretirement plans for 1996, 1995 and 1994 were $0.7 million,
$0.8 million and $0.7 million, respectively.

Incentive Savings Plan - Substantially all employees are eligible to
participate in a savings plan under which designated contributions, which
may be invested in common stock of Aetna or certain other investments, are
matched, up to 5% of compensation, by Aetna. Pretax charges to operations
for the incentive savings plan were $5.4 million, $4.9 million and $3.3
million in 1996, 1995 and 1994, respectively.

Stock Plans - Aetna has a stock incentive plan that provides for stock
options, deferred contingent common stock or equivalent cash awards or
restricted stock to certain key employees. Executive and middle management
employees may be granted options to purchase common stock of Aetna at or
above the market price on the date of grant. Options generally become 100%
vested three years after the grant is made, with one-third of the options
vesting each year. Aetna does not recognize compensation expense for stock
options granted at or above the market price on the date of grant under its
stock incentive plans. In addition, executives may be granted incentive
units which are rights to receive common stock or an equivalent value in
cash. The incentive units may vest within a range from 0% to 175% at the
end of a four year period based on the attainment of performance goals. The
costs to the Company associated with the Aetna stock plans for 1996, 1995
and 1994, were $8.1 million, $6.3 million and $1.7 million, respectively.
As of December 31, 1996, Aetna transferred to the Company approximately
$1.1 million of deferred tax benefits related to stock options. This amount
is reported as an increase in retained earnings.

10. Related Party Transactions

The Company is compensated by the Separate Accounts for bearing mortality
and expense risks pertaining to variable life and annuity contracts. Under
the insurance contracts, the Separate Accounts pay the Company a daily fee
which, on an annual basis, ranges, depending on the product, from .10% to
1.90% of their average daily net assets. The Company also receives fees
from the variable life and annuity mutual funds and The Aetna Series Fund
for serving as investment adviser. Under the advisory agreements, the Funds
pay the Company a daily fee which, on an annual basis, ranges, depending on
the fund, from .25% to .85% of their average daily net assets. The Company
also receives fees (expressed as a percentage of the average daily net
assets) from the variable life and annuity mutual funds and The Aetna
Series Fund for providing administration services, and from The Aetna
Series Fund for providing shareholder services and promoting sales. The
amount of compensation and fees received from the Separate Accounts and
Funds, included in Charges Assessed Against Policyholders, amounted to
$185.4 million, $128.1 million and $104.6 million in 1996, 1995 and 1994,
respectively. The Company may waive advisory fees at its discretion.

F-26
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

10. Related Party Transactions (Continued)

The Company acts as an investment adviser for its affiliated mutual funds.
Since August 1996, Aeltus Investment Management, Inc. ("Aeltus"), a wholly
owned subsidiary of HOLDCO and an affiliate of the Company, has been acting
as Subadvisor of all affiliated mutual funds and of most of the General
Account assets. Fees paid by the Company to Aeltus, included in both
Charges Assessed Against Policyholders and Net Investment Income, on an
annual basis, range from .06% to .55% of the average daily net assets under
management. For the year ended December 31, 1996, the Company paid $16.0
million in such fees.

The Company may, from time to time, make reimbursements to a Fund for some
or all of its operating expenses. Reimbursement arrangements may be
terminated at any time without notice.

Since 1981, all domestic individual non-participating life insurance of
Aetna and its subsidiaries has been issued by the Company. Effective
December 31, 1988, the Company entered into a reinsurance agreement with
Aetna Life Insurance Company ("Aetna Life") in which substantially all of
the non-participating individual life and annuity business written by Aetna
Life prior to 1981 was assumed by the Company. A $108.0 million commission,
paid by the Company to Aetna Life in 1988, was capitalized as deferred
policy acquisition costs. An additional $6.1 million commission, paid by
the Company to Aetna Life in 1996, was capitalized as deferred policy
acquisition costs. The Company maintained insurance reserves of $628.3
million and $655.5 million as of December 31, 1996 and 1995, respectively,
relating to the business assumed. In consideration for the assumption of
this business, a loan was established relating to the assets held by Aetna
Life which support the insurance reserves. The loan is being reduced in
accordance with the decrease in the reserves. The fair value of this loan
was $625.3 million and $663.5 million as of December 31, 1996 and 1995,
respectively, and is based upon the fair value of the underlying assets.
Premiums of $25.3 million, $28.0 million and $32.8 million and current and
future benefits of $39.5 million, $43.0 million and $43.8 million were
assumed in 1996, 1995 and 1994, respectively.

Investment income of $44.1 million, $46.5 million and $51.5 million was
generated from the reinsurance loan to affiliate in 1996, 1995 and 1994,
respectively. Net income of approximately $8.1 million, $18.4 million and
$25.1 million resulted from this agreement in 1996, 1995 and 1994,
respectively.

On December 16, 1988, the Company assumed $25.0 million of premium revenue
from Aetna Life for the purchase and administration of a life contingent
single premium variable payout annuity contract. In addition, the Company
also is responsible for administering fixed annuity payments that are made
to annuitants receiving variable payments. Reserves of $28.9 million and
$28.0 million were maintained for this contract as of December 31, 1996 and
1995, respectively.

Effective February 1, 1992, the Company increased its retention limit per
individual life to $2.0 million and entered into a reinsurance agreement
with Aetna Life to reinsure amounts in excess of this limit, up to a
maximum of $8.0 million on any new individual life business, on a yearly
renewable term basis. Premium amounts related to this agreement were $5.2
million, $3.2 million and $1.3 million for 1996, 1995 and 1994,
respectively.

F-27
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

10. Related Party Transactions (Continued)

The Company received a capital contribution of $10.4 million in cash from
HOLDCO in 1996. The Company received no capital contributions in 1995 or
1994.

Premiums due and other receivables include $2.8 million and $5.7 million
due from affiliates in 1996 and 1995, respectively. Other liabilities
include $10.7 million and $12.4 million due to affiliates for 1996 and
1995, respectively.

Substantially all of the administrative and support functions of the
Company are provided by Aetna and its affiliates. The financial statements
reflect allocated charges for these services based upon measures
appropriate for the type and nature of service provided.

11. Reinsurance

The Company utilizes indemnity reinsurance agreements to reduce its
exposure to large losses in all aspects of its insurance business. Such
reinsurance permits recovery of a portion of losses from reinsurers,
although it does not discharge the primary liability of the Company as
direct insurer of the risks reinsured. The Company evaluates the financial
strength of potential reinsurers and continually monitors the financial
condition of reinsurers. Only those reinsurance recoverables deemed
probable of recovery are reflected as assets on the Company's Consolidated
Balance Sheets.

F-28
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

11. Reinsurance (Continued)

The following table includes premium amounts ceded/assumed to/from
affiliated companies as discussed in Note 10 above.

Ceded to Assumed
Direct Other from Other Net
Amount Companies Companies Amount
------ --------- --------- ------
(millions)
1996
Premiums:
Life Insurance $ 34.6 $ 11.2 $ 25.3 $ 48.7
Accident and Health Insurance 6.3 6.3 -- --
Annuities 84.3 -- 0.6 84.9
======= ======= ======= =======
Total earned premiums $ 125.2 $ 17.5 $ 25.9 $ 133.6
======= ======= ======= =======
1995
Premiums:
Life Insurance $ 28.8 $ 8.6 $ 28.0 $ 48.2
Accident and Health Insurance 7.5 7.5 -- --
Annuities 164.0 -- 0.5 164.5
======= ======= ======= =======
Total earned premiums $ 200.3 $ 16.1 $ 28.5 $ 212.7
======= ======= ======= =======
1994
Premiums:
Life Insurance $ 27.3 $ 6.0 $ 32.8 $ 54.1
Accident and Health Insurance 9.3 9.3 -- --
Annuities 137.3 -- 0.2 137.5
======= ======= ======= =======
Total earned premiums $ 173.9 $ 15.3 $ 33.0 $ 191.6
======= ======= ======= =======

12. Commitments and Contingent Liabilities

Commitments

Through the normal course of investment operations, the Company commits to
either purchase or sell securities or money market instruments at a
specified future date and at a specified price or yield. The inability of
counterparties to honor these commitments may result in either higher or
lower replacement cost. Also, there is likely to be a change in the value
of the securities underlying the commitments. At December 31, 1996, the
Company had commitments to purchase investments of $17.9 million. The fair
value of the investments at December 31, 1996 approximated $18.3 million.

F-29
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

12. Commitments and Contingent Liabilities (Continued)

Litigation

The Company is involved in numerous lawsuits arising, for the most part, in
the ordinary course of its business operations. While the ultimate outcome
of litigation against the Company cannot be determined at this time, after
consideration of the defenses available to the Company and any related
reserves established, it is not expected to result in liability for amounts
material to the financial condition of the Company, although it may
adversely affect results of operations in future periods.

F-30
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

13. Segment Information (1)

The Company's operations are reported through two major business segments:
Financial Services and Individual Life Insurance.

Summarized financial information for the Company's principal operations was
as follows:

(Millions) 1996 1995 1994
- --------------------------------------------------------------------------------
Revenue:
Financial Services $ 1,195.1 $ 1,211.3 $ 1,013.5
Individual Life Insurance 445.7 407.9 386.1
---------------------------------
Total revenue $ 1,640.8 $ 1,619.2 $ 1,399.6
- --------------------------------------------------------------------------------
Income before income taxes: (2)
Financial Services $ 129.9 $ 160.1 $ 122.5
Individual Life Insurance 83.0 103.1 98.4
---------------------------------
Total income before income taxes $ 212.9 $ 263.2 $ 220.9
- --------------------------------------------------------------------------------
Net income: (2)
Financial Services $ 94.3 $ 113.8 $ 85.5
Individual Life Insurance 55.9 62.1 59.8
---------------------------------
Net income $ 150.2 $ 175.9 $ 145.3
- --------------------------------------------------------------------------------

Assets under management: (3)
Financial Services $27,268.1 $22,534.4 $18,122.9
Individual Life Insurance 2,830.5 2,590.9 2,220.5
- --------------------------------------------------------------------------------
Total assets under management $30,098.6 $25,125.3 $20,343.4
- --------------------------------------------------------------------------------

(1) The 1996 results include severance and facilities charges of $30.7 million,
after tax. Of this charge $21.5 million related to the Financial Services
segment and $9.2 million related to the Individual Life Insurance segment.
(2) Excludes any effect of the corporate facilities and severance charge
recorded in 1996 which is not directly allocable to the Financial Services
and Individual Life Insurance segments. (Refer to Note 7).
(3) Excludes net unrealized capital gains (losses) of $366.4 million, $797.1
million and $(386.4) million at December 31, 1996, 1995 and 1994,
respectively.

F-31

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

UNDERTAKING TO FILE REPORTS

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

UNDERTAKING PURSUANT TO RULE 484

Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

REPRESENTATIONS, PURSUANT TO SECTION 26(e)(2)(A) OF
THE INVESTMENT COMPANY ACT OF 1940

REGISTRANT MAKES THE FOLLOWING REPRESENTATION:

Aetna Life Insurance and Annuity Company represents that the fees and charges
deducted under the policies covered by this registration statement, in the
aggregate, are reasonable in relation to the services rendered, the expenses
expected to be incurred, and the risks assumed by the insurance company.

CONTENTS OF THE
REGISTRATION STATEMENT

This Registration Statement comprises the following papers and documents:

[bullet] The facing sheet
[bullet] A cross-reference sheet

<PAGE>

[bullet] One Prospectus for the AetnaVest Estate Protector II Variable Life
Insurance Policy consisting of 80 pages
[bullet] The undertaking to file reports
[bullet] The undertaking pursuant to Rule 484
[bullet] Representations pursuant to Section 26(e)(2)(A) of the Investment
Company Act of 1940
[bullet] The signatures
[bullet] Written consents of the following persons:
A. Consent of Counsel (included as part of Exhibit 2 below)*
B. Actuarial Consent (included as part of Exhibit 6 below)
C. Consent of Independent Auditors (included as Exhibit 7 below)
* To be filed by Amendment

The following Exhibits:
<TABLE>
<C> <C> <S>

1. Exhibits required by paragraph A of instructions to exhibits for
Form N-8B-2:
(1) Resolution establishing Variable Life Account B(1)
(2) Not Applicable
(3)(i) Master General Agent Agreement(1)
(3)(ii) Life Insurance General Agent Agreement(1)
(3)(iii) Broker Agreement(1)
(3)(iv) Life Insurance Broker-Dealer Agreement(1)
(4) Not Applicable
(5)(i) Form of AetnaVest Estate Protector II Policy (70225-97)
(5)(ii) Form of Disability Benefit Rider (70226-97)
(5)(iii) Form of Split Option Amendment Rider(2)
(6)(i) Certificate of Incorporation and By-laws of Aetna Life Insurance and Annuity Company(3)
(6)(ii) Amendment of Certificate of Incorporation of Aetna Life Insurance and Annuity Company(4)
(7) Not Applicable
(8)(i) Fund Participation Agreement (Amended and Restated) between Aetna Life Insurance and Annuity Company,
Alger American Fund and Fred Alger Management, Inc., dated as of March 31, 1995(5)
(8)(ii) Fund Participation Agreement between Aetna Life Insurance and Annuity Company, Variable Insurance
Products Fund and Fidelity Distributors Corporation dated February 1, 1994 and amended on December 15,
1994, February 1, 1995, May 1, 1995, January 1, 1996 and March 1, 1996(4)

<PAGE>

(8)(iii) Fund Participation Agreement between Aetna Life Insurance and Annuity Company, Variable Insurance Products
Fund II and Fidelity Distributors Corporation dated February 1, 1994 and amended on December 15, 1994,
February 1, 1995, May 1, 1995, January 1, 1996 and March 1,1996(4)
(8)(iv) Service Agreement between Aetna Life Insurance and Annuity Company and Fidelity
Investments Institutional Operations Company dated as of November 1, 1995(6)
(8)(v) Fund Participation Agreement between Aetna Life Insurance and Annuity Company and Janus
Aspen Series dated April 19, 1994 and amended March 1, 1996(5)
(8)(vi) Fund Participation Agreement between Aetna Life Insurance and Annuity Company and Scudder Variable Life
Investment Fund dated April 27, 1992 and amended February 19, 1993 and August 13, 1993(5)
(8)(vii) Amendment dated as of February 20, 1996 to Fund Participation Agreement between Aetna Life Insurance
and Annuity Company and Scudder Variable Life Investment Fund dated April 27, 1992 as amended
February 19, 1993 and August 13, 1993(6)
(8)(viii) Fund Participation Agreement between Aetna Life Insurance and Annuity Company, Investors Research
Corporation and TCI Portfolios, Inc., dated July 29, 1992 and amended December 22, 1992 and June 1,
1994(5)
(9) Not Applicable
(10)(i) Form of Application (70059-96)
(10)(ii) Supplement (70268-97) to Form of Application 70059-96
(11) Issuance, Transfer and Redemption Procedures

2. Opinion and Consent of Counsel*
3. Not Applicable
4. Not Applicable
5. See Item No. (27)
6. Actuarial Opinion and Consent
7. Consent of Independent Auditors
8. Copy of Power of Attorney(7)
(27) Financial Data Schedule

* To be filed by Amendment
1. Incorporated by reference to Post-Effective Amendment No. 2 to Registration Statement on Form S-6 (File No.
33-76004), as filed electronically on February 16, 1996.
2. Incorporated by reference to Post-Effective Amendment No. 1 to Registration Statement on Form S-6 (File No.
33-64277), as filed electronically on November 15, 1995.
3. Incorporated by reference to Post-Effective Amendment No. 1 to Registration Statement on Form S-1 (File No.
33-60477), as filed electronically on April 15, 1996.
4. Incorporated by reference to Post-Effective Amendment No. 12 to Registration Statement on Form N-4 (File No.
33-75964), as filed electronically on February 11, 1997
5. Incorporated by reference to Post-Effective Amendment No. 5 to Registration Statement on Form N-4 (File No.
33-75986), as filed electronically on April 12, 1996.
6. Incorporated by reference to Post-Effective Amendment No. 3 to Registration Statement on Form N-4 (File No.
33-88720), as filed electronically on June 28, 1996.
7. Included on signature page of this Registration Statement.
</TABLE>

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 the Registrant,
Variable Life Account B of Aetna Life Insurance and Annuity Company, has duly
caused this Registration Statement on Form S-6 to be signed on its behalf by the
undersigned, thereunto duly authorized, and the seal of the Depositor to be
hereunto affixed and attested, all in the City of Hartford, and State of
Connecticut, on this 16th day of May, 1997.

VARIABLE LIFE ACCOUNT B
OF AETNA LIFE INSURANCE AND
ANNUITY COMPANY
(Registrant)

(SEAL)

ATTEST: /s/ Kirk P. Wickman
------------------------
Kirk P. Wickman
Secretary

By: AETNA LIFE INSURANCE AND
ANNUITY COMPANY
(Depositor)

By: /s/ Daniel P. Kearney
---------------------------------------
Daniel P. Kearney
Principal Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
indicated and on the dates indicated. Each person whose signature appears below
constitutes Kirk P. Wickman, and Julie E. Rockmore and each of them
individually, such person's true and lawful attorneys, and agents with full
power of substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign for such person and in such
person's name and capacity indicated below, any and all amendments to this
Registration Statement, hereby ratifying and confirming such person's signature
as it may be signed by said attorneys to any and all amendments.

Signature Title Date

/s/Daniel P. Kearney Director and President ) May
- -------------------- (Principal Executive Officer ) 16, 1997
Daniel P. Kearney )

<PAGE>

/s/Christopher J. Burns Director )
- ------------------------------------ )
Christopher J. Burns )
)
/s/Timothy A. Holt Director )
- ------------------------------------ )
Timothy A. Holt )
)
)
/s/Gail P. Johnson Director )
- ------------------------------------ )
Gail P. Johnson )
)
/s/John Y. Kim Director )
- ------------------------------------ )
John Y. Kim )
)
/s/Shaun P. Mathews Director )
- ------------------------------------ )
Shaun P. Mathews )
)
/s/Glen Salow Director )
- ------------------------------------ )
Glen Salow )
)
/s/Creed R. Terry Director )
- ------------------------------------ )
Creed R. Terry )
)
/s/Deborah Koltenuk Vice President and Treasurer, Corporate Controller )
- ------------------- )
Deborah Koltenuk )

By:
---------------------------
*Julie E. Rockmore
Attorney-in-Fact

<PAGE>

VARIABLE LIFE ACCOUNT B
EXHIBIT INDEX

Exhibit No. Exhibit Page
<C> <S> <C>

99-1.1 Resolution of the Board of Directors of Aetna Life Insurance and Annuity *
Company establishing Variable Life Account B

99-1.3(i) Master General Agent Agreement *

99-1.3(ii) Life Insurance General Agent Agreement *

99-1.3(iii) Broker-Dealer Agreement *

99-1.3(iv) Life Insurance Broker-Dealer Agreement *

99-1.5(i) Form of AetnaVest Estate Protector II Policy (70225-97)
-----

99-1.5(ii) Form of Disability Benefit Rider (70226-97) -----

99-1.5(iii) Form of Split Option Amendment Rider *

99-1.6(i) Certification of Incorporation and By-Laws of Depositor *

99-1.6(ii) Amendment of Certificate of Incorporation of Aetna Life Insurance and Annuity *
Company

99-1.8(i) Fund Participation Agreement (Amended and Restated) between Aetna Life Insurance *
and Annuity Company, Alger American Fund and Fred Alger Management, Inc. dated as
of March 31, 1996

99-1.8(ii) Fund Participation Agreement between Aetna Life Insurance and Annuity Company, *
Variable Insurance Products Fund and Fidelity Distributors Corporation dated
February 1, 1994 and amended on December 15, 1994, February 1, 1995, May 1, 1995,
January 1, 1996 and March 1, 1996

*Incorporated by reference

<PAGE>

Exhibit No. Exhibit Page

99-1.8(iii) Fund Participation Agreement between Aetna Life Insurance and Annuity Company,
Variable Insurance Products Fund II and Fidelity Distributors Corporation dated *
February 1, 1994 and amended on December 15, 1994, February 1, 1995, May 1, 1995,
January 1, 1996 and March 1,1996

99-1.8(iv) Service Agreement between Aetna Life Insurance and Annuity Company and *
Fidelity Investments Institutional Operations Company dated as of November 1,
1995

99-1.8(v) Fund Participation Agreement between Aetna Life Insurance and Annuity Company *
and Janus Aspen Series dated April 19, 1994 and amended March 1, 1996

99-1.8(vi) Fund Participation Agreement between Aetna Life Insurance and Annuity Company *
and Scudder Variable Life Investment Fund dated April 27, 1992 and amended
February 19, 1993 and August 13, 1993

99-1.8(vii) Amendment dated as of February 20, 1996 to Fund Participation Agreement between *
Aetna Life Insurance and Annuity Company and Scudder Variable Life Investment Fund
dated April 27, 1992 as amended February 19, 1993 and August 13, 1993

99-1.8(viii) Fund Participation Agreement between Aetna Life Insurance and Annuity Company, *
Investors Research Corporation and TCI Portfolios, Inc. dated July 29, 1992
and amended December 22, 1992 and June 1, 1994

99-1.10(i) Form of Application (70059-96)
-----

99-1.10(ii) Supplement (70268-97) to Form of Application 70059-96
-----

99-1.11 Issuance, Transfer and Redemption Procedures
-----

99-2 Opinion and Consent of Counsel **

99-6 Actuarial Opinion and Consent
-----

*Incorporated by reference
**To be filed by Amendment

<PAGE>

Exhibit No. Exhibit Page

99-7 Consent of Independent Auditors
-----

99-8 Copy of Power of Attorney *

99-27 Financial Data Schedule
-----

*Incorporated by reference
</TABLE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY
Hartford, Connecticut 06156
(A STOCK COMPANY)

While this Policy is in force, Aetna will pay Proceeds subject to John Doe
all of this Policy's provisions. Other rights and benefits are Mary Doe
provided as described in this Policy. The provisions of this and
the following pages are part of this Policy.

THIS POLICY IS A LEGAL CONTRACT BETWEEN YOU AND AETNA
PLEASE READ YOUR POLICY CAREFULLY

RIGHT OF POLICY EXAMINATION

This Policy may be returned to Aetna or its representative within 10 days of
receipt of Policy or 10 days after Aetna mails notice of right to cancel,
whichever is later. Return this Policy to Aetna, Individual Life Insurance, at
151 Farmington Avenue, Hartford, Connecticut 06156. Upon its return, this Policy
will be deemed void from its beginning. The amount refunded will be:

1. the difference between payments made and amounts allocated to Variable Life
Account B; plus
2. the value of amounts allocated to Variable Life Account B on the date the
returned contract is received by Aetna; plus
3. any charges made under this Policy's terms on the amounts allocated to
Variable Life Account B.

Signed for Aetna on its Date of Issue.

/s/ Kirk P. Wickman /s/ Dan Kearney
Secretary President

----------------------
Registrar

FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY ON THE LIVES OF TWO INSUREDS

[bullet] FLEXIBLE PREMIUMS PAYABLE UNTIL MATURITY DATE OR SECOND DEATH
[bullet] PROCEEDS PAYABLE UPON THE FIRST EVENT TO OCCUR - SURRENDER, MATURITY
OR SECOND DEATH
[bullet] NON-PARTICIPATING - NO DIVIDENDS PAYABLE

The amount or duration of the death benefit may be fixed or variable. The death
benefit is payable as described in the Death Benefit Options and Proceeds
sections of this Policy.

Values in each Fund held in a Separate Account may increase or decrease daily.
Such values are not guaranteed as to dollar amount. Refer to the Policy Values
section of this Policy for more information.

<PAGE>

Table of Contents
- -------------------------------------------------------------------------------
Page No.

Policy Specifications ..................................................... PS1
Policy Summary ............................................................ 1
Definitions ............................................................... 1
Attained Age .......................................................... 1
Basic Monthly Premium ................................................. 1
Date of Issue ......................................................... 1
Death Benefit ......................................................... 1
Fixed Account ......................................................... 1
Fixed Account Value ................................................... 2
Fund(s). .............................................................. 2
Guaranteed Death Benefit .............................................. 2
Home Office ........................................................... 2
Initial Coverage ...................................................... 2
Loan Account Value .................................................... 2
Maturity Date ......................................................... 2
Minimum Specified Amount .............................................. 2
Monthly Deduction Day ................................................. 2
Net Premium ........................................................... 2
Net Single Premium .................................................... 2
Policy Month .......................................................... 2
Policy Year/Policy Anniversary ........................................ 2
Proceeds .............................................................. 2
Second Death .......................................................... 3
Separate Account(s) ................................................... 3
Separate Account Value ................................................ 3
Specified Amount ...................................................... 3
Subsequent Application(s) ............................................. 3
Surviving Insured ..................................................... 3
Total Account Value ................................................... 3
Valuation Date ........................................................ 3
Valuation Period ...................................................... 3
Variable Annuity Account B ............................................ 3
Variable Life Account B ............................................... 3
Variable Option ....................................................... 3
We, Our, Us, Company .................................................. 3
Written Request ....................................................... 3
You, Your ............................................................. 3
General Provisions ........................................................ 4
The Contract .......................................................... 4
Owner ................................................................. 4
Beneficiary ........................................................... 4
Changes in Owner and Beneficiary ...................................... 4
Assignment ............................................................ 4
Non-Participating ..................................................... 5
Policy Settlement ..................................................... 5
Age and/or Sex ........................................................ 5
Change of Address ..................................................... 5
Annual Report ......................................................... 5
Projection of Benefits ................................................ 5
Proceeds .............................................................. 5
Coverage Beyond Maturity .............................................. 6
Right to Defer Payment ................................................ 6
Suicide and Incontestability .............................................. 7
Suicide Exclusion ..................................................... 7
Incontestability ...................................................... 7
Premiums and Reinstatement ................................................ 8
General ............................................................... 8
Planned Premiums ...................................................... 8
Additional Premiums ................................................... 8
Allocation of Premium ................................................. 8
Changes in Allocation Percentages ..................................... 8
No Lapse Coverage ..................................................... 8
Grace Period .......................................................... 9
Reinstatement ......................................................... 9
Death Benefit Options ..................................................... 10
General ............................................................... 10
Option 1 ............................................................. 10
Option 2 ............................................................. 10
Guaranteed Death Benefit .................................................. 10
Policy Values ............................................................. 11
Basis of Calculation .................................................. 11
Interest Credited ..................................................... 11
Fixed Account Value ................................................... 11
Separate Account Value ................................................ 12
Charges to Policy Values .............................................. 12
Transfers Within Accounts ............................................. 13
Monthly Deductions .................................................... 13
Cost of Insurance ..................................................... 13
Cost of Insurance Rate ................................................ 13
Nonforfeiture Provisions .................................................. 14
Continuation of Coverage .............................................. 14
Surrender Value ....................................................... 14
Surrender Charge ...................................................... 14
Partial Surrender ..................................................... 15
Paid-Up Nonforfeiture Option .......................................... 15
Policy Loans .............................................................. 15
General ............................................................... 15
Preferred Loans ....................................................... 15
Loan Interest Rate Charged ............................................ 16
Repayment ............................................................. 16
Changes in Insurance Coverage ............................................. 16
General ............................................................... 16
Increase in Specified Amount .......................................... 16
Decrease in Specified Amount .......................................... 16
Change in Death Benefit Option ........................................ 17
Change from Option 1 to 2 ............................................ 17
Change from Option 2 to 1 ............................................ 17

- --------------------------------------------------------------------------------
Any riders and a copy of the application(s) are at the end of this Policy.

<PAGE>

Table of Contents
- --------------------------------------------------------------------------------
Page No.

Change of Fund(s) ........................................................ 17
Separate Account ......................................................... 18
Settlement Options ....................................................... 18
Conditions ........................................................... 18
Income Options ....................................................... 18
Option 1 - Interest .................................................. 18
Option 2 - Stated Period ............................................. 19
Option 3 - Life Income ............................................... 20
Option 4 - Life Income for Two Payees ................................ 21
Terms of Options ..................................................... 22
Betterment of Payments ............................................... 23
Separate Account ..................................................... 23
Fund(s) Settlement Option Units of Variable
Annuity Account B .................................................. 23
Fund(s) Settlement Option Unit Value of
Variable Annuity Account B ......................................... 23
Withdrawal and Death of the Payee .................................... 24

- --------------------------------------------------------------------------------
Any riders and a copy of the application(s) are at the end of this Policy.

<PAGE>

F2 222 000 JOHN DOE PS 1
MARY DOE

P O L I C Y S P E C I F I C A T I O N S

NAME OF
INSUREDS: JOHN DOE (A)
MARY DOE (B)

POLICY
NUMBER: F 2 222 000 JANUARY 1, 1998 DATE OF ISSUE

SEX AGE PREMIUM CLASS
MALE 45 PREFERRED NONSMOKER
FEMALE 45 PREFERRED NONSMOKER

BENEFICIARY: SEE ATTACHED BENEFICIARY AND POLICY OWNER ENDORSEMENT SHEETS

POLICYOWNER - THE INSUREDS

PLAN - FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY ON THE LIVES OF TWO
INSUREDS

INITIAL SPECIFIED AMOUNT: $500,000 DEATH BENEFIT OPTION: 1

MINIMUM SPECIFIED AMOUNT: $500,000

MATURITY DATE: JANUARY 1, 2053
COVERAGE BEYOND MATURITY ELECTED: YES

INITIAL PLANNED PREMIUM: $X,XXX.00
INITIAL PREMIUM MODE: ANNUAL

BASIC MONTHLY PREMIUM: MONTHLY DEDUCTION DAY: THE
BASIC POLICY ONLY: $XXX.XX 1ST DAY OF EACH MONTH

GUARANTEED DEATH BENEFIT MONTHLY PREMIUM: $XXX.XX

NO LAPSE COVERAGE EXPIRATION DATE: JANUARY 1, 2003

SPLIT OPTION AMENDMENT RIDER
SPLIT OPTION RIDER PERCENTAGES:
50% FOR JOHN DOE
50% FOR MARY DOE

<PAGE>
F2 222 000 JOHN DOE PS 2
MARY DOE

NET PREMIUM INITIAL ALLOCATION PERCENTAGES:
FIXED ACCOUNT 100%

GUARANTEED POLICY FEE:
1) $39.00 PER MONTH FOR THE FIRST POLICY YEAR; AND
2) $14.00 PER MONTH FOR EACH POLICY YEAR AFTER THE FIRST.

GUARANTEED MONTHLY ADMINISTRATIVE EXPENSE CHARGE
$0.08 PER MONTH PER $1,000 OF SPECIFIED AMOUNT IN EACH POLICY YEAR.

MAXIMUM PREMIUM LOAD:
SALES LOAD: 6.65% OF TOTAL PREMIUMS
STATE PREMIUM TAX CHARGE: NOT GUARANTEED; SUBJECT TO CHANGES IN CURRENT
TAX LAWS
FEDERAL INCOME TAX CHARGE: NOT GUARANTEED; SUBJECT TO CHANGES IN CURRENT
TAX LAWS

GUARANTEED INTEREST RATE FOR FIXED ACCOUNT VALUE: 4% PER YEAR

THE PLANNED PREMIUM AMOUNT SHOWN ABOVE MAY NOT CONTINUE THE POLICY IN FORCE TO
THE MATURITY DATE EVEN IF THIS AMOUNT IS PAID AS SCHEDULED. THE PERIOD FOR WHICH
THE POLICY WILL CONTINUE WILL DEPEND UPON:

1) THE AMOUNT, TIMING, AND FREQUENCY OF PREMIUM PAYMENT;
2) CHANGES IN THE SPECIFIED AMOUNT AND THE DEATH BENEFIT OPTIONS;
3) CHANGES IN INTEREST CREDITED, FUND PERFORMANCE, AND MORTALITY DEDUCTIONS;
4) DEDUCTIONS FOR RIDERS AND BENEFITS;
5) PARTIAL SURRENDERS AND POLICY LOANS.

UPON SURRENDER OF THIS POLICY THERE MAY BE A SURRENDER CHARGE. SEE PAGE PS3. IN
ADDITION TO THE PARTIAL SURRENDER CHARGE, AN ADMINISTRATIVE FEE OF $25 MAY APPLY
FOR EACH POLICY SURRENDER.

<PAGE>
PS 3

TABLE OF MAXIMUM SURRENDER CHARGES

(Insert Table)

THIS TABLE APPLIES TO THE INITIAL SPECIFIED AMOUNT FOR THE FIRST 20 YEARS.

AN ADDITIONAL TABLE WILL APPLY UPON EACH INCREASE IN THE SPECIFIED AMOUNT. THE
20 YEAR PERIOD FOR THE ADDITIONAL TABLE WILL BEGIN ON THE EFFECTIVE DATE OF THE
INCREASE.

<PAGE>
PS 6

TABLE OF
GUARANTEED MAXIMUM INSURANCE RATES
PER $1,000 OF AMOUNT AT RISK

POLICY MONTHLY POLICY MONTHLY POLICY MONTHLY
YEAR RATE YEAR RATE YEAR RATE
[OBJECT OMITTED]

(Insert Table)

<PAGE>
PS 7

TABLE OF NET SINGLE PREMIUMS
POLICY NET SINGLE POLICY NET SINGLE POLICY NET SINGLE
YEAR PREMIUM YEAR PREMIUM YEAR PREMIUM
<S> <C> <C> <C> <C> <C>
1998 .220486 2017 .453052 2036 .771933
1999 .229279 2018 .469268 2037 .785508
2000 .238445 2019 .485805 2038 .798314
2001 .247937 2020 .502635 2039 .810345
2002 .257785 2021 .519739 2040 .821659
2003 .267999 2022 .537099 2041 .832333
2004 .278588 2023 .554691 2042 .842502
2005 .289561 2024 .572470 2043 .852304
2006 .300926 2025 .590371 2044 .861916
2007 .312688 2026 .608304 2045 .871545
2008 .324855 2027 .626160 2046 .881429
2009 .337431 2028 .643831 2047 .891862
2010 .350420 2029 .661235 2048 .903107
2011 .363827 2030 .678307 2049 .915359
2012 .377658 2031 .695011 2050 .928723
2013 .391913 2032 .711331 2051 .943440
2014 .406592 2033 .727246 2052 .961538
2015 .421686 2034 .742703 2053 1.000000
2016 .437181 2035 .757631
</TABLE>

<PAGE>

Policy Summary

It is important that You understand Your insurance policy. We have tried to use
understandable language throughout. However, should You have any questions after
You have read it, please call the representative who sold this Policy to You or
call Us. This summary is not a substitute for the detailed policy provisions.

This is a flexible premium variable life insurance policy on the lives of two
insureds. This Policy provides that account values may be invested on either a
fixed or variable or a combination of fixed and variable basis.

You may allocate Net Premiums to the Fixed Account, Variable Life Account B, or
both Accounts. Net Premiums allocated to Variable Life Account B must be
allocated to one or more Variable Options we make available. The Variable
Options support the benefits provided by the variable portion of this Policy.
The Fund Account Value in each Variable Option is not guaranteed and will vary
with the investment performance of the associated Fund.

If the Fixed Account is selected, Net Premiums allocated to that Account will
accumulate at rates of interest We determine. Such rates will not be less than
4% a year.

Proof of the first death should be sent to Us as soon as reasonably possible.

Proceeds as described in this Policy will be paid upon surrender, maturity, or
Second Death.

Sufficient premiums must be paid to continue this Policy in force or to qualify
for the Guaranteed Death Benefit. Premium reminder notices will be sent for
Planned Premiums and for premiums required to continue this Policy in force.
This Policy may be reinstated.

Other rights and benefits are explained in this Policy.

Definitions

Attained Age
Issue age of the Insured as shown in the Policy Specifications, increased by the
number of Policy Years elapsed. Issue age is each Insured's age on his/her
birthday nearest this Policy's Date of Issue.

Basic Monthly Premium
The amount of premium to assure that this Policy remains in force for a period
of at least 5 Policy Years beginning on the Issue Date or the Issue Date of an
Increase.

Date of Issue
The effective date of initial coverage is the Date of Issue shown in the Policy
Specifications. The Date of Issue and the effective date for any change in
coverage will be the Date of Coverage Change shown in the supplemental Policy
Specifications which will be sent to You. Coverage is contingent upon payment of
the first premium and issue of this Policy as provided in the application.

Death Benefit
The amount described in the Death Benefit Options provision which is payable on
the date of the Second Death, subject to all provisions contained in this
Policy.

Fixed Account
A non-variable option available on this Policy that guarantees a minimum
interest rate of 4% per year.

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Fixed Account Value
The non-loaned portion of this Policy's Total Account Value attributable to the
non-variable portion of this Policy. The Fixed Account Value is part of the
general assets of the Company.

Fund(s)
One or more of the underlying variable funding options available under the
policy. Each of the funds is an open-end management investment company (mutual
fund) whose shares are purchased by the Separate Account to fund the benefits
provided by the policy.

Guaranteed Death Benefit
A provision that assures that the Policy will stay in force, even if the Total
Account Value is insufficient to cover the current Monthly Deductions. The
Guaranteed Death Benefit is available to the younger Insured's Attained Age 100.

Home Office
Our main office, located at 151 Farmington Avenue, Hartford, Connecticut 06156.

Initial Coverage
Coverage provided by this Policy prior to any change in coverage.

Loan Account Value
The sum of all unpaid loans. The amount necessary to repay all Policy Loans in
full is the Loan Account Value plus any accrued interest.

Maturity Date
The Policy Anniversary on which the younger Insured reaches Attained Age 100.

Minimum Specified Amount
The Specified Amount for this Policy cannot be decreased below this amount. The
Minimum Specified Amount for this Policy is shown in the Policy Specifications.

Monthly Deduction Day
The first Monthly Deduction Day is the Date of Issue. Monthly Deduction Days
occur each month thereafter on the same day of the month as the Date of Issue.

Net Premium
The Net Premium is equal to the premium paid, less the deduction for premium
load.

Net Single Premium
The Net Single Premium is the amount required to purchase a guaranteed benefit
assuming the Policy's Total Account Value is allocated to the Fixed Account,
using the Insureds' Attained Ages and premium classes. The Net Single Premium is
determined using guaranteed interest of 4.0% per year and guaranteed Cost of
Insurance Rates.

Policy Month
The Policy Month begins each month on the same day of the month as the Date of
Issue.

Policy Year/Policy Anniversary
The first Policy Year is the 12 month period beginning on the Date of Issue.
Your Policy Anniversary is equal to the Date of Issue plus 1 year, 2 years, etc.

Proceeds
The amount We will pay upon the Second Death, the Maturity Date, or upon
surrender of this Policy as described in the Proceeds provision.

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Second Death
Death of the Surviving Insured.

Separate Account(s)
A separate account established by Aetna Life Insurance and Annuity Company for
the purpose of funding this Policy: Variable Life Account B; or, when referring
to a settlement option as described in the Settlement Options provisions of this
Policy, Variable Annuity Account B.

Separate Account Value
The portion of this Policy's Total Account Value attributable to the variable
portion of this Policy. This Policy's Separate Account Value is held in Variable
Life Account B.

Specified Amount
The Specified Amount is shown in the Policy Specifications or in the
Supplemental Policy Specifications, if later changed. The Specified Amount is
chosen by the Policyowner and used in determining the Death Benefit.
It may be increased or decreased as described in this Policy.

Subsequent Application(s)
Any application after the initial application initiated by You or by Us.

Surviving Insured
The Insured living after the first death.

Total Account Value
The sum of the Fixed Account Value, the Separate Account Value, and the Loan
Account Value.

Valuation Date
Any day on which the New York Stock Exchange is open for trading.

Valuation Period
The period of time commencing, usually at 4:00 p.m. Eastern Time on each
Valuation Date and ending at 4:00 p.m. Eastern Time on the next Valuation Date.

Variable Annuity Account B
A Separate Account which segregates assets attributable to the variable portion
of annuity contracts and life insurance settlement options from other assets of
the Company. Its assets are invested in shares of the Funds. Variable Annuity
Account B holds all or a portion of the Policy's Proceeds if a variable
settlement option is elected.

Variable Life Account B
A Separate Account which segregates assets attributable to the variable portion
of life insurance from other assets of the Company. Its assets are invested in
shares of the Funds.

Variable Option
One or more of the variable funding options available under this Policy.

We, Our, Us, Company
Refers to Aetna Life Insurance and Annuity Company, its successors, or assigns.

Written Request
A request in writing, in a form satisfactory to Us and received by Us at the
Home Office.

You, Your
Refers to the Owner(s) of this Policy.

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General Provisions

The Contract
This Policy, the initial application on the Insureds, any Subsequent
Applications and any riders constitute the entire contract. Copies of all
applications are attached to and made a part of this Policy.

Only the President, Executive Vice President or the Corporate Secretary may
agree to a change in this Policy, and then only in writing.

All statements made by or for the Insureds are representations and not
warranties. We will not use such statements to void this Policy or defend
against a claim unless it is contained in the initial application or Subsequent
Applications.

Owner
Unless otherwise stated in the application or later changed, this Policy is
owned by both Insureds jointly. After the first death, the Owner is the
Surviving Insured unless otherwise stated.

The Owner is entitled to exercise all rights granted by this Policy while one or
both Insureds are alive.

If this Policy is owned jointly, any exercise of rights granted by this Policy
must be made jointly.

Beneficiary
The individual or entity that will receive any Proceeds on the Second Death is
the Beneficiary. The Beneficiary is as stated in the application, unless later
changed.

If no designated Beneficiary is living at the time of the Second Death, all
benefits will be paid to the Owner or the Owner's executors, administrators, or
assigns.

Changes in Owner and Beneficiary
Unless this Policy states otherwise, the Owner and the Beneficiary, or both, may
be changed. This may be done as often as desired during the lifetime of one or
both of the Insureds and while this Policy is in force.

To change the Owner or Beneficiary, Your Written Request must be sent to Us.
When We give Our written acceptance, the change will take effect as of the date
Your Written Request was signed. The change will be subject to any action We
take before Our written acceptance of the change.

Assignment
A copy of an Assignment must be on file at the Home Office. Until We receive
such notice, We will not be required to take notice of, or be responsible for,
any transfer of interest in this Policy by Assignment, agreement, or otherwise.

We are not responsible for the validity of any Assignment. The rights of the
Policyowner and the interest of the Beneficiary will be subject to the rights of
any assignee of record.

<PAGE>

Non-Participating
No dividends will be paid.

Policy Settlement
All amounts payable by Us will be paid from the Home Office. We will deduct from
the amount payable at settlement any debt plus accrued interest and any overdue
amount necessary to keep this Policy in force to the date that Proceeds are
payable. We may require return of this Policy.

Age and/or Sex
If the age and/or sex of one or both Insureds is misstated, the amount of the
Death Benefit will be adjusted to reflect the coverage that would have been
purchased by the most recent pre-Maturity Date Monthly Deduction at the correct
age and/or sex.

Change of Address
You must notify Us at the Home Office of a change in Your mailing address.

Annual Report
At least once during each Policy Year We will send You a report. The report will
show the Total Account Value, the Surrender Value and the Death Benefit on the
date of the report. It will also show, since the last report, at least the
following information:

1. gross premiums paid;

2. the Cost of Insurance and the cost of riders;

3. interest and investment return credited to the Total Account Value;

4. the amount of any surrenders or Partial Surrenders;

5. the amount of any surrender charges made;

6. a summary of loan activity;

7. a projection of the Total Account Value, Loan Account Value and Surrender
Value as of the succeeding Policy Anniversary; and

8. any other information required by the state in which this Policy was
delivered.

Projection of Benefits
We will provide a projection of illustrative future Death Benefits and Total
Account Values at any time upon Written Request. We reserve the right to charge
a fee of $25 for this service.

Proceeds
Proceeds on the Second Death will equal:

1. the Death Benefit; less

2. the Loan Account Value plus any accrued interest; less

3. any payment required to keep the policy in force.

Proceeds on the Second Death are payable after receipt at the Home Office of due
proof of death of the Surviving Insured.

<PAGE>

Proceeds on maturity of this Policy will equal:

1. the Total Account Value on the Maturity Date; less

2. the Loan Account Value plus any accrued interest.

Proceeds on surrender of this Policy will equal the Surrender Value as described
in the Surrender Value provision.

All Proceeds are subject to adjustment under the Age and/or Sex,
Incontestability, Suicide Exclusion and Grace Period provisions.

Coverage beyond Maturity
You may elect to continue coverage beyond the Maturity Date provided the policy
is in force on the Maturity Date. Any extra benefit riders will be terminated on
the Maturity Date. If elected by Your Written Request, the following will apply:

[bullet] We will continue to credit interest to the Total Account Value of this
Policy as described in the Interest Credited provision.

[bullet] On the Maturity Date the Separate Account Value of this Policy will be
transferred to the Fixed Account.

[bullet] Monthly Deductions will be calculated with a Cost of Insurance Rate
equal to zero

[bullet] Proceeds are payable on the Second Death and will be as described in
the Proceeds provision of this Policy. Proceeds on maturity will not
be paid.

[bullet] No future premium payments will be accepted except for the amount
required to keep this Policy in force.

Rights and benefits as described in this Policy will be available before the
Second Death.

Right to Defer Payment
Payments of any Separate Account Value will be made within 7 days after Our
receipt of Your Written Request. However, the Company reserves the right to
suspend or postpone the date of any payment of any benefit or values for any
Valuation Period (a) when the New York Stock Exchange is closed (except holidays
or weekends); (2) when trading on the Exchange is restricted; (3) when an
emergency exists as determined by the SEC so that disposal of the securities
held in the Funds is not reasonably practicable or it is not reasonably
practicable to determine the value of the Funds' net assets; or (4) during any
other period when the SEC, by order, so permits for the protection of security
holders. For payment from the Separate Account in such instances, We may defer
payment of:

1. Surrender or Partial Surrender Values;

2. any Proceeds on death in excess of the current Specified Amount; or

3. any portion of the loan value.

Payment of any Fixed Account Value may be deferred for up to six months, except
when used to pay premiums due Us.

<PAGE>

Suicide and Incontestability

Suicide Exclusion
If one or both Insureds die by suicide, while sane or insane, within 2 years
from the Date of Issue of this Policy, this Policy will end and We will pay:

1. the difference between payments made and amounts allocated to the Separate
Account; plus

2. the Separate Account Value; plus

3. any charges made under this Policy's terms on the Separate Account Value;
less

4. the sum of:

(a) the Loan Account Value transferred from the Fixed Account Value; plus

(b) the interest due on the Loan Account Value; plus

(d) any interest earned on the Loan Account Value transferred to the
Separate Account Value.

If one or both Insureds die by suicide while sane or insane, within 2 years from
the Date of Issue of any increase in coverage, We will pay only the Monthly
Deductions for the increase in coverage.

If one or both Insureds die by suicide while sane or insane, more than 2 years
from the Date of Issue of this Policy but within 2 years from the Date of Issue
of any increase in coverage, We will pay:

1. the Proceeds on death for any coverage in effect more than 2 years from the
Date of Issue of this Policy; plus

2. the Monthly Deductions for the increase in coverage.

All amounts will be calculated as of the date of the suicide.

Incontestability
With respect to statements made in the initial application or any Subsequent
Application for each Insured: We will not contest this Policy after it has been
in force during the lifetime of each Insured for 2 years from its Date of Issue.

With respect to statements made in any Subsequent Application for one or both
Insureds: We will not contest coverage relating to Subsequent Applications after
coverage has been in force during the lifetime of each Insured for 2 years from
the Date of Issue of such coverage or from the effective date of any
reinstatement.

If this Policy is contested, Your rights or the Beneficiary's rights may be
affected.

<PAGE>

Premiums and Reinstatement

General
Sufficient premiums must be paid to continue this Policy in force until the
Maturity Date or to qualify for the Guaranteed Death Benefit. The Planned
Premium is due on the Date of Issue. Premium due dates are measured from the
Date of Issue.

Any premiums after the first premium are payable only at our Home Office. Send
Your check or money order, payable to Aetna, to the Home Office. Please be sure
to write Your policy number on Your check. A receipt signed by an officer of the
Company will be given upon request.

We may require satisfactory evidence of insurability if payment of the new
Planned Premium or an Additional Premium during the current Policy Year would
increase the difference between the Death Benefit and the Total Account Value.

Planned Premiums
Planned Premiums are those premiums We agree to bill. Premium reminder notices
for Planned Premiums will be sent at frequencies of 3, 6 or 12 months, or at any
other frequency to which We agree. Planned Premiums as of the Date of Issue are
shown in the Policy Specifications.

You may change the amount and frequency of Planned Premiums by Written Request.

Additional Premiums
Additional Premiums are premium payments in excess of Planned Premiums.
Additional Premiums may be paid at any time while this Policy is in force and
before the Maturity Date.

Allocation of Premium
Each Net Premium will be allocated to the Funds You select under Variable Life
Account B and/or the Fixed Account in the percentages indicated in the Policy
Specifications. If these percentages are changed in accordance with the Changes
in Allocation Percentages provision of this Policy, We will send a letter to You
confirming the change.

Changes in Allocation Percentages
Allocation percentages may be changed at any time by Your request to Us.
Allocations must be changed in whole percentages. The change will be effective
as of the date of the next premium payment after You notify Us.

No Lapse Coverage
This Policy will not terminate within the 5-year period after its Date of Issue
or the Date of Issue of any increase if on every Monthly Deduction Day within
that period the sum of premiums paid within that period equals or exceeds:

1. The sum of the Basic Monthly Premiums for each Policy Month from the start
of the period, including the current month; plus

2. Any Partial Surrenders; plus

3. Any increase in the Loan Account Value since the start of the period.

If on any Monthly Deduction Day within the 5-year period the sum of premiums
paid is less than the sum of items 1, 2 and 3 above, the Grace Period provision
will apply.

After the 5-year period expires, the Total Account Value may be insufficient to
keep this Policy in force. Payment of an Additional Premium may be necessary.

<PAGE>

If the Basic Monthly Premiums have been paid, but outstanding loans have caused
this Policy to enter the Grace Period, this provision will not keep this Policy
in force beyond the Grace Period. The Basic Monthly Premium will continue to be
due and payable if the conditions of the Grace Period are met.

The Basic Monthly Premium is shown in the Policy Specifications.

Grace Period
If the conditions of the No Lapse Coverage or Guaranteed Death Benefit provision
have been met but outstanding loans have caused the Surrender Value to be
insufficient to allow a Monthly Deduction on the Monthly Deduction Day, We will
allow You 61 days of grace for payment of an amount sufficient to allow the
Monthly Deduction. We may require payment of the amount equal to the lesser of
(1) or (2) where:

(1) is the amount necessary to meet the loan related conditions of the No Lapse
Coverage or Guaranteed Death Benefit provision; or

(2) is an amount sufficient to cover the Monthly Deduction(s) that would result
in the Surrender Value being greater than zero.

If the conditions of the No Lapse Coverage or Guaranteed Death Benefit provision
have not been met and the Surrender Value is insufficient to allow a Monthly
Deduction on a Monthly Deduction Day, We will allow You 61 days of grace for
payment of an amount sufficient to allow the Monthly Deduction. We may require
payment of the amount necessary to keep the policy in force for the current
month plus two additional months.

Written notice will be mailed to Your last known address, according to Our
records, not less than 61 days before termination of this Policy. This notice
will also be mailed to the last known address of any assignee of record.

During the days of grace this Policy will stay in force. If the Second Death
occurs during the days of grace, We will deduct an amount required to keep the
policy in force from the Death Benefit.

Reinstatement
If this Policy terminates as provided in the Grace Period provision, it may be
reinstated. To reinstate this Policy, the following conditions must be met:

[bullet] This Policy has not been fully surrendered.

[bullet] You must apply for reinstatement within 5 years after the date of
termination and before the Maturity Date.

[bullet] We must receive evidence of insurability, satisfactory to Us, on each
Insured.

[bullet] We must receive a premium payment sufficient to keep this Policy in
force for the current month plus two additional months.

If this Policy is reinstated while the No Lapse Coverage provision would have
been in effect if this Policy had not lapsed, all values including the Loan
Account Value would be reinstated to the point they were on the date of lapse.

<PAGE>

If this Policy is reinstated after the No Lapse Coverage provision has expired,
this Policy would be reinstated on the Monthly Deduction Day following Our
approval. This Policy's Total Account Value at reinstatement would be the Net
Premium paid less the Monthly Deduction for that day. Any Loan Account Value
would not be reinstated.

If this Policy's Total Account Value less any Loan Account Value including
accrued interest was not sufficient to cover the full Surrender Charge at the
time of lapse, only the remaining portion of the Surrender Charge would be
reinstated. At the time of this Policy's reinstatement, the remaining portion of
the Surrender Charge will be proportionately reduced by the same pattern as the
original Table of Surrender Charges.

Extra benefit riders will be reinstated only with Our consent.

The Guaranteed Death Benefit provision will not be reinstated.

Death Benefit Options

General
The Proceeds payable upon the Second Death is based upon one of the following
Death Benefit Options You choose. The option for this Policy as of the Date of
Issue is shown in the Policy Specifications. If You have changed the Death
Benefit option, the option is shown in the Supplemental Policy Specifications
which were sent to You.

Option 1
The Specified Amount includes the Total Account Value. Under this option, the
Death Benefit will be the greater of: (a) the Specified Amount or (b) a
percentage of the Total Account Value. This percentage is 1 divided by the Net
Single Premium per dollar.

Option 2
The Specified Amount is in addition to the Total Account Value. Under this
option, the Death Benefit will be the greater of: (a) the Specified Amount plus
the Total Account Value on the date of death or (b) a percentage of the Total
Account Value. This percentage is 1 divided by the Net Single Premium per
dollar.

Guaranteed Death Benefit

Your Policy will remain in force until the younger Insured's Attained Age 100,
even if the Total Account Value is insufficient to satisfy the current Monthly
Deduction, if on each Monthly Deduction Day the sum of all premiums paid equals
or exceeds the sum of all Guaranteed Death Benefit Premiums for each Policy
Month from the Date of Issue, including the current month, plus any Partial
Surrenders.

If We determine on a Monthly Deduction Day that this condition has not been
satisfied, the Guaranteed Death Benefit Provision will terminate. You will have
61 days to pay the amount required to keep the Guaranteed Death Benefit in
force.

If Guaranteed Death Benefit premiums have been paid, but outstanding loans have
caused this Policy to enter the Grace Period, this provision will not keep this
Policy in force beyond the Grace Period. Your Guaranteed Death Benefit premium
will continue to be due and payable if the conditions of the Grace Period are
met.

The Guaranteed Death Benefit premium is shown in the Policy Specifications.

<PAGE>

The Guaranteed Death Benefit may not, depending on the Death Benefit Option
chosen, be available to all risk classes.

Once terminated, the Guaranteed Death Benefit provision cannot be reinstated.

Policy Values

Basis of Calculation
The values of this Policy equal or exceed those required by law in the state
where this Policy is delivered. A detailed statement has been filed with the
state which shows how to compute those values.

Interest Credited
We will credit interest on the Fixed Account Value at the guaranteed rate of
4.0% per year. This guaranteed rate equals 0.0032737%, per month, compounded
monthly. We may credit interest in excess of the guaranteed rate.

During Policy Years 1 through 10 the Loan Account Value equal to the
non-preferred loan will earn interest at the guaranteed rate. We may credit
interest in excess of the guaranteed rate.

Beginning in Policy Year 11 or, if later, at the younger Insured's Attained Age
65, the interest earned by the portion of the Loan Account Value equal to the
Preferred Loan will be credited at the guaranteed policy loan interest rate.
Interest, at the rates specified, will be earned by the Loan Account Value and
credited to the Fixed Account Value and the Separate Account Value in the same
proportion in which the Loan Account Value was originally deducted from these
values.

Interest credited to the Loan Account Value will never be less than 4.0% per
year.

Fixed Account Value
The Fixed Account Value for this Policy will be:

1. the value of the Net Premiums credited to the Fixed Account Value; less

2. the portion of Monthly Deductions taken from the Fixed Account Value; plus

3. interest credited; less

4. any transfers of value out of the Fixed Account Value; plus

5. any transfers from the Fund(s) to the Fixed Account Value; plus

6. interest earned on the Loan Account Value attributable to the Fixed Account
Value; plus

7. any loan repayments credited to the Fixed Account Value.

<PAGE>

Separate Account Value
The Separate Account Value of this Policy will be the sum of the Fund Account
Values.

A. Fund Account Value

The portion of each Net Premium allocated to a Fund plus any interest
earned on the Loan Account Value which is attributable to that Fund is
credited to this Policy in the form of accumulation units. Accumulation
units measure the value of Your interest in each applicable Variable
Option. The number of accumulation units credited is equal to that portion
of Net Premium divided by the Accumulation Unit Value for that Variable
Option for the Valuation Period in which the premium is received.

The Fund Account Value of each Variable Option will equal the Accumulation
Unit Value for a Variable Option multiplied by the number of accumulation
units for that Variable Option credited to this Policy.

B. Accumulation Unit Value

The Accumulation Unit Value is determined by multiplying the value of the
Variable Option's accumulation unit for the immediately preceding Valuation
Period by the net investment factor for the current period.

The net investment factor equals the net investment rate plus 1.0. The net
investment rate is determined separately for each Variable Option held in
Variable Life Account B as follows:

1. the net assets of the Variable Option held in Variable Life Account B
at the end of a Valuation
Period; less

2. the net assets of the Variable Option held in Variable Life Account B
at the beginning of that Valuation Period, adjusted by any taxes or
provisions for taxes attributable to the operation of Variable Life
Account B; divided by

3. the value of the Variable Option's accumulation units held in Variable
Life Account B at the beginning of the Valuation Period; less

4. a daily charge at an annual rate not to exceed .90% of net assets of
the Fund for mortality and expense risks attributable to policies
funded through Variable Life Account B.

Charges to Policy Values
Charges and deductions made according to this Policy's provisions will be
deducted from the Separate Account Value and the Fixed Account Value in the same
proportion that these Values bear to the sum of the Fixed Account Value and the
Separate Account Value on the date of the deduction.

The portion of the deduction attributable to the Separate Account Value will
reduce each Fund Account Value proportionately. The value deducted from each
Fund is determined by dividing the amount of the deduction attributable to that
Fund by the Variable Option's Accumulation Unit Value for the Valuation Period
when the charge was made. The resulting number of Variable Option accumulation
units will be deducted from the total accumulation units for that Fund.

The portion of the deduction attributable to the Fixed Account Value will be
deducted from that Value as a dollar amount.

<PAGE>

Transfers Within Accounts
At any time prior to the Maturity Date, You may transfer all or part of each
Fund Account Value to any other Fund or to the Fixed Account Value at any time.
Funds may be transferred between the Funds or from the Funds to the Fixed
Account. We reserve the right to charge an administrative fee of $25 for more
than 12 transfers per year.

We reserve the right to limit the total number of Funds You may elect to 17 over
the lifetime of this Policy.

Within the forty-five days following the Policy Anniversary, You may request a
transfer of a portion of the Fixed Account Value to one or more of the Funds.
This type of transfer is allowed only once within these forty-five days and We
must receive Your request at the Home Office within the forty-five days. The
transfer will be effective on the Valuation Date that Your request is received
by the Home Office. The amount of such transfer cannot exceed the greater of 25%
of the Fixed Account Value or $500.

Accumulation units for each Variable Option will be added to or subtracted from
Your Separate Account Value, based on each Variable Option's Accumulation Unit
Value at the end of the Valuation Period when request for such transfer is
received by Us. A dollar amount will be added to or subtracted from the Fixed
Account Value according to the terms of Your request for transfer.

Monthly Deductions
Monthly Deductions begin on the Date of Issue and occur on each Monthly
Deduction Day thereafter. The Monthly Deduction will be deducted from this
Policy's values as described in the Charges to Policy Values provision.

The Monthly Deduction is equal to:

1. the Cost of Insurance as calculated below; plus

2. the monthly policy fee, shown in the Policy Specifications; plus

3. the monthly expense charge per $1,000 of Specified Amount, as shown in the
Policy Specifications.

Cost of Insurance
The Cost of Insurance on any Monthly Deduction Day will be (1) multiplied by the
result of (2) minus (3) where:

(1) is the monthly Cost of Insurance Rate on that date divided by 1,000;

(2) is the Death Benefit on that date divided by 1.0032737;

(3) is the Total Account Value on that date before computing the Monthly
Deductions for the Cost of Insurance for this Policy.

Cost of Insurance Rate
The monthly Cost of Insurance is based on both Insured's issue age, sex, number
of policy years elapsed and premium class. For an increase, the premium class
for that increase will be used. If an Insured is assigned a premium class which
designates "smoker" and this classification changes, You may, by Written
Request, reclassify the Insured any time after the first Policy Anniversary.
Upon Our acceptance of the change, Supplemental Policy Specifications will be
sent to You.

The monthly Cost of Insurance Rates may be adjusted by Us from time to time.
Adjustments will be on a class basis and will be based on Our estimates for
future factors such as mortality,

<PAGE>

investment income, expenses, and the length of time policies stay in force. Any
adjustments will be made on a nondiscriminatory basis.

The rate during any Policy Year will never exceed the rate shown for that year
in the Table of Guaranteed Maximum Insurance Rates in the Policy Specifications.
Those rates are based on the 1980 Commissioners Standard Ordinary Mortality
Table, Male or Female, Smoker or Nonsmoker.

Nonforfeiture Provisions

Continuation of Coverage
Coverage of this Policy will continue to the Maturity Date as long as the
Surrender Value is sufficient to cover each Monthly Deduction. If the Surrender
Value is insufficient to cover a Monthly Deduction, the Grace Period provision
will apply except as provided under the Guaranteed Death Benefit and No Lapse
Coverage provisions.

Surrender Value
By Written Request, the Owner may surrender this Policy for its full Surrender
Value at any time before the Maturity Date while one or both Insureds is alive.
All insurance coverage under this Policy will end on the date of the full
surrender. Partial Surrenders will also be allowed. We reserve the right to
defer payments as provided under the Right to Defer Payment provision.

The full Surrender Value will equal:

1. the Total Account Value on the date of surrender; less

2. the Surrender Charge; less

3. the Loan Account Value plus any accrued interest.

Surrender Charge
At the time of surrender, We will deduct a Surrender charge from the Total
Account Value. The applicable Surrender Charge for this Policy is shown in the
Policy Specifications in the Table of Surrender Charges.

Any increase in the Specified Amount will result in additional Surrender
Charges. The charge will be effective on the Date of Issue for the increase.
Supplemental Policy Specifications will be sent to You once the change is
complete and will reflect the additional Surrender Charge in the Table of
Surrender Charges.

Any decrease in the Specified Amount will not reduce the original or any
additional Surrender Charge.

Partial Surrender
Partial Surrenders may be made at any time after the expiration of the Right of
Policy Examination period.

A partial Surrender Charge will be included in the amount of the Total Account
Value which is surrendered. The minimum amount of any Partial Surrender after
any Partial Surrender Charge is applied is $500. We may also charge an
administrative fee of $25.

The partial Surrender Charge will be in proportion to the Surrender Charge that
would apply to a full Surrender. The proportion will be computed as the amount
of the net Partial Surrender divided by the sum of the Fixed Account Value and
the Separate Account Value less the full Surrender Charge. When the Partial
Surrender is made, any future Surrender Charge will be reduced in the same
proportion.

<PAGE>

If the Death Benefit option for this Policy is Option 1, a Partial Surrender
will reduce the Total Account Value, Death Benefit, and Specified Amount. The
Specified Amount and Total Account Value will be reduced by equal amounts.
However, We will not allow a Partial Surrender if the Specified Amount will be
reduced below the Minimum Specified Amount.

If the Death Benefit option for this Policy is Option 2, a Partial Surrender
will reduce the Total Account Value and the Death Benefit. The Specified Amount
will not be reduced.

If the Death Benefit option for this Policy is determined as the Total Account
Value divided by the Net Single Premium, the Partial Surrender may not reduce
the Specified Amount.

A reduction in the Specified Amount will cause a reduction in the required
premiums for the Guaranteed Death Benefit provision. The future premium required
to maintain the Guaranteed Death Benefit provision will be based on the new
Specified Amount.

Paid-Up Nonforfeiture Option
By Written Request, You may elect, at any time while one or both Insureds are
alive and before the Maturity Date, to continue this Policy as paid-up life
insurance.

The Surrender Value will be applied as a Net Single Premium to determine the
Specified Amount of the paid-up insurance. The cost of the paid-up insurance
will be based on the guaranteed maximum Cost of Insurance Rates in this Policy
and an interest rate of 4.0% compounded annually. However, the Specified Amount
of the paid-up insurance cannot exceed the Death Benefit under this Policy as of
the effective date of the paid-up insurance. Any excess Surrender Value will be
refunded to You.

The effective date of the paid-up insurance will be the Monthly Deduction Day
which occurs on or immediately after the date Your request is received by Us.

As of the effective date:

[bullet] no further premium payments, Monthly Deductions, excess interest
credits or changes in coverage may be made; and

[bullet] all extra benefit riders will terminate.

Policy Loans

General
We will grant loans at any time after the expiration of the Right of Policy
Examination period. The amount of the loan will not be more than the Loan Value.
The Loan Value for this Policy is 90% of the sum of the Fixed Account Value and
the Separate Account Value less the Surrender Charge applicable at the time of
the loan.

The amount of the loan will be transferred out of the Fixed Account and Separate
Account Values as described in the Policy Values provision. The loan amount
increases the Loan Account Value.

The Loan Account Value plus accrued interest will reduce any Proceeds under this
Policy. If the Loan Account Value exceeds the sum of the Separate Account Value
plus the Fixed Account Value less the Surrender Charge, the Grace Period
provision will apply.

Preferred Loans
<PAGE>
Beginning in the 11th Policy Year or upon the younger Insured's Attained Age 65,
whichever is later, and on each Policy Anniversary thereafter, that portion of
the loan attributable to the Separate Account Value will be treated as
preferred.

Loan Interest Rate Charged
Interest, at an annual effective rate, will be charged on the Policy's Loan
Account Value. The Loan Interest Rate is 8% per year on the Loan Account Value
that is not treated as a Preferred Loan. The Loan Interest Rate charged on the
Preferred Loan is 4.5%. Interest is due and payable on the next Policy
Anniversary, the date this Policy ends or upon full repayment of the Loan
Account Value. Any interest not paid when due will be added to the Loan Account
Value on the Policy Anniversary and will itself bear interest on the same terms.

Repayment
The loan may be repaid in full or in part at any time prior to the Maturity Date
as long as this Policy is in force and one or both Insureds is alive. The amount
necessary to repay all loans in full is the Loan Account Value plus any accrued
interest.

Loan repayments will be allocated to the Fixed Account Value and the Separate
Account Value in the same proportion in which the loan was taken. The Loan
Account Value will be reduced by the amount of any loan repayment.

Changes in Insurance Coverage

General
For any change in coverage We will require Your Written Request. Supplemental
Policy Specifications and/or a notice confirming the change will be sent to You
once the change is completed.

Increase in Specified Amount
Increases will be allowed at any time while this Policy is in force and both
Insureds are alive. The increase may be rescinded by You within 10 days of
receipt of the Supplemental Policy Specifications and/or notice of the right to
rescind the increase, whichever is later.

Satisfactory evidence of insurability on both Insureds will be required.

The Date of Issue for any increase will be shown in the supplemental Policy
Specifications.

The Surrender Value immediately after an increase must be at least three times
the sum of:

(1) the most recent Monthly Deduction from the Total Account Value; and

(2) the Specified Amount of the increase multiplied by the applicable Cost of
Insurance Rate divided by 1000.

Any increase in the Specified Amount will increase the Surrender Charge. The
5-year period as described in the No Lapse Coverage provision will restart on
the Date of Issue of the increase.

The Basic Monthly Premium and the premium required to satisfy the Guaranteed
Death Benefit will be based on the new Specified Amount.

Decrease in Specified Amount
You may decrease the Specified Amount of this Policy after the 5th Policy Year.
We will not allow a decrease in the Specified Amount if the Specified Amount
would be reduced below the Minimum Specified Amount.

<PAGE>

For a decrease in the Specified Amount, the Date of Issue will be the Monthly
Deduction Date on or next following the date on which Your Written Request is
received.

The decrease will reduce any past increases in the reverse order in which they
occurred.

The Basic Monthly Premium and the premium required to satisfy the Guaranteed
Death Benefit will be based on the new Specified Amount.

Change in Death Benefit Option
Any change in the Death Benefit option is subject to the following conditions:

We will not allow a change in the Death Benefit option if the Specified Amount
will be reduced below the Minimum Specified Amount.

The change will take effect on the Monthly Deduction Day on or next following
the date on which Your Written Request is received.

There will be no change in the Surrender Charge.

Evidence of insurability may be required.

Change from Option 1 to 2
Changes from Option 1 to 2 will be allowed at any time while this Policy is in
force. The Specified Amount will be reduced to equal the Specified Amount less
the Total Account Value at the time of the change. If a change from Option 1 to
2 would reduce the Specified Amount to below the Minimum Specified Amount, an
increase in Specified Amount would be imposed to bring the new Specified Amount
up to the Minimum Specified Amount.

The Basic Monthly Premium and the premium required to satisfy the Guaranteed
Death Benefit will be based on the new Specified Amount.

Change from Option 2 to 1
Changes from Option 2 to 1 will be allowed at any time while this policy is in
force. The new Specified Amount will equal the Specified Amount plus the Total
Account Value as of the date of the change.

The Basic Monthly Premium and the premium required to satisfy the Guaranteed
Death Benefit will be based on the new Specified Amount.

Change of Fund(s)

If shares of any Fund are no longer available for investment by the Separate
Account or, in Our judgment, further investment in such shares should become
inappropriate in view of the purpose of the Policy, We may cease to make such
Fund shares available under the Policy prospectively, or we may substitute
shares of other Fund(s) for shares already acquired. We may also, from time to
time, add additional Funds. Any elimination, substitution or addition of Funds
will be done in accordance with applicable state or federal securities laws. We
reserve the right to substitute shares of another Fund for shares already
acquired without a proxy vote.

The investment policy of a Separate Account may not be changed without the
approval of the Insurance Commissioner of the State of Connecticut. The approval
process has been filed with the Commissioner.

We will notify You of any change.

<PAGE>

Separate Account

Variable Life Account B is a Separate Account established by Us in accordance
with the laws of the State of Connecticut. Income, realized and unrealized gains
and losses from the assets of Variable Life Account B will be credited to or
charged against Variable Life Account B without regard to Our other income,
gains, or losses. Variable Life Account B's liabilities arise from the variable
life insurance policies that it supports. The assets of Variable Life Account B
are available to cover the liabilities of the General Account only to the extent
that Variable Life Account B's assets exceed its liabilities.

The value of the assets of Variable Life Account B is determined whenever the
policy benefits vary and at the end of every Valuation Period.

Settlement Options

Conditions
All or part of the Proceeds of this Policy may be applied under one or more of
the options described below or in any manner to which We agree and that We make
available. An election shall be made by Written Request filed with the Home
Office. The payee of Proceeds may make this election if no prior election has
been made.

Payments will be made at intervals of 1, 3, 6 or 12 months in equal amounts as
elected. Payments under a settlement option may be made on a fixed dollar or
variable basis. However, once payments begin on either the fixed or variable
basis, the option may not be changed to one with payments on the alternate
basis.

Our consent to the election of an option is required if:

1. The payee is not a natural person receiving payments in his or her own
right;

2. the payee is an assignee of this Policy; or

3. payments would be less than $25 each or totaling less than $120 in a year.

Income Options
The rates for these Income Options are based on the 1983 rates for Individual
Annuity Mortality Table and a pivotal age of 55. For purposes of calculating
payments, the Adjusted Ages of the payees will be used. The Adjusted Age is the
payee's age on his or her birthday nearest the commencement date of the annuity
and then reduced by one year for annuities commencing in the 1990's, reduced two
years for annuities beginning during 2000-2009, and so on.

Rates for ages and intervals not shown for any of the following income options
will be furnished upon request.

Option 1 - Interest
Payment of interest on Proceeds left with Us. Proceeds held under this option
may be left with Us after the death of the payee only with Our consent. By
Written Request, the payee may later elect to:

[bullet] Receive all or a portion of the amount held under this option; or

[bullet] apply all or a portion of this amount to options 2, 3 or 4 as
described below.

<PAGE>

Option 2 - Stated Period
Payments for a stated number of years, not longer than 30 years. If payments for
this option are made on a variable basis, the present value of any remaining
payments may be withdrawn at any time.

Rates for Fixed Payments with Guaranteed Interest Rate of 3.0%; and
Rates for Variable Payments with Assumed Net Return Rate of 3.0%

- ---------------------------------------------------------------------
PAYMENT PER $1,000 PROCEEDS
- ---------------------------------------------------------------------
YEARS OF YEARS OF
STATED STATED
PERIOD MONTHLY PERIOD MONTHLY
---------------- ----------------- ----------------
3 $28.99 15 $6.87
4 22.06 20 5.51
5 17.91 25 4.71
10 9.61 30 4.18
- ----------------- ================ ----------------- ----------------

Rates for Variable Payments with Assumed Net Return Rate of 5%

- ---------------------------------------------------------------------
PAYMENT PER $1,000 PROCEEDS
- ---------------------------------------------------------------------
YEARS OF YEARS OF
STATED STATED
PERIOD MONTHLY PERIOD MONTHLY
---------------- ----------------- ----------------
3 $29.80 15 $7.82
4 22.89 20 6.51
5 18.74 25 5.76
10 10.51 30 5.28
- ---------------------------------------------------------------------

<PAGE>

Option 3 - Life Income
Payments for the lifetime of the payee. If also chosen, We will guarantee
payments for 60, 120, 180, or 240 months. No payment will be due after death,
except payment for any remaining fixed period.

Rates for Fixed Payments with Guaranteed Interest Rate of 3.0%; and
Rates for Variable Payments with Assumed Net Return Rate of 3.0%

- -----------------------------------------------------------------------------------------------------------------------------
MONTHLY LIFE INCOME PER $1,000 PROCEEDS
- -----------------------------------------------------------------------------------------------------------------------------
AGE WITH FIXED PERIOD WITHOUT
---------------------------- ---------------------------- ----------------------------
NEAREST 10 YEARS 15 YEARS 20 YEARS FIXED PERIOD
------------------------------------------------------------------------------------------------------------------
BIRTHDAY Male Female Male Female Male Female Male Female
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
50 $4.22 $3.89 $4.17 $3.86 $4.08 $3.82 $4.27 $3.90
51 4.30 3.95 4.23 3.92 4.14 3.88 4.34 3.97
52 4.37 4.01 4.30 3.98 4.20 3.93 4.43 4.03
53 4.45 4.08 4.37 4.04 4.26 3.99 4.51 4.10
54 4.54 4.15 4.45 4.11 4.32 4.04 4.60 4.18
55 4.62 4.22 4.53 4.18 4.39 4.11 4.70 4.25
56 4.72 4.30 4.61 4.25 4.45 4.17 4.80 4.34
57 4.82 4.38 4.69 4.32 4.51 4.23 4.91 4.42
58 4.92 4.47 4.78 4.40 4.58 4.30 5.03 4.52
59 5.03 4.56 4.87 4.48 4.65 4.37 5.15 4.61
60 5.14 4.66 4.96 4.57 4.71 4.44 5.28 4.72
61 5.27 4.76 5.06 4.66 4.78 4.51 5.43 4.83
62 5.39 4.87 5.16 4.75 4.84 4.58 5.58 4.95
63 5.53 4.98 5.26 4.85 4.90 4.65 5.74 5.08
64 5.66 5.10 5.36 4.95 4.96 4.72 5.91 5.21
65 5.81 5.22 5.46 5.05 5.02 4.79 6.10 5.36
66 5.96 5.36 5.56 5.16 5.08 4.86 6.30 5.51
67 6.12 5.50 5.66 5.26 5.13 4.93 6.51 5.67
68 6.28 5.65 5.77 5.37 5.18 5.00 6.73 5.85
69 6.44 5.80 5.86 5.49 5.23 5.06 6.97 6.04
70 6.61 5.97 5.96 5.60 5.27 5.12 7.23 6.25
71 6.79 6.14 6.05 5.71 5.31 5.18 7.51 6.47
72 6.96 6.32 6.14 5.83 5.34 5.23 7.80 6.71
73 7.14 6.50 6.23 5.94 5.37 5.28 8.12 6.98
74 7.32 6.69 6.31 6.04 5.40 5.32 8.46 7.26
75 7.50 6.89 6.38 6.14 5.42 5.35 8.82 7.57
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

Rates for Variable Payments with Assumed Net Return Rate of 5%
<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------
MONTHLY LIFE INCOME PER $1,000 PROCEEDS
- ------------------------------------------------------------------------------------------------------------------
AGE WITH FIXED PERIOD WITHOUT
----------------------------------------------------------------
NEAREST FOR 120 MONTHS FOR 240 MONTHS FIXED PERIOD
-------------------------------- ------------------------------- -------------------------------
BIRTHDAY MALE FEMALE MALE FEMALE MALE FEMALE
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
50 $5.41 $5.09 $5.24 $5.01 $5.48 $5.12
51 5.48 5.14 5.29 5.05 5.55 5.17
52 5.55 5.20 5.34 5.10 5.63 5.23
53 5.62 5.26 5.40 5.15 5.71 5.30
54 5.70 5.33 5.45 5.20 5.80 5.37

55 5.79 5.39 5.51 5.25 5.89 5.44
56 5.87 5.47 5.56 5.31 5.99 5.52
57 5.97 5.54 5.62 5.37 6.10 5.60
58 6.06 5.62 5.68 5.42 6.21 5.69
59 6.17 5.71 5.74 5.48 6.33 5.79

60 6.28 5.80 5.79 5.55 6.46 5.89
61 6.39 5.90 5.85 5.61 6.60 6.00
62 6.51 6.00 5.91 5.67 6.75 6.11
63 6.64 6.10 5.96 5.73 6.91 6.23
64 6.77 6.22 6.02 5.80 7.09 6.37

65 6.91 6.34 6.07 5.86 7.27 6.51
66 7.05 6.46 6.12 5.92 7.47 6.66
67 7.20 6.60 6.16 5.99 7.68 6.82
68 7.35 6.74 6.21 6.04 7.91 7.00
69 7.51 6.89 6.25 6.10 8.15 7.19

70 7.67 7.04 6.28 6.15 8.41 7.39
71 7.83 7.21 6.32 6.20 8.69 7.62
72 8.00 7.38 6.35 6.25 8.99 7.86
73 8.16 7.55 6.37 6.29 9.31 8.12
74 8.33 7.73 6.39 6.33 9.65 8.41

75 8.50 7.92 6.41 6.36 10.02 8.72
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

Option 4 - Life Income for Two Payees
Payments during the joint lifetimes of two payees. At the death of either,
payments will continue to the survivor. When this option is chosen a choice must
be made of:

1. 100% of the payment to continue to the survivor;

2. 66 2/3% of the payment to continue to the survivor;

3. 50% of the payment to continue to the survivor;

4. payments for a minimum of 120 months, with 100% of the payment to continue
to the survivor; or

5. 100% of the payment to continue to the survivor if the survivor is the
original payee, and 50% of the payment to continue to the survivor if the
survivor is the second payee.

<PAGE>

No payment will become due after the death of the surviving payee.
The following tables illustrate the applicable rates if number (3) of option 4
is chosen.

Rates for Fixed Rate Payments with Guaranteed Interest Rate of 3.0%; and
Rates for Variable Rate Payments with Assumed Net Return of 3.0%
<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------
MONTHLY JOINT LIFE INCOME WITH 1/2 TO SURVIVOR PER $1,000 PROCEEDS
- ------------------------------------------------------------------------------------------------------------------
AGE OF
MALE AGE OF FEMALE PAYEE
----------------------------------------------------------------------------------------------------
PAYEE 50 55 60 65 70 75 80 85
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
50 $4.08 $4.26 $4.48 $4.75 $5.07 $5.46 $5.90 $6.36
55 4.27 4.47 4.71 5.01 5.37 5.80 6.30 6.83
60 4.49 4.71 4.99 5.32 5.73 6.22 6.80 7.42
65 4.76 5.01 5.32 5.70 6.17 6.75 7.44 8.19
70 5.07 5.36 5.71 6.15 6.70 7.40 8.23 9.16
75 5.41 5.74 6.15 6.66 7.32 8.15 9.16 10.34
80 5.77 6.15 6.62 7.22 7.99 8.99 10.24 11.73
85 6.12 6.54 7.08 7.77 8.67 9.86 11.40 13.27
- ------------------------------------------------------------------------------------------------------------------
</TABLE>

Rates for Variable Rate Payments with Assumed Net Return Rate of 5%
<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------
MONTHLY JOINT LIFE INCOME WITH 1/2 TO SURVIVOR PER $1,000 PROCEEDS
- ------------------------------------------------------------------------------------------------------------------
AGE OF
MALE AGE OF FEMALE PAYEE
----------------------------------------------------------------------------------------------------
PAYEE 50 55 60 65 70 75 80 85
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
50 $5.29 $5.46 $5.68 $5.95 $6.29 $6.73 $7.25 $7.82
55 5.48 5.66 5.89 6.18 6.56 7.03 7.60 8.24
60 5.71 5.91 6.16 6.49 6.90 7.42 8.06 8.78
65 6.01 6.23 6.51 6.87 7.33 7.93 8.67 9.50
70 6.36 6.61 6.93 7.34 7.87 8.56 9.43 10.43
75 6.78 7.05 7.42 7.89 8.51 9.33 10.35 11.57
80 7.23 7.54 7.96 8.51 9.23 10.20 11.44 12.95
85 7.68 8.05 8.53 9.16 10.00 11.14 12.64 14.51
- ------------------------------------------------------------------------------------------------------------------
</TABLE>

Terms of Options
Proceeds applied under option 1 will be held by Us in the General Account.
Proceeds applied under options 2, 3 and 4 will be held:

1. In the General Account if payments on a fixed dollar basis are elected; or

2. in Variable Annuity Account B using any of its Funds available under this
Policy for settlement option purposes if payments on a variable basis are
elected; or

3. in both the General Account and the Variable Annuity Account B.

Proceeds in the General Account will be used to make payments on a fixed dollar
basis. We will add interest to such Proceeds at an annual rate not less than
3.0%. We may add interest daily at any higher rate. As to option 1, we may from
time to time offer higher interest rates with certain conditions on withdrawal
which are currently published by Us.

Proceeds in Variable Annuity Account B will be used to make payments on a
variable basis. An assumed annual net return rate of 5% may be chosen for such
payments. If not chosen, We will use an assumed net return rate of 3.0%. The
assumed annual net return rate is the interest rate used to determine the amount
of the first payment on a variable basis. Variable Annuity Account B must earn
this rate plus enough to cover the mortality and expense risk and administrative
fee charges if future payments on a variable basis are to remain level.

<PAGE>

If payments on a variable basis are not to decrease, We must earn a gross return
on the assets of Variable Annuity Account B of:

1. 4.75% on an annual basis, plus an annual return of up to .25% needed to
offset the administrative charge set at the time the settlement option
payments started, if an assumed annual net return rate of 3.0% is
chosen; or

2. 6.25% on an annual basis, plus an annual return of up to .25% needed to
offset the administrative charge set at the time the settlement option
payments started, if an assumed annual net return rate of 5% is chosen.

Payments will not change due to changes in the mortality or expense results or
administrative charges.

Betterment of Payments
If option 2, 3 or 4 is chosen, and if the guaranteed payments are less than
those of Our current single premium immediate annuity on the same plan, those
larger amounts will be paid instead.

Separate Account
Payments on a variable basis will be made from the Proceeds held in Variable
Annuity Account B. Variable Annuity Account B is a Separate Account established
by Us in accordance with the laws of the State of Connecticut. Income, realized
and unrealized gains and losses from the assets of Variable Annuity Account B
will be credited to or charged against Variable Annuity Account B without regard
to Our other income, gains, or losses. Variable Annuity Account B's liabilities
arise from the variable portion of annuity contracts and life insurance
settlement options that it supports. The assets of Variable Annuity Account B
are available to cover the liabilities of the General Account only to the extent
that Variable Annuity Account B's assets exceed its liabilities.

Fund(s) Settlement Option Units of Variable Annuity Account B
If payment on a variable basis is chosen, the first payment is calculated as
follows:

1. The portion of Proceeds applied to make payments on the variable basis;
divided by

2. 1,000; multiplied by

3. the payment rate for the option chosen.

This amount is divided by the Fund settlement option unit value on the tenth
Valuation Period before the due date of the first payment to determine the
number of Fund settlement option units. The number of Fund settlement option
units remains fixed. Each future payment is equal to this number multiplied by
the Fund settlement option unit value on the tenth Valuation Period prior to the
due date of the payment.

Fund(s) Settlement Option Unit Value of Variable Annuity Account B For any
Valuation Period the Fund settlement option unit value is equal to:

1. The value for the previous Period; multiplied by

2. the net return factor(s) for the Period; multiplied by

3. a factor to reflect the assumed annual net return rate. The factor for
3.0% per year is .9999190 or, for 5% per year, .9998663.

The dollar value of the Fund settlement option unit values and payments may
increase or decrease due to investment gain or loss.

<PAGE>

Net Return Factor(s):

The net return factor(s) are used to compute Variable Annuity Account B values
and payments for any of its Funds.

The net return factor for each Fund is equal to 1.0000000 plus the net return
rate.

The net return rate is equal to:

1. The value of the shares of the Fund held by Variable Annuity Account B at
the end of a Valuation Period; less

2. the value of the shares of the Fund at the start of the Valuation Period;
adjusted by any taxes (or provisions for taxes) on Variable Annuity Account
B; divided by

3. the total value of the Fund settlement option units and other Fund
accumulation units of Variable Annuity Account B at the start of the
Valuation Period; less

4. a daily actuarial charge at an annual rate of 1.25% for annuity mortality
and expense risks and profit; and a daily administrative charge which will
not exceed .25% on an annual basis.

A net return rate may be more or less than 0.

The value of a share of the Fund is equal to the net assets of the Fund divided
by the number of shares outstanding.

The administrative charge may not be changed for amounts which have been used to
purchase a settlement option.

Withdrawal and Death of Payee
As to funds held under option 1, withdrawals and change of option may be made if
the payee makes the election. Under option 2, if payments are made on a variable
basis, the present value of any remaining payments may be withdrawn at any time.
Amounts in the General Account under option 2 may not be withdrawn. No
withdrawals or changes of option may be made under options 3 and 4. Upon the
death of the payee, the current value of the amount held under option 1 or the
present value of any guaranteed payments not yet paid will be paid in one sum to
the designated beneficiary. The designated beneficiary may elect to continue the
remaining payments instead of receiving the lump sum amount. If no designated
beneficiary exists, the present value of any remaining payments will be paid in
one sum to the estate of the payee.

The interest rate used to determine the first payment will be used to calculate
the present value of any remaining payments.

<PAGE>

FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY ON THE LIVES OF TWO INSUREDS

[bullet] FLEXIBLE PREMIUMS PAYABLE UNTIL MATURITY DATE OR SECOND DEATH

[bullet] PROCEEDS PAYABLE UPON THE FIRST EVENT TO OCCUR - SURRENDER, MATURITY
OR SECOND DEATH

[bullet] NON-PARTICIPATING - NO DIVIDENDS PAYABLE

The amount or duration of the death benefit may be fixed or variable. The death
benefit is payable as described in the Death Benefit Options and Proceeds
sections of this Policy.

A DISABILITY BENEFIT RIDER

This Extra Benefit Rider is attached to and made a part of this Policy. It
provides for credit of the Benefit Amount in the event of Total Disability of
the Insured. We will credit the Benefit Amount subject to the provisions of this
Rider and this Policy.

Definitions

Basic Monthly Premium
The Basic Monthly Premium is the amount of premium to assure that the Policy
remains in force for a period of at least 5 Policy Years beginning on the Issue
Date or the Issue Date of an Increase.*

Insured
As stated in the Policy Specifications, the Insured is the individual who has
coverage as provided by this Rider.

Total Disability, Disabled
Total Disability is the inability due to sickness or injury to perform the
substantial and material duties of any Occupation for remuneration or profit.

Occupation
For the first full 24 months of Total Disability, Occupation is the Insured's
occupation when Total Disability starts. After 24 months, Occupation means any
occupation for which the Insured is reasonably suited by education, training or
experience.

Benefit
We will credit the Benefit Amount for this Policy on each Monthly Deduction Day
which occurs during the Total Disability of the Insured. Subject to the
conditions of this Rider, this Benefit will apply retroactively to premium due
dates since the start of the Total Disability.

If the two persons on whose lives the Policy is issued each file a claim subject
to the conditions of this Rider, only one Benefit will be paid. The Benefit
Amount will be the greater of:

(1) the Basic Monthly Premium; or

(2) the Monthly Deduction for that day for this Policy and all Extra Benefit
Riders, if any, except this one.

Conditions
The following conditions apply:

1. the Total Disability of the Insured must start while this Rider is in force
and before the Insured is Attained Age 60;

2. the Total Disability must be continuous for at least 180 days;

3. We must receive Notice and Proof as described in this Rider;

Page 1
<PAGE>

4. Premiums due more than 12 months before We receive Proof of Total
Disability will not be credited unless Proof could not have reasonably been
given sooner;

5. The Specified Amount of this Policy may not be increased during the
Insured's Total Disability, except as specifically provided for under any
Extra Benefit Rider attached to this policy

Notice and Proof of Disability
We will require written Notice and Proof of the Total Disability. Notice and
satisfactory Proof of the Total Disability of the Insured must be given to Us
within 12 months of the commencement of the Insured's Total Disability.

Failure to provide Notice and Proof will not reduce the claim for this Rider's
Benefit if it is shown that Notice of Proof was provided as soon as reasonably
possible.

After a claim is approved and the Benefit is exercised, We may require further
Proof at reasonable intervals. As part of the Proof, we may require that doctors
of Our choice examine the Insured at Our expense. If the required Proof is not
given or if the Insured recovers, no further Benefit Amount will be credited.

Other Provisions
Excluded Disabilities
This Rider does not provide its Benefit for Total Disability which results from:
1. military (land, sea, or air) service by the Insured in time of war,
declared or undeclared;
2. injury that is intentionally self-inflicted.

Reinstatement
In the Insured is Totally Disabled on the date this Policy terminates because of
insufficient value, We will reinstate this Policy if:

1. the requirements of the Notice and Proof section of this Rider are met; and

2. the right to exercise this Rider's Benefit would otherwise have been granted.

Incontestability
We cannot contest this Rider, except for failure to pay required premiums, after
it has been in force during the lifetime of the Insured for a period of two
years from its Date of Issue with no Total Disability having occurred.

Rider Premium
The Rider Premium is shown in the Policy Specifications and will be calculated
independently of the Policy's premium option.

Monthly Rider Cost
The Monthly Rider Cost for this Rider is equal to the result of (a) multiplied
by (b) where:

(a) is the Rider Rate, as determined by the table below; and

(b) is the Monthly Premium for this Rider's Premium Option.

The monthly deduction for this Policy will be increased by the cost for this
Rider.

There is no cost for this Rider on any Monthly Deduction Day for which benefits
are due under this Rider.

Rider Rate

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Issue Age Rate Issue Age Rate Issue Age Rate
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Under 33 .02 48-49 .06 55-57 .10
- ----------------------------------------------------------------------------------------------------
33-39 .03 50-52 .07 58-59 .11
- ----------------------------------------------------------------------------------------------------
40-43 .04 53 .08
- ----------------------------------------------------------------------------------------------------
44-47 .05 54 .09
- ----------------------------------------------------------------------------------------------------
</TABLE>

Page 2
<PAGE>

Policy Loans
This Rider's Benefit does not include the payment of loan interest due during
the period of Total Disability.

Termination
This Rider will terminate on the first of the following events to occur:

1. on the Policy Anniversary that the Insured becomes Attained Age 60, unless
the Benefit Amount is currently being waived according to the terms of this
Rider. After Attained Age 60 this Rider's Premium will no longer be due;

2. on the date this Policy ends;

3. on the next premium due date after We receive Your Written Request to
terminate this Rider.

Termination of this Rider will not prejudice a claim for Total Disability which
exists at that time.

This Rider has no cash value.

This Rider is attached to and made a part of this Policy. It is signed for Aetna
on its Date of Issue.

Aetna Life Insurance and Annuity Company

/s/ Kirk P. Wickman
Secretary

- ------------------------------- --------------------------------------------------------------------------------------------------
LIFE INSURANCE APPLICATION
Aetna Life Insurance and Annuity Co.
151 Farmington Avenue
Hartford, CT 06156-1961
- --------------------- ------------------------------------------------------------------------------------------------------------
General ANSWER ALL QUESTIONS IF:
Information [checkmark] New Insurance [ ] Increase Amount $ [ ] Policy No.
-------------------- -----------
ANSWER QUESTIONS 1, 8 (if applicable), 4, 20, 21 & Policyowner/Taxpayer Id. Number
[ ] Term Conversion/Guaranteed Option $ . Continue $ as term
--------------------- ----------------------
[ ] Other Policy Change ANSWER APPLICABLE QUESTIONS
-----------------------------------
[ ] Policy Number to be changed/converted
- --------------------- --------- -------------------------------------------- -----------------------------------------------------
ST OF DEL [checkmark] STATE OF DELIVERY CT
-------------------------------------------------------------------------
- --------------------- ------------------------------------------------------------------------------------------------------------
(Proposed) 1. Print Full Legal Name (First, Middle, Last)
Insured John J. Doe
Information ------------------------------------------------------------------------------------------------------------
Residence Address (Number, Street) P. O. Box
123 Main Street
------------------------------------------------------------------------------------------------------------
City, State and Zip Code
Hartford, CT 06104
------------------------------------------------------------------------------------------------------------
Sex Date of Birth (mm/dd/yy) Place of Birth MVR License # and License State
Male 01/01/62 Avon, CT 0612345 CT
------------------------------------------------------------------------------------------------------------
2a. Occupation (Title & Give Exact Duties)
Comptroller
------------------------------------------------------------------------------------------------------------
2b. Employer's Name and Address 2c. Annual Income
ABC CORPORATION $175,000
-----------------------------------------------------------------------------------------------------------
2d. Amount of life insurance presently in force:
Aetna $0.00 ADB $0.00 Other Companies $0.00 ADB $0.00
------------- --------- ------- -----
Are there current negotiations with other companies? [ ] Yes [checkmark] No
If Yes, advise Company and results.
------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
3. Will life insurance or annuity in any Company be replaced or changed if insurance applied for is
issued? [ ] Yes [checkmark] No
Explain
- --------------------- ------------------------------------------------------------------------------------------------------------
Policy 4. Basic Plan Flex. Prem. Var. UL on 2 Insds Face Amount $500,000
------------------------------ ---------------------------------------
Information Death Benefit Option (if applicable) Option 1
-------------------------------------------------------------
Dividend Option [ ] Pay in Cash [ ] Reduce premium (not for salary deduction)

[ ] Other [ ] Specify
------------------------------ -------------------------------------------------
Direct Billing Frequency [ ] Annual [ ] Semi-Annual
[ ] Quarterly [checkmark] Monthly (ACP/List Bill) Plan

List Supplemental Benefits/Riders & Amounts (e.g. WP, ADB, EPOR, ROPR)

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

70059-96 * For CIR - Submit application supplement1

<PAGE>

- --------------------- -----------------------------------------------------------------------------------------------------------
(Proposed) NON MEDICAL - QUESTIONS 5-19 SHOULD NOT BE COMPLETED FOR TERM
Insured CONVERSIONS OR EXERCISE OF GUARANTEED INSURABILITY OPTION
Information 5. HAVE YOU WITHIN 2 YEARS: (IF YES, EXPLAIN)
a. Flown as a pilot or crew member or intend to do so? (If Yes, furnish
Aviation supplement) . . . . . . . . . . . . . . . . . . . . . . . . . . [ ] Yes [checkmark] No
b. Engaged in motor vehicle or boat racing, rock or mountain climbing,
hang gliding or sky, skin or scuba diving or intend such activities?
(If Yes, furnish Avocation supplement). . . . . . . . . . . . . . . . . . [ ] Yes [checkmark] No
c. Had your license suspended or revoked, had 3 or more moving violations,
or been charged with driving under the influence of alcohol or drugs? [ ] Yes [checkmark] No
d. Frequently traveled outside of the United States or intend to do so? . . . . [ ] Yes [checkmark] No
6. HAVE YOU EVER:
a. Had insurance refused, or offered only with an extra premium? . . . . . . . [ ] Yes [checkmark] No
b. Been arrested and convicted for a felony offense? . . . . . . . . . . . . . [ ] Yes [checkmark] No
7. HAVE YOU IN THE LAST 5 YEARS: (IF YES, EXPLAIN)
a. Used hallucinogenic or narcotic drugs not prescribed by a doctor? . . . . . [ ] Yes [checkmark] No
b. Used alcoholic beverages? (Note type, quantity and frequency) . . . . . . . [ ] Yes [checkmark] No
c. Had or been advised to have medical treatment or counseling from a
commonly recognized practitioner or organization for alcohol or drug use?. [ ] Yes [checkmark] No
8. a. Have you smoked cigarettes within the past 12 months? . . . . . . . . . . . [ ] Yes [checkmark] No
Information If Yes, how much? . . . . . . . . . . . . . . . . . . . . . . . . . . . .
---------------------
b. If No, have you used any other tobacco products within the past 12 months
(e.g. cigar, pipe, smokeless tobacco)? . . . . . . . . . . . . . . . . . [ ] Yes [checkmark] No
If Yes, have you smoked cigarettes within the past 10 years? . . . . . [ ] Yes [checkmark] No
c. Have you used any nicotine substitutes within the past 12 months
(e.g. patch, gum)? . . . . . . . . . . . . . . . . . . . . . . . . . . [ ] Yes [checkmark] No
- ---------------------
Height & 9. a. What is your current height? . . . . . . . . . . . . . . . . . . . . . . . . 6'0"
Weight ---------------------
b. What is your current weight? . . . . . . . . . . . . . . . . . . . . . . . . 200lbs
---------------------
c. If under age 2, birth weight? . . . . . . . . . . . . . . . . . . . . . . .
---------------------
- ---------------------
History 10. Have you had a history of heart, lung or liver disorder, stroke, diabetes or
cancer? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [ ] Yes [checkmark] No
- --------------------- ------------------------------------------------------------------------------------------------------------
Attending 11. Name, address and phone number of personal physician, date, reason last seen and results.
Physician Dr. Jones
Information ------------------------------------------------------------------------------------------------------------
10 Summer Street, Hartford, CT 06101 (860) 275-0121
------------------------------------------------------------------------------------------------------------
Routine Physical on 9/30/96.
------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL INFORMATION (Give details of YES answers, dates and results) For
additional space please use Addendum Sheet.
------------------------------------------------------------------------------------------------------------
QUES. #
- ----------------------------------------------------------------------------------------------------------------------------------

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

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

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

IF AN EXAM IS REQUIRED AND QUESTION 10 IS ANSWERED "YES" AN MD EXAM IS REQUIRED
70059-96

<PAGE>

- --------------------- -----------------------------------------------------------------------------------------------------------
(Proposed) PART II - QUESTIONS 12 - 19 REQUIRED EVEN FOR EXAMINED BUSINESS
Insured 12. HAVE YOU EVER IN THE LAST 10 YEARS HAD OR BEEN TREATED
Information FOR: (IF YES, EXPLAIN)
a. Mental or nervous disorder? . . . . . . . . . . . . . . . . . . . . . . . [ ] Yes [checkmark] No
b. Disease of the nervous system or brain? . . . . . . . . . . . . . . . . . [ ] Yes [checkmark] No
c. Fainting, seizures, paralysis or stroke? . . . . . . . . . . . . . . . . [ ] Yes [checkmark] No
d. Shortness of breath, persistent cough? . . . . . . . . . . . . . . . . . [ ] Yes [checkmark] No
e. Emphysema or other lung disease? . . . . . . . . . . . . . . . . . . . . [ ] Yes [checkmark] No
f. Chest pain, high blood pressure, heart attack, heart murmur, disease of the
heart or blood vessels? . . . . . . . . . . . . . . . . . . . . . . . . . [ ] Yes [checkmark] No
g. Hepatitis, cirrhosis, or other disease of the liver or pancreas? . . . . [ ] Yes [checkmark] No
h. Ulcer, colitis, chronic diarrhea, or other disorder of the stomach or
intestines? [ ] Yes [checkmark] No
i. Sugar, albumin, blood or pus in urine? . . . . . . . . . . . . . . . . . [ ] Yes [checkmark] No
j. Disease of the kidneys, reproductive organs or sexually transmitted disease
(other than AIDS)? [ ] Yes [checkmark] No
k. Diabetes, thyroid or glandular disease? . . . . . . . . . . . . . . . . [ ] Yes [checkmark] No
l. Arthritis, disease or injury of the muscles, bones or joints? . . . . . . [ ] Yes [checkmark] No
m. Cancer, tumor, cyst, disease of skin or lymph glands? . . . . . . . . . . [ ] Yes [checkmark] No
13. HAVE YOU IN THE LAST 10 YEARS (IF YES, EXPLAIN):
a. Been diagnosed or treated for immune deficiency (other than AIDS), anemia
or other blood disorder by a member of the medical profession? . . . . [ ] Yes [checkmark] No
b. Had recurrent fever, fatigue or unexplained weight loss? . . . . . . . [ ] Yes [checkmark] No
14. Have you in the last 10 years been diagnosed or treated for AIDS/ARC or
had a positive HIV (AIDS virus) antibody test?. . . . . . . . . . . . . . [ ] Yes [checkmark] No
15. OTHER THAN ABOVE, HAVE YOU WITHIN THE PAST 5 YEARS: No
(IF YES, EXPLAIN)
a. Had a checkup, consultation, illness, injury, surgery or diagnostic test? [checkmark] Yes [ ] No
b. Been advised to have any diagnostic test, hospitalization or surgery which
was not completed? . . . . . . . . . . . . . . . . . . . . . . . . . . . [ ] Yes [checkmark] No
16. a. Are you now under observation or treatment? . . . . . . . . . . . . . . . . [ ] Yes [checkmark] No
b. Do you need assistance, supervision or use of medical appliances of any [ ] Yes [checkmark] No
kind? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17. Have you within 90 days had or been advised to have surgery or to be admitted
to a medical facility or within 2 years been treated or diagnosed by a physician
for heart disease, stroke, immune disorder (other than AIDS) or cancer? . . [ ] Yes [checkmark] No
- ---------------------
Family 18. a. Do you have a family history of diabetes, heart disease or hereditary
History disease? (If Yes, explain) . . . . . . . . . . . . . . . . . . . . . . [ ] Yes [checkmark] No
b. Father, age: 68 health status: healthy if deceased, cause:
------- -------------- ---------------------
c. Mother, age: 65 health status: healthy if deceased, cause:
------ --------------------- ---------------------
- ---------------------
Explanations 19. EXPLANATIONS: Include, nature and severity of condition, frequency of attacks, treatments
received, medication, dates, name, address & phone number of medical attendants and hospitals.
For additional space please use Addendum Sheet.
- --------------------- ------------------------------------------------------------------------------------------------------------
QUESTION #
- --------------------- ------------------------------------------------------------------ -----------------------------------------
15a Routine Physical
- --------------------- ------------------------------------------------------------------ -----------------------------------------

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

70059-96

<PAGE>

BENEFICIARY/OWNER INFORMATION

- ------------------------------------------------------------------------------------------------------------------
Beneficiary 20 A. PRIMARY (provide full name and relationship)
Information Mary J. Doe, Wife
--------------------------------------------------------------------------------------------

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

--------------------------------------------------------------------------------------------
------------------------ -------------------------------------------------------------------
Soc. Sec. # ###-##-####
------------------------ -------------------------------------------------------------------
B. SECONDARY (If any, provide full name and relationship)

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

--------------------------------------------------------------------------------------------
Unless otherwise requested, if more than one beneficiary is named, payment will be made in equal
shares. If no beneficiary survives the insured, payment will be made to the executors or
administrators of the insured.
C. OTHER [ ] (e.g. Mode Settlement, Trustee under the Will, Individual Creditor. If Creditor -
who will receive any balance.
--------------------------------------------------------------------------------------------

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

--------------------------------------------------------------------------------------------
Soc. Sec. #
--------------------------------------------------------------------------------------------
D. FINAL (check one) [checkmark]Estate of the Insured
[ ] Executors or Administrators of the Survivor of the Beneficiary(ies)

- ------------------------------------------------------------------------------------------------------------------
OWNER POLICYOWNER: THE (PROPOSED) INSURED IS POLICYOWNER UNLESS UNDER AGE 15
OR OTHERWISE REQUESTED.
21. A. PRIMARY (Provide full name, address, relationship and Date of Birth, mm/dd/yy)

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

------------------------------------------------------------------------------------------------------
B. SECONDARY (If any, provide full name, address, relationship and Date of Birth, mm/dd/yy)

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

---------------------------------------------------------------------------------------------------
C. OTHER [ ]

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

---------------------------------------------------------------------------------------------------
D. FINAL: (check one) [ ] Insured
[ ] Insured at legal age in policy delivery state
[checkmark] Executors or Administrators of the Survivor of the Owner(s)

70059-96

<PAGE>

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

22. Any payment is subject to the terms and conditions of the Temporary Insurance Agreement. If payment
is made, the Temporary Insurance Agreement must be provided and explained.

23. If automatic payment from checking account is selected:
I (we) authorize Aetna Life Insurance and Annuity Company (ALIAC) to debit my (our) checking account
electronically, by paper means or by any other commercially accepted method, to cover premiums and
other payments for my policy(ies). I (we) also authorize my financial institution named on the voided check
attached to charge my account for such payments. If my/our account number or financial institution
change, I (we) authorize ALIAC to accept verbal instructions from me regarding such changes, and to
change this authorization accordingly. This authorization is to remain in full force and effect until ALIAC
has received written notification from me (or either of us) of its termination within a reasonable time
to take action.

[ ] Attach "VOID" Check Date of draw (8th, 20th or 28th)
--------------------------------------------------------
Signature of Payor
---------------------------------------------------------------------------------------------------------------

24. Any person who, knowingly presents a false or fraudulent claim for payment of a loss or benefit
or knowingly presents false information in an application for insurance is guilty of a crime and may
be subject to fines and confinement in prison.

The answers above are true and complete to the best of knowledge and belief.

I agree that no producer may alter the terms of the application, the Temporary Insurance Agreement or the policy,
nor can the producer waive any of Aetna's rights or requirements.

I agree that coverage can take effect only if the proposed insured is alive, and all answers in this application
material to the risk are still true and complete when the policy is delivered and the entire first premium is
paid.

I agree to advise the Company or producer in writing of any known or suspected changes in the health of the
proposed insured, or of any changes to any answers on this application, prior to delivery of this policy.

- ----------------------------------------------------------------------------------------------------------------------------------
Signature of (Proposed) Insured (Required if age 10 or over) Date
John J. Doe 09/01/97
- ----------------------------------------------------------------------------------------------------------------------------------
(Signature of parent if juvenile under age 10) Date

- ----------------------------------------------------------------------------------------------------------------------------------
Signature of Applicant/Policyowner, if other than proposed insured Date

- ----------------------------------------------------------------------------------------------------------------------------------
Signature of Assignee, if applicable Date

- ---------------------------------------------------------------------------------------------------------------------------------
City State Zip
Hartford CT 06156
- ---------------------------------------------------------------------------------------------------------------------------------
Signature of Agent I M Agent Agent License #567 Date 09-01-97
</TABLE>

70059-96

Aetna Life Insurance and Annuity Company
Hartford, Connecticut 06156
Supplement to Application for
Variable Life Insurance
<TABLE>
<S> <C> <C> <C>

1. Proposed Insured A John J. Doe
---------------------------------------------------------
First Middle Last
Proposed Insured A Jane J. Doe
---------------------------------------------------------
First Middle Last

2. Premium Payment Allocation (Indicate Whole Percentages. Percentages must equal 100%.)

[Global International Growth & Income -- Stocks & Bonds
% Janus Aspen Worldwide Growth Portfolio % Aetna Investment Advisers Fund
% Scudder International Portfolio % Janus Aspen Balance Portfolio
Aggressive Growth Income Income --
% Alger American Small Cap Portfolio % Aetna Income Shares
% Janus Aspen Aggressive Growth Portfolio % Janus Aspen Short-Term Bond Portfolio
Growth Stability of Principal
% Fidelity VIP II Contrafund Portfolio % Aetna Variable Encore Fund (Money Market)
% Janus Aspen Growth Portfolio 100% Aetna Fixed Account
% American Century VP Capital Appreciation Asset Allocation
Growth & Income -- Stocks % Aetna Ascent Variable Portfolio
% Aetna Variable Fund % Aetna Crossroads Variable Portfolio
% Aetna Variable Index Plus Portfolio % Aetna Legacy Variable Portfolio]
% Fidelity VIP Equity-Income Portfolio

Owner's Suitability

The rules of the National Association of Securities Dealers, Inc. require that the Sales Representative have reasonable
grounds to believe that the sale is suitable for the Owner,
based on information provided by the Owner as shown on this form and on information known by the Sales Representative.

3. Owner's Taxpayer Identification Number: [checkmark] Individual ###-##-####
|_| Partnership |_| Corporation |_| Trustee |_| Other |_||_|-|_||_||_||_||_||_||_|

4. Age: 45
5: Citizenship: US
6. Marital Status: M
7. Number of Dependents: 0
8. Occupation: Sr. Accountant
9. Employers' Name(s) & Address: ABC Corporation, Hartford, CT 06104

10. Investment Objectives (check all applicable objectives)
|_| Capital Preservation
|_| Tax Advantage/Deferral
[checkmark] Current Income
|_| Growth and Income
|_| Growth
|_| Aggressive Growth
|_| Other (please specify) _______________________________________________

11. Insurance Objectives (check all applicable objectives)
|_| Estate Creation

<PAGE>

[checkmark] Estate Conservation
|_| Other (please specify)

12. Investment Knowledge: |_| Limited [checkmark] Good |_| Extensive

13. Risk Tolerance: |_| None |_| Low [checkmark] Medium |_| High

14. Is the coverage in accord with the Owner's insurance objectives and anticipated financial needs? [checkmark] Yes |_| No

15. Total Income of Owner's Immediate Family
|_| $250,000+
[checkmark] $100,000 - $249,999
|_| $ 50,000 - $99,999
|_| $ 25,000 - $49,999
|_| Under $25,000

16: Estimated Net Worth of Owner's Immediate Family
|_| $1,000,000+
|_| $ 500,000 - $1,000,000
[checkmark] $ 250,000 - $ 500,000
|_| $ 100,000 - $ 250,000
|_| Under $100,000

17. Federal Tax Bracket: |_| 15% [checkmark] 28% |_| Other (please specify)

18. Is the Owner associated with a National Association of Securities Dealers, Inc. firm? |_| Yes [checkmark] No

19. If jointly, or business, owned, please provide the name(s) and signature(s) of the person(s) authorized to
exercise ownership rights: _____________________________________________________________________

I understand that:

THE AMOUNT AND DURATION OF THE DEATH BENEFIT MAY VARY UNDER SPECIFIED CONDITIONS.

VALUES NOT IN THE FIXED ACCOUNT MAY INCREASE OR DECREASE IN ACCORDANCE WITH THE EXPERIENCE OF THE SEPARATE ACCOUNT.

THE AMOUNT OF THE MATURITY BENEFIT IS NOT GUARANTEED BUT IS DEPENDENT UPON THE THEN SURRENDER VALUE.

ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH BENEFITS, ACCOUNT VALUES, AND SURRENDER VALUES ARE AVAILABLE UPON REQUEST.

I hereby acknowledge receipt of the Prospectus dated May, 1997 for all applicable prospectus(es) pertaining to the Separate Account
and all of the variable options.

Signed at Hartford, CT on 06/01/97
(City, State) (Mo/Day/Yr)

By John J. Doe By
--------------------- -------------------------------------
Signature of Owner Signature of Owner

Based on information obtained from the Owner, I believe the investment is suitable for the Owner's objectives.

I M Agent on 06/01/97
-------------------------------------- ------------
Signature of Registered Representative (Mo/Day/Yr)
</TABLE>

Aetna Life Insurance and Annuity Company's Redemption
and Transfer Procedure and Method of Computing
Adjustments on Payments and Cash Value Upon Conversion
to Fixed Benefit Policies

This document sets forth, as required by Rule 6e-3(T)(b)(12)(iii), the
administrative procedures that will be followed by Aetna Life Insurance and
Annuity Company (the "Company") in connection with the issuance of The Flexible
Premium Variable Life Insurance Policy on the Lives of Two Insureds (the
"Policy") described in this Registration Statement, the transfer of assets held
thereunder, and the redemption by Policyowners of their interests in the
Policies.

1. PUBLIC OFFERING PRICE

Purchase and Related Transactions

Set out below is a summary of the principal Policy provisions and
administrative procedures which might be deemed to constitute, either
directly or indirectly, a "purchase" transaction. The summary shows that,
because of the insurance nature of the Policies, the procedures involved
necessarily differ in certain significant respects from the purchase
procedures for mutual funds and contractual plans.

a. Premium Levels and Underwriting Standards

Premiums for the Policies will not be the same for all Policyowners.
The Policy is a flexible premium life insurance Policy in that the
Policyowner has the right to decide when to make premium payments
and in what amounts. The Policy provides various premium levels at
which the Policyowner may make payments. As described in this
Registration Statement, they are the Planned Premium, the Basic
Monthly Premium, and the Guaranteed Death Benefit 100 Premium. The
Policyowner may make any other premium payments as Additional
Premiums. Payment of premiums in accordance with the premium levels
listed above is not mandatory and failure to do so will not of
itself cause the Policy to lapse. Instead, Policyowners may make
premium payments in any amount at any frequency. If at any time
a premium is paid that would exceed the maximum premium limitations
set forth in the Policy, the Company will accept only that portion
of the premium that is not in excess of the maximum. Any portion of
the premium in excess of the maximum will be returned to the
Policyowner and no further premiums will be accepted until allowed
by the maximum limitations stated in the Policy. Section 7702 of
the Internal Revenue Code includes a definition of life insurance
for tax purposes. These rules place limits on the relationship
between the death benefit and the account value. If necessary, the
Company will increase the death benefit of a Policy in order to
maintain compliance with Section 7702.

As described in this Registration Statement, the Basic Monthly
Premium provides for the No Lapse Coverage provision for all
Policies. The Guaranteed Death Premium provides for the Guaranteed
Death Benefit to the Younger Insured's Attained Age 100 provision
for all Policies except for those Policies with Death Benefit Option
2 where one or both Insureds are substandard table-rated or have an
underwriting class of uninsurable.

Under the No Lapse Coverage Provision, the Policy will not terminate
within the 5-year period after the Issue Date or the Issue Date of
any increase in Specified Amount if on every Monthly Deduction Day
within that period the sum of premiums paid within that period
equals or exceeds the sum of the Basic Monthly Premiums for each
policy month from the start of the period, including the current
month, plus any Partial Surrenders, plus any increase in the Loan
Account Value since the start of the period. If on any Monthly
Deduction Day within the 5-year period the sum of premiums is
insufficient to provide for

- --------------------------------------------------------------------------------
"Procedures Manual" Page 1

Page 4
<PAGE>

the No Lapse Coverage Provision, the Grace Period provision will
apply. The Grace Period provision is defined under Section 2.c.
below.

Under the Guaranteed Death Benefit provision, the Policy will remain
in force until the Younger Insured's Attained Age 100, even if the
Total Account Value is insufficient to satisfy the current Monthly
Deduction, if on each Monthly Deduction Day the sum of all premiums
paid equals or exceeds the sum of all the Guaranteed Death Benefit
Premiums for each policy month from the Issue Date, including the
current month, plus any Partial Surrenders. If the Guaranteed Death
Benefit provision is in place and the required premium is not
received within 61 days the Guaranteed Death Benefit provision will
terminate. If the Guaranteed Death Benefit Premiums have been paid,
but outstanding Policy Loans have caused the Policy to enter the
Grace Period, the Guaranteed Death Benefit provision will not keep
the Policy in force beyond the Grace Period. The Guaranteed Death
Benefit Premium will continue to be due and payable if the
conditions of the Grace Period are met.

In the absence of or upon expiration of the No Lapse Coverage
Provision or the Guaranteed Death Benefit provision (collectively
known as the Guaranteed Death Benefit provisions), the Policy will
remain in force so long as the Surrender Value is sufficient to pay
for the Monthly Deduction on each Monthly Deduction Day. The Grace
Period will not begin so long as the Surrender Value is sufficient
to pay for the Monthly Deduction on the Monthly Deduction Day.

The Cost of Insurance rate utilized in computing the Cost of
Insurance charge will not be the same for each Insured. The chief
reason is that the principle of pooling and distribution of
mortality risks is based upon the assumption that each Insured
incurs an insurance rate commensurate with his or her mortality risk
which is actuarially determined based upon factors such as issue
age, attained age, sex, and underwriting class (health, occupation,
avocation, smoker/nonsmoker status). Accordingly, while not all
Insureds will be subject to the same Cost of Insurance rate, there
will be a single Cost of Insurance rate for all Insureds in a given
actuarial category.

The Policies will be offered and sold pursuant to established
underwriting standards and in accordance with State insurance laws.
State insurance laws prohibit unfair discrimination among Insureds
but recognize that Cost of Insurance rates must be based upon
factors such as issue age, attained age, health, and occupation.
Most States also recognize that Cost of Insurance rates must be
based upon the sex of the Insured. However, for those States that do
not allow distinctions based on sex, the Company will use Cost of
Insurance rates that disregard the sex of the Insured.

b. Application and Initial Premium Processing

Upon receipt of a completed application form, the Company will
follow certain insurance underwriting procedures designed to
determine whether the proposed Insureds are insurable. This process
may involve such verification procedures as medical examinations and
personal telephone interviews with the proposed Insureds. The Policy
will not be issued until these underwriting procedures have been
completed.

If a sufficient premium payment is made at the time of the
application and if the proposed Insureds have answered favorably
questions relating to his or her health, a temporary insurance
agreement (where approved for use and subject to certain stated
maximums) will be provided to the applicant (proposed Policyowner).
This agreement provides that insurance (up to $1,000,000 in
approving States) equal to the Specified Amount applied for will be
provided until the applicant is notified of acceptance or rejection
of the application. Our standard practice is then to make the Policy
effective on the date of underwriting approval for the Specified
Amount applied for, and to apply the premium payments as of that
date. Under limited circumstances, the Company may backdate a
Policy, upon request, by assigning an Issue Date earlier than the
date the application is signed but no earlier than six months prior
to approval of the Policy. Backdating may be desireable, for
example, so that the policyowner can purchase a particular Policy
Specified Amount for lower Cost of Insurance Rates based on a
younger insurance age. For a

- --------------------------------------------------------------------------------
"Procedures Manual" Page 2

<PAGE>

backdated Policy, the policyowner may pay the premium for the
period between the Issue Date and the date the application is
received in the Home Office. Backdating of the Policy will not
affect the date on which the premium payments are credited to the
Separate Account and credited with Accumulation Units. The Policy
cannot be credited with Accumulation Units until the Net Premium is
actually deposited in the Separate Account.

The above procedure is not followed in those States that do not
allow the Company to reflect performance of the Separate Account in
the refund as a result of exercising the Right of Policy Examination
provision. In such States, either no money will be accepted at the
time of the application, or the Policy may only be dated from the
date of the underwriting approval.

Under the Company's current rules, the minimum Specified Amount at
issue is $500,000. The Company reserves the right to revise its
rules from time to time to specify a different minimum Specified
Amount at issue.

c. Premium Allocation

In the application for a Policy, the Policyowner can allocate
premiums among the variable options of the Separate Account. The
premium will be allocated (after its receipt) on the first Valuation
Date on or following the effective date of the insurance coverage
under the Policy. Premiums paid after the date of the application
will be allocated according to the Policyowner's instructions in
effect at the time the premium payment is received in the Company's
Home Office. The allocation for future premium payments may be
changed at any time, free of charge. The change will be effective as
of the date of the next premium payment after the Policyowner
notifies the Company of the change.

d. Reinstatement of a Lapsed Policy

If the Policy lapses (terminates without value) as provided in the
Grace Period provision, it may be reinstated. To reinstate the
Policy, the following conditions must be met:

1. the Policy has not been fully surrendered;
2. the Policyowner must apply for reinstatement of a lapsed
policy within 5 years after the date of lapse and before
the Maturity Date
of the Policy;
3. the Company must receive evidence of insurability,
satisfactory to the Company, on each Insured; and
4. the Company must receive a premium payment sufficient to
keep the Policy in force for the current month plus two
additional months.

If the Policy is reinstated while the No Lapse Coverage Provision
would have been in effect had the Policy not lapsed, the values
including the Loan Account Value will be reinstated to the point
they were on the date of lapse.

If the Policy is reinstated after the No Lapse Coverage Provision
would have expired had the Policy not lapsed, the Policy will be
reinstated on the Monthly Deduction Day following the Company's
approval. The Policy's Total Account Value at reinstatement will be
the Net Premium paid less the Monthly Deduction for that Monthly
Deduction Day. Any Loan Account Value will not be reinstated.

If the Policy's Total Account Value less and Loan Account Value
including accrued interest was not sufficient to cover the Full
Surrender Charge at the time of lapse, only the remaining portion of
the Surrender Charge will be reinstated. At the time of the Policy's
reinstatement, the remaining portion of the Surrender Charge will be
proportionately reduced by the same pattern as the original schedule
of Surrender Charges.

Supplemental Benefits will be reinstated only with the Company's
consent. The Guaranteed Death Benefit provisions will not be
reinstated.

- --------------------------------------------------------------------------------
"Procedures Manual" Page 3

<PAGE>

e. Increases in Specified Amount

The administrative procedures in connection with Increases in
Specified Amount are specified in full under the Policy Changes
provision in the Policy Rights section of this Registration
Statement.

f. Policy Loans

The administrative procedures in connection with Policy Loans are
specified in full under the Policy Loan provision in the Policy
Rights section of this Registration Statement.

g. Correction of Misstatement of Age and/or Sex

The administrative procedures in connection with the correction of
misstatement of age and/or sex are specified in full under the
Misstatement as to Age and/or Sex provision in the Miscellaneous
Policy Provisions section of this Registration Statement.

2. REDEMPTION PROCEDURES

Surrenders and Related Transactions

This Section outlines those procedures which might be deemed to constitute
redemptions under the Policy. These procedures differ in certain
significant respects form the redemption procedures for mutual funds and
contractual plans.

a. Full or Partial Surrender Value

The administrative procedures in connection with Full or Partial
Surrender of the Policy are specified in full under Full Surrenders
provision and Partial Surrenders provision of the Policy Rights
section of this Registration Statement.

b. Death or Maturity Benefit Claims

As long as the Policy remains in force, the Company will generally
pay a Death Benefit to the beneficiary in accordance with the terms
of the Policy, within seven days after the Company receives due
proof of death of the Surviving Insured and verifies the validity of
the claim.

Payment of Death Benefit may, however, be postponed under certain
circumstances. In particular, during the first two Policy Years
after either (a) the Issue Date, (b) an increase in Specified Amount
or (c) a Policy is reinstated, and in other circumstances in which
the Company may have a basis for contesting the claim, there can be
a delay beyond the seven day period. The amount of the Death Benefit
is determined at the end of the Valuation Period during which the
Surviving Insured dies. The Death Benefit payable under the selected
Death Benefit Option will be reduced by the amount necessary to
repay the Loan Account Value in full and, if the Policy is within
the Grace Period, any payment required to keep the Policy in force.
The Death Benefit will be increased by any additional insurance
provided by rider.

The Death Benefit may exceed the Specified Amount of the Policy. The
amount by which the Death Benefit exceeds the Specified Amount
depends upon the Death Benefit Option in effect and the Total
Account Value of the Policy. Under Death Benefit Option 1, the Death
Benefit will be the greater of (a) the Specified Amount or (b) a
percentage of the Total Account Value. This Percentage is 1 divided
by the Net Single Premium per dollar of Specified Amount. If the
Death Benefit is the Specified Amount, the Death Benefit will be
increased by any premium payment and gain in investment earnings
during the portion of the policy month preceding death.

Under Death Benefit Option 2, the Death Benefit will be the greater
of (a) the Specified Amount plus the Total Account Value on the date
of death or (b) a percentage of the Total Account Value. This
Percentage

- --------------------------------------------------------------------------------
"Procedures Manual" Page 4

<PAGE>

is 1 divided by the Net Single Premium per dollar of Specified
Amount. Death Benefit Option 2 provides a varying Death Benefit
which increases or decreases over time, depending upon the amount
of premium paid and the investment performance of the Fund(s)
chosen by the Policyowner.

The amount of the benefit payable at maturity is the Total Account
Value on the Maturity Date. These proceeds will be reduced by the
Loan Account Value and any unpaid accrued interest and are payable
only if one or both Insureds are living on the Maturity Date. The
Maturity Date is the Policy Anniversary on which the Younger Insured
reaches Attained Age 100.

c. Policy Lapsation

If the Surrender Value is insufficient to allow a Monthly Deduction
on the Monthly Deduction Day and if the conditions of the No Lapse
Coverage provision or the Guaranteed Death Benefit provision have
been met, the Company will allow the Policyowner 61 days of grace
for payment of an amount sufficient to allow the Monthly Deduction.
The Company may require payment of the amount equal to the lesser of
(1) or (2) where (1) is the amount necessary to meet the conditions
of the No Lapse Coverage provision or Guaranteed Death Benefit
provision and (2) is an amount sufficient to cover the Monthly
Deduction(s) that would result in the Surrender Value being greater
than zero.

If the conditions of the No Lapse Coverage provision or the
Guaranteed Death Benefit provision have not been met and the
Surrender Value is insufficient to allow a Monthly Deduction on the
Monthly Deduction Day, the Company will allow 61 days of grace for
payment of an amount sufficient to allow the Monthly Deduction. The
Company may require payment of the amount necessary to keep the
policy in force for the current month plus two additional months.

Written notice will be mailed to the Policyowner's last known
address, according to the Company's records, not less than 61 days
before termination of the Policy. The notice will also be mailed to
the last known address of any assignee of record.

During the days of grace, the Policy will stay in force. If the
Second Death occurs during the days of grace, the Company will
deduct an amount required to keep the policy in force from the Death
Benefit.

If payment is not made within 61 days after the Monthly Deduction
Day, the Policy will terminate without value at the end of the Grace
Period. The termination will be effective on the Monthly Deduction
Day for the first unpaid Monthly Deduction.

3. TRANSFERS

There are currently 18 Variable Options of the Separate Account. The
Company reserves the right to limit the total number of Variable Options
elected by the Policyowner to 17 over the lifetime of the Policy. Each
Variable Option invests in an open-end management investment company
(mutual fund) whose shares are purchased by the Separate Account to fund
the benefits provided by the Policy. At any time prior to the Maturity
Date, the Policyowner may transfer all or part of value attributable to
one Variable Option to the value of any other Variable Option or to the
Fixed Account Value. The Company reserves the right to charge an
administrative fee of $25 for more than 12 such transfers per Policy Year.
This administrative fee, if imposed, will be deducted on a pro rata basis
in proportion to the values in each Variable Option of the Separate
Account. A transfer due to Automated Transfers (Dollar Cost Averaging) or
a Policy Loan will not count toward the transfers limit.

Within the 45 days following the Policy Anniversary, the Policyowner may
request a transfer of a portion of the Fixed Account Value to one or more
of the Variable Options. This type of transfer is allowed only once within
this 45 day period, and the Company must receive the Policyowner's request
at the Home Office within the 45 day period. The transfer will be
effective on the Valuation Date that the Policyowner's request is

- --------------------------------------------------------------------------------
"Procedures Manual" Page 5

<PAGE>

received by the Home Office. The amount of such transfer cannot exceed
25% of the Fixed Account Value. However, if the Fixed Account Value is
less than or equal to $500, the policyowner may transfer all or a portion
of the Fixed Account Value.

Accumulation Units for each Variable Option will be added to or subtracted
from the Separate Account Value, based on each Variable Option's
Accumulation Unit Value at the end of the Valuation Period when the
request for such transfer is received by the Company. A dollar amount will
be added or subtracted from the Fixed Account Value according to the terms
of the request for transfer.

4. CONVERSION PROCEDURES

At any time during the life of the Policy, this Flexible Premium Policy
can essentially be converted to a permanent life insurance contract by
transferring the entire Separate Account Value to the Fixed Account. This
conversion (transfer) will provide the same death benefit or the same net
amount at risk as the flexible contract at the time of conversion and Cost
of Insurance rates which are based on the same issue age and underwriting
class of the insureds as the flexible contract. In order to retain a
permanent life insurance contract, all future Net Premiums must also be
allocated to the Fixed Account. The Company guarantees a minimum interest
rate on amounts in the Fixed Account and assumes the risk of investment
gain or loss. The Company guarantees that , at any time, the Fixed Account
Value will not be less than the amount of the Net Premiums allocated to
the Fixed Account, plus interest at an annual rate of not less than 4%,
less the amount of any Partial Surrenders, Policy Loans, or Monthly
Deductions.
- --------------------------------------------------------------------------------
"Procedures Manual" Page 6

151 Farmington Avenue
Hartford, CT 06156

Jo-Anne Rankin, FSA, MAAA
Pricing Actuary
Life Products Group, TN41
(860) 273-4436
Fax: (860) 273-4438
May 13, 1997

Re: AetnaVest Estate Protector II

Dear Sir or Madam:

This opinion is furnished in connection with registration by Aetna Life
Insurance and Annuity Company on Form S-6 of its flexible premium variable
universal life insurance product, (the "Policies") under the Securities
Act of 1933. The prospectus included in the Registration Statement was
prepared under my direction, and I am familiar with the Registration
Statement, as amended, and Exhibits thereto.

In my opinion, the illustrations of benefits under the Policies included
in the prospectus under the caption "Illustrations of Death Benefits,
Total Account Values and Surrender Values," based on the assumptions
stated in the illustrations, are consistent with the provisions of the
respective forms of the Policies. Also in my opinion the age selected in
the illustrations is representative of the manner in which the Policies
operate.

I hereby consent to use of this opinion as an exhibit to the Registration
Statement.

Very truly yours,

/s/ Jo-Anne Rankin

Jo-Anne Rankin
Pricing Actuary

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors of Aetna Life Insurance and Annuity Company and
Policyholders of Aetna Variable Life Account B:

We consent to the use of our reports dated February 4, 1997 and February 14,
1997 included herein and to the references to our Firm under the caption
"Independent Auditors" in the Prospectus.

/s/ KPMG Peat Marwick LLP

Hartford, Connecticut
May 16, 1997

<ARTICLE> 6
<CIK> 0000785986
<NAME> Aetna Variable Life Account B

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 209,041,214
<INVESTMENTS-AT-VALUE> 223,173,883
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 223,173,883
<PAYABLE-FOR-SECURITIES> 0
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<DIVIDEND-INCOME> 13,813,478
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<EXPENSES-NET> 1,905,137
<NET-INVESTMENT-INCOME> 11,908,341
<REALIZED-GAINS-CURRENT> 3,222,616
<APPREC-INCREASE-CURRENT> 9,741,095
<NET-CHANGE-FROM-OPS> 24,872,052
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<DISTRIBUTIONS-OF-INCOME> 0
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