FORTIS BENEFITS INSURANCE CO VARIABLE ACCOUNT C, S-6EL24/A, 1996-05-29

FORTIS BENEFITS INSURANCE CO VARIABLE ACCOUNT C
S-6EL24/A, 1996-05-29

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As filed with the Securities and Exchange Commission on May 29, 1996

Registration No. 33-65243
________________________________________________________________________________

SECURITIES AND EXCHANGE COMMISSION
Washington DC 20549
___________________________________

Pre-Effective Amendment No. 2
to
FORM S-6
Registration Statement
Under
THE SECURITIES ACT OF 1933
___________________________________

VARIABLE ACCOUNT C
OF FORTIS BENEFITS INSURANCE COMPANY
(Exact name of trust)

FORTIS BENEFITS INSURANCE COMPANY
(formerly Western Life Insurance Company)
(Name of Depositor)

500 Bielenberg Drive
Woodbury, Minnesota 55125
(Complete address of depositor's principal executive offices)
_______________________________________

RHONDA J. SCHWARTZ, ESQ.
P. O. Box 64284
St. Paul, Minnesota 55164
(Name and complete address of agent for service)
_______________________________________

Securities Registered: Interests in Variable Account C pursuant to variable
life insurance policies

This filing is made pursuant to Rules 6c-3 and 6e-3(T)
under the Investment Company Act of 1940

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Registrant elects to be governed by Rule 6e-3(T)(b)(13)(i)(A) under the
Investment Company Act of 1940 with respect to the Policies described in the
Prospectus.

___________________________________

An indefinite amount of the securities being offered has been registered
pursuant to a declaration under Rule 24f-2 under the Investment Company Act of
1940, set out in the Form S-6 Registration Statement contained in File No. 33-
03919. The registrant filed its Rule 24f-2 notice for the year ended December
31, 1994 on February 27, 1995.

<PAGE>

<TABLE>
<S> <C> <C> <C>
FORTIS BENEFITS INSURANCE COMPANY
WALL STREET MAILING STREET ADDRESS: TELEPHONE: 1-(800) 800-2638
SURVIVOR SERIES ADDRESS: 500 BIELENBERG DRIVE EXTENSION 3028
(Flexible Premium P.O. BOX 64284 WOODBURY
Survivorship ST. PAUL MINNESOTA 55125
Variable Life MINNESOTA 55164
Insurance Policies)
</TABLE>

The flexible premium survivorship variable life
insurance Policies offered by this Prospectus are issued
by Fortis Benefits Insurance Company and are designed to
provide (1) lifetime insurance protection on the joint
lives of two insureds and (2) flexibility in connection
with premium payments and death benefits. This
flexibility allows an owner of a Policy to provide for
changing insurance needs with a single insurance policy.
The minimum Face Amount for a Policy is $100,000 and the
smallest initial annual premium is generally $2,000.

There are four face amount bands. The face amount band
of the Policy affects the level of policy value bonuses
which may be paid, and the level of the policy issuance
expense charge. Policies with a minimum face amount of
$5,000,000 are Band 4 Policies; Policies with a minimum
face amount of $1,000,000 are Band 3 Policies; Policies
with a minimum face amount of $500,000 are Band 2
Policies; while Policies with a face amount of less than
$500,000 are Band 1 Policies.

The Policy provides for a death benefit payable upon the
death of the second to die of the two insured persons.
There is no benefit payable on the death of the first
insured to die. With respect to the Policy Value
available for investment under a Policy, the Policy
owner may elect to receive a rate of return based on one
or more of the separate investment portfolios of Fortis
Series Fund, Inc. There is no guaranteed minimum Policy
Value with respect to these portfolios, and the Policy
owner bears the entire investment risk that this value
(or the Surrender Value) may decline to zero.
Alternatively, a Policy owner may, with respect to all
or part of the Policy Value, elect to receive fixed
rates of return.

The Policy may be fully surrendered at any time for its
Surrender Value. See "Surrender and Partial Withdrawal."
Generally after the first Policy year, the Policy owner
may make a partial withdrawal of
PROSPECTUS DATED
Surrender Value once a year. The Policy owner also may
take out Policy loans and has considerable flexibility
May , 1996

to vary the frequency and amount of premium payments.
Payment of Planned Periodic Premiums will not
necessarily keep a Policy from lapsing if the Surrender
Value is exhausted. However, the Policy is guaranteed to
stay in force if certain Minimum Premium payments are
made. The Policy owner can select a guarantee period of
10 years, 20 years or to the younger joint insured's Age
85. If the younger joint insured is Age 65 or over at
issue, the guarantee period is to the policy anniversary
following the younger insured's Age 75 (or for 5 years
if age 71 or more at issue). The guarantee period if
either insured is rated for higher mortality risk at
issue is 5 years.

This prospectus contains detailed information about
these and other Policy features, including certain
restrictions and limitations which apply. This
Prospectus also discusses the way in which the return
earned by the Policy Value can affect a Policy's death
benefit and Surrender Value.

As in the case of other life insurance policies, it may
not be advantageous to purchase flexible premium
survivorship variable life insurance as a replacement
for, or in addition to, an existing flexible premium
variable or other life insurance policy.

THESE POLICIES ARE NOT DEPOSITS OR OBLIGATIONS OF, NOR
ARE THEY GUARANTEED OR ENDORSED BY, ANY BANK,
[LOGO]
CREDIT UNION, BROKER-DEALER OR OTHER FINANCIAL
INSTITUTION. THEY ARE NOT FEDERALLY INSURED BY THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY; AND INVOLVE
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THIS PROSPECTUS IS NOT VALID UNLESS
PRECEDED OR ACCOMPANIED BY THE CURRENT PROSPECTUS FOR
FORTIS SERIES FUND, INC., WHICH CONTAINS ADDITIONAL
INFORMATION ABOUT THAT ENTITY. INFORMATION CONTAINED
HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS
BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY
BE ACCEPTED PRIOR TO THE TIME THE REGISTRATOIN STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE
AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY
STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER
THE SECURITIES LAWS OF ANY SUCH STATE.

THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Index of Defined Words and Phrases...................................... 4
Summary................................................................. 5
- Fortis Benefits/Fortis Financial Group Member..................... 5
- Payment of Premiums............................................... 5
- Guaranteed Death Benefit.......................................... 5
- Allocation of Premiums Among Various Alternatives................. 5
- Policy Value; Premium Based Bonuses; Policy Value Bonuses......... 6
- Surrenders........................................................ 6
- Charges........................................................... 7
- Death Benefit..................................................... 7
- Optional Insurance Benefits....................................... 8
- Benefit at Maturity............................................... 8
- Policy Loans...................................................... 8
- Settlement Options................................................ 8
- Taxes............................................................. 8
- Right to Return a Policy.......................................... 8
- How to Exercise Your Rights Under a Policy........................ 8
The Separate Account and Fortis Series Fund, Inc........................ 9
- The Separate Account.............................................. 9
- Financial and Performance Information............................. 9
- Fortis Series Fund, Inc........................................... 10
Policy Benefits......................................................... 11
- Death Benefit..................................................... 11
- Death Benefit Options............................................. 11
- Second-to-Die Rider............................................... 11
- Accelerated Benefit Rider......................................... 11
- Changes in Face Amount............................................ 12
- Change in Death Benefit Option.................................... 13
- Policy Split Option............................................... 13
- Policy Value...................................................... 14
- Premium Based Bonuses and Policy Value Bonuses.................... 14
- Calculation of Separate Account Policy Value...................... 16
- Separate Account Net Investment Return............................ 16
Payment and Allocation of Premiums...................................... 16
- Issuance of a Policy.............................................. 16
- Premiums.......................................................... 17
- Allocation of Premiums and Policy Value........................... 17
- Guaranteed Death Benefit.......................................... 18
- Policy Lapse and Reinstatement.................................... 19
Charges and Deductions.................................................. 19
- Premium Tax and Sales Charges; Policy Issuance Expense Charges.... 19
- Monthly Deduction from Policy Value............................... 21
- Charge for Mortality and Expense Risks............................ 22
- Miscellaneous..................................................... 22
- Guarantee of Certain Charges...................................... 23
Loan Privileges......................................................... 23
- Rate Charged on Policy Loans...................................... 23
- Credited Rate for Policy Loans.................................... 23
- Effect of a Policy Loan........................................... 23
- Repayment of a Loan............................................... 23
Surrender and Partial Withdrawal........................................ 24
Rights Reserved by Fortis Benefits...................................... 24
- Payment and Deferment............................................. 24
Distribution of the Policies............................................ 25
Federal Tax Matters..................................................... 25
- Tax Status of the Policy.......................................... 25
- Tax Status of Additional Insured Rider............................ 26
- Taxation of Policy Benefits....................................... 26
- Taxation of Fortis Benefits....................................... 27
</TABLE>

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<TABLE>
<CAPTION>
PAGE
<S> <C>
Other Policy Provisions................................................. 27
Management.............................................................. 29
Voting Privileges....................................................... 30
Reports................................................................. 30
State Regulation........................................................ 30
Legal Matters........................................................... 30
Experts................................................................. 30
Ratings and Rankings.................................................... 31
Financial Statements.................................................... 31
Appendix A.............................................................. A-1
- Optional Income Plans............................................. A-1
- Optional Insurance Benefits....................................... A-1
Appendix B.............................................................. B-1
- Illustrations of Death Benefits, Policy Values, Surrender Values
and Accumulated Premium.......................................... B-1
Appendix C.............................................................. C-1
- The General Account............................................... C-1
- General Description............................................... C-1
- General Account Policy Value...................................... C-1
- Transfers, Surrenders and Policy Loans............................ C-1
Variable Universal Life Service Request Form
</TABLE>

THE POLICIES ARE NOT AVAILABLE IN ALL STATES. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE. FORTIS BENEFITS DOES NOT AUTHORIZE ANY INFORMATION OR
REPRESENTATION REGARDING THE OFFERING DESCRIBED IN THIS PROSPECTUS WHICH IS NOT
INCLUDED IN THIS PROSPECTUS OR ANY SUPPLEMENT THERETO OR IN ANY SUPPLEMENTAL
SALES MATERIAL AUTHORIZED BY FORTIS BENEFITS.

The purpose of the Policies is to provide insurance protection for the
beneficiary named therein. No claim is made that the Policies are in any way
similar or comparable to a systematic investment plan of a mutual fund.
<PAGE>
INDEX OF DEFINED WORDS AND PHRASES

Below are listed words and phrases used in this Prospectus, together with the
page or pages of this Prospectus on which each is defined or explained.

<TABLE>
<CAPTION>
PAGE
<S> <C>
Adjusted Age............................................................................................. 21
Age...................................................................................................... 28
Alternative Death Benefit................................................................................ 11
Contingent Deferred Sales Charge......................................................................... 20
Date of Receipt.......................................................................................... 27
Death Benefit Option A (Option "A")...................................................................... 11
Death Benefit Option B (Option "B")...................................................................... 11
Face Amount.............................................................................................. 16
Fortis Benefits.......................................................................................... 5
Fortis Series............................................................................................ 10
General Account.......................................................................................... C-1
Grace Period............................................................................................. 19
Guaranteed Death Benefit................................................................................. 5
Home Office.............................................................................................. 8
Maximum Bonus Premiums................................................................................... 14
Minimum Premium.......................................................................................... 18
Monthly Deduction........................................................................................ 21
Monthly Anniversary...................................................................................... 16
Net Amount at Risk....................................................................................... 21
Net Cash Value........................................................................................... 19
NYSE..................................................................................................... 16
Planned Periodic Premium................................................................................. 17
Policy Anniversary....................................................................................... 16
Policy Band.............................................................................................. 16
Policy Date.............................................................................................. 16
Policy Value............................................................................................. 16
Policy Value Bonuses..................................................................................... 15
Portfolio................................................................................................ 10
Premium Based Bonuses.................................................................................... 14
Pro Rata Basis........................................................................................... 21
Separate Account......................................................................................... 9
Subaccount............................................................................................... 10
Surrender Charge......................................................................................... 20
Surrender Value.......................................................................................... 6
Valuation Date........................................................................................... 16
Valuation Period......................................................................................... 16
1940 Act................................................................................................. 9
</TABLE>

4
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SUMMARY

FORTIS BENEFITS/FORTIS FINANCIAL GROUP MEMBER

Fortis Benefits Insurance Company ("Fortis Benefits"), the issuer of the
Policies, was founded in 1910. At the end of 1995, Fortis Benefits had
approximately $86 billion of total life insurance in force. Fortis Benefits is a
Minnesota Corporation and is qualified to sell life insurance and annuity
contracts in the District of Columbia and in all states except New York. Fortis
Benefits is an indirectly wholly-owned subsidiary of Fortis, Inc., which is
itself indirectly owned 50% by Fortis AMEV and 50% by Fortis AG. Fortis, Inc.
manages the United States operations for these two companies.

Fortis Benefits is a member of the Fortis Financial Group, a joint effort by
Fortis Benefits, Fortis Advisers, Inc., Fortis Investors, Inc., and Time
Insurance Company, offering financial products through the management, marketing
and servicing of mutual funds, annuities, and life insurance products.

Fortis AMEV is a diversified financial services company headquartered in
Utrecht, the Netherlands, where its insurance operations began in 1847. Fortis
AG is a diversified financial services company headquartered in Brussels,
Belgium, where its insurance operations began in 1824. Fortis AMEV and Fortis AG
have merged their operating companies under the trade name of Fortis. The Fortis
group of companies is active in insurance, banking and financial services, and
real estate development in the Netherlands, Belgium, the United States, Western
Europe, and the Pacific Rim. Fortis had approximately $140 billion in assets as
of year-end 1995.

All of the guarantees and commitments under the Policies are general obligations
of Fortis Benefits, regardless of whether the Policy Value has been allocated to
the Separate Account or to the General Account. None of Fortis Benefits'
affiliated companies has any legal obligation to back Fortis Benefits'
obligations under the Policies.

PAYMENT OF PREMIUMS

At the time of Policy issuance, the Planned Periodic Premium must be, on an
annualized basis, at least the greater of (1) $2,000, or (2) twelve monthly
Minimum Premiums. The Planned Periodic Premiums are assumed to be level in the
first Policy year. If the Planned Periodic Premium is paid monthly, the initial
premium must at least equal two months' Planned Periodic Premiums. If the
planned premium is on a different frequency, the initial premium must at least
equal all monthly Minimum Premiums to the next billing date. Thereafter, subject
to the limitations described under "Payment and Allocation of Premiums--
Premiums," premium payments may be made at any time and in any amount. All
Policies will specify a Planned Periodic Premium, but payment of this is
optional, except to the extent described above with respect to the initial
premium payment.

GUARANTEED DEATH BENEFIT

A Policy is guaranteed to stay in force if, as of each Monthly Anniversary, (1)
the cumulative amount of premiums paid to date, less the cumulative amount of
partial withdrawals taken by the policy owner, less the amount of any
outstanding Policy loans, at least equals (2) the cumulative monthly Minimum
Premiums for Policy months up to and including that beginning on that Monthly
Anniversary. For purposes of this calculation, premiums paid in any Policy year,
Minimum Premiums, and partial withdrawals are assumed to accumulate at an
effective annual rate of 4%. For this purpose premiums and Minimum Premiums for
any policy year are assumed to commence accumulating interest at the beginning
of the Policy year in which they are paid. Partial withdrawals are assumed to be
taken at the end of the policy year in which they are taken or at the end of the
current monthly anniversary, if earlier. The Policy is guaranteed to stay in
force if certain Minimum Premium payments are made. The Policy owner can select
a guarantee period of 10 years, 20 years or to the younger joint insured's age
85. If the younger joint insured is Age 65 or over at issue, the guarantee
period is to the policy anniversary following the younger insured's Age 75 (or
for 5 years if Age 71 or more at issue). The guarantee period if either insured
is rated for higher mortality risk at issue is 5 years. This guarantee period is
provided by rider. The guarantee period may be shorter in some states due to
state limitations. Subject to these conditions, there is in effect a "Guaranteed
Death Benefit" in the amount of the Policy's then-current Face Amount and any
term insurance riders. The initial monthly Minimum Premiums are specified in
each Policy, and additional Minimum Premium payments will be necessary to keep
this guarantee in effect if the Face Amount of the Policy or rider benefits are
increased. See "Guaranteed Death Benefit" under "Payment and Allocation of
Premiums-- Premiums."

If the Guaranteed Death Benefit Rider is not in effect, a Policy will lapse if
the Net Cash Value becomes insufficient to pay the continuing charges and
deductions. See "Payment and Allocation of Premiums-- Policy Lapse and
Reinstatement" and "Charges and Deductions." Premium payments in excess of the
Planned Periodic Premium payments may therefore be necessary to keep a Policy in
force.

ALLOCATION OF PREMIUMS AMONG VARIOUS ALTERNATIVES

The owner of a Policy may allocate premiums paid under a Policy to one or more
of the Subaccounts of Variable Account C, a separate investment account of
Fortis Benefits (see "The Separate Account and Fortis Series Fund, Inc.") and/or
to Fortis Benefits' General Account. The assets in each of the current
Subaccounts are invested in a separate class (or series) of stock of Fortis
Series Fund, Inc. ("Fortis Series"), a "series" type of mutual fund. Each class
of stock represents a separate investment Portfolio within Fortis Series. The
investment Portfolios of Fortis Series which are currently available are the
Aggressive Growth Series, the International Stock Series, the Growth Stock
Series, the Global Growth Series, the Blue Chip Stock Series, the S&P 500 Index
Series, the Growth and Income Series, the Value Stock Series, the Global Asset
Allocation Series, the Asset Allocation Series, the High Yield Series, the
Global Bond Series, the Diversified Income Series, the U.S. Government
Securities Series and the Money Market Series. Premiums allocated to the General
Account are held as part of Fortis Benefits' general investment assets. See
Appendix C--"The General Account."

Each Portfolio has a different investment objective and is managed by Fortis
Advisers, Inc. For providing investment management services to the Portfolios,
Fortis Advisers, Inc. currently receives a fee from the Funds at an annual rate
as follows: for Aggressive Growth Series, .7% of the first $100 million of
average daily net assets and .6% thereafter;

5
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for International Stock Series, .85% of the first $100 million of such assets,
and .8% thereafter; for Global Growth Series, .7% of the first $500 million of
average daily net assets, and .6% thereafter; for Growth Stock Series and for
Growth & Income Series, .7% of the first $100 million of average daily net
assets, and .6% thereafter; for Blue Chip Stock Series .9% of the first $100
million of average daily net assets, and .85% thereafter; for S&P 500 Index
Series .4% of average daily net assets; for Value Series .7% of the first $100
million of average daily net assets, and .6% thereafter; for Global Asset
Allocation Series, .9% of the first $100 million of such assets, and .85%
thereafter; for Asset Allocation Series and High Yield Series, .5% of the first
$250 million of average daily net assets, and .45% thereafter; for Global Bond
Series, .75% of the first $100 million of such assets, and .65% thereafter; for
Diversified Income Series and U.S. Government Securities Series .5% of the first
$50 million of average daily net assets, and .45% thereafter; for Money Market
Series, .3% of the first $500 million of average daily net assets, and .25%
thereafter. The Portfolios also bear most of their other expenses.

The International Stock Series, the Blue Chip Stock Series, the S&P 500 Index
Series, the Global Asset Allocation Series and the Global Bond Series has each
retained a sub-adviser to provide investment research, advice and supervision
subject to the general control of Fortis Advisers, Inc. Lazard Freres Asset
Management is the sub-adviser of the International Stock Series; T. Rowe Price
Associates, Inc. is the sub-adviser of the Blue Chip Stock Series; The Dreyfus
Corporation is the sub-adviser of the S&P 500 Index Series; Morgan Stanley Asset
Management Limited is the sub-adviser of the Global Asset Allocation Series; and
Warburg Investment Management International Ltd. is the sub-adviser of the
Global Bond Series.

From its advisory fee, Fortis Advisers, Inc. pays the sub-advisers a fee at an
annual rate as follows: For International Stock Series, .45% of the first $100
million of such Series' average daily net assets, and .375% thereafter; for Blue
Chip Stock Series .5% of the first $100 million of average daily net assets, and
.45% thereafter; for S&P 500 Index Series .17% of average daily net assets; for
Global Asset Allocation Series, .5% of the first $100 million of such assets,
and .4% thereafter; and for the Global Bond Series, .35% of the first $100
million of such assets, and .225% thereafter.

For a full description of the Portfolios, see the prospectus for Fortis Series
which accompanies this Prospectus and the Statement of Additional Information
referred to therein.

A Policy owner may change allocations of future premiums at any time without
charge by submitting a written request in form acceptable to Fortis Benefits,
subject to certain limitations. See "Payment and Allocation of
Premium--Allocation of Premiums and Policy Value." Because investment
performance of a Subaccount (unlike that of the General Account) is not
guaranteed by Fortis Benefits, allocation of premiums to a Subaccount increases
the amount of the investment risk to the Policy owner, and allocation to the
General Account decreases such risk. However, the potential benefit of the
General Account is limited to the guaranteed return, plus any discretionary
return declared by Fortis Benefits.

TRANSFERS OF POLICY VALUE. A Policy owner may transfer amounts among the
Subaccounts at any time. Transfers may also be made at any time from a
Subaccount to the General Account. The Policy owner, under Fortis Benefits'
current rules, may transfer up to 50% of any unloaned Policy Value in the
General Account to one or more Subaccounts. This transfer may be made only once
during the Policy Year.

For additional conditions and limitations on transfers, see "Payment and
Allocation of Premiums--Allocation of Premiums and Policy Value" and Appendix
C--"Transfers, Surrenders and Policy Loans."

POLICY VALUE; PREMIUM BASED BONUSES; POLICY VALUE BONUSES

POLICY VALUE. The "Policy Value" is the amount "at work" for the Policy owner
earning a return in the Separate Account and/or in the General Account at any
time. It is (1) the cumulative amount of premiums paid to date, (2) less any
withdrawals and less all deductions and charges imposed to date under the
Policy, (3) plus the cumulative amount of any Premium Based Bonuses and Policy
Value Bonuses, (4) plus the cumulative net amount of positive or negative
investment return earned to date on amounts allocated to the Separate Account
under the Policy, (5) plus the cumulative net amount of interest earned to date
on amounts held in the General Account under the Policy.

PREMIUM BASED BONUSES. In most states a bonus will be paid by Fortis Benefits
starting at the end of the seventh Policy year based on the average premium paid
by the Policy owner, the issue age of the younger insured, and the policy year
in which the bonus is paid. See "Policy Benefits--Premium Based Bonuses and
Policy Value Bonuses."

POLICY VALUE BONUSES. In most states Policy Value Bonuses will be paid by Fortis
Benefits on each Monthly Anniversary after the monthly deduction is made. The
amount of the Policy Value Bonus is based on the Policy Value and certain other
factors. The Policy Value Bonuses in effect partially offset the mortality and
expense risk charges. See "Charges and Deductions--Mortality and Expense Risk
Charges." After the 19th Policy year, Fortis Benefits currently intends to add
.35% to the annual rate for Policy Value Bonuses. This increase would
substantially offset any daily charge for premium taxes and sales charges that
was then being made. See "Policy Benefits--Premium Based Bonuses and Policy
Value Bonuses."

SURRENDERS

A Policy may be surrendered at any time for all of its Surrender Value, and part
of the Surrender Value may be withdrawn up to once a year, generally after the
first Policy year. See "Surrender and Partial Withdrawal." The Surrender Value
is the Policy Value, less the amount of the Surrender Charge (referred to
below), less the amount of any outstanding Policy loan and plus the amount of
any policy loan interest paid for future periods (see "Loan Privileges"). If
Death Benefit Option A is in effect, a partial withdrawal will reduce the
Policy's Face Amount on a dollar-for-dollar basis.

CHARGES

In addition to Fortis Series' expenses, the following charges are imposed under
the Policies:

6
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PREMIUM TAX CHARGE. The current premium tax charge is 2.2% of all premium
payments. Rather than being deducted from premium payments, this charge is
currently assessed through periodic deductions from Policy Value, and any
balance of the current premium tax charge may be deducted as part of the
Surrender Charge referred to below. Periodic deductions for the current premium
tax charge will not exceed $0.78 per Policy each month, plus a daily deduction
at an annual rate of .1964% of the Policy's net assets in the Separate Account.

SALES CHARGES. The maximum total sales charge is 9% of premiums paid. Rather
than being deducted from premiums, sales charges are currently assessed through
periodic deductions from Policy Value, and any balance of the sales charges may
be deducted as a Contingent Deferred Sales Charge that would be included as part
of the Surrender Charge. The periodic deductions for sales charges will not
exceed $3.22 per Policy each month plus a daily deduction at an annual rate of
.8036% of the Policy's net assets in the Separate Account.

POLICY ISSUANCE EXPENSE CHARGES. A monthly Policy issuance expense charge at the
rates set out below will be deducted as part of the Monthly Deduction for the
first ten years following issuance of the Policy and also for ten years after a
Face Amount increase:

<TABLE>
<CAPTION>
MONTHLY RATE PER $1,000 OF FACE
AMOUNT AT ISSUE (OR FACE AMOUNT
INCREASE)
-------------------------------
<S> <C>
Band 1... $ .10
Band 2... .08
Band 3... .05
Band 4... .03
</TABLE>

The Band does not change in the event of a subsequent face amount decrease. For
purposes of calculating this charge, the Face Amount at the time of issuance or
Face Amount increase is used to determine the Policy Band. Upon lapse or
surrender, any remaining uncollected charge is included as part of the surrender
charge.

SURRENDER CHARGE. The Surrender Charge is the sum of any Policy issuance
expense, premium tax and sales charges not previously deducted, as described
above. The Surrender Charge (a) is imposed only if the Policy is surrendered in
full or lapses before the tenth Policy Anniversary and (b) is subject to certain
maximums that decrease over time. See "Charges and Deductions--Premium Tax and
Sales Charges."

ADDITIONAL CHARGES AS A RESULT OF FACE AMOUNT INCREASES. If the Policy owner
requests a Face Amount increase, the Policy will be subject to additional
premium tax and sales charges and a charge for issuing the Face Amount increase.
These will be imposed at the same rates and in the same manner as described
above for the similar charges in connection with the original Policy. See
"Charges and Deductions--Premium Tax and Sales Charges" and "Policy Issuance
Expense Charges."

MONTHLY DEDUCTION. The Policy Value will be reduced by a Monthly Deduction equal
to the sum of (1) the monthly deduction referred to above under "Premium Tax
Charge" and "Sales Charges," (2) the charge for Policy issuance expenses
discussed above, (3) a monthly cost of insurance charge, (4) an administrative
expense charge, currently $6.00 per month, and (5) the monthly cost of any
optional insurance benefits added by rider. Fortis Benefits expects to derive no
profit from the charges set forth in (1), (2) and (4) above.

RISK CHARGE. A daily charge at an annual rate of 1.00% of the average daily net
assets attributable to Policies in each Subaccount of the Separate Account is
imposed to compensate Fortis Benefits for its assumption of certain mortality
and expense risks. See "Charges and Deductions--Charge for Mortality and Expense
Risks."

Subject to certain limitations, the charge for cost of insurance, the monthly
administrative expense charge, the premium tax charge, the charge for certain
optional insurance riders, and the amount of Minimum Premiums may be increased
in the future. Fortis Benefits also reserves the right to raise the current
premium tax charge assessed through periodic deductions to 3.0% and to impose
charges for other taxes that may be payable and are attributable to the
policies. Although it has no current plans to do so, Fortis Benefits reserves
the right to deduct up to 5% as a sales charge and up to 2.5% as a premium tax
charge directly from premiums. If Fortis Benefits does deduct these charges
directly from premiums, the premium tax and sales charges recoverable through
periodic deductions will be reduced by at least a corresponding amount. As to
charges that may be imposed or increased in the future, see generally "Charges
and Deductions."

DEATH BENEFIT

The Policy provides for the payment of a benefit upon the death of the Surviving
Insured pursuant to one of two options, as selected in advance by the Policy
owner. Under Death Benefit Option A, the death benefit is the Face Amount of the
Policy. Under Death Benefit Option B, the death benefit is the Face Amount of
the Policy plus the Policy Value on the date of death. If greater than the death
benefit otherwise payable under Option A or Option B, an Alternative Death
Benefit equal to a multiple (determined by the Age of the younger insured at
death) of the Policy Value will be paid. See "Policy Benefits--Death Benefit."
The death benefit payable will in any case be reduced by any outstanding Policy
loan and any due and unpaid charges accrued during the Grace Period.

Subject to certain limitations and conditions, the Policy owner may (1) increase
or, after the third Policy year, decrease the Face Amount of the Policy or (2)
after the third Policy year change the death benefit, once a year, from Option A
to Option B or from Option B to Option A. See "Changes in Face Amount" and
"Change in Death Benefit Option" under "Policy Benefits." Any increase in the
Face Amount or change in death benefit from Option A to Option B requires
additional evidence of insurability satisfactory to Fortis Benefits. An increase
in Face Amount requested by the Policy owner will result in additional charges.
See "Premium Tax and Sales Charges,""Policy Issuance Expense Charges" and
"Monthly Deduction From Policy Value" under "Charges and Deductions." A
requested increase in Face Amount will also increase the monthly Minimum
Premiums. See "Minimum Premiums" under "Payment and Allocation of
Premiums--Premiums." Decreases in Face Amount result in a decrease in the
monthly Minimum Premium. See "Policy Benefits--Changes in Face Amount."

7
<PAGE>
Subject to certain limits a Policy owner may take a portion of the initial
coverage on the Surviving Insured pursuant to our Second-To-Die term insurance
rider to the Policy. Coverage under the rider is generally less costly initially
than a comparable amount of coverage under the base Policy.

OPTIONAL INSURANCE BENEFITS

A Policy owner has the flexibility to add optional insurance benefits by rider,
to the extent available in the Policy owner's state. These optional benefits are
described in Appendix A--"Optional Insurance Benefits."

BENEFIT AT MATURITY

Unless the Policy owner exercises an option to extend the maturity date of the
Policy, the Policy matures on the date the younger insured reaches, or would
have reached, Age 100. See "Other Policy Provisions--Option to Extend the
Maturity Date." When the Policy matures, the Policy Value, less the amount of
any outstanding Policy loan, will be paid to the Policy owner, upon return of
the Policy.

POLICY LOANS

A Policy owner may in general borrow up to 90% of the difference between the
Policy Value and the amount of any then-applicable Surrender Charge. After the
later of 12 years, or the younger insured's Age 70, the Policy owner may borrow
up to 100% of such difference. The interest rate credited on loaned amounts is
4%, and the interest rate charged on loans is 5.66% per year, payable in
advance, except to the extent that certain Policy owners may qualify for a lower
loan interest rate. See "Loan Privileges."

SETTLEMENT OPTIONS

Any amount payable on death of the insured or other termination of a Policy may
be received in cash or pursuant to one of several "settlement" options, at the
election of the Policy owner or beneficiary. See Appendix A--"Optional Income
Plans."

TAXES

For federal income tax purposes, under current law, Fortis Benefits believes
that gains in Policy Value resulting from positive net investment returns will
not be taxed to Policy owners until such gains are distributed to them.

Policy loan interest generally is not deductible for federal income tax
purposes. In addition, certain Policy loans, Policy pledges, or Policy
assignments may constitute taxable distributions.

Also, certain changes under a Policy (such as changes in Face Amount, death
benefit option, and perhaps other changes) or payment of premiums in excess of
certain amounts may have significant tax consequences. Accordingly, Policy
owners are strongly encouraged to consult competent tax advisers in this regard.

For a brief discussion of these and certain other tax implications of owning a
Policy, see "Federal Tax Matters."

RIGHT TO RETURN A POLICY

The Policy owner may return the Policy by delivery or by mailing postmarked
within 10 days after receipt (except where the Policy or state law requires a
longer period), within 45 days after he or she signs Part I of the application
for insurance, or within 10 days after receipt of a Notice of Withdrawal Right,
whichever is the latest, and receive a refund within 7 days. Nevertheless, under
Fortis Benefits' current administrative practice, the Notice of Withdrawal Right
will continue to be accepted if its Date of Receipt is not more than 20 days
after Fortis Benefits releases the Policy to an active status in its processing
system, pursuant to its administrative and underwriting procedures. The amount
refunded will be the amount of premiums paid. See "Policy Benefits--Changes in
Face Amount" for a description of similar rights to cancel any increases in Face
Amount.

HOW TO EXERCISE YOUR RIGHTS UNDER A POLICY

To exercise rights under a Policy, the owner must follow the procedures stated
in the Policy. To request a loan, surrender, or partial withdrawal, the owner
must utilize forms prepared by Fortis Benefits for each purpose; and it is
recommended that Fortis Benefits' forms also be used for making any other change
or request. The forms are available from your sales representative or from
Fortis Benefits at its Home Office: P.O. Box 64582, St. Paul, MN 55164,
1-800-800-2638, extension 3028. Should a request be received for a loan,
surrender or partial withdrawal that is not on Fortis Benefits' form, the proper
form will be sent to the Policy owner, and, in the case of a total surrender,
the owner will usually be contacted, as well. The completed forms, as well as
any premium payments, loan and interest payments, and all other communications
should also be submitted to Fortis Benefits' Home Office.

If a Policy owner has submitted a telephone authorization form which has been
received by Fortis Benefits, transfers of Policy Value may be made by telephone.
The number to call for this purpose is 1-800-800-2638, extension 3028. A
Telephone Authorization Form is attached at the end of this Prospectus. Fortis
Benefits will not be responsible for, and the Policy owner will bear the risk of
loss from, oral instructions, including fraudulent instructions which are
reasonably believed to be genuine. Fortis Benefits will employ reasonable
procedures to confirm that telephone instructions are genuine, but if such
procedures are not deemed reasonable, Fortis Benefits may be liable for any
losses due to unauthorized or fraudulent instructions. Fortis Benefits'
procedures are to verify address and social security number, tape record the
telephone call and provide written confirmation of the transaction. Fortis
Benefits reserves the right to modify, condition or terminate this telephone
privilege at any time without prior notice.

Fortis Benefits reserves the right to require return of the Policy with any
request which makes a change in the Policy. After effecting the requested
change, Fortis Benefits will deliver a revised Policy to the Policy owner.
Currently, however, Fortis Benefits requires the Policy to be returned only on
maturity, total surrender or death of the Surviving Insured. If the Policy owner
is unable to return the Policy because it has been lost or destroyed, Fortis
Benefits will accept a written statement to that effect signed by the Policy
owner in lieu of return of the Policy.

8
<PAGE>
Unless the context indicates otherwise, the foregoing Summary and the discussion
in the rest of this Prospectus assume that Net Cash Values are sufficient to pay
all charges deducted on Monthly Anniversaries and that no Policy loans have been
made.

THE SEPARATE ACCOUNT AND FORTIS SERIES FUND, INC.

THE SEPARATE ACCOUNT

The Separate Account, which is a segregated investment account of Fortis
Benefits, was established as Variable Account C by Fortis Benefits pursuant to
the insurance laws of Minnesota as of March 13, 1986. The Separate Account is
used to fund the Policies, as well as certain other variable life insurance
policies issued by Fortis Benefits. The assets allocated to the Separate Account
are the property of Fortis Benefits. Although the Separate Account is an
integral part of Fortis Benefits, the Separate Account is registered with the
Securities and Exchange Commission as a unit investment trust under the
Investment Company Act of 1940 ("1940 Act"). Registration does not involve
supervision of the management or investment practices or policies of the
Separate Account or of Fortis Benefits by the Commission.

All income, gains and losses, whether or not realized, from assets allocated to
the Separate Account are credited to or charged against the Separate Account
without regard to other income, gains or losses of Fortis Benefits. Each Policy
provides that assets in the Separate Account representing reserves for variable
life insurance policies shall not be chargeable with liabilities arising out of
any other business of Fortis Benefits. Fortis Benefits contributed funds to
establish various Subaccounts of the Separate Account and Fortis Benefits may
accumulate in the Separate Account proceeds from charges under the Policies and
other amounts in excess of the Separate Account assets representing Policy
reserves. Fortis Benefits may from time to time transfer to its general
investment assets any Separate Account assets in excess of amounts attributable
to Policy reserves.
The assets in each Subaccount are invested in a distinct class (or series) of
stock issued by Fortis Series, each representing a separate investment Portfolio
within Fortis Series. New Subaccounts may be added as new Portfolios are added
to Fortis Series and made available to Policy owners. Correspondingly, if any
Portfolios are eliminated from Fortis Series, Subaccounts may be eliminated from
the Separate Account.

FINANCIAL AND PERFORMANCE INFORMATION

The information presented below reflects the performance of the underlying
investment portfolios of the Fortis Series Fund. Please refer to "Financial
Highlights" in the attached prospectus for the Fund and "Performance" in the
related Fund statement of additional information for a description of how this
performance information is computed. Annual rates of return reflect expenses and
investment gains and losses of the portfolios. They do not reflect asset-based
charges against the Separate Account, consisting of the 1.00% mortality and
expense risk charge and the .35% premium tax and sales charge. They also do not
reflect other current policy fees nor the cost of insurance or Surrender Charges
(See "Charges and Deductions" for a full description of these charges). These
charges reduce the performance quoted. The example below shows the effect of all
applicable current charges that may apply to the Policy based on the performance
quoted.

NET ANNUAL RATES OF RETURN

<TABLE>
<CAPTION>
FOR CALENDAR YEAR ENDED
DECEMBER 31
INCEPTION -------------------------------------------------------------------------------------
DATE 1987 1988 1989 1990 1991 1992 1993 1994
--------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth............. 5/94 N/A N/A N/A N/A N/A N/A N/A (1.89)%*
International Stock........... 1/95 N/A N/A N/A N/A N/A N/A N/A N/A
Growth Stock.................. 10/86 11.31% 4.49% 36.46% (3.10)% 53.50% 2.94% 8.78% (2.82)%
Global Growth................. 5/92 N/A N/A N/A N/A N/A 10.88%* 17.92% (2.98)%
Blue Chip Stock............... 5/96 N/A N/A N/A N/A N/A N/A N/A N/A
S&P 500 Index................. 5/96 N/A N/A N/A N/A N/A N/A N/A N/A
Growth & Income............... 5/94 N/A N/A N/A N/A N/A N/A N/A 1.74%*
Value......................... 5/96 N/A N/A N/A N/A N/A N/A N/A N/A
Global Asset Allocation....... 1/95 N/A N/A N/A N/A N/A N/A N/A N/A
Asset Allocation.............. 4/87 (6.12)%* 3.71% 23.75% 2.01% 27.65% 6.95% 9.79% (.31)%
Global Bond................... 1/95 N/A N/A N/A N/A N/A N/A N/A N/A
High Yield.................... 5/94 N/A N/A N/A N/A N/A N/A N/A (.75)%*
Diversified Income............ 5/88 N/A 3.90%* 12.30% 8.87% 14.68% 7.08% 12.76% (5.22)%
U.S. Gov't Securities......... 11/86 1.60% 6.36% 13.14% 7.93% 14.36% 6.14% 9.45% (6.44)%
Money Market.................. 11/86 5.80% 6.78% 9.42% 7.87% 5.91% 3.36% 2.77% 3.92%

<CAPTION>
THROUGH
DECEMBER 31, 1995 AVG
------------------------------- SINCE
1995 1 YEAR 3 YEARS 5 YEARS INCEPTION
-------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Aggressive Growth............. 29.89% 29.89% N/A N/A 15.64%
International Stock........... 14.35%* 14.35%* N/A N/A 14.35%
Growth Stock.................. 27.66% 27.66% 10.51% 16.35% 11.24%
Global Growth................. 30.49% 30.49% 14.29% N/A 14.73%
Blue Chip Stock............... N/A N/A N/A N/A N/A
S&P 500 Index................. N/A N/A N/A N/A N/A
Growth & Income............... 29.70% 29.70% N/A N/A 18.09%
Value......................... N/A N/A N/A N/A N/A
Global Asset Allocation....... 17.47%* 17.47%* N/A N/A 17.47%
Asset Allocation.............. 21.97% 21.97% 10.11% 12.75% 9.80%
Global Bond................... 19.02%* 19.02%* N/A N/A 19.02%
High Yield.................... 12.73% 12.73% N/A N/A 6.97%
Diversified Income............ 17.26% 17.26% 7.81% 9.00% 9.14%
U.S. Gov't Securities......... 18.78% 18.78% 6.75% 8.10% 7.69%
Money Market.................. 5.71% 5.71% 4.13% 4.33% 5.70%
</TABLE>

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

*Not annualized

Wall Street Series Last Survivor was not offered for sale prior to May 1996.

9
<PAGE>

Example: If the insureds under the Policy were a male, Age 55, and a female, Age
53, and the Policy owner invested $25,000 annually in a Death Benefit Option A
Policy, with a face amount of $1,400,000 it would have provided the following
benefits as of December 31, 1995, for the time periods and subaccounts indicated
based on applicable current charges:

<TABLE>
<CAPTION>
ONE YEAR ENDED DECEMBER 31, 1995 THREE YEARS ENDED DECEMBER 31, 1995
---------------------------------------- ----------------------------------------
POLICY SURRENDER DEATH SURRENDER DEATH
VALUE VALUE BENEFIT POLICY VALUE VALUE BENEFIT
------------ --------- ------------- ------------ --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Aggressive Growth....................... 31,695 25,677 1,400,000 N/A N/A N/A
International Stock..................... 27,629 21,602 1,400,000 N/A N/A N/A
Growth Stock............................ 31,498 25,483 1,400,000 97,313 86.226 1,400,000
Global Growth........................... 31,902 25,886 1,400,000 101,678 90,601 1,400,000
Blue Chip Stock......................... N/A N/A N/A N/A N/A N/A
S&P 500 Index........................... N/A N/A N/A N/A N/A N/A
Growth & Income......................... 30,555 24,533 1,400,000 N/A N/A N/A
Value................................... N/A N/A N/A N/A N/A N/A
Global Asset Allocation................. 27,048 21,020 1,400,000 N/A N/A N/A
Asset Allocation........................ 27,959 21,935 1,400,000 89,432 78,328 1,400,000
Global Bond............................. 24,668 18,637 1,400,000 N/A N/A N/A
High Yield.............................. 25,801 19,770 1,400,000 N/A N/A N/A
Diversified Income...................... 25,866 19,837 1,400,000 80,085 68,949 1,400,000
U.S. Gov't Securities................... 26,023 19,995 1,400,000 79,253 68,112 1,400,000
Money Market............................ 25,122 19,091 1,400,000 77,167 66,022 1,400,000

SINCE PORTFOLIO'S INCEPTION THROUGH
FIVE YEARS ENDED DECEMBER 31, 1995 DECEMBER 31, 1995
---------------------------------------- ----------------------------------------
POLICY SURRENDER DEATH SURRENDER DEATH
VALUE VALUE BENEFIT POLICY VALUE VALUE BENEFIT
------------ --------- ------------- ------------ --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Aggressive Growth....................... N/A N/A N/A 65,388 56,722 1,400,000
International Stock..................... N/A N/A N/A 54,785 46,228 1,400,000
Growth Stock............................ 174,926 162,956 1,400,000 460,737 458,061 1,427,000
Global Growth........................... N/A N/A N/A 139,795 126,276 1,400,000
Blue Chip Stock......................... N/A N/A N/A N/A N/A N/A
S&P 500 Index........................... N/A N/A N/A N/A N/A N/A
Growth & Income......................... N/A N/A N/A 63,353 54,678 1,400,000
Value................................... N/A N/A N/A N/A N/A N/A
Global Asset Allocation................. N/A N/A N/A 54,334 45,778 1,400,000
Asset Allocation........................ 161,157 149,187 1,400,000 356,754 352,764 1,427,000
Global Bond............................. N/A N/A N/A 51,276 42,719 1,400,000
High Yield.............................. N/A N/A N/A 52,954 44,260 1,400,000
Diversified Income...................... 143,572 131,602 1,400,000 260,765 254,780 1,427,000
U.S. Gov't Securities................... 139,903 127,933 1,400,000 321,878 319,203 1,427,000
Money Market............................ 131,099 119,129 1,400,000 290,745 288,070 1,427,000
</TABLE>

These benefits will differ for other insureds. They will differ according to
differences in investment allocation, premium timing and amount, death benefit
type and amount as well as Age and underwriting classification of the insureds.
Because the Policies are insurance policies, actual performance should always be
considered in context with the level of death benefit and cash values.

The performance data is historical; future performance will vary.

FORTIS SERIES FUND, INC.

Fortis Series is a "series" type of mutual fund which is registered with the
Securities and Exchange Commission as a diversified open-end management
investment company under the 1940 Act. Fortis Series has served as the
investment medium for the Separate Account since the Separate Account commenced
operations. Fortis Series is also an investment medium for Variable Account D of
Fortis Benefits, through which variable annuity contracts are issued. Although
Fortis Benefits does not foresee any material conflicts between the interests of
Policy owners and variable annuity contract owners, Fortis Series' Board of
Directors will monitor to identify any material irreconcilable conflicts that
may develop and to determine what action, if any, should be taken in response.
If it becomes necessary for any separate account to replace shares of any
Portfolio with another investment, the Portfolio may have to liquidate
securities on a disadvantageous basis.

Fortis Benefits purchases and redeems Fortis Series shares for the Separate
Account at their net asset value without the imposition of any sales or
redemption charges. Such shares represent interests in the Portfolios of Fortis
Series, each of which corresponds to one of the Subaccounts of the Separate
Account. Any dividend or capital gain distributions received from a Portfolio
that are attributable to Policies will be reinvested in shares of that Portfolio
at net asset value as of the date paid. Such distributions will have the effect
of reducing the net asset value of each share of the Portfolio and increasing
the number of Portfolio shares outstanding. However, the total Policy Value in
the corresponding Subaccount will not change as a result of any such
distribution.

Fortis Series' Portfolios are the Aggressive Growth, International Stock Series,
Growth Stock, Global Growth, Blue Chip Stock, S&P 500 Index, Growth and Income,
Value, Global Asset Allocation Series, Asset Allocation, High Yield, Global Bond
Series, Diversified Income, U.S. Government Securities and Money Market Series.
A full description of the Portfolios, their investment policies and
restrictions, their charges, the

10
<PAGE>
risks attendant to investing in them, and other aspects of their operations is
contained in the prospectus for Fortis Series accompanying the Prospectus and in
the Statement of Additional Information referred to therein. The complete risk
disclosure in the Prospectus for the Global Asset Allocation Series, Asset
Allocation, the High Yield Series, and the Diversified Income Series should be
read before selection of them for Policy investment.

POLICY BENEFITS

DEATH BENEFIT

As long as the Policy remains in force, Fortis Benefits will, upon due proof of
the Surviving Insured's death and return of the Policy, pay the insurance
proceeds of the Policy to the named beneficiary. Fortis Benefits will pay
interest from the date of death to the date of commencement of any optional
income plan or to the date of distribution at a minimum of 3 1/2% per annum. See
Appendix A--"Optional Income Plans."

The insurance proceeds are: (1) the death benefit provided under Option A or
Option B, whichever is in effect on the date of death, plus (2) any additional
insurance on the Surviving Insured's life that is provided by rider, minus (3)
any outstanding Policy loan and any due and unpaid charges accruing during a
Grace Period, plus (4) any loan interest paid by the Policy owner for periods
beyond the date of death.

DEATH BENEFIT OPTIONS

The Policy owner selects one of the two below-described death benefit options in
the application and can, after the third Policy year, change the option once
each Policy year, by written request. See "Change in Death Benefit Option,"
below.

OPTION A. The death benefit is equal to the Face Amount of insurance.

OPTION B. The death benefit is equal to the Face Amount of insurance plus the
Policy Value at the date of the Surviving Insured's death.

ALTERNATIVE DEATH BENEFIT. Under either Option A or Option B, there is an
Alternative Death Benefit which applies if it provides a death benefit greater
than the death benefit option chosen. The Alternative Death Benefit is a
multiple of the Policy Value at the date of death as set forth in the table
below.

<TABLE>
<CAPTION>
ATTAINED AGE OF MULTIPLE OF
YOUNGER INSURED POLICY VALUE
---------------- ------------
<S> <C>
40 or less 2.50
45 2.15
50 1.85
55 1.50
60 1.30
65 1.20
70 1.15
75 1.05
80 1.05
85 1.05
90 1.05
95 1.00
</TABLE>

For Ages not listed, the progression between the listed Ages is constant.

Both Option A and Option B provide insurance protection, as well as possible
build-up of Policy Value. Under Option A, the insurance coverage remains level,
unless the Alternative Death Benefit applies. Under Option B, the insurance
coverage varies as the Policy Value changes.

For any Face Amount, the death benefit under Option B will be greater than or
equal to that under Option A, since the Policy Value is added to the Face Amount
and included in the death benefit under Option B but not under Option A.
However, the cost of insurance included in the Monthly Deduction (see "Charges
and Deductions--Monthly Deduction From Policy Value") will be greater, and thus
the accumulation of Policy Value will be lower, under Option B than under Option
A, assuming the same Face Amount and otherwise identical Policies. See Appendix
B--"Illustrations of Death Benefits, Policy Values, Surrender Values and
Accumulated Premiums."

SECOND-TO-DIE RIDER

Subject to certain limits, coverage payable on the death of the Surviving
Insured may be taken out under our Second-To-Die term insurance rider, rather
than taking out all of the coverage under Option A or Option B of the base
Policy described above. This rider is available only at the time a Policy is
first issued, and a charge will be deducted for it as part of each Monthly
Deduction.

Coverage under the Second-To-Die Rider is generally less costly initially than a
comparable amount of coverage obtained under the base Policy. However, the
Policy owners who intend to retain and make substantial premium payments under
their Policies, coverage under the base Policy will probably be more
economically advantageous over the long term.

Any coverage under the Second-To-Die Rider is not considered in computing the
Alternative Death Benefit mentioned above. Therefore, if part of the coverage is
taken under the rider, the Alternative Death Benefit will apply at lower levels
of Policy Value than if all of the coverage had been taken out under the base
Policy. The Alternative Death Benefit, when it applies, has the effect of
automatically increasing the amount of insurance coverage under the base Policy
and, as a consequence, the amount deducted for cost of insurance. Accordingly,
it is more likely that such increases will occur if coverage is taken out under
the Second-To-Die Rider, rather that under the base Policy.

For a more complete discussion of the Second-To-Die Rider and factors you should
consider in determining whether to apply for it, see "Second-To-Die Rider" under
"Optional Insurance Benefits--Joint Term Life Insurance Riders" in Appendix A at
the end of this prospectus.

ACCELERATED BENEFIT RIDER

The Accelerated Benefit Rider will be issued as a part of all Policies issued in
a state that has approved such rider. The Accelerated Benefit Rider allows a
Policy owner to receive benefits from the Policy that would be otherwise payable
upon the death of an insured. The benefit

11
<PAGE>
may vary state-by-state and a Fortis Benefits representative should be consulted
as to whether, and to what extent, the rider is available in any particular
state.

The Accelerated Benefit Rider allows the Policy owner to elect an accelerated
payment of all or part of the death benefit under the Policy and any term
insurance rider that is less than two years prior to the original expiry or
maturity date. For any survivorship benefit the election can only be made after
the death of one of the joint insureds. The accelerated payment will be
discounted for twelve months' interest and will be reduced by any outstanding
loan if not otherwise paid, multiplied by the percentage of the eligible amount
which is accelerated. The interest rate discount will be equal to the lesser of
(1) the applicable federal interest rate determined under Section 846(c)(2) of
the Internal Revenue Code; (2) the current maximum statutory adjustable policy
loan interest rate; or (3) 10%. Fortis Benefits can furnish details about the
amount of the benefit under the Accelerated Benefit Rider available to an
eligible Policy owner under a particular Policy. The benefits paid under the
Accelerated Benefit Rider are available when Fortis Benefits has received
written notice and satisfactory proof (a certificate by a doctor) that the
insured has a life expectancy of twelve months or less due to an irreversible
medical condition. The benefit will be paid in a lump sum unless otherwise
agreed to by Fortis Benefits.

The payment of a benefit must be approved in writing by any irrevocable
beneficiary and any collateral assignee. No benefit is available if the
insured's irreversible medical condition results from self-inflicted injury and
such injury occurs within the first two policy years (one year in Colorado and
North Dakota). If such injury occurs beyond such period, the amount that may be
requested may not include any part of the death benefit that was first effective
within a two year period (one year in Colorado and North Dakota) prior to such
injury.

All or part of the eligible amount may be accelerated under the Accelerated
Benefit Rider. If the death benefit is only partially accelerated, a Face Amount
at least equal to the minimum Face Amount required for the Policy or rider must
remain under the Policy or rider. The benefit payable must be at least
$2,500.00, or if smaller the entire eligible amount. If the entire eligible
amount is accelerated, the Policy or rider will terminate. If the entire
eligible amount is paid on the person who is insured under the base Policy, any
rider on the Policy that provides insurance on the life of any other person will
be administered according to the provisions in the rider concerning the death of
the person insured under the base Policy.

The maximum amount of any accelerated death benefit payable under a Policy and
all other policies issued by Fortis Benefits with an Accelerated Benefit Rider
is $500,000.

If only a portion of the eligible amount is paid, the Policy and/or rider will
remain in force. The amount of insurance, and the loan amount and Surrender
Value if the benefit is paid on the death benefit provided by the base Policy,
of the Policy or rider will be reduced as of the date of approval of the benefit
request by the percentage of the eligible amount which is accelerated. Future
monthly Minimum Premiums and cost of insurance will be adjusted as if (1) a loan
repayment were made equal to the reduction in the loan amount, (2) a withdrawal
were made equal to the reduction in Surrender Value, and (3) a Face Amount
decrease were made equal to the difference between the accelerated eligible
amount and the face amount decrease caused by withdrawal.

There is no charge for this rider provision as a part of your policy. However,
an administrative fee (not to exceed $300) will be charged at the time the
benefit is paid. The current fee is $50.

Fortis Benefits agrees that unless otherwise required by law, no benefit will be
paid if the Policy owner is required to elect it in order to meet the claims of
creditors or to obtain a government benefit. Receipt of payment of a benefit
under the Accelerated Benefit Rider may affect eligibility for government
sponsored benefit programs, such as Medicaid and Supplemental Security Income.
The rider can be terminated by request.

The Accelerated Benefit Rider is not a long term care rider or nursing home
insurance rider. The amount this rider pays may not be enough to cover medical,
nursing home or other bills. The benefit can be used for any purpose.

Having the Accelerated Benefit Rider as a part of the Policy has no adverse tax
consequences. However, electing to use it could. Although there currently are
proposed IRS regulations which would treat a benefit received under the
Accelerated Benefit Rider for income tax purposes like a death benefit received
by a beneficiary after the death of an insured, receipt of a benefit under the
Accelerated Benefit Rider may give rise to a Federal or State income tax. A
competent tax adviser should be consulted for further information.

CHANGES IN FACE AMOUNT

INCREASE. A Policy owner may at any time increase the Face Amount of a Policy,
subject to the conditions discussed below.

The minimum Face Amount increase is currently $5,000, and all other requirements
are as if the increase were a separate Policy. Increases in Face Amount may be
made only if the Surrender Value after the increase is large enough to cover at
least the Monthly Deduction for the Policy month following the increase. Any
increase may require that additional evidence of insurability be submitted to
Fortis Benefits. No Face Amount increase will be permitted if benefits are being
paid under the terms of a Waiver of Monthly Deductions Rider or the Waiver of
Selected Amount Rider. See Appendix A--"Optional Insurance Benefits." Fortis
Benefits reserves the right to establish different maximum or minimum amounts
for future Face Amount increases.

Following a Face Amount increase requested by the Policy owner, additional sales
and issuance charges will be applicable. See "Charges and Deductions--Premium
Tax and Sales Charges" and "Policy Issuance Expense Charges." An increase in
Face Amount requested by the Policy owner also will increase the monthly Minimum
Premium. See "Minimum Premiums" under "Payment and Allocation of Premiums--
Premiums."

The Policy owner may cancel the Face Amount increase. The cancellation request
must be delivered or mailed to Fortis Benefits by letter postmarked (1) within
10 days after receipt of a Policy schedule amendment reflecting any requested
Face Amount increase, (2) within

12
<PAGE>
45 days after the Policy change application for such increase is signed, or (3)
within 10 days after receipt of a Notice of Withdrawal Right, whichever is
latest. Upon such a cancellation, Monthly Deductions, including rider costs,
arising from the increase are credited to the Policy Value. No premiums paid
will be refunded, except that Fortis Benefits will promptly refund premiums to
the extent necessary to cure any violation of the then current maximum premium
limitations under Section 7702 of the Internal Revenue Code of 1986, as amended
(the "Code"). See "Payment and Allocations of Premiums--Premiums." The Surrender
Charge and the monthly Minimum Premium will be adjusted to the level they would
have been in the absence of the Face Amount increase.

Also, during the first two years following a Face Amount increase requested by a
Policy owner, the Policy owner may transfer all or part of the Policy Value to
the General Account without charge. See "Policy Value Transfers" under "Payment
and Allocation of Premiums--Allocation of Premiums and Policy Values." Such a
transfer to the General Account could be made, for example, in the amount of any
premiums paid which are deemed attributable to the increase. See "Charges and
Deductions--Premium Tax and Sales Charges" and "Policy Issuance Expense Charges"
regarding the method of such attribution.

DECREASE. After the third Policy year, the Policy owner may request a decrease
in the Face Amount of the Policy. Also, no face amount decrease is allowed in
the first year following a Face Amount increase requested by the Policy owner.

The Face Amount remaining in force after any requested decrease may not be less
than $100,000. No decrease in the Face Amount will be permitted if it would
result in any violation of the then current maximum premium limitations under
Section 7702 of the Code. The monthly Minimum Premium will also be reduced. See
"Minimum Premiums" under "Payment and Allocation of Premiums--Premiums."

EFFECTIVE DATE. Any Face Amount increase or decrease will become effective on
the Monthly Anniversary on or next following (1) the Date of Receipt of the
request or (2) if evidence of insurability is required, the date Fortis Benefits
approves the request. Nevertheless, there will be no insurance coverage under
any change in Face Amount or other change in benefits requiring evidence of
insurability, unless, at the time of delivery of a Policy schedule amendment
reflecting the change in benefits, the insureds' health remain as stated in the
application for the change.

Commencing on its effective date, a change in the Face Amount generally will
also affect the Net Amount at Risk and may affect the insureds' rate class, both
of which affect a Policy owner's monthly cost of insurance charge. (Net Amount
at Risk is the difference in amount between the death benefit and the Policy
Value.) See "Rate Class" under "Charges and Deductions--Monthly Deduction from
Policy Value." This in turn can affect the level of subsequent Policy Values and
death benefits.

CHANGE IN DEATH BENEFIT OPTION

After the third Policy year, the death benefit option in effect may be changed
once each Policy year by sending a written request in form acceptable to Fortis
Benefits at its Home Office. The effective date of any such change will be the
Monthly Anniversary on or following (1) the Date of Receipt of the request or
(2) if evidence of insurability is required, approval by Fortis Benefits.

A change from Option A to Option B requires evidence of insurability and results
in an automatic reduction in the Face Amount by the amount of Policy Value on
the effective date of the change. This change may not be made if it would result
in a Face Amount which is less than the minimum Face Amount, which is $100,000.
Nor will a change in death benefit option be permitted if it results in any
violation of the then current maximum premium limitations under Section 7702 of
the Code. See "Payment and Allocation of Premiums-- Premiums."

A change from Option A to Option B will not alter the death benefit at the time
of the change, but will affect the determination of the death benefit from then
on. Since, from then on, the Policy Value will be added to the new Face Amount,
the death benefit will vary with the Policy Value. Moreover, under Option B, the
Net Amount at Risk will not vary unless the Alternative Death Benefit is in
effect. Therefore, after a change from Option A to Option B, the cost of
insurance will generally be higher if the Policy Value increases, but lower if
the Policy Value decreases. See "Charges and Deductions--Monthly Deductions From
Policy Value."

Although a change from Option A to Option B results in an automatic reduction in
Face Amount, it will not result in any change in the charges for premium tax,
sales or issuance expenses or in the monthly Minimum Premium.

If the death benefit option changes from Option B to Option A, the Face Amount
will be increased by the amount of the Policy Value on the effective date of the
change. The death benefit will not be altered at the time of the change.
However, the change in death benefit option will continue to affect the
determination of the death benefit from then on, because the Policy Value will
no longer be added to the Face Amount in determining the death benefit.
Therefore, after a change from Option B to Option A, the cost of insurance
charges will generally be lower if the Policy Value increases but higher if the
Policy Value decreases. See "Charges and Deductions--Monthly Deductions From
Policy Value."

Although a change from Option B to Option A results in an automatic increase in
the Face Amount of a Policy, no additional sales charge or expense charge will
be imposed as a result of such a change, and no evidence of insurability will be
required. Nor will there be any change in the monthly Minimum Premium under a
Policy or any right to a refund of charges upon cancellation of the Face Amount
increase.

POLICY SPLIT OPTION

POLICY SPLIT OPTION. The Policy owner may elect to split the Policy and purchase
two individual Fortis Benefits VUL policies; one on the life of each insured.
This election may be exercised only by written notice to Fortis Benefits' Home
Office within 180 days following either: (1) The date of entry of a final decree
of divorce with respect to the joint insureds; or (2) The effective date of a
change in the Federal estate tax laws that would reduce or eliminate the
unlimited marital deduction; or (3) Written confirmation of a dissolution of a
business partnership

13
<PAGE>

or closely held corporation in which the joint insureds are partners or
shareholders. For Policies issued in the State of Texas there is a monthly
charge of $.04 per $1,000 of Face Amount for this benefit.

There is a 60-day waiting period after divorce or business dissolution before
the option can be elected. The new policies will be issued subject to the
following terms and conditions:

1. There will be no new evidence of insurability required.

2. Premiums, charges, and bonuses for the new policies will be based on each
insured's attained age and current rate class.

3. As of the effective date of the Policy split policy value, and the Face
Amount of the Policy, excluding any riders, will be divided equally between
the new policies, unless a different percentage is specified in the Policy
schedule for the Policy. An unequal split is allowed only at the discretion
of Fortis Benefits upon issuance of the Policy.

4. Loans must be paid at the time of the Policy division.

5. In no event may the combined death benefits of the new policies exceed that
provided under the Policy. A withdrawal of policy value from the Policy will
be made to prevent this from occurring.

6. Riders on the new policies will be allowed at the discretion of Fortis
Benefits, and only if evidence of insurability is provided.

7. The owner and beneficiary of the new policies will be the same as under the
Policy, unless the Policy owner specifies otherwise.

8. Any existing incontestable or suicide period under the Policy will continue
under the two new policies.

The Policy Split Option is not available if any of the following apply when
exercise of the option is sought:

1. Either insured is deceased or considered "uninsurable" pursuant to Fortis
Benefits' underwriting guidelines.

2. The combined rating of the insureds, as indicated in the Policy schedule, is
more than Table 4.

3. Either insured is older than the issue age of the new policy's maximum issue
age.
4. The Policy is in the grace period.
5. The Policy is receiving benefits from any disability rider.
Exercise of this option is treated as a taxable transaction. The Policy owner
should consult a tax adviser before exercising this option.

POLICY VALUE

The total Policy Value at any time is the sum of the Policy Values in the
General Account (see Appendix C--"The General Account" and "Loan Privileges")
and the Subaccounts of the Separate Account at such time.

The Policy Value in the Separate Account may increase or decrease on each
Valuation Date, depending on the investment return of the chosen Subaccounts.
See "Separate Account Net Investment Return," below. "Valuation Dates" are all
business days, except, with respect to any Subaccount, days on which the related
Fortis Series Portfolio does not value its shares. Valuations for any date other
than a Valuation Date will be determined as of the next Valuation Date.

PREMIUM BASED BONUSES AND POLICY VALUE BONUSES

PREMIUM BASED BONUSES. In most states a premium based bonus will be paid by
Fortis Benefits starting on the last day of the seventh and each subsequent
Policy year and continuing for the life of the Policy or, if earlier, the date
the younger insured would have reached age 100. The amount of the bonus is a
percentage of the lesser of (a) or (b), the result divided by the number of
years that the Policy has been in force where: (a) is the sum of all premiums
paid less any withdrawals and loans; and (b) is the sum of all monthly Maximum
Bonus Premiums to date. The current percentages and durations are as follows:

CURRENT PREMIUM BASED BONUS PERCENTAGES

<TABLE>
<CAPTION>
END OF POLICY YEAR
-------------------
9
AND
LATER
TO
ORIGINAL
MATURITY
AGE OF DATE
YOUNGER INSURED OF
AT ISSUE 0-6 7 8 POLICY
- ------------------------- --- --- --- ----
<S> <C> <C> <C> <C>
18-50.................... 0% 2% 4% 4 %
51-60.................... 0 2 4 7
61-70.................... 0 5 7 10
71-85.................... 0 5 5 5
</TABLE>

Maximum Bonus Premiums with respect to a policy or a benefit change generally is
the estimated premium payment which would keep the policy (a benefit change) in
force to the younger insured's Age 85, without regard to substandard risks or
riders. A Face Amount increase or decrease requested by the Policy owner will
cause an increase or decrease, respectively, in the size of future Maximum Bonus
Premiums.

Subject to the guaranteed minimums set forth below, Fortis Benefits reserves the
right in its sole discretion to reduce the rate of Premium Based Bonuses. Policy
owners will be given one year's notice before any such reduction takes effect.
Fortis Benefits guarantees Premium Based Bonuses for eligible Policies at
specified rates. The guaranteed rates are based on the younger insured's Age at
Policy issue, as follows:

14
<PAGE>
GUARANTEED PREMIUM BASED BONUSES PERCENTAGES

Premium Based Bonuses are offered or guaranteed only to the extent allowed by
the state in which the Policy is issued.

POLICY VALUE BONUSES. In most states Fortis Benefits intends to credit Policy
Value Bonuses on each monthly anniversary after the monthly deduction is made,
at an annual rate, as set forth below:

ANNUAL RATE OF POLICY VALUE BONUSES AS A PERCENT OF NET CASH VALUE
<TABLE>
<CAPTION>
OPTION A ANNUAL BONUSES
---------------------------------------------------------
SURRENDER VALUE BAND 1 BAND 2 BAND 3 BAND 4
- ---------------------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
$0 - $9,999 0.00% 0.00% 0.00% 0.00%
$10,000 - $49,999 0.00% 0.00% 0.05% 0.05%
$50,000 - $99,999 0.05% 0.05% 0.10% 0.10%
$100,000 + 0.10% 0.10% 0.15% 0.20%

<CAPTION>
OPTION B ANNUAL BONUSES
---------------------------------------------------------
SURRENDER VALUE BAND 1 BAND 2 BAND 3 BAND 4
- ---------------------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
$0 - $9,999 0.00% 0.00% 0.00% 0.00%
$10,000 - $49,999 0.30% 0.30% 0.35% 0.35%
$50,000 - $99,999 0.35% 0.35% 0.40% 0.40%
$100,000 + 0.40% 0.40% 0.45% 0.50%
</TABLE>

If the death benefit option is changed the rate is computed using the weighted
average of the rates based on the number of months each death benefit option is
in effect.

For purposes of calculating the Policy Value Bonus percentage, the average Face
Amount of the Policy from issuance to the point of the bonus payment will be
used to determine the Policy Band. For example, if the Policy had a Face Amount
of $1 million for 18 months, $500,000 for 60 months, and $2 million for 6
months, the policy has an average Face Amount of (18 x $1,000,000) + (60 x
$500,000) + (6 x $2,000,000) DIVIDED BY 84= $714,285, a Band 2 Policy.

Fortis Benefits intends to add .35% to the annual rate for Policy Value Bonuses
after the 19th Policy year. This increase is not guaranteed. To the extent
implemented, however, the increase would substantially offset any daily charge
for premium taxes and sales charges that is then being made.

Policy Value Bonuses are offered or guaranteed only to the extent allowed by the
state in which the Policy is issued.

ALLOCATION AND EFFECTS. Any Premium Based Bonus and Policy Value Bonus will be
allocated among the General Account and the Subaccounts of the Separate Account
on a Pro Rata Basis. Following such allocation, these amounts will be credited
with investment performance and otherwise be treated the same as any other
amounts allocated to the Subaccounts or the General Account, as the case may be.
Thus, for example, any Premium Based Bonus or Policy Value Bonus will increase
the Option B (but not the Option A) death benefit under the Policy. Under an
Option A death benefit, Premium Based Bonus and Policy Value Bonuses will result
in reduced cost of insurance charges.

15
<PAGE>
CALCULATION OF SEPARATE ACCOUNT POLICY VALUE

On each Valuation Date, the Policy Value in a Subaccount of the Separate Account
will be:

(1) The cumulative amount of premiums allocated to the Subaccount; plus

(2) The amount of all Premium Based Bonuses and Policy Value Bonuses credited to
the Subaccount (see "Policy Benefits-- Premium Based Bonuses and Policy
Value Bonuses"); plus

(3) All amounts transferred to the Subaccount from the General Account or from
another Subaccount; minus

(4) Any amounts transferred from the Subaccount to the General Account or to
another Subaccount; minus

(5) Any partial withdrawal from the Subaccount; minus

(6) The amount of any daily deductions for premium tax and sales charges (see
"Charges and Deductions -- Premium Tax and Sales Charges") allocated to the
Subaccount; minus

(7) The portion of the cumulative Monthly Deductions allocated to the Subaccount
(see "Charges and Deductions--Monthly Deductions From Policy Value" and
"Policy Issuance Expense Charges"); plus

(8) The cumulative net investment return (discussed below) on the amount of
Policy Value in the Subaccount from time to time.

The Policy's total Policy Value in the Separate Account is the sum of the Policy
Values in each Subaccount, which have no guaranteed minimum.

SEPARATE ACCOUNT NET INVESTMENT RETURN

The net asset value for each Fortis Series Portfolio is determined as of the
close of regular trading on the New York Stock Exchange ("NYSE"), on each
Valuation Date. The net investment return for each Subaccount and all
transactions and calculations with respect to the Policies as of any Valuation
Date are determined as of that time.

Each Subaccount is credited with a rate of net investment return equal to its
gross rate of investment return during each Valuation Period less (1) an
adjustment for the Separate Account's charge for mortality and expense risks (at
an annual rate of 1.00%) and (2) a charge for Fortis Benefits' income taxes, if
any such tax charge becomes necessary in the future (see "Federal Tax
Matters--Taxation of Fortis Benefits"). Each Subaccount's gross rate of
investment return during a Valuation Period is the rate of increase or decrease
in the per share net asset value of the underlying Fortis Series Portfolio over
the Valuation Period, adjusted upward to take appropriate account of any
dividends or distributions paid by the Portfolio during this period.

A "Valuation Period" is the period between two successive Valuation Dates,
commencing at the close of regular trading on the NYSE on each Valuation Date
and ending at the close of regular trading on the NYSE on the next succeeding
Valuation Date. Depending primarily on the investment experience of the
underlying Portfolio, a Separate Account Subaccount's net investment return may
be either positive or negative during a Valuation Period. Subject to applicable
legal requirements, Fortis Benefits reserves the right to change the times of
day when values under a Policy are determined.

PAYMENT AND ALLOCATION OF PREMIUMS

ISSUANCE OF A POLICY

Individuals wishing to purchase a Policy must complete an application which will
be sent to Fortis Benefits' Home Office. Currently the minimum Face Amount of
insurance for which a Band 1 Policy may be issued is $100,000, $500,000 for a
Band 2 Policy, $1,000,000 for a Band 3 Policy, and $5,000,000 for a Band 4
Policy. A Policy will generally be issued to insureds Age 18-85 who supply
evidence of insurability satisfactory to Fortis Benefits.

Acceptance of an application is subject to Fortis Benefits' underwriting
guidelines and Policy approval procedures. Any premium payments for a Policy
that never goes into effect, or that is subsequently revoked, will be returned
without interest.

If the proposed insureds meet certain health requirements, Fortis Benefits will
issue temporary term life insurance to cover the period before the Policy goes
into effect. Temporary insurance will be issued only if the initial premium
payment has been paid with the application and the amount of temporary insurance
coverage will not exceed $250,000 under all applications for the proposed
insureds pending with Fortis Benefits and any other insurers. If a temporary
insurance benefit is paid, a premium for the amount of temporary coverage from
the date of its issue to the date of death will be charged. Temporary coverage
is subject to certain other conditions, including special limits for temporary
coverage of certain optional benefits provided by rider, and is for a maximum of
ninety days. Except as otherwise provided in any temporary insurance agreement,
there will be no insurance coverage under a Policy unless at the time the Policy
is delivered the insureds' health is the same as stated in the application.

The Policy Date is the date used to determine Policy Anniversaries and Monthly
Anniversaries, regardless of when the Policy is delivered. The Policy Date is
also when Monthly Deductions commence. When temporary insurance has been
provided, the Policy Date will ordinarily be the date of part I of the
application, except that if that date is the 29th through the 31st of any month,
the Policy Date will be the first of the next month. When no temporary insurance
has been provided, the Policy Date will ordinarily be three days after the date
the application is approved, except that if that date is the 29th through 31st
of any month, the Policy Date will be the first of the next month. A later
Policy Date will result in monthly deductions being taken out later and
investment performance on any premium payment being reflected in the Separate
Account later. A prospective purchaser may request a Policy Date later than that
which otherwise would apply, subject to Fortis Benefits' current administrative
policies. No interest or other return on premium payments will be credited prior
to the Policy Date, however.

Notwithstanding the general procedures outlined above, the purchaser may,
subject to Fortis Benefits' current administrative policies and state insurance
law requirements, request a Policy Date up to six months prior to the date the
Policy is issued, for the purpose of

16
<PAGE>
preserving a younger Age of an insured person under the Policy. In many cases, a
younger Age will result in a smaller monthly Minimum Premium, lower cost of
insurance rates and lower Surrender Charges. An earlier Policy Date will also
result in a correspondingly earlier commencement of Monthly Deductions and, in
some cases, lower Premium Based Bonuses. If an earlier Policy Date is requested,
all monthly Minimum Premiums commencing with that date, plus the amount of
initial premium payment that otherwise would be required, must be paid before
the Policy will be issued.

In other cases, unless otherwise requested, if an insured's birthday falls
between the date of an application and the date the Policy is approved, the
Policy Date will generally be set early enough to preserve the younger Age.

PREMIUMS

PAYMENT OF PREMIUMS. At the time of Policy issuance, the Planned Periodic
Premium must be, on an annualized basis, at least the greater of (1) $2,000, or
(2) twelve monthly Minimum Premiums. For purposes of this requirement, the
Planned Periodic Premiums are assumed to be level in the first policy year. The
initial premium payment must cover all monthly Minimum Premiums from the Policy
Date to the next billing date, generally after the Policy is mailed for
delivery, and must be paid before a Policy will take effect. If the Planned
Periodic Premium is paid monthly, at least two months' Planned Periodic Premiums
must be paid.

Subject to Fortis Benefits' guidelines, each Policy owner will determine a
Planned Periodic Premium schedule that provides for the payment of level
premiums at specified intervals for the life of the Policy. (If desired, these
may be paid by means of automatic monthly drafts on the Policy owner's checking
account.) The Policy owner, however, is not required to pay premiums in
accordance with the Planned Periodic Premium schedule, except to the extent
described above with respect to the initial premium payment. THE PAYMENT OF
PLANNED PERIODIC PREMIUMS WILL NOT GUARANTEE THAT THE POLICY REMAINS IN FORCE.
Instead, the duration of the Policy depends upon the Net Cash Value. See
"Payment and Allocation of Premiums--Policy Lapse and Reinstatement."

Subject to the limitations described below, a Policy owner may make additional
premium payments at any time in any amount.

The total of all premiums paid may never exceed the then current maximum premium
limitations under Section 7702 of the Code. If at any time a premium is paid
that would result in any violation of the then current maximum premium
limitations, Fortis Benefits will accept only that portion of the premium that
will make total premiums equal to the limit. Fortis Benefits will promptly
refund any such excess, unless the Policy owner directs otherwise. Any amount so
refunded will include any positive net investment performance attributable to
such amount prior to refund. The amount of any positive net investment
performance refunded will constitute ordinary income to the Policy owner for
federal income tax purposes.

Fortis Benefits reserves the right to impose additional limits on the number or
amount of premium payments. Fortis Benefits currently has no intention of
imposing such limits except when the Alternative Death Benefit is in effect. See
"Policy Benefits--Death Benefit Options."

ALLOCATION OF PREMIUMS AND POLICY VALUE

ALLOCATION OF PREMIUMS. In the application for a Policy, the Policy owner
indicates the initial allocation of premiums among the General Account and the
Subaccounts of the Separate Account. (As discussed below, this allocation will
generally take effect 20 days following the date the Policy is mailed for
delivery to the Policy owner.) Allocation percentages must be in whole numbers.
The Policy owner may change the allocation of future premiums without charge at
any time (other than during any Grace Period) by submitting a written request in
a form acceptable to Fortis Benefits at its Home Office. The change will be
effective as of the Date of Receipt of such form.

The first premium payment will be allocated automatically to the General Account
as of the later of the Policy Date or Date of Receipt, and, assuming a Policy
goes into effect, will earn a return for the Policy owner. Any other premiums
will be allocated to the General Account as of the later of the Policy Date or
the Date of Receipt. These payments will be held in the General Account
generally until the twentieth day after the Policy is mailed for delivery. Then,
all premiums, plus any other amounts previously earned in the General Account,
will be re-allocated among the General Account and the Subaccounts in accordance
with the premium allocation percentage established by the Policy owner. If
either insured is in a substandard risk class, the reallocation will occur on
the twentieth day after the Date of Receipt by Fortis Benefits of all items
necessary under its administrative and underwriting procedures to release the
Policy to an active status in its processing system.

Each premium payment accepted after this reallocation is credited to the
Subaccounts or General Account as of the Date of Receipt. There is an exception
to this rule, however, with respect to any premium payments as to which
underwriting requirements apply or where Fortis Benefits obtains authorization
of the Policy owner to delay acceptance of the premium until permitted under
Section 7702 of the Code. In such cases, the premium is held in a non-interest
bearing account until it is allocated to the Subaccounts or General Account as
of the later of the Date of Receipt of the premium or the date of acceptance of
such premium by Fortis Benefits.

POLICY VALUE TRANSFERS. After the initial allocation of premiums has occurred,
and subject to the limitations described below, the Policy owner may transfer
Policy Value between the General Account and the Subaccounts of the Separate
Account and among the Subaccounts, except during any Grace Period.

Transfers from the General Account to the Separate Account are limited to one
transfer in each Policy Year, which currently may not be for more than 50% of
the General Account Policy Value at the date of transfer (excluding the amount
of any General Account Policy Value attributable to Policy loans). However, if
the unloaned General Account Policy Value at the date of transfer is less than
$1,000, the Policy owner may transfer the entire unloaned balance from the
General Account to

17
<PAGE>
the Separate Account. Fortis Benefits reserves the right to review these limits
on an annual basis and, subject to the limits in the Policy, to reduce them.

Fortis Benefits will determine all values in connection with a transfer as of
the Date of Receipt of the transfer request. Fortis Benefits may in its
discretion permit a continuing request for transfers of specified amounts
automatically on a periodic basis. Fortis Benefits reserves the right to
restrict the number and amount of transfers, but currently has no plans to
impose any such restrictions. At least four transfers per Policy year among the
Subaccounts or to the General Account will always be permitted. Fortis Benefits
will give Policy owners advance notice of any such restrictions.

Transfers are not taxable under current law. Except as discussed below, transfer
requests must be in writing, in a form acceptable to Fortis Benefits. Although
it currently has no plans to do so, Fortis Benefits may impose a charge of up to
$25 on transfers. Any such charge would be designed only to cover the
administrative cost of effecting transfers. Telephone transfers may be made if a
telephone authorization form has been received. See "Summary--How to Exercise
Your Rights Under a Policy."

In no event will Fortis Benefits restrict or prohibit any transfer of all Policy
Value to the General Account (1) during the first two Policy years, (2) within
the first two years after a Face Amount increase requested by the Policy owner,
or (3) within 60 days after the Policy owner receives notice of any material
change in a Portfolio's investment policy. Nor will any transfer charge be
imposed on such transfers, except that a charge may be imposed subsequent to the
first full transfer after issue, a Face Amount increase, or a change in
investment policy.

LIMITATION. Under the Policy, Fortis Benefits reserves the right to control the
amount of any assets in any investment alternative. Pursuant to this authority,
Fortis Benefits has established the following administrative procedures for the
protection of the interest of all investors participating in Fortis Series'
Portfolios: a Policy owner may not invest, allocate, transfer or exchange Policy
Value into any Subaccount if the value allocated to that Subaccount under the
Policy (and under any other insurance or annuity contract directly or indirectly
controlled by the same person, jointly or individually) would immediately
thereafter equal 25% or more of the related Fortis Series Portfolio's net
assets. Fortis Benefits reserves the right to modify these procedures at any
time.

GUARANTEED DEATH BENEFIT

GUARANTEED DEATH BENEFIT. A Policy is guaranteed to stay in force if, as of each
Monthly Anniversary, the cumulative amount of premiums paid to date, less the
amount of any outstanding Policy loans and cumulative partial withdrawals taken
by the Policy owner, at least equals the cumulative monthly Minimum Premiums for
Policy months up to and including that beginning on that Monthly Anniversary.
For purposes of this calculation, premiums paid in any Policy year, Minimum
Premiums, and partial withdrawals are assumed to accumulate at an effective
annual rate of 4%. For this purpose premiums and Minimum Premiums for any Policy
year are assumed to commence accumulating interest at the beginning of the
Policy year in which they are paid. Partial withdrawals are assumed to be taken
at the end of the year or at the end of the current monthly anniversary, if
earlier. This benefit is provided by the Guaranteed Death Benefit rider issued
as a part of all Policies issued in a state that has approved such rider. The
Policy owner can choose at issue a guarantee period of 10 years, 20 years, or to
Age 85 of the younger insured. The choice cannot be changed after the Policy is
issued. If the issue age of the younger insured is 65 or older, the guarantee
will be for the lesser of 10 years from the Policy Date or until the younger
insured's Age 75 (or for 5 years if the younger insured is Age 71 or more at
issue). The guarantee if either insured is rated for higher mortality is for
five years. The guarantee period may be shorter in some states due to state
limitations. There is no charge for the benefit in the first ten years. After
the tenth Policy year, the monthly charge for the 20 year guarantee is $.02 per
thousand dollars of Face Amount in effect under the Policy or under any
supplemental term insurance rider described in Appendix A, and $.04 per thousand
of such Face amount for the guarantee period to Age 85 of the younger insured.
The initial charge is set forth in the Policy schedule. For Policies issued in
the State of Texas there is no charge for this extended benefit. A subsequent
increase or decrease in Face Amount will result in an increase or decrease,
respectively, in the level of charges for the Guaranteed Death Benefit. The same
is true of the addition or cancellation of any benefits under any supplemental
term insurance rider described in "Appendix A." The new charges will be set
forth in the Policy schedule amendment delivered following any change. If the
Guaranteed Death Benefit terminates for any reason, the charge for it will
terminate at the same time.

The minimum amount must be paid prior to the next Monthly Anniversary for the
rider to stay in force. Fortis Benefits will send the Policy owner a notice of
the minimum amount required to be paid. The Guaranteed Death Benefit will
terminate if at least this amount is not paid, or if the Date of Receipt by
Fortis Benefits of this amount is not prior to the next Monthly Anniversary. Any
Grace Period under the Policy will end on the date otherwise provided in the
Policy, but in no event earlier than the Monthly Anniversary following lapse of
the Guaranteed Death Benefit. Once the Guaranteed Death Benefit terminates, it
may not be reinstated.

MINIMUM PREMIUMS. For the 10 year and 20 year guarantee periods the monthly
Minimum Premium with respect to a Policy or benefit change generally is the
estimated monthly premium payment which would keep the Policy (or benefit
change) in force for 20 years based on (1) the insureds' then-current Ages, sex,
and smoking habits and (2) reasonable assumptions for interest, costs of
insurance, and other charges. If the guarantee period to Age 85 of the younger
insured is selected, the monthly Minimum Premium will be one that is sufficient
to keep the Policy in force for the extended guarantee period provided for by
the rider, based on the assumptions set out above. However, in the event the
premium requirements for a longer period are not met, the rider will stay in
force for the shorter guarantee period, i.e. 20 or 10 years so long as the
premium requirements for that shorter guarantee period continue to be met. If
the younger insured is Age 65 or over at issue, the monthly Minimum Premium will
be one that is sufficient to keep the Policy in force for 10 years. For insureds
rated for higher mortality, it will be reduced to one that is sufficient to keep
the Policy in force for five years. The smallest monthly Minimum Premium for a
Policy without substandard risks or optional riders is $25. Fortis

18
<PAGE>
Benefits reserves the right to change the monthly Minimum Premium, although any
such change would affect only subsequent increases in the monthly Minimum
Premium due to changes in benefits.

Starting with the Monthly Anniversary when any Face Amount increase requested by
the Policy owner becomes effective, the monthly Minimum Premium will include an
additional amount attributable to the increase above the Face Amount on which
the previous monthly Minimum Premium was computed.

Starting with the Monthly Anniversary when any Face Amount decrease requested by
the Policy owner becomes effective, the monthly Minimum Premium will be reduced
by an amount attributable to the decrease below the Face Amount on which the
previous monthly Minimum Premium was computed. (The Monthly Minimum Premium will
not be reduced for any prior periods, however.) If there have been no Face
Amount increases, the decrease in any subsequent monthly Minimum Premium will be
(1) the monthly Minimum Premium before the change, multiplied by (2) the
proportion that the decrease represents of the Face Amount before the change. If
there have been any Face Amount increases, the decrease will be deemed to reduce
the most recent increase first.

The initial monthly Minimum Premium that must be paid to ensure the availability
of the Guaranteed Death Benefit Rider is set forth in the Policy schedule
included in the Policy. Any increased or decreased monthly Minimum Premium for
these purposes will be set forth in a Policy schedule amendment delivered to the
Policy owner following the change. Except as otherwise discussed below, the
monthly Minimum Premium for the Face Amount or any Face Amount change will
include an amount necessary to support certain substandard rate class charges
and any optional insurance benefits pursuant to Policy riders. Accordingly, in
such cases any increase or decrease in optional benefits provided by rider will
result in a higher or lower monthly Minimum Premium. For this purpose, the
amount of additional monthly Minimum Premium attributable to an increase in
benefits will be based on the most recent rate class if an insured's rate class
has worsened. On the other hand, the monthly Minimum Premium will be reduced
starting with the first Monthly Anniversary after Fortis Benefits approves any
new rate class for an insured which is more favorable than that on which the
previous monthly Minimum Premium was based.

POLICY LAPSE AND REINSTATEMENT

LAPSE. A Policy may lapse if the Net Cash Value on any Monthly Anniversary is
insufficient to pay the Monthly Deduction. The "Net Cash Value" is the Policy
Value less any outstanding Policy loan, plus any loan interest paid for future
periods. Fortis Benefits will notify the Policy owner and any assignee of record
of any Net Cash Value shortfall unless the Guaranteed Death Benefit Rider is in
effect. If the Guaranteed Death Benefit Rider is in effect, we will still send
the notification if the Minimum Premium payment requirement has not been met.
See "Guaranteed Death Benefit" under "Payment and Allocation of
Premiums--Premiums," above. The Policy owner will have a Grace Period of 61 days
to make a premium payment sufficient to cover at least the amount of such
shortfall, plus any additional Monthly Deductions until the end of the Grace
Period. Failure to make a sufficient payment within the Grace Period will result
in termination of the Policy, with no remaining Surrender Value, except to the
extent otherwise provided pursuant to the Guaranteed Death Benefit Rider.

If the Surviving Insured dies during the Grace Period, the insurance proceeds
payable will be the Death Benefit in effect immediately prior to entering the
Grace Period, but any due and unpaid Monthly Deductions will be deducted from
the proceeds.

REINSTATEMENT. A lapsed Policy may be reinstated at any time within five years
after the end of the Grace Period while both joint insureds are alive (or if the
Policy lapsed after the first death, while the surviving insured is alive) and
before the maturity date by submitting the following items to Fortis Benefits:
(1) a written application for reinstatement; (2) evidence of insurability
satisfactory to Fortis Benefits; (3) a premium that, net of any premium charges
that Fortis Benefits may in the future deduct from premiums, at least equals the
sum of (a) an amount necessary to keep the Policy in force for at least the two
Policy months commencing with the effective date of reinstatement, which
consists of two Monthly Deductions and any increase in the Surrender Charge
attributable to such premium, and (b) the balance needed to cover any due and
unpaid Monthly Deductions through the end of the Grace Period.

Any Policy loan on the date of termination will be automatically canceled
(except in jurisdictions where such cancellation is not permitted) and in that
case need not otherwise be repaid or reinstated. The amount of Policy Value on
the date of reinstatement will be equal to the premium paid at reinstatement,
less any premium charge deducted from premiums, less the first Monthly Deduction
paid in accordance with (a) above, and less the amounts paid in accordance with
(b) above. This Policy Value will be allocated according to the Policy owner's
most recent allocation designation. If the Policy loan must be reinstated, the
Policy Value will be increased by the amount of the loan, and that portion of
the Policy Value will be held in the General Account and credited with interest
at a rate of 4% per annum.

The date of reinstatement will be the first Monthly Anniversary on or following
approval of the application for reinstatement. The Guaranteed Death Benefit
Rider will not be reinstated. Following reinstatement, the Surrender Charge will
be reinstated and will be calculated using the original Policy Date and Face
Amount increase dates as appropriate. See "Charges and Deductions--Premium Tax
and Sales Charges; Policy Issuance Expense Charges." The Policy Issuance Expense
Charges will also be reinstated. However, credit will be given for the time
period prior to the Policy's lapse.

CHARGES AND DEDUCTIONS

PREMIUM TAX AND SALES CHARGES

PREMIUM TAX CHARGES. Premium tax charges are not deducted from premium payments.
This allows more of each premium payment to be put to work earning a return for
the Policy owner. Currently, a premium tax charge in the amount of 2.2% of all
premium payments is assessed through monthly and daily deductions from Policy
Value, as described below. Any portion of such amount that is not recovered by
Fortis Benefits pursuant to the monthly and daily deductions may be deducted as
part of the Surrender Charge discussed below. The charge

19
<PAGE>
for premium taxes is to reimburse Fortis Benefits for taxes on premiums and
similar assessments that are imposed by most, but not all, state and local
governmental entities at various rates. The charge for premium taxes is imposed
on all Policies even though there may be no premium tax assessed by the
jurisdiction in which the Policy is purchased. Rather, the current rate at which
the charge is imposed is an average rate that Fortis Benefits estimates will be
paid on premiums in all jurisdictions. In order to more fully reimburse itself
for premium taxes or similar charges that it has paid or expects to pay, Fortis
Benefits reserves the right to raise the current premium tax charge assessed
through periodic deductions to 3.0%. Fortis Benefits also reserves the right to
assess a charge for premium taxes directly from premiums to a maximum of 2.5%,
in which case the amount of premium tax charges recoverable through the periodic
deductions therefor would be reduced by at least a corresponding amount. Fortis
Benefits also reserves the right to impose charges for other taxes that may be
payable and are attributable to the policies. Fortis Benefits does not expect to
make a profit from the premium tax charge.

SALES CHARGES. A sales charge in the amount of 9% of all premium payments is
also assessed through the monthly and daily deductions from Policy Value. Any
amount of this sales charge that is not recovered by Fortis Benefits through
these deductions may be deducted as a Contingent Deferred Sales Charge that is
included as part of the Surrender Charge. It is not possible to state how long
it would take for the full sales charge to be recovered through these
deductions. First, the cumulative sales charge will increase with each new
premium payment, and the Policy owner has considerable flexibility to vary the
amount and timing of premium payments. Second, the actual dollar amount of the
daily deduction to recover the sales charge depends on a number of factors that
will differ for each Policy, including the amount of premium payments made, the
performance of the investment options the Policy owner chooses, the amount and
timing of Premium Based Bonuses and Policy Value Bonuses or loans and loan
repayments, and the Age, sex and rate class of the insureds.

Fortis Benefits reserves the right to deduct total sales charges from premium
payments, up to a maximum of 5%, in which case the amount of premium tax charges
recoverable through the periodic deductions therefor would be reduced by at
least a corresponding amount. The sales charges under the Policies help to
defray sales expenses, including sales commissions and the cost of prospectuses,
other sales material and advertising. The amount of sales charges deducted in
any year, however, cannot be specifically related to actual sales expenses for
that year. Fortis Benefits does not expect to recover all of its sales expenses
from the sales charges. The balance will be recovered from other sources,
including any profits attributable to cost of insurance and mortality and
expense risk charges under the Policies and Fortis Benefits' general assets and
surplus.

The aggregate monthly deduction for premium tax and sales charges total is $4.00
per policy (as part of the Monthly Deduction referred to below), and the daily
deduction for these purposes is at an annual rate of .35% of the value of the
Policy's net assets in the Separate Account. These monthly and daily deductions,
however, will be waived to the extent that the cumulative amount of all such
deductions and premium charges would exceed the current charge of 11.2% of all
premium payments made to date (or 12% if the premium tax charge were increased
to its 3% maximum). Any daily deductions after the nineteenth policy year for
sales charges and premium taxes would be substantially offset, assuming that
Fortis Benefits implements the full Policy Value Bonus in the 20th Policy year,
as currently planned. See "Policy Benefits--Premium Based Bonuses and Policy
Value Bonuses."

Any amount of premium tax charges and sales charges not recovered through the
monthly or daily deductions and premium charges are deducted, if at all, ONLY as
part of the Surrender Charge discussed below. The Surrender Charge (1) is
imposed only in the event the Policy lapses or is surrendered in full before the
tenth Policy Anniversary and (2) is subject to an overall upper limit or "cap"
that decreases over time. Accordingly, Fortis Benefits' method of imposing
premium tax charges and sales charges under the Policies in many cases will
result in substantially less than the full amount of such charges being imposed.

POLICY ISSUANCE EXPENSE CHARGE

POLICY ISSUANCE EXPENSE CHARGES. A monthly policy issuance expense charge at the
rates set out below will be deducted as part of the Monthly Deduction for the
first ten Policy Years following issuance of the Policy:

<TABLE>
<CAPTION>
MONTHLY RATE
PER $1,000 OF
FACE AMOUNT
-----------------
<S> <C>
Band 1.................................... .10
Band 2.................................... .08
Band 3.................................... .05
Band 4.................................... .03
</TABLE>

This charge also will be imposed for ten years following any requested Face
Amount increase, the additional "per thousand" charge being based on the dollar
amount of the increase. If the Policy is surrendered or lapses within ten years
after issuance or a Face Amount increase, all or part of the remaining Policy
issuance expense charge for such ten year period will be deducted as part of the
Surrender Charge.

This charge is designed primarily to compensate Fortis Benefits for underwriting
and other start-up expenses incurred in connection with issuing the Policy or
Face Amount increase. Such expenses include the cost of processing applications,
conducting medical examinations, determining insurability and the insureds' risk
class, and establishing Policy records (including computer set up costs). Fortis
Benefits does not expect its revenues from this charge to exceed its costs and
expenses of issuing and underwriting the Policies and Face Amount increases.

SURRENDER CHARGE.

SURRENDER CHARGE. A Surrender Charge may be assessed on lapse or full surrender
of a Policy before the tenth Policy Anniversary (or the tenth anniversary of a
Face Amount increase requested by the Policy owner). The Surrender Charge is (1)
any amount of the Policy issuance expense charge discussed below that has not
yet been recovered plus (2) any portion of the current premium tax charge and
the sales charge referred to above that has not yet been collected through the

20
<PAGE>
monthly and daily deductions therefor or through any deductions from premiums
that Fortis Benefits may make in the future for these purposes.

The entire Surrender Charge is subject to an overall upper limit or "cap" as set
forth in the table below. The table below also shows the amount by which the
overall cap is increased by a Face Amount increase requested by the Policy
owner. The overall cap (and each amount of increase therein) also decreases at a
constant rate on the first and each subsequent Policy Anniversary (or increase
anniversary, as the case may be) until it reaches zero on the tenth Policy
Anniversary (or increase anniversary). Accordingly, there will be no Surrender
Charge on surrenders or lapses as of the later of the tenth Policy Anniversary
or the tenth anniversary of any Face Amount increase.

<TABLE>
<CAPTION>
ADJUSTED OVERALL "CAP" ON
AGE AT TIME OF SURRENDER CHARGE
POLICY ISSUANCE OR (PER THOUSAND DOLLARS
FACE AMOUNT OF FACE AMOUNT OR
INCREASE FACE AMOUNT INCREASE)
- ------------------- -----------------------
<S> <C>
18 - 24 1.90
25 - 29 3.30
30 - 34 4.50
35 - 39 6.00
40 - 44 8.25
45 - 49 10.75
50 - 54 14.25
55 - 59 19.00
60 - 64 25.20
65 - 69 33.60
70 - 85 41.00
</TABLE>

The Adjusted Age, for purposes of calculating the surrender charge cap, is the
Age of the younger insured plus 1/3 of the lesser of (a) the difference in Age
between the younger and older insured or (b) 20. If both insureds are over Age
80, the "cap" per thousand is $33.

No Surrender Charge is deducted upon a partial withdrawal of Policy Value or a
Face Amount decrease. However, when a Policy owner requests a Face Amount
decrease (or a partial withdrawal that results in a Face Amount decrease), a
portion of the overall "cap" referred to above is reduced: the portion of the
cap that is attributable to the cancelled Face Amount is reduced to the extent
that it exceeds the amount of the Surrender Charge then in effect that is
attributable to the cancelled Face Amount. For this purpose, the most recent
Face Amount increases are deemed to be cancelled first.

It is not possible to state, as a general matter, what the Surrender Charge will
be as a percentage of premiums paid. This is because the components of the
Surrender Charge vary based on factors other than the amount of premiums paid.
For example, the amount of the premium tax and sales charge that remains
uncollected at the time of surrender or lapse depends on such factors as the
period of time the Policy has been in force, the performance of the investment
options the Policy owner chooses, the amount and timing of any Premium Based
Bonuses, Policy Value Bonuses or loans and loan repayments, and the Age, sex,
and rate class of the insureds. Also, the overall Surrender Charge "cap"
referred to above is not based on the amount of premiums paid, but on the
Policy's Face Amount and the number of years since the Policy was issued.

MONTHLY DEDUCTION FROM POLICY VALUE

The Monthly Deduction from Policy Value includes (1) the monthly charges
described above under "Premium Tax and Sales Charges," (2) policy issuance
expense charges discussed above, (3) the cost of insurance charge, (4) certain
monthly administrative expense charges, and (5) the charge for optional
insurance benefits added by rider (see Appendix A--"Optional Insurance
Benefits"). The cost of insurance charges and monthly administrative expense
charges, are discussed separately in the paragraphs that follow.

The Monthly Deduction will be deducted as of each Monthly Anniversary commencing
with the Policy Date. The Monthly Deduction will be allocated among the General
Account and each Subaccount of the Separate Account selected by the Policy
owner. If no such selection is made, or if there are insufficient funds in the
selected subaccounts, then the allocation will be made in the proportion that
the Policy Value in the General Account (excluding the amount of any General
Account Policy Value attributable to Policy loans) and the Policy Value in each
Subaccount, respectively, bear to the Policy's total Policy Value (excluding the
amount of any General Account Policy Value attributable to Policy Loans) as of
the date of the transaction (that is, on a "Pro Rata Basis").

If any part of a Monthly Deduction is not made because of insufficient Policy
Value, and if the Policy nevertheless does not lapse, the undeducted amount will
be deducted on receipt of any subsequent premium payment.

COST OF INSURANCE. Because the cost of insurance depends upon a number of
variables, it can vary from month to month. Fortis Benefits will determine the
monthly cost of insurance charge by multiplying the applicable cost of insurance
rate or rates by the Net Amount at Risk for each Policy month. The Net Amount at
Risk for a Policy month is (1) the death benefit, divided by 1.00327374, at the
beginning of the Policy month, less (2) the Policy Value at the beginning of the
Policy month. Additional amounts may be charged if the rate class is less
favorable than standard.

After the later of twenty years from issue or attained age 65 of the younger
insured, the cost of insurance charges will be calculated using an Adjusted Net
Amount at Risk. The Adjusted Net Amount at Risk is the lesser of (a) the Net
Amount at Risk or (b) a percentage of the remaining initial Face Amount of the
Policy. The percentage is 70% at attained age 65 of the younger insured and
grades down linearly to 50% at attained age 85 of the younger insured.

Cost of insurance charges for Face Amount increases will be calculated
separately using the same method described above.

If two Policies are otherwise identical, a Option A Policy will have a lower
death benefit, higher Policy Value, and lower cost of insurance charges than a
Option B Policy. Since the death benefit payable under Option A remains constant
while the death benefit payable under Option B varies with the Policy Value,
Policy Value increases will generally reduce the Net Amount at Risk under Option
A but not under Option B. If the Net Amount at Risk is greater, the cost of
insurance will be greater. If the Alternative Death Benefit is in effect (see
"Policy Benefits--Death Benefit Options"), the cost of insurance will vary

21
<PAGE>
directly with the Policy Value under both death benefit options. While both
joint insureds are alive, the Alternative Death Benefit multiple is determined
based on the younger insured's Age.

Cost of insurance rates are based on the Issue Age, sex, duration and rate class
of each joint insured. The actual monthly cost of insurance deductions will be
based on Fortis Benefits' expectations as to future experience, and generally
increase each year as the Ages of the insureds increase. They will not, however,
be greater than the guaranteed cost of insurance rates set forth in the Policy.
The maximum cost of insurance rates for standard risk insureds will not exceed
the rates calculated from certain of the 1980 Commissioners Standard Ordinary
Mortality Tables and the sex, Age and rate class of each joint insured. The rate
class of each joint insured will affect the cost of insurance rate. These tables
set forth different mortality estimates for males and females and for smokers
and non-smokers. The maximum cost of insurance rates for a table-rated
substandard insured are based on a multiple (shown on the Policy schedule page)
of the above rates. Additional level amounts per thousand dollars of Face Amount
are charged if a substandard insured is assigned a flat extra rating.

Any change in the cost of insurance rates or charges will apply to all insureds
of the same Age, sex, duration and rate class.

Cost of insurance rates that differ as between male and female insureds are not
permitted under current law in Montana, and perhaps other states or in
connection with certain employee benefit arrangements. Employers should
therefore seek legal advice as to any questions they may have in this regard. To
the extent legally necessary, Fortis Benefits may make available gender-neutral
cost of insurance rates, and affected purchasers should inquire of their sales
representative whether these are currently available in their states. The
gender-neutral rates will be higher than those otherwise applicable to females
and lower than those otherwise applicable to males. Where gender-neutral rates
are required, Minimum Premiums also will be gender-neutral.

RATE CLASS. Fortis Benefits currently places insureds into one of several rate
classes depending on the mortality risk. Fortis Benefits has both smoker and
non-smoker rate classes. For an otherwise identical Policy, insureds in a
non-smoker rate class will have a lower cost of insurance than those in a smoker
rate class.

If a Policy owner requests a Face Amount increase at a time when either insured
is in a less favorable rate class than previously, a higher cost of insurance
deduction will apply to that portion of the Net Amount at Risk attributable to
the increase. (This does not apply to Face Amount increases resulting
automatically from a change from Death Benefit Option B to Option A, as
described under "Policy Benefits--Change in Death Benefit Option.") When the
Alternative Death Benefit is in effect, the Net Amount at Risk can exceed the
Policy's Face Amount, in which case the rate used for such excess approximately
equals the blended rate for the other portion of the Net Amount at Risk. If an
insured's rate class improves, the lower cost of insurance deduction will apply
to the entire Net Amount at Risk, commencing on the Monthly Anniversary on or
after Fortis Benefits approves the new rate class.

A Policy owner may request a change in smoking status. The change will be
allowed only if the insured would not otherwise be in a less favorable rate
class. Any change from smoker to non-smoker rate class will take effect on the
next Monthly Anniversary, and the resulting rates for the coverage under the
base policy will be applicable for the previous 12 months from the effective
date of the change. Such reduced rates for the previous 12 months will be
implemented by a refund credited at the effective date of the change.

For purposes of determining the cost of insurance charge, any decrease in the
Face Amount will reduce the Face Amount in the following order: (1) the Face
Amount provided by the most recent increase; (2) the next most recent increases
successively; and (3) the Face Amount when the Policy was issued.

MONTHLY ADMINISTRATIVE EXPENSE CHARGES. A monthly administrative charge of $6.00
per Policy will be deducted from Policy Value as part of the Monthly Deduction
for each Policy Month. Fortis Benefits reserves the right to change this
administrative charge, but it will never exceed $7.50 per month. Fortis Benefits
also reserves the right to impose an additional monthly administrative expense
charge of up to $.13 per thousand dollars of Face Amount then in force. These
charges compensate Fortis Benefits for expenses incurred in administering the
Policy.

Fortis Benefits does not expect its revenues from the monthly administrative
expense charges to exceed its costs and expenses in administering the Policies.

CHARGE FOR MORTALITY AND EXPENSE RISKS

A daily charge is made for mortality and expense risks assumed by Fortis
Benefits. The charge is at an annual rate of 1.00% of the average daily value of
the net assets in the Separate Account that are attributable to the Policies.

The mortality risk assumed is that the insureds may live for a shorter period of
time than estimated. It also covers the risks underlying the first ten years of
the Guaranteed Death Benefit Rider and the Policy Split Option. See
"Premium--Guaranteed Death Benefits" and "Policy Split Option." The expense risk
assumed is that expenses incurred in issuing and administering the Policies will
be greater than estimated. Fortis Benefits will realize a gain if the charges
under the Policies prove to be more than sufficient to cover the actual costs of
its mortality and expense commitments. If the charges are not sufficient, the
loss will fall on Fortis Benefits.

MISCELLANEOUS

As discussed under "Payment and Allocation of Premiums--Allocation of Premiums
and Policy Value" and "Surrender and Partial Withdrawal," Fortis Benefits
reserves the right to impose charges to defray its administrative expenses in
effecting transfers of Policy Value and partial withdrawals. Fortis Benefits
currently has no plans to impose any such charges, which in any event would not
be designed to yield revenues to Fortis Benefits in excess of its costs of
effecting such transactions. Neither these charges nor any additional charges
referred to above under "Policy Issuance Expense Charge" and "Monthly Deduction
from Policy Value--Monthly Administrative

22
<PAGE>
Expense Charges" will be imposed if such revenues, together with Fortis
Benefits' revenues from all other administrative and expense charges under the
Policies, are expected to exceed Fortis Benefits' total costs of issuing and
administering the Policies.

CHARGE FOR INCOME TAXES. Currently, no charge is made against the Separate
Account for income taxes deemed attributable to the Policies. However, Fortis
Benefits may decide to make such a charge in the future.

GUARANTEE OF CERTAIN CHARGES

Fortis Benefits guarantees, and may not increase, the monthly and daily charges
for sales expenses and premium taxes; the maximum rates for premium tax and
sales charges deducted through such periodic charges; the maximum Surrender
Charge rates; the maximum monthly administrative expense charges; the rate of
the charge to cover the costs of issuing a Policy or a Face Amount increase; the
charge against the Separate Account for mortality and expense risks with respect
to the Policies; the maximum cost of insurance rates; and the maximum amount of
any charges for transfers or partial withdrawals of Policy Value. Fortis
Benefits reserves the right to change the monthly Minimum Premium. Any such
change will affect only subsequent increases in the monthly Minimum Premium due
to changes in benefits. Fortis Benefits also reserves the right to deduct
premium taxes and sales charges from premium payments, subject to guaranteed
maximums that may not be increased. Sales charges from periodic and premium
deductions will not exceed 9% of premiums.

LOAN PRIVILEGES

The Policy owner may borrow money from Fortis Benefits using the Policy as the
only security for the loan.

The maximum amount that may be borrowed at any time is 90% of the difference
between the Policy Value and the amount of any Surrender Charge then in effect.
After the later of 10 years from the issue date or the younger insured's Age 70,
it is 100% of such difference. Fortis Benefits will allocate a Policy loan among
the General Account and the Subaccounts of the Separate Account selected by the
Policy owner. If no selection is made then the allocation will be on a Pro Rata
Basis.

RATE CHARGED ON POLICY LOANS

Except as noted below, interest on Policy loans is charged at an effective
annual rate of 5.66% per year, payable annually in advance. If not paid when
due, loan interest at the same rate will be added to the loan. An amount equal
to the loan interest accrued to the end of the year will be taken from the
General Account and the Subaccounts on the same basis that the Monthly
Deductions are allocated, and transferred to the General Account.

Fortis Benefits will charge interest at a reduced effective annual rate of 3.85%
per year, payable in advance, if the Policy owner meets certain requirements.
Qualifying Policy owners may be charged the reduced interest rate on one Policy
loan in each Policy year of up to 10% of the Surrender Value as of the date of
the loan, provided that the generally applicable limitations on the overall
amount of Policy loans (described above) are not exceeded. A Policy owner
qualifies for this reduced interest rate if (1) the Policy is in the third or
subsequent Policy year and the Surrender Value is at least $10,000, or (2) in
any event, after the policy has been in force for at least 10 years. The 10%
limitation of such loans is increased to 15% of the Surrender Value for loans
obtained in Policy years in which the insured is age 59 1/2 or older.

CREDITED RATE FOR POLICY LOANS

As of the Date of Receipt at Fortis Benefits' Home Office of the loan request
form and assignment of the Policy for security, Policy Value equal to the
portion of the Policy loan allocated to each Subaccount will be transferred from
such Subaccount to the General Account. This amount, plus the portion of the
Policy loan allocable to Policy Value already being held in the General Account,
will be credited with interest at an effective rate of 4% per annum.

NO INTEREST IN ADDITION TO THAT REFERRED TO ABOVE WILL BE CREDITED TO LOANED
POLICY VALUES NOR WILL POLICY VALUES IN THE GENERAL ACCOUNT PARTICIPATE IN ANY
INVESTMENT EXPERIENCE APPLICABLE TO THE SEPARATE ACCOUNT.

EFFECT OF A POLICY LOAN

A loan, whether or not repaid, will have a permanent effect on Policy Value, to
the extent that the investment results of the Subaccounts differ from the
interest rate credited to loaned amounts. A loan may also have a permanent
effect on the amount of Premium Based Bonuses and Policy Value Bonuses paid; and
on the death benefit, since a Option B benefit varies with the Policy Value and
a Option A benefit may have resulted in an Alternative Death Benefit coming into
effect if no loans were made. A loan may also cause the termination of the
Guaranteed Death Benefit Rider.

A loan may also cause the Policy to lapse if projected earnings are not
achieved. Adverse tax consequences may result if the Policy lapses, matures or
is surrendered with loans outstanding. For Policies that are not modified
endowment contracts, loans will be treated as ordinary income to the extent of
the gain upon lapse, surrender or maturity. For Policies which are modified
endowment contracts, loans are taxable distributions when taken. See "Federal
Tax Matters--Taxation of Policy Benefits."

The loaned Policy Value on any Valuation Date will be the amount of the
outstanding loan plus any interest credited on loaned Policy Value which has not
yet been reallocated to the unloaned portion of the General Account or to the
Subaccounts of the Separate Account as of the Valuation Date. Interest credited
to loaned Policy Values will be reallocated upon each Policy Anniversary on the
same basis that the Monthly Deductions are allocated. Interest credited will
also be reallocated upon full repayment of the loan in the same manner as the
repayment is allocated.

REPAYMENT OF A LOAN

Indebtedness may be repaid in whole or in part any time before the Maturity Date
while the surviving insured is living. As of the Date of Receipt of the
repayment, unless the Policy owner specifies otherwise, loaned Policy Value
equal to the amount of the repayment will be reallocated among the unloaned
portion of the General Account and the Subaccounts of the Separate Account in
the same proportion as

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premiums are then being allocated to those accounts. The Policy owner must
designate whether a payment is intended as a loan payment or as a premium
payment. Any payment for which no designation is made will be treated as a
premium payment.

SURRENDER AND PARTIAL WITHDRAWAL

Full surrender of the Policy for the Surrender Value may be made at any time
while the Policy is in effect. A Surrender Charge will be deducted from the
Policy Value on any full surrender within ten years after the Policy Date. An
additional amount of Surrender Charge may also be deducted on any full surrender
within ten years after the date of any Face Amount increase above the amount on
which such charge was previously calculated. See "Surrender Charge" under
"Charges and Deductions--Premium Tax and Sales Charges." (This does not apply to
a Face Amount increase occurring automatically upon a change from a Option B to
a Option A death benefit.)

Partial withdrawals of Surrender Value may be made once each Policy year after
the first Policy year during the Surviving Insured's lifetime. The amount
withdrawn will be deducted from the General Account and the Subaccounts of the
Separate Account as selected by the Policy owner. If no selection is made then
the amount will be withdrawn on a Pro Rata Basis. Fortis Benefits reserves the
right to deduct a withdrawal charge from the proceeds of partial withdrawals,
although it has no current plans to do so. Any such charge would not be imposed
on a full surrender, would not be designed to yield a profit to Fortis Benefits,
and would not exceed $25 per withdrawal (or, if less, 2% of the amount
withdrawn).

When Death Benefit Option A is in effect, any partial withdrawal will reduce the
Face Amount and thus the death benefit, by the amount withdrawn. Such an
automatic reduction in Face Amount does not result in any change in the monthly
Minimum Premium, but may result in a distribution (as a further partial
withdrawal) of any additional amount necessary to comply with the maximum
premium limitation under Section 7702 of the Code. See "Payment and Allocation
of Premiums--Premiums."

When Death Benefit Option B is in effect, the amount withdrawn will not reduce
the Face Amount. However, the death benefit will be reduced by the amount
withdrawn, because Policy Value is reduced by the amount withdrawn. Under either
Option A or Option B, when the Alternative Death Benefit is in effect, a partial
withdrawal will reduce the death benefit by a greater amount than otherwise
would be the case.

A partial withdrawal may also cause the termination of any Guaranteed Death
Benefit Rider or reduce the amount of any Premium Based Bonuses and Policy Value
Bonuses.

A Policy owner will not be permitted to make any partial withdrawal that would
reduce the Face Amount of the Policy below the minimum Face Amount of $100,000.
If a request for a partial withdrawal is received that would reduce the Face
Amount below the minimum, Fortis Benefits will not implement the partial
withdrawal request, but will contact the Policy owner as to whether the request
should be disregarded, reduced to a smaller amount or changed to a request for a
full surrender.

Surrenders or partial withdrawals are made by sending a written request on
Fortis Benefits' form to its Home Office, together with the Policy, in the case
of total surrender. See "Summary--How to Exercise Your Rights Under a Policy."
The surrender or withdrawal, and any related automatic Face Amount reduction,
will be effective as of the Date of Receipt by Fortis Benefits of the request on
its form and, if required, the Policy.

RIGHTS RESERVED BY FORTIS BENEFITS

Fortis Benefits reserves the right to make certain changes if, in its judgement,
they would best serve the interests of the Policy owners or would be appropriate
in carrying out the purposes of the Policies. Any changes will be made only to
the extent and in the manner permitted by applicable laws. Also, when required
by law, Fortis Benefits will obtain Policy owner approval of the changes and
approval from any appropriate regulatory authority. Such approval may not be
required in all cases, however. Examples of the changes Fortis Benefits may make
include:

- To operate the Separate Account in any form permitted under the 1940 Act
or in any other form permitted by law.

- To take any action necessary to comply with or obtain and continue any
exemptions from the 1940 Act or otherwise to comply with laws, rules,
regulations, interpretations, holdings, order or rulings which necessarily
or appropriately must be complied with for the Policies to serve their
intended purposes.

- To transfer or limit any assets in any Subaccount to another Subaccount,
or to one or more separate accounts, or to the General Account; or to add,
combine or remove Subaccounts in the Separate Account.

- To substitute, for the Portfolio shares held in any Subaccount, the shares
of another Portfolio of Fortis Series or the shares of another investment
company or any other investment permitted by law.

- To make any other necessary technical changes in the Policy in order to
conform with any action the above provisions permit Fortis Benefits to
take, including to change the way Fortis Benefits assesses charges, but
without increasing as to any then outstanding Policy the aggregate amount
of the types of charges which Fortis Benefits has guaranteed. See "Charges
and Deductions--Guarantee of Certain Charges."

If any Portfolio materially changes its investment policy, a Policy owner will
have sixty days after receiving notice of the change to transfer all of the
Policy Value to the General Account, as described under "Payment and Allocation
of Premiums--Allocation of Premiums and Policy Value."

PAYMENT AND DEFERMENT

With respect to amounts in the Subaccounts of the Separate Account, payment of
the maturity proceeds, death benefit, accelerated death benefit, all or a
portion of the Surrender Value or a loan will ordinarily

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<PAGE>
be made within five days after the Date of Receipt of all documents required for
such payment. Also, death benefit payments will be made only after all state
insurance law requirements (including receipt of any required tax waiver) are
satisfied.

However, Fortis Benefits may defer the determination, application or payment of
any death benefit, accelerated death benefit, loan, partial withdrawal,
surrender or any transfer of Policy Value for any period during which the New
York Stock Exchange is closed (other than customary weekend and holiday
closings), for any period during which any emergency exists as a result of which
it is not reasonably practicable for Fortis Benefits to determine the investment
experience for a Policy, or for such other periods as the Securities and
Exchange Commission may by order permit for the protection of Policy owners.

As with traditional life insurance, Fortis Benefits may delay payment of the
entire insurance proceeds or other Policy benefits if entitlement to payment is
being questioned. Fortis Benefits may also defer the payment of any amount
attributable to a premium payment made by check to allow the check reasonable
time to clear. To the extent permitted under the Policies and applicable state
insurance laws, Fortis Benefits may also defer payment of Policy loans, partial
withdrawals or other proceeds payable out of the General Account for a period of
up to 6 months, although no such deferrals will be made of amounts to be used to
pay premiums on insurance policies issued by Fortis Benefits.

DISTRIBUTION OF THE POLICIES

The Policies will be sold by individuals who, in addition to being licensed by
state insurance authorities to sell the policies of Fortis Benefits, are also
registered representatives of Fortis Investors, Inc. ("Investors"), the
principal underwriter of the Policies, or registered representatives of other
broker-dealer firms or representatives of firms that are exempt from
broker-dealer regulation. Investors and any such other broker-dealer firms are
registered with the Securities and Exchange Commission under the Securities
Exchange Act of 1934 as broker-dealers and are members of the National
Association of Securities Dealers, Inc.

Commissions and other compensation are paid by Fortis Benefits to Investors
under a distribution agreement entered into by them as of January 1, 1994 and
amended September 30, 1995. As compensation for distributing the Policies,
Fortis Benefits pays Investors 90% of all premiums, regardless of when paid, up
to the first twelve monthly Minimum Premiums (and up to the amount of twelve
months' Minimum Premium attributable to Face Amount increases); and 4% of all
other premiums paid during the first six years after the Policy Date and 2% of
such excess premiums paid in Policy years seven through ten. Fortis Benefits
also pays Investors .25% of the unloaned Policy Value annually as a service fee
from the eleventh Policy year. Fortis Benefits also pays a general marketing
allowance to Fortis Investors equal to 20% of the first twelve monthly Minimum
Premiums, not to exceed an amount agreed to in advance by Fortis Benefits and
Fortis Investors ($1,812,000 in calendar year 1996 for all Variable Universal
Life Policies issued by Fortis Benefits). The Minimum Premiums for these
purposes are generally those used to determine availability of the Guaranteed
Death Benefit period to Age 85 of the younger insured, decreased by any term
conversion credit. Investors pays a selling allowance not in excess of those
amounts to other broker dealer firms or exempt firms who sell the Policies.
Fortis Benefits may, under certain flexible compensation arrangements, pay
Fortis Investors different selling allowances and service fees than as set forth
above, and Fortis Investors may in turn pay different selling allowances and
larger service fees to its registered representatives and other broker-dealer
firms than as set forth above. However, in such case, such flexible compensation
arrangements will have actuarially equivalent present values to the amounts of
the selling allowances and service fees set forth above. In many cases,
registered representatives, broker-dealers or exempt firms are eligible for
additional compensation, and general agents and managing general agents also
receive additional compensation, based on meeting certain production or
mortality experience standards. Commissions and other compensation do not,
however, represent a charge or deduction against Policies in addition to those
set forth under "Charges and Deductions." Such compensation for the Policies and
for all other variable universal life policies issued by Fortis Benefits totaled
$26,084,059 for 1995, $24,147,115 for 1994, and $15,961,921 for 1993.
Commissions with respect to premium payments which are refunded are returned.
The distribution agreement may be terminated by either party upon 60 days'
notice to the other.

Investors is a Minnesota corporation engaged primarily in the sale of investment
company securities. Investors is the principal underwriter for the following
registered investment companies (in addition to the Separate Account and Fortis
Series): Variable Account D of Fortis Benefits, First Fortis Life Insurance
Company's Separate Account A and Variable Account C, Fortis Advantage
Portfolios, Inc., Fortis Capital Fund, Inc., Fortis Growth Fund, Inc., Fortis
Fiduciary Fund, Inc., Fortis Tax-Free Portfolios, Inc., Fortis Money Fund, Inc.,
Fortis Income Portfolios, Inc., Fortis Worldwide Portfolios, Inc., and Special
Portfolios, Inc. Investors' address is 500 Bielenberg Drive, Woodbury,
Minnesota, 55125.

Officers, directors, and employees of Fortis Benefits and Investors, together
with those of Fortis, Inc. and its other subsidiaries, are bonded pursuant to a
joint fidelity bond, in the amount of $5,000,000 per occurrence, in favor of
such companies.

FEDERAL TAX MATTERS

The following description is a brief summary of the tax rules, primarily related
to federal income and estate taxes, which in the opinion of Fortis Benefits are
currently in effect.

The following discussion is intended to provide a general description of the
federal income tax considerations associated with the Policy. It does not
purport either to be complete or to cover all situations; this discussion is not
intended to be taken as tax advice. Consult a qualified tax adviser for more
complete information. This discussion is based upon Fortis Benefits'
understanding of the present federal income tax laws as they are currently
interpreted by the Internal Revenue Service. No representation is made as to the
likelihood of continuation of the present federal income tax laws or of the
current interpretation by the Internal Revenue Service.

TAX STATUS OF THE POLICY

Section 7702 of the Internal Revenue Code of 1986, as amended, (the "Code")
includes a definition of life insurance for federal income tax purposes. This
definition can be satisfied by complying with either of two tests set forth in
Section 7702. Although the secretary of the Treasury is authorized to prescribe
regulations interpreting the manner in which the tests under Section 7702 are to
be applied, such regulations have not been issued. In addition, the Technical
and

25
<PAGE>
Miscellaneous Revenue Act of 1988 (TAMRA) provides certain requirements under
Section 7702 of the Code for mortality and other expense charges of life
insurance contracts. The Treasury issued proposed regulations on mortality
charges in 1991. Guidance on these requirements is extremely limited, but Fortis
Benefits believes the Policies qualify as life insurance under the proposed
regulations.

If it is subsequently determined that a Policy does not satisfy Section 7702,
Fortis Benefits reserves the right to modify the Policy as appropriate, and to
the extent possible, to qualify it as a life insurance contract under Section
7702. If a Policy were determined not to be a life insurance contract for
Section 7702 purposes, such Policy would not provide any of the tax advantages
normally provided by a life policy.

Section 817(h) of the Code also authorizes the Secretary of the Treasury (the
"Treasury") to set standards by regulation or otherwise for investments of the
Separate Account to be "adequately diversified" in order for the Policy to be
treated as life insurance for federal tax purposes. The Separate Account,
through Fortis Series, intends to comply with the diversification requirements
prescribed in Regulations Section 1.817-5, which affect how the assets of Fortis
Series may be invested. Fortis Benefits believes that Fortis Series will be
operated in compliance with the requirements prescribed by the Treasury.

In connection with the issuance of the temporary regulations on diversification
requirements, the Treasury announced that such regulations do not provide
guidance concerning the extent to which Policy owners may direct their
investments to particular Subaccounts of the Separate Account. Additional
guidance may come from the Treasury in the future. In that case, the Treasury
might treat a Policy owner as the owner of assets of the Separate Account if a
Fortis Series Portfolio is too narrow in its investment strategy, even though it
technically meets the diversification requirements. It is not clear whether
Treasury's position, if promulgated, would be applied on a prospective basis
only. While Fortis Benefits believes that the investment strategies of the
Policy's Portfolios are sufficiently broad, it reserves the right to modify the
Policy as necessary to prevent the Policy owner from being considered the owner
of the assets of the Separate Account.

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

TAX STATUS OF ADDITIONAL INSURED RIDER PLUS

The coverage under the Additional Insured Rider Plus for a non-family member is
not a qualified additional benefit as defined in Section 7702 of the Code. As a
result, the Monthly Deductions attributable to such coverage may be deemed to be
distributions from the policy for tax purposes. However, the benefit payable
under the rider should be excludible from the gross income of the beneficiary.
Before purchasing such coverage you should consult with a qualified tax adviser
for more complete information.

TAXATION OF POLICY BENEFITS

IN GENERAL. Fortis Benefits believes that the proceeds and Policy Value
increases of a Policy should be treated in a manner consistent with a
fixed-benefit life insurance policy for federal income tax purposes. Thus, the
death benefit under the Policy should be excludable from the gross income of the
beneficiary under Section 101(a)(1) of the Code. The tax results are unclear if
the Policy is continued beyond the original maturity date. It is possible that
the Policy owner will be treated as being in constructive receipt of the Policy
surrender value after the original maturity date and subject to tax. Policy
owners should consult with their tax advisor before exercising the option to
extend the maturity date.

The exchange of the Policy for another life insurance policy, the payment of a
premium, a change in Face Amount or death benefit option, an accelerated death
benefit payment, a transfer or assignment of a Policy, a Policy loan, a lapse
with an outstanding indebtedness, a partial withdrawal or the surrender of a
Policy may have tax consequences depending on the circumstances. Federal estate
and state and local estate, inheritance and other tax consequences of ownership
or receipt of Policy proceeds depend upon the circumstances of each owner or
beneficiary.

If a Policy is part of a collateral assignment equity split dollar arrangement
with an employer, any increase in Policy Value may be taxable annually. This
type of arrangement involves premium advances by an employer which are secured
through a collateral assignment of the Policy. A tax advisor should be consulted
with respect to any type of split dollar arrangement involving the Policy.

Generally, the Policy owner will not be deemed to be in constructive receipt of
the Policy Value, including increments thereof, under the Policy until there is
a distribution. The tax consequences of a distribution from a Policy depend, in
part, on whether the Policy is classified as a "modified endowment contract"
under Section 7702A.

MODIFIED ENDOWMENT CONTRACTS. A Policy may be treated as a modified endowment
contract depending upon the amount of premiums paid for such Policy. The premium
limitation rules for determining whether a Policy will be treated as a modified
endowment contract are extremely complex. Moreover, due to the Policy's
flexibility, classification as a modified endowment contract will depend on the
circumstances of each Policy. Accordingly, a current or prospective Policy owner
is strongly advised to contact a competent tax adviser before purchasing a
Policy or paying a premium or making any other change in any existing Policy to
determine whether the Policy would be treated as a modified endowment contract.

DISTRIBUTIONS FROM MODIFIED ENDOWMENT CONTRACTS. Policies classified as modified
endowment contracts are subject to the following tax rules: First, all
distributions from such a Policy are treated as taxable up to an amount equal to
the excess (if any) of the Policy Value immediately before the distribution over
the investment in the Policy (described below) at such time. Second, loans taken
from or secured by such a Policy, and assignments as well as surrenders,
withdrawals and benefits paid at maturity, are treated as taxable distributions.
Third, a 10% additional income tax is imposed on the portion of any distribution
or deemed distribution from such a Policy that is included in income except
where the distribution, loan, assignment or pledge is made on or after the
Policy owner attains age 59 1/2, is attributable to the Policy owner becoming
disabled, or is a part of a series of substantially equal periodic payments for
the life of the Policy owner or the joint lives of the Policy owner and Policy
owner's beneficiary.

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<PAGE>
DISTRIBUTIONS FROM POLICIES THAT ARE NOT MODIFIED ENDOWMENT CONTRACTS. The
distribution rules for Policies that are not modified endowment contracts are
the same as those that applied to all life insurance contracts before TAMRA was
enacted. Thus, distributions from Policies that are not classified as modified
endowment contracts are generally treated as first recovering the investment in
the Policy (see below) and then only after the return of all such investment in
the Policy as disbursing taxable income. An exception to this general rule
occurs in the case of a decrease in the Policy's death benefit or any other
change that reduces benefits under the Policy in the first 15 years after the
Policy is issued and that results in a cash distribution to the owner in order
for the Policy to continue complying with the Section 7702 definitional limits.
Such cash distribution will be taxed in whole or in part as ordinary income (to
the extent of any gain in the Policy) under rules prescribed in Section 7702.

Loans from Policies that are not modified endowment contracts are not treated as
distributions. Instead, such loans are treated as indebtedness of an owner.

In addition, upon a complete surrender or lapse of a Policy that is not a
modified endowment contract, or when benefits are paid at such a Policy's
maturity date, if the amount received plus the amount of indebtedness exceeds
the total investment in the Policy, the excess will generally be treated as
ordinary income.

Finally, neither distributions nor loans from Policies that are not modified
endowments are subject to the 10% additional income tax.

POLICY LOAN INTEREST. Generally, interest paid on any loan under a Policy which
is owned by an individual is not deductible. In addition, interest on any loan
under a Policy owned by a taxpayer and covering the life of any individual who
is an officer or is financially interested in the business carried on by that
taxpayer will not be tax deductible to the extent the aggregate amount of such
loans with respect to contracts covering such individual exceeds $50,000. There
is however pending legislation that would eliminate the deductibility of
interest paid even on loans $50,000 and under, with respect to both new and
previously issued policies.

No amount of Policy loan interest is, in any event, deductible if the Policy
were deemed for federal tax purposes to be a single premium life insurance
contract. The Policy owner should consult a tax adviser as to whether the Policy
would be so deemed.

INVESTMENT IN THE POLICY. Investment in the Policy means (i) the aggregate
amount of any premiums or other consideration paid for the Policy including the
amount of any loan received under the Policy to the extent that the loan is
included in the gross income of the Policy owner minus (ii) the aggregate amount
received under the Policy which was excluded from the gross income of the Policy
owner, except that the amount of any loan received under the policy which is
excluded from gross income shall be disregarded.

If there is a non-family member insured under the Additional Insured Rider Plus,
the Investment in the Policy is reduced by the total amount of Monthly
Deductions attributable to that insured.

MULTIPLE CONTRACTS. Under TAMRA, all modified endowment contracts that are
issued by Fortis Benefits or its affiliates, to the same Policy owner during a
calendar year are treated as one modified endowment contract for purposes of
determining the amount includible in gross income under Section 72(e) of the
Code.

EXCHANGES. TAMRA also provides that a life insurance contract received in
exchange for a Policy classified as a modified endowment contract will also be
treated as a modified endowment contract. Accordingly, a Policy owner should
consult a tax adviser before effecting an exchange of a Policy.

TAXATION OF FORTIS BENEFITS

Fortis Benefits does not initially expect to incur any federal income tax upon
the earnings or capital gains attributable to the Separate Account. Based upon
these expectations, no charge is currently being made against the Separate
Account for federal income taxes which may be attributable to the Separate
Account. If, however, Fortis Benefits determines that it may incur such taxes,
it may assess a charge against the Separate Account for those taxes, which would
reduce a Policy's net investment return.

Under present laws, Fortis Benefits may incur state and local taxes (in addition
to premium taxes) in several states. At present, these taxes are not
significant. If they increase, however, Fortis Benefits may decide to make
charges for such taxes or provisions for such taxes against the Separate
Account.

OTHER POLICY PROVISIONS

OWNER. The owner of a Policy is the individual or entity named as such in the
application for the Policy. The owner is entitled to exercise all rights under a
Policy, including the right to name a new owner or a successor who would become
the Policy owner if the owner should die before the Surviving Insured dies.
Otherwise the owner's estate would become the owner.

BENEFICIARY. The beneficiary is the person or persons to whom the insurance
proceeds are payable upon the Surviving Insured's death. The owner may name a
contingent beneficiary to become the beneficiary if all the beneficiaries die
while the Surviving Insured is alive. If no beneficiary or contingent
beneficiary is alive when the Surviving Insured dies, the owner (or the owner's
estate) will be the beneficiary. While the Surviving Insured is alive, the owner
may change any beneficiary or contingent beneficiary.

COLLATERAL ASSIGNMENT. The owner may assign a Policy as collateral. Rights under
the Policy will be transferred to the extent of the assignee's interest. Fortis
Benefits is not bound by an assignment or release thereof, unless it is in
writing and is recorded at its Home Office. Fortis Benefits is not responsible
for the validity of any assignment or release thereof.

DATE OF RECEIPT. The Date of Receipt by Fortis Benefits of any payment or other
communication is the actual date it is received at Fortis Benefits' Home Office
in proper form unless received (1) after the close of the NYSE, or (2) on a date
which is not a Valuation Date. In either of these two cases, the Date of Receipt
will be deemed to be the next Valuation Date.

DATE OF CERTAIN CHANGES. Changes in beneficiaries and successor owners and
assignments take effect as of the date the owner signed

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<PAGE>
the change request, subject to any actions taken by Fortis Benefits prior to the
Date of Receipt of written notice of the change in form satisfactory to Fortis
Benefits or, in the case of an assignment, recording by Fortis Benefits.

SUICIDE. The insurance proceeds will not be paid if either insured commits
suicide within two years (one year in Colorado and North Dakota) from the Policy
Date. Instead, Fortis Benefits will pay the beneficiary an amount equal to all
premiums paid for the Policy, without interest, less any outstanding Policy
loan, plus any loan interest paid for periods beyond the date of death, and less
any partial withdrawals. If either insured commits suicide more than two years
after the Policy Date but within two years (one year in Colorado and North
Dakota) from the effective date of any reinstatement or increase in Face Amount
requested by the Policy owner, Fortis Benefits' liability with respect to such
increase or reinstatement will be limited to the cost of insurance attributable
to such increase or reinstatement since that date. In states where it is
required, the Policy owner is given the option to have the Policy reissued as an
individual policy on the Surviving Insured if the first death is a suicide. The
new policy will be on a form then available and will have the same effective
date as this Policy. This option is not available if the Surviving Insured is
considered uninsurable. Riders may be added if Fortis Benefits agrees to issue
such Riders.

AGE AND SEX. If either insured's Age or sex as stated in the application is not
correct, the death benefit under a Policy will be adjusted to reflect the amount
of insurance coverage which the most recent cost of insurance charges and
deductions for riders would have purchased at the correct Age and sex. As used
herein, "Age" is each insured's actual age on the most recent Policy
Anniversary.

INCONTESTABILITY. Fortis Benefits may contest the validity of a Policy, any Face
Amount increase, or any optional insurance benefit based on other misstatements
in the application therefor. However, any such statements will be considered
representations and not warranties. Fortis Benefits will not contest the
validity of a Policy after it has been in force during the lifetime of each
insured for two years from the Policy Date. Fortis Benefits will not contest the
validity of any optional insurance benefit, reinstatement or increase in Face
Amount after it has been in force during the lifetime of each insured for two
years from its effective date.

The Policy owner must notify Fortis Benefits of the death of the first joint
insured to die as soon as it is possible to do so. Failure to notify Fortis
Benefits of an insured's death will not prevent Fortis Benefits from contesting
the validity of the Policy should there be a basis upon which to do so.

OPTION TO EXTEND MATURITY DATE. This option is available as part of Policies
issued in a state that has approved the endorsement containing this provision.
This option allows the Policy owner to request a later maturity date, if the
Policy Value is at least $2,000. The request must be in writing and must be made
within 60 days of the current maturity date. If this option is exercised the
Policy owner will not be permitted to 1) make any further premium payments
except if necessary to prevent lapse of the Policy 2) make any Face Amount or
death benefit option changes or 3) make any partial withdrawals that would
reduce the Policy Value below $2,000.

Also, upon exercise of this option the following occurs: 1) The Death Benefit
becomes the Alternative Death Benefit (see "Death Benefit Options--Alternative
Death Benefit") 2) No further Premium Based Bonuses are credited 3) All
supplemental riders (including those in disability status) except the
Accelerated Benefit Rider terminate and 4) Any Policy loan will be charged
interest at an effective annual rate of 3.85% per year payable in advance.

DIVIDENDS. The Policies are nonparticipating. This means that they are not
eligible for dividends and they do not participate in any distribution of Fortis
Benefits' surplus.

ADDITIONAL CREDITS FOR CERTAIN GROUPS. The credits described below will be made
under Policies owned by Fortis, Inc., its subsidiaries, any individual who at
the time of purchase is an officer, director, employee, retiree or sales
representative of any such company, any Fortis Series director, any director of
any of the other mutual funds managed by Fortis Advisers, Inc., or a spouse or
child under Age 21 of any such person, or a representative or employee of a
broker-dealer that has a selling agreement with Fortis Investors, Inc. No credit
will be made for any Policy for which sales compensation is paid. Additionally,
in Fortis Benefits' discretion, certain charges may also be reduced or waived
for these categories of persons.

Fortis Benefits will credit 40% of the first year Planned Periodic Premium (not
to exceed the Maximum Bonus Premium for that year) and 25% of the sum of such
premium in the second Policy year. The first credit, after deduction of any
premium tax that Fortis Benefits may determine in the future to impose on
premium payments, will be applied as if it were a premium payment received on
the date the Policy is released by Fortis Benefits to an active status in its
processing system. The second credit will be applied similarly on the first
Policy Anniversary. The premium returned upon exercise of the Policy owner's
right to cancel a Policy will not include the amount of any credit.

Additionally, for a Face Amount increase, Fortis Benefits will credit 40% of the
first year Planned Periodic Premium (not to exceed the Maximum Bonus Premium
attributable to the Face Amount increase) attributable to the increase on the
effective date of such Face Amount increase if the Policy owner is at that time
a member of the above described group. On the first anniversary of such Face
Amount increase, 25% of such premium attributable to the Face Amount increase
still in effect will be credited to the Policy. These credits are granted only
if the Face Amount increase is at least $25,000 and the annualized planned
periodic premium is equal to twelve monthly Minimum Premiums for the entire
Policy. The credit is granted only on the portion of the Face Amount increase
that equals the excess of the current face amount over the largest face amount
that has ever been in force on the Policy.

If a Policy is issued in exchange for another policy or policies issued by
Fortis Benefits or Time Insurance Company within the last 5 years and Fortis
Benefits relies on the evidence of insurability previously provided, no credits
will be paid for the transferred Face Amount. If such exchange is made after 5
years, the credit is 50% of the amount above for the transferred coverage. The
full credit amount will be paid on any increase in Face Amount above the
transferred coverage.

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<PAGE>
The foregoing program is subject to termination at any time without notice. All
variations will reflect differences in Fortis Benefits' expected commissions,
sales or administrative expenses or mortality experience with respect to the
group of persons to whom such variations apply. All such variations will be
pursuant to administrative rules and procedures established by Fortis Benefits
from time to time and will be designed to be fair, reasonable and
non-discriminatory with respect to each group of Policy owners.

PURCHASES BY LIFE INSURANCE POLICY HOLDERS. When issuing a Policy or increasing
the Face Amount for an insured who is already covered by one of its or Time
Insurance Company's life insurance policies, Fortis Benefits may rely on the
evidence of insurability previously provided, rather than relying on new
evidence, in which case, the suicide and contestability periods will run from
the original date of coverage. This procedure applies only to that portion of
the Policy's Face Amount which is not in excess of the amount of existing
insurance coverage, and the insurance will terminate when the new coverage
becomes effective.

If the value of an existing life insurance policy which was issued by Fortis
Benefits Insurance Company is transferred to a Policy, then neither the premium
tax charge nor the sales charge will be assessed against the amount transferred.

Also, for its or Time Insurance Company's term insurance policy holders, if the
term policy has been outstanding for at least one year, Fortis Benefits will
give the Policy owner a "conversion credit" in the amount of the lesser of the
prior twelve months' premiums on the term policy or 25% of the annualized
Planned Periodic Premium (not to exceed the Maximum Bonus Premium at the
attained Ages of the joint insureds) for the amount of Policy Face Amount
established by the conversion. The conversion credit will be applied as if it
were a premium payment received by us on the date the Policy is released by
Fortis Benefits to an active status in its processing system (or, in the case of
an existing Policy, on the effective date of the Face Amount increase). No
premium tax charges will be assessed against the conversion credit. The Policy's
Surrender Value and Policy loan value during the first year following the
conversion do not include the amount of the conversion credit, nor does the
amount paid upon an exercise of the Policy owner's right to cancel a Policy or
Face Amount increase.

The foregoing procedures are subject to Fortis Benefits' administrative rules as
in effect from time to time and may be terminated at any time.

MANAGEMENT

The directors and executive officers, to the extent responsible for variable
life insurance operations, of Fortis Benefits are listed below, together with
their principal occupations and business experience for the past five years:

<TABLE>
<S> <C>
OFFICER-DIRECTORS
Robert Brian Pollock (4) President and Chief Executive Officer; before then
Senior Vice President--Life and Disability.
Thomas Michael Keller (5) Executive Vice President; before then Senior Vice
President of Fortis, Inc.
Dean C. Kopperud (1) Senior Vice President--also officer of affiliated
companies.

OTHER DIRECTORS
Allen Royal Freedman (2) Chairman and Chief Executive Officer of Fortis,
Inc.
Henry Carroll Mackin (2) Executive Vice President of Fortis, Inc.
Arie Aristide Fakkert (3) Assistant General Manager of Fortis International
N.V.

EXECUTIVE OFFICERS
Larry A. Medin (1) Senior Vice President--Sales; before then Senior
Vice President--Western Divisional Officer,
Colonial Group, Inc.
Anthony J. Rotondi (1) Senior Vice President--Manufacturing and
Information Technology, also officer of affiliated
companies.
Rhonda Schwartz (1) Senior Vice President and General Counsel--Life
and Investment Products; before then Secretary and
General Counsel of Fortis, Inc.; before then
Norris, McLaughlin, Marcus--attorneys.
Michael John Peninger (4) Senior Vice President and Chief Financial Officer
Jon H. Nicholson (1) Senior Vice President--Product Development and
Marketing
</TABLE>

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

(1) Address: Fortis Benefits Insurance Company, P.O. Box 64271, St. Paul, MN
55164. Fortis Benefits is a wholly-owned subsidiary of Time Insurance
Company, 501 West Michigan, Milwaukee, WI 53201, which is itself
wholly-owned by Fortis, Inc.

(2) Address: Fortis, Inc., One Chase Manhattan Plaza, New York, NY 10005.
Fortis, Inc. is wholly owned by Fortis International, N.V., which is itself
wholly owned by AMEV/VSB 1990 N.V. The latter two companies share the same
address as Fortis AMEV N.V. AMEV/VSB 1990 N.V. is 50% owned by Fortis AMEV
N.V. and 50% owned by Fortis AG, Boulevard Emile Jacqmain 53, Brussels,
Belgium.

(3) Address: Fortis AMEV, Archimedeslaan 10, 3584 BA Utrecht, The Netherlands.

(4) Address: 2323 Grand Avenue, Kansas City, MO 64108.

(5) Address: 501 West Michigan, Milwaukee WI 53201.

29
<PAGE>
VOTING PRIVILEGES

In accordance with its view of current applicable law, Fortis Benefits will,
with respect to certain matters, vote each Subaccount's shares in the
corresponding Portfolio at regular and special meetings of the shareholders of
Fortis Series in proportion to instructions received from persons having the
voting interest in the corresponding Subaccount of the Separate Account.
However, if the 1940 Act or any rules thereunder should be amended or if the
present interpretation thereof should change, and as a result Fortis Benefits
determines that it is permitted to vote such shares of the Portfolios in its own
right, it may elect to do so.

Each Policy owner participating in a Subaccount will be entitled to cast one
vote with respect to that Subaccount for each $100 of Policy Value in that
Subaccount as of the date stock ownership is determined for the corresponding
Fortis Series shareholder meeting. (Fractional votes will be counted.) All
shares of the Portfolio held by that Subaccount will be voted in proportion to
the votes of Policy owners participating in the Subaccount. Shares held in other
separate accounts will in general be voted in accordance with instructions of
the participants therein. This tends to diminish the relative voting influence
of the Policies. Any shares of a Portfolio owned by Fortis Benefits in its
General Account or by affiliated companies of Fortis Benefits will be voted in
the same proportion as instructions for that Portfolio which are received from
persons having the voting interest in all separate accounts investing in Fortis
Series.

The Policy owners may give instructions regarding the election of the Board of
Directors of Fortis Series, ratification of the selection of its independent
auditors, the approval of the investment adviser of a Portfolio, changes in
fundamental investment policies of a Portfolio, and all other matters that are
put to a vote by Fortis Series shareholders.

Notwithstanding contrary Policy owner voting instructions, Fortis Benefits may
vote Portfolio shares in any manner necessary to enable any Portfolio to (1)
make or refrain from making any change in the investments or investment policies
of any Portfolio, if required by any insurance regulatory authority; (2) refrain
from making any change in the investment policies or any investment adviser or
principal underwriter of any Portfolio which may be initiated by Policy owners
or the Fortis Series Board of Directors, provided that Fortis Benefits'
disapproval of the change is reasonable and, in the case of a change in
investment policies or investment adviser, based on a good faith determination
that such change would be contrary to state law or otherwise inappropriate in
light of the Portfolio's objective and purposes; or (3) enter into or refrain
from entering into any advisory agreement or underwriting contract, if required
by any insurance regulatory authority. If Fortis Benefits does disregard Policy
owner voting instructions, an explanation of this action and the reasons for it
will be included in the next semi-annual report to Policy owners.

REPORTS

Policy owners will receive promptly statements of significant transactions such
as changes in Face Amount, changes in death benefit option, transfers among
Subaccounts, partial withdrawals, Policy loans, loan repayments, termination for
any reason, reinstatement, premium payments (except as noted below) and unpaid
loan interest added to loan principal. These transactions will also be
summarized in an annual statement sent to the Policy owner. The annual statement
will be as of a date not more than 60 days prior to mailing, and will also
summarize the following other items: premiums paid by use of a plan selected by
the Policy owner authorizing monthly withdrawals of premiums from the Policy
owner's checking account, paycheck or government payment during the annual
period, deductions of charges occurring during that annual period, any Premium
Based Bonuses and Policy Value Bonuses credited during that period and the
status of the death benefit, Policy Value (both total and net of any Surrender
Charge), amounts in the Subaccounts and General Account, and any Policy loan. In
addition, an owner will be sent semiannual reports containing financial
statements for Fortis Series, as required by the 1940 Act. Fortis Benefits'
current policy is to honor requests for statements of Policy values during a
Policy year, although Fortis Benefits reserves the right at any time to cease
offering or to charge for this service. Such statements may be requested through
the phone number on the cover of this Prospectus.

STATE REGULATION

Fortis Benefits is subject to regulation and supervision by the Commerce
Department of the State of Minnesota, which periodically examines its affairs.
It is also subject to the insurance laws and regulations of all jurisdictions
where it is authorized to do business. Fortis Benefits intends to satisfy the
necessary requirements to sell the policies in all states, other than New York,
as soon as possible.

LEGAL MATTERS

The legality of the Policies described in this Prospectus has been passed upon
by Douglas R. Lowe, Associate General Counsel of Fortis Benefits. Messrs.
Freedman, Levy, Kroll & Simonds, Washington, D.C., have advised Fortis Benefits
on certain federal securities law matters.

EXPERTS

The financial statements of Fortis Benefits Insurance Company and Fortis
Benefits Insurance Company Variable Account C appearing in this Prospectus have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
reports thereon appearing elsewhere herein, and are included in reliance upon
such reports given upon the authority of such firm as experts in accounting and
auditing.

Actuarial matters included in this Prospectus have been examined by Renee C.
West, FSA, MAAA, Actuarial Officer, Individual Actuarial Department of Fortis
Benefits, as stated in her opinion filed as an exhibit to the registration
statement.

30
<PAGE>
RATINGS AND RANKINGS

Fortis Benefits may advertise its relative performance as compiled by outside
organizations. Following is a list of ratings services which may be referred to
in advertisements, along with the category in which the applicable Subaccount is
included:
<TABLE>
<CAPTION>
RATING SERVICE CATEGORY
- -------------------------------------- ----------------------
<S> <C>
AGGRESSIVE GROWTH SUBACCOUNT
Morningstar Publications, Inc. aggressive growth
Lipper Analytical Services, Inc. small company growth
INTERNATIONAL STOCK SUBACCOUNT
Morningstar Publications, Inc. international stock
Lipper Analytical Services, Inc. international equity
GLOBAL GROWTH SUBACCOUNT
Morningstar Publications, Inc. international stock
Lipper Analytical Services, Inc. global
GROWTH STOCK SUBACCOUNT
Morningstar Publications, Inc. growth
Lipper Analytical Services, Inc. capital appreciation
GLOBAL ASSET ALLOCATION SUBACCOUNT
Morningstar Publications, Inc. balanced
Lipper Analytical Services, Inc. global flexible
GROWTH AND INCOME SUBACCOUNT
Morningstar Publications, Inc. growth and income
Lipper Analytical Services, Inc. growth and income
ASSET ALLOCATION SUBACCOUNT
Morningstar Publications, Inc. balanced
Lipper Analytical Services, Inc. flexible portfolios

<CAPTION>
RATING SERVICE CATEGORY
- -------------------------------------- ----------------------
<S> <C>
HIGH YIELD SUBACCOUNT
Morningstar Publications, Inc. high yield
Lipper Analytical Services, Inc. high current yield
GLOBAL BOND SUBACCOUNT
Morningstar Publications, Inc. international bond
Lipper Analytical Services, Inc. world income
DIVERSIFIED INCOME SUBACCOUNT
Morningstar Publications, Inc. corporate bond
Lipper Analytical Services, Inc. general bond
U.S. GOVERNMENT SUBACCOUNT
Morningstar Publications, Inc. U.S. government bond
Lipper Analytical Services, Inc. U.S. government
MONEY MARKET SUBACCOUNT
Morningstar Publications, Inc. money market
Lipper Analytical Services, Inc. money market
</TABLE>

FINANCIAL STATEMENTS

The financial statements of Fortis Benefits included in this Prospectus should
be considered only as bearing upon the ability of Fortis Benefits to meet its
obligations under the Policies.

Fortis Benefits generally reinsures risks for non-group insurance in excess of
$500,000 per insured with other insurance companies. See Notes 2 and 11 to
Fortis Benefits' financial statements.

31
<PAGE>
REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Fortis Benefits Insurance Company

We have audited the accompanying balance sheets of Fortis Benefits Insurance
Company as of December 31, 1995 and 1994, and the related statements of income,
shareholder's equity and cash flows for each of the three years in the period
ended December 31, 1995. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our 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 financial statements referred to above present fairly, in
all material respects, the financial position of Fortis Benefits Insurance
Company at December 31, 1995 and 1994, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles.

In 1993, as discussed in Note 2 to the financial statements, the Company changed
its method of accounting for income taxes, postretirement benefits other than
pensions and certain investments in debt and equity securities.

/s/ Ernst & Young LLP
Minneapolis, Minnesota
February 14, 1996

32
<PAGE>
BALANCE SHEETS
FORTIS BENEFITS INSURANCE COMPANY
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
DECEMBER 31
---------------------------
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
Investments--Note 4
Fixed maturities, at fair value (amortized cost 1995--$1,951,204;
1994--$1,749,347)..................................................... $ 2,075,624 $ 1,674,782
Equity securities, at fair value (cost 1995--$60,935; 1994--$59,010)... 78,852 64,552
Mortgage loans on real estate, less allowance for possible losses
(1995--$8,353;
1994--$7,429)......................................................... 562,697 452,547
Policy loans........................................................... 53,863 49,221
Short-term investments................................................. 153,499 117,562
Real estate and other investments...................................... 11,918 13,441
------------ ------------
2,936,453 2,372,105

Cash..................................................................... 1 10,888

Receivables:
Uncollected premiums................................................... 55,992 40,667
Reinsurance recoverable on unpaid and paid losses...................... 11,812 15,181
Due from affiliates.................................................... 388 2,220
Other.................................................................. 14,581 12,593
------------ ------------
82,773 70,661

Accrued investment income................................................ 41,209 38,584
Deferred policy acquisition costs--Note 5................................ 237,509 232,198
Property and equipment at cost, less accumulated depreciation--Note 6.... 60,031 56,939
Deferred federal income taxes--Note 8.................................... -- 48,509
Other assets............................................................. 3,551 1,120
Assets held in separate accounts--Note 9................................. 1,781,485 1,212,910
------------ ------------
TOTAL ASSETS............................................................. $ 5,143,012 $ 4,043,914
------------ ------------
------------ ------------
</TABLE>

See notes to financial statements.

33
<PAGE>
BALANCE SHEETS (CONTINUED)
FORTIS BENEFITS INSURANCE COMPANY
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
DECEMBER 31
---------------------------
1995 1994
------------ ------------
<S> <C> <C>
POLICY RESERVES, LIABILITIES, AND SHAREHOLDER'S EQUITY

POLICY RESERVES AND LIABILITIES
Future policy benefit reserves:
Traditional life insurance.............................................. $ 407,706 $ 375,257
Interest sensitive and investment products.............................. 1,101,931 912,653
Accident and health..................................................... 832,925 798,293
------------ ------------
2,342,562 2,086,203

Unearned premiums......................................................... 13,044 16,145
Other policy claims and benefits payable.................................. 196,403 169,864
Policyholder dividends payable............................................ 7,930 6,793
------------ ------------
2,559,939 2,279,005
Accrued expenses.......................................................... 68,441 45,905
Current income taxes payable.............................................. 5,375 4,352
Deferred federal income taxes--Note 8..................................... 9,538 --
Other liabilities......................................................... 31,145 32,416
Liabilities related to separate accounts.................................. 1,757,476 1,208,039
------------ ------------
TOTAL POLICY RESERVES AND LIABILITIES....................................... 4,431,914 3,569,717

SHAREHOLDER'S EQUITY--Notes 1, 10 and 12
Common stock, $5 par value, 1,000,000 shares authorized, issued and
outstanding.............................................................. 5,000 5,000
Additional paid-in capital................................................ 408,000 358,000
Retained earnings......................................................... 207,421 153,551
Unrealized gains (losses) on investments, net--Note 4..................... 88,131 (42,908)
Unrealized gains on assets held in separate accounts net of deferred taxes
of $1,371 in 1995
and $298 in 1994......................................................... 2,546 554
------------ ------------
TOTAL SHAREHOLDER'S EQUITY.................................................. 711,098 474,197
------------ ------------
TOTAL RESERVES, LIABILITIES, AND SHAREHOLDER'S EQUITY....................... $ 5,143,012 $ 4,043,914
------------ ------------
------------ ------------
</TABLE>

See notes to financial statements.

34
<PAGE>
STATEMENTS OF INCOME
FORTIS BENEFITS INSURANCE COMPANY
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
------------------------------------------
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
REVENUES
Insurance operations
Traditional life insurance premiums.......................... $ 251,353 $ 207,824 $ 187,863
Interest sensitive and investment product policy charges..... 46,076 37,823 28,778
Accident and health premiums................................. 934,900 776,799 738,412
------------ ------------ ------------
1,232,329 1,022,446 955,053
Net investment income--Note 4.................................. 203,537 162,514 153,657
Realized gains (losses) on investments--Note 4................. 55,080 (28,815) 73,623
Other income................................................... 33,085 35,958 27,100
------------ ------------ ------------
TOTAL REVENUES............................................. 1,524,031 1,192,103 1,209,433
BENEFITS AND EXPENSES
Benefits to policyholders:
Traditional life insurance................................... 202,911 162,168 145,958
Interest sensitive and investment products................... 73,676 55,026 50,935
Accident and health.......................................... 769,588 620,367 598,146
------------ ------------ ------------
1,046,175 837,561 795,039
Policyholder dividends......................................... 4,305 1,986 5,855
Amortization of deferred policy acquisition costs--Note 5...... 41,291 34,566 36,503
Insurance commissions.......................................... 95,559 86,111 76,816
General and administrative expenses............................ 254,940 197,427 185,986
------------ ------------ ------------
TOTAL BENEFITS AND EXPENSES................................ 1,442,270 1,157,651 1,100,199
------------ ------------ ------------
Income before federal income taxes and cumulative effect of
accounting changes.............................................. 81,761 34,452 109,234
Federal income taxes--Note 8..................................... 27,891 11,595 31,090
------------ ------------ ------------
Income before cumulative effect of accounting changes............ 53,870 22,857 78,144
Cumulative effect of change in accounting for income
taxes--Note 2................................................. -- -- 4,814
Cumulative effect of change in accounting for postretirement
benefits other than pensions, net of tax--Note 2.............. -- -- (1,251)
------------ ------------ ------------
NET INCOME................................................. $ 53,870 $ 22,857 $ 81,707
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

See notes to financial statements.

35
<PAGE>
STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY
FORTIS BENEFITS INSURANCE COMPANY
(IN THOUSANDS)

<TABLE>
<CAPTION>
UNREALIZED
UNREALIZED GAINS ON
ADDITIONAL GAINS ASSETS HELD
COMMON PAID-IN RETAINED (LOSSES) ON IN SEPARATE
STOCK CAPITAL EARNINGS INVESTMENTS ACCOUNTS TOTAL
----------- ----------- ----------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance January 1, 1993........... $ 5,000 $ 345,000 $ 52,634 $ 4,263 $ 657 $ 407,554
Net income........................ -- -- 81,707 -- -- 81,707
Dividends to shareholder.......... -- -- (4,000) -- -- (4,000)
Other............................. -- -- 353 -- -- 353
Change in unrealized gains on
investments, net................. -- -- -- 2,099 -- 2,099
Change in unrealized gains on
investments, net, resulting from
initial adoption of FASB
115--Note 1...................... -- -- -- 43,782 -- 43,782
Change in unrealized gain on
assets held in separate account,
net of deferred tax expense of
$238............................. -- -- -- -- 413 413
----- ----------- ----------- ----------- ----- ---------
Balance December 31, 1993......... 5,000 345,000 130,694 50,144 1,070 531,908
Net income........................ -- -- 22,857 -- -- 22,857
Additional paid-in capital........ -- 13,000 -- -- -- 13,000
Change in unrealized losses on
investments, net................. -- -- -- (93,052) -- (93,052)
Change in unrealized gain on
assets held in separate account,
net of deferred tax benefit of
$277............................. -- -- -- -- (516) (516)
----- ----------- ----------- ----------- ----- ---------
Balance December 31, 1994......... 5,000 358,000 153,551 (42,908) 554 474,197
Net income........................ -- -- 53,870 -- -- 53,870
Additional paid-in capital........ -- 50,000 -- -- -- 50,000
Change in unrealized gains on
investments, net................. -- -- -- 131,039 -- 131,039
Change in unrealized gain on
assets held in separate account,
net of deferred tax expense of
$1,073........................... -- -- -- -- 1,992 1,992
----- ----------- ----------- ----------- ----- ---------
Balance December 31, 1995......... $ 5,000 $ 408,000 $ 207,421 $ 88,131 $ 2,546 $ 711,098
----- ----------- ----------- ----------- ----- ---------
----- ----------- ----------- ----------- ----- ---------
</TABLE>

36
<PAGE>
STATEMENT OF CASH FLOWS
FORTIS BENEFITS INSURANCE COMPANY
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
---------------------------------------------
1995 1994 1993
------------- ------------- -------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income................................................... $ 53,870 $ 22,857 $ 81,707
Adjustments to reconcile net income to net cash provided by
operating activities:
Cumulative effect of accounting changes.................... -- -- (3,563)
Increase in future policy benefit reserves for traditional,
interest sensitive and accident and health policies....... 80,478 79,014 58,299
Increase (decrease) in other policy claims and benefits and
policyholder dividends payable............................ 27,676 10,075 (15,868)
Decrease in deferred federal income taxes.................. (13,584) (2,356) (9,776)
Increase (decrease) in income taxes payable................ 1,023 3,283 (12,733)
Amortization of policy acquisition costs................... 41,291 34,566 36,503
Policy acquisition costs deferred.......................... (56,391) (54,349) (45,841)
Provision for mortgage loan losses......................... 924 1,105 1,648
Provision for depreciation................................. 15,654 12,267 9,399
Accrual of discount, net................................... (239) (914) 72
Change in receivables, accrued investment income, unearned
premiums, accrued expenses and other liabilities.......... 3,427 (36,650) 5,751
Net realized (gains) losses on investments................. (55,080) 28,815 (73,623)
Other...................................................... (2,431) (135) 164
------------- ------------- -------------
NET CASH PROVIDED BY OPERATING ACTIVITIES................ 96,618 97,578 32,139
INVESTING ACTIVITIES
Purchase of fixed maturity investments....................... (2,151,133) (1,943,697) (2,337,842)
Sales or maturities of fixed maturity investments............ 2,000,068 1,798,184 2,358,288
(Increase) decrease in short-term investments................ (35,908) (44,266) 28,756
Purchase of other investments................................ (240,264) (211,836) (201,601)
Sales or maturities of other investments..................... 112,598 104,399 75,539
Purchase of property and equipment........................... (19,975) (16,164) (13,155)
Purchase of group insurance business......................... -- (6,644) (5,521)
Other........................................................ 1,229 500 49
------------- ------------- -------------
NET CASH USED BY INVESTING ACTIVITIES.................... (333,385) (319,524) (95,487)
FINANCING ACTIVITIES
Activities related to investment products:
Considerations received.................................... 187,484 200,499 68,943
Surrenders and death benefits.............................. (60,522) (19,207) (37,262)
Interest credited to policyholders......................... 48,918 31,867 30,024
Additional paid-in capital from shareholder.................. 50,000 13,000 --
Dividends paid to shareholder................................ -- -- (4,000)
------------- ------------- -------------
NET CASH PROVIDED BY FINANCING ACTIVITIES................ 225,880 226,159 57,705
------------- ------------- -------------
INCREASE (DECREASE) IN CASH.............................. (10,887) 4,213 (5,643)
Cash at beginning of year...................................... 10,888 6,675 12,318
------------- ------------- -------------
CASH AT END OF YEAR...................................... $ 1 $ 10,888 $ 6,675
------------- ------------- -------------
------------- ------------- -------------
</TABLE>

See notes to financial statements.

37
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FORTIS BENEFITS INSURANCE COMPANY

DECEMBER 31, 1995

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS: Fortis Benefits Insurance Company (the Company) is an
affiliate of the worldwide Fortis group of companies owned by Fortis AMEV of the
Netherlands and Fortis AG of Belgium. The Company is incorporated in Minnesota
and distributes its products in all states except New York. To date, the
majority of the Company's revenues have been derived from group employee
benefits products and the remainder from individual life and annuity products.

BASIS OF STATEMENT PRESENTATION: The financial statements are presented in
conformity with generally accepted accounting principles. Certain amounts
included in the 1993 and 1994 financial statements have been reclassified to
conform to the 1995 presentation.

RECOGNITION OF REVENUES, POLICY RESERVES AND LIABILITIES AND POLICY ACQUISITION
COSTS: The Company follows generally accepted accounting principles which differ
in certain respects from statutory accounting practices prescribed or permitted
by regulatory authorities. The more significant of these principles are:

Premiums for long-duration traditional life policies are recognized as
revenues when due over the premium-paying period. Liabilities for future
policy benefits and expenses are computed using the net level method and
include investment yield, mortality, withdrawal, and other assumptions based
on the Company's experience, modified as necessary to reflect anticipated
trends and to include provisions for possible unfavorable deviations.

Revenues for universal life and investment products consist of charges
assessed against policy account balances during the period for the cost of
insurance, policy administration, and surrender charges. Future policy
benefit reserves are computed under the retrospective deposit method and
consist of policy account balances before applicable surrender charges and
certain deferred policy initiation fees that are being recognized in income
over the term of the policies. Policy benefits charged to expense during the
period include amounts paid in excess of policy account balances and
interest credited to policy account balances. Interest credit rates for
universal life and investment products ranged from 4% to 7.80% in 1995 and
1994.

Premiums for long-term disability, short-term traditional life, and accident
and health are recognized as revenues ratably over the contract period in
proportion to the risk insured. Liabilities for future disability income
policy benefits are based on the 1964 Commissioners Disability Table at 6
percent interest. Calculated reserves are modified based on the Company's
actual experience. Claims and benefits payable for reported and incurred but
not reported losses and related loss adjustment expenses are determined
using case-basis estimates and past experience. The methods of making such
estimates and establishing the related liabilities are continually reviewed
and updated. Any adjustments resulting therefrom are reflected in earnings
currently.

For interest sensitive and investment products, deferred policy acquisition
costs are amortized in relation to profits. For group life, accident and
health, disability, and dental insurance business acquired on October 1,
1991 (see Note 3), the Company recorded the present value of future profits
as deferred policy acquisition costs. These costs are amortized in
proportion to premium revenue over the estimated premium paying period of
the related policies and, if required, are expensed when such costs are
deemed not to be recoverable from future policy revenues, including the
related investment income.

For insurance products issued subsequent to December 31, 1984, the costs of
acquiring new business, which vary with and are directly related to the
production of new business, are deferred, to the extent recoverable from
future profits, and amortized against income. The period of amortization
varies depending upon the product. For traditional life products, the policy
acquisition costs are deferred and amortized over the premium paying period
of the contracts. For interest sensitive and investment products, the policy
acquisition costs are deferred and amortized in relation to the present
value of estimated future gross profits.

38
<PAGE>
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENTS: The Company's investment strategy is developed based on many
factors including insurance liability matching, rate of return, maturity, credit
risk, tax considerations and regulatory requirements.

Prior to December 31, 1993, the Company classified fixed maturity investments as
available-for-sale recorded at the lower of amortized cost or market, computed
on a portfolio basis. Equity securities were carried at fair value. At December
31, 1993, all fixed maturity securities were classified as available-for-sale
and carried at fair value. The effect of adopting Statement 115 at December 31,
1993 was to increase the carrying amount of fixed maturities by $76,309,000,
policyholder dividends payable by $2,684,000, deferred income taxes by
$23,575,000 and shareholder's equity by $43,782,000 and to reduce the carrying
amount of deferred policy acquisition costs by $6,268,000. Beginning in 1994,
the classification of fixed maturity investments between available-for-sale or
held to maturity is made at the time of each purchase and, prospectively, that
classification is reevaluated as of each balance sheet date.

Changes in market values of available-for-sale securities, after deferred income
taxes and after adjustment for the amortization of deferred policy acquisition
costs, and participating policyholders' share of earnings are reported as
unrealized gains (losses) on investments directly in shareholder's equity and,
accordingly, have no effect on net income. The offsets to the unrealized
appreciation or depreciation represent valuation adjustments relating to amounts
of additional deferred policy acquisition costs or amortization of deferred
policy acquisition costs and the additional liabilities established for future
policyholder benefits and participating policyholders' share of the Company's
earnings that would have been required as a charge or credit to operations had
such unrealized amounts been realized.

Mortgage loans constitute first liens on commercial real estate and other income
producing properties. The insurance statutes in Minnesota generally require that
the initial principal loaned not exceed 80% of the appraised value of the
property securing the loan. The Company's policy fully complies with this
statute. Mortgage loans on real estate are reported at unpaid balances, adjusted
for amortization of premium or discount, less allowance for possible losses. The
change in the allowance for possible losses is recorded with realized gains and
losses on investments. Policy loans are reported at unpaid balance.

Realized gains and losses on sales of investments, and declines in value judged
to be other-than-temporary, are recognized on the specific identification basis.
Investment income is recorded as earned.

PROPERTY AND EQUIPMENT: Property and equipment are recorded at cost less
accumulated depreciation. The Company provides for depreciation principally on
the straight line method over the estimated useful lives of the related
property.

INCOME TAXES: Income taxes have been provided using the liability method in
accordance with Financial Accounting Standards Board ("FASB") Statement 109,
ACCOUNTING FOR INCOME TAXES. Deferred tax assets and liabilities are determined
based on the differences between the financial reporting and the tax bases and
are measured using the enacted tax rates.

SEPARATE ACCOUNTS: Assets and liabilities associated with separate accounts
relate to premium and annuity considerations for variable life and annuity
products for which the contract holder, rather than the Company, bears the
investment risk. Separate account assets are reported at fair value.

GUARANTY FUND ASSESSMENTS: The economy and other factors have caused an increase
in the number of insurance companies that are under regulatory supervision. This
circumstance may result in an increase in assessments by state guaranty funds,
or voluntary payments by solvent insurance companies, to cover losses to
policyholders of insolvent or rehabilitated companies. Mandatory assessments can
be partially recovered through a reduction in future premium taxes in some
states. The Company is not able to reasonably estimate the impact of future
assessments on its financial position but does not believe that the impact will
be material.

USE OF ESTIMATES: The preparation of financial statements in conformity of
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 those estimates.

39
<PAGE>
2. CHANGES IN ACCOUNTING PRINCIPLES

EMPLOYERS' ACCOUNTING FOR POSTRETIREMENT BENEFITS OTHER THAN PENSIONS: Effective
January 1, 1993, the Company adopted FASB Statement 106, EMPLOYERS' ACCOUNTING
FOR POSTRETIREMENT BENEFITS OTHER THAN PENSIONS. The Company elected to
immediately recognize the cumulative effect of this change in accounting for
postretirement benefits of $1,895,000 ($1,251,000 net of deferred income tax
benefit), which represents the accumulated postretirement benefit obligation
existing at January 1, 1993. The impact of Statement 106 on operating results
for 1993 was not material.

ACCOUNTING FOR INCOME TAXES: Effective January 1, 1993, the Company adopted FASB
Statement 109, ACCOUNTING FOR INCOME TAXES. Statement 109 provides for a balance
sheet approach in determining deferred income tax assets and liabilities. The
cumulative effect of adopting Statement 109 increased the Company's deferred tax
asset and net income by approximately $4,814,000 in 1993.

ACCOUNTING AND REPORTING FOR REINSURANCE OF SHORT-DURATION AND LONG-DURATION
CONTRACTS: In 1993, the Company adopted FASB Statement 113, ACCOUNTING AND
REPORTING FOR REINSURANCE OF SHORT-DURATION AND LONG-DURATION CONTRACTS. Under
Statement 113, amounts paid or deemed to have been paid for reinsurance
contracts are recorded as reinsurance recoverables.

ACCOUNTING FOR CERTAIN DEBT AND EQUITY SECURITIES: The Company adopted FASB
Statement 115, ACCOUNTING FOR CERTAIN DEBT AND EQUITY SECURITIES, as of December
31, 1993. Under Statement 115, all fixed maturities are classified as
available-for-sale and carried at fair value, while equity securities continue
to be carried at fair value. Adoption of Statement 115 had no effect on net
income in 1993.

3. ACQUIRED BUSINESS
In October, 1991, the Company purchased certain assets and assumed certain
liabilities from The Mutual Benefit Life Insurance Company in Rehabilitation
(MBL). The seller transferred to the Company, the assets and liabilities
relating to the group life, accident and health, disability and dental insurance
business of MBL. The acquisition was accounted for as a purchase. The Company
purchased this business for $318,000,000. Per contractual agreement, additional
payments were paid to MBL based upon the persistency of the long term disability
portion of the business. Under terms of this agreement, the Company paid
$6,644,000, $5,521,000 and $8,685,000 in 1994, 1993, and 1992, respectively.
This additional purchase price was accounted for as deferred policy acquisition
costs. No additional payments will be made.

40
<PAGE>
4. INVESTMENTS

AVAILABLE FOR SALE SECURITIES: The following is a summary of the available for
sale securities (in thousands):

<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED
COST GAIN LOSS FAIR VALUE
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
December 31, 1995:
Fixed Income Securities:
Governments..................... $ 453,406 $ 36,938 $ 142 $ 490,202
Public utilities................ 55,793 4,617 -- 60,410
Industrial & miscellaneous...... 1,420,374 82,705 1,282 1,501,797
Other........................... 21,631 1,586 2 23,215
------------ ------------ ------ ------------
Total......................... 1,951,204 125,846 1,426 2,075,624
Equity Securities................. 60,935 20,321 2,404 78,852
------------ ------------ ------ ------------
Total......................... $ 2,012,139 $ 146,167 $ 3,830 $ 2,154,476
------------ ------------ ------ ------------
------------ ------------ ------ ------------
December 31, 1994:
Fixed Income Securities:
Governments..................... $ 829,607 $ 1,129 $ 40,642 $ 790,094
Public utilities................ 60,885 1,132 1,389 60,628
Industrial & miscellaneous...... 847,018 3,184 38,505 811,697
Other........................... 11,837 764 238 12,363
------------ ------------ ------ ------------
Total......................... 1,749,347 6,209 80,774 1,674,782
Equity Securities................. 59,010 9,896 4,354 64,552
------------ ------------ ------ ------------
Total......................... $ 1,808,357 $ 16,105 $ 85,128 $ 1,739,334
------------ ------------ ------ ------------
------------ ------------ ------ ------------
</TABLE>

The amortized cost and fair value of available-for-sale investments in fixed
maturities at December 31, 1995, by contractual maturity, are shown below (in
thousands). Expected maturities will differ from contractual maturities because
borrowers may have the right to call or prepay obligations with or without call
or prepayment penalties.

<TABLE>
<CAPTION>
AMORTIZED
COST FAIR VALUE
------------ ------------
<S> <C> <C>
Due in one year or less.................................... $ 80,474 $ 80,960
Due after one year through five years...................... 472,741 487,764
Due after five years through ten years..................... 687,374 727,723
Due after ten years........................................ 710,615 779,177
------------ ------------
Total.................................................. $ 1,951,204 $ 2,075,624
------------ ------------
------------ ------------
</TABLE>

MORTGAGE LOANS: The Company has issued commercial mortgage loans on properties
located throughout the country. Approximately 35% of outstanding principal is
concentrated in the states of California, Florida and New York at December 31,
1995 as compared to concentrated interests in California, Florida, and Texas of
34% at December 31, 1994. Loan commitments outstanding totaled $10,030,000 at
December 31, 1995.

In May 1993, FASB issued Statement 114, ACCOUNTING BY CREDITORS FOR IMPAIRMENT
OF A LOAN, which becomes effective for fiscal years beginning after December 15,
1994, and which the Company adopted in 1995. Statement 114 requires that
impaired loans are to be valued at the present value of expected future cash
flows discounted at the loan's effective interest rate, or, as a practical
expedient, at the loan's observable market price, or the fair market value of
the collateral if the loan is collateral dependent. The impact of adoption was
not material to the Company's financial position or operating results.

41
<PAGE>
4. INVESTMENTS (CONTINUED)
INVESTMENTS ON DEPOSIT: The Company had fixed maturities and mortgage loans on
real estate carried at $2,385,000 and $8,132,000, respectively, at December 31,
1995, and $2,635,000 and $8,132,000 respectively, at December 31, 1994 on
deposit with various governmental authorities as required by law.

NET UNREALIZED GAINS (LOSSES): The adjusted net unrealized gains (losses)
recorded in shareholder's equity were as follows (in thousands):

<TABLE>
<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Change in unrealized gains (losses) before adjustment for the
following items:............................................ $ 214,452 $ (155,923) $ 80,288
Capitalization (amortization) of deferred policy
acquisition costs......................................... (9,789) 9,288 (6,268)
Participating policyholders' share of earnings............. -- 2,684 (2,684)
Deferred income taxes...................................... (71,632) 50,383 (25,042)
------------ ------------ ------------
Change in net unrealized gains (losses)...................... 133,031 (93,568) 46,294
Net unrealized gains, beginning of the year.................. (42,354) 51,214 4,920
------------ ------------ ------------
Net unrealized gains (losses), end of year................... $ 90,677 $ (42,354) $ 51,214
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

NET INVESTMENT INCOME AND REALIZED GAINS (LOSSES) ON INVESTMENTS: Major
categories of net investment income and realized gains (losses) on investments
for each year were as follows (in thousands):

<TABLE>
<CAPTION>
REALIZED GAINS (LOSSES)
NET INVESTMENT INCOME ON INVESTMENTS
------------------------------- -------------------------------
1995 1994 1993 1995 1994 1993
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Fixed maturities............................ $ 139,062 $ 119,668 $ 120,844 $ 50,393 $ (27,854) $ 70,626
Equity securities........................... 2,026 1,937 1,490 2,830 1,352 3,955
Mortgage loans on real estate............... 49,227 36,816 28,370 (242) (2,992) (1,805)
Policy loans................................ 2,797 2,731 3,004 -- -- --
Short-term investments...................... 11,863 4,671 4,282 (3) (60) 1
Real estate & other investments............. 4,750 2,138 1,171 2,102 739 846
--------- --------- --------- --------- --------- ---------
Tota1................................... 209,725 167,961 159,161 $ 55,080 $ (28,815) $ 73,623
--------- --------- ---------
--------- --------- ---------
Expenses.................................... (6,188) (5,447) (5,504)
--------- --------- ---------
$ 203,537 $ 162,514 $ 153,657
--------- --------- ---------
--------- --------- ---------
</TABLE>

Proceeds from sales of investments in fixed maturities were $2,000,068,000,
$1,798,185,000, and $2,335,230,000 in 1995, 1994 and 1993, respectively. Gross
gains of $61,070,000, $16,618,000, and $75,133,000 and gross losses of
$10,677,000, $44,472,000, and $4,507,000 were realized on the sales in 1995,
1994, and 1993, respectively.

42
<PAGE>
5. DEFERRED POLICY ACQUISITION COSTS
The changes in deferred policy acquisition costs by product were as follows (in
thousands):

<TABLE>
<CAPTION>
INTEREST
SENSITIVE AND
TRADITIONAL INVESTMENT ACCIDENT AND
LIFE PRODUCTS HEALTH TOTAL
----------- ------------- ------------- ---------
<S> <C> <C> <C> <C>
Balance January 1, 1994.................. $ 61,474 $ 87,946 $ 47,063 $ 196,483
Acquisition costs deferred:
Acquired business...................... -- -- 6,644 6,644
Other business......................... -- 54,349 -- 54,349
Acquisition costs amortized.............. (11,564) (10,274) (12,728) (34,566)
Allowance for additional amortization
from unrealized gains on
available-for-sale securities........... -- 9,288 -- 9,288
----------- ------------- ------------- ---------
Balance December 31, 1994................ $ 49,910 $ 141,309 $ 40,979 $ 232,198
Acquisition costs deferred:
Other business......................... -- 56,391 -- 56,391
Acquisition costs amortized.............. (11,378) (17,071) (12,842) (41,291)
Additional amortization of deferred
acquisition costs from unrealized losses
on available-for-sale securities........ -- (9,789) -- (9,789)
----------- ------------- ------------- ---------
Balance December 31, 1995................ $ 38,532 $ 170,840 $ 28,137 $ 237,509
----------- ------------- ------------- ---------
----------- ------------- ------------- ---------
</TABLE>

Included within total deferred policy acquisition costs at December 31, 1995 is
$46,750,000 of present value of future profits (PVP) resulting from acquisitions
accounted for as a purchase. The estimated amount of PVP to be amortized during
each of the next three years is as follows: 1996--$19,210,000;
1997--$17,262,000; 1998--$10,278,000.

During 1995, 1994, and 1993, the Company sold portions of its investment
portfolio and in accordance with FASB Statement 97, the recognition of the
realized capital (losses) gains resulted in (reduced) additional amortization of
acquisition costs deferred of $4,825,000, $(935,000), and $5,400,000,
respectively. In addition, the Company (reduced) recorded policyholder dividends
payable of $1,095,000 in 1995, $(761,000) in 1994 and $2,800,000 in 1993.

6. PROPERTY AND EQUIPMENT
A summary of property and equipment for each year follows (in thousands):

<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
Land................................................................... $ 1,900 $ 1,900
Building and improvements.............................................. 23,319 23,084
Furniture and equipment................................................ 85,592 68,017
--------- ---------
110,811 93,001
Less accumulated depreciation.......................................... (50,780) (36,062)
--------- ---------
Net property and equipment............................................. $ 60,031 $ 56,939
--------- ---------
--------- ---------
</TABLE>

43
<PAGE>
7. UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES
Activity for the liability for unpaid accident and health claims and claims
adjustment expense is summarized as follows (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Balance as of January 1, net of reinsurance recoverables..... $ 838,810 $ 806,538 $ 776,194
Add: Incurred losses related to:
Current year............................................... 827,261 656,052 612,621
Prior years................................................ (28,520) (58,218) (41,619)
--------- --------- ---------
Total incurred losses.................................... 798,741 597,834 571,002
Deduct: Paid losses related to:
Current year............................................... 492,460 377,595 353,124
Prior years................................................ 216,259 187,967 187,534
--------- --------- ---------
Total paid losses........................................ 708,719 565,562 540,658
--------- --------- ---------
Balance as of December 31, net of reinsurance recoverables... $ 928,832 $ 838,810 $ 806,538
--------- --------- ---------
--------- --------- ---------
</TABLE>

In 1995, the accident/health business experienced overall unfavorable claims
experience. The unfavorable experience was the result of medical cost trends and
the negative impact of medical premium rate restrictions in certain states. In
1994 and 1993, the accident/health business experienced overall favorable
development on claims reserves established as of the previous year end. The
favorable development was a result of lower medical costs due to less
uncertainty in the health business, a reduction of loss reserves which
considered historically high inflation in medical costs and, in 1994, a
refinement in the claims reserve estimates.

8. FEDERAL INCOME TAXES
The Company reports its taxable income in a consolidated federal income tax
return along with other affiliated subsidiaries of Fortis, Inc. Income tax
expense or credits are allocated among the affiliated subsidiaries by applying
corporate income tax rates to taxable income or loss determined on a separate
return basis according to a Tax Allocation Agreement.

The cumulative effect of adopting Statement 109 as of January 1, 1993 was to
increase net income for 1993 by $4,814,000. An increase in the tax rate from 34%
to 35% was effective in the third quarter of 1993 and resulted in a $305,000
increase in net income from the recalculation of the deferred liability account.

Deferred income taxes reflect the net tax effects of temporary differences
between the basis of assets and liabilities for financial statement purposes and
for income tax purposes.

44
<PAGE>
8. FEDERAL INCOME TAXES (CONTINUED)
The significant components of the Company's deferred tax liabilities and assets
as of December 31, 1995 and 1994 are as follows (in thousands):

<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
Deferred tax assets:
Reserves............................................ $ 54,346 $ 42,715
Separate account assets/liabilities................. 34,386 27,663
Unrealized losses................................... -- 22,806
Accrued liabilities................................. 13,781 14,565
Claims and benefits payable......................... 2,626 1,976
Other............................................... 123 1,393
--------- ---------
Total deferred tax assets......................... 105,262 111,118
Deferred tax liabilities:
Unrealized gains.................................... 48,826 --
Deferred policy acquisition costs................... 60,930 55,329
Investments......................................... -- 1,194
Fixed assets........................................ 5,044 6,086
--------- ---------
Total deferred tax liabilities.................... 114,800 62,609
--------- ---------
Net deferred tax asset (liability)................ $ (9,538) $ 48,509
--------- ---------
--------- ---------
</TABLE>

The Company is required to establish a valuation allowance for any portion of
the deferred tax asset that management believes will not be realized. In the
opinion of management, it is more likely than not that the Company will realize
the benefit of the deferred tax assets, and, therefore, no such valuation
allowance has been established.

The Company's tax expense before cumulative effect of accounting changes is
shown as follows (in thousands):

<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Current........................................ $ 39,660 $ 15,046 $ 35,747
Deferred....................................... (11,769) (3,451) (4,657)
--------- --------- ---------
$ 27,891 $ 11,595 $ 31,090
--------- --------- ---------
--------- --------- ---------
</TABLE>

Tax payments were made of $47,711,000, $18,080,000 and $53,600,000 in 1995,
1994, and 1993, respectively. Tax refunds were received of $7,258,000 and
$7,729,000 in 1995 and 1994, respectively.

The Company's effective income tax rate varied from the statutory federal income
tax rate as follows:

<TABLE>
<CAPTION>
1995 1994 1993
----- ----- -----
<S> <C> <C> <C>
Statutory income tax rate............................ 35.0% 35.0% 35.0%
Tax audit provision.................................. 0.0% 0.8% (4.6)%
Other, net........................................... (0.9)% (2.1)% (1.9)%
--- --- ---
34.1% 33.7% 28.5%
--- --- ---
--- --- ---
</TABLE>

45
<PAGE>
9. ASSETS HELD IN SEPARATE ACCOUNTS
Separate account assets were as follows (in thousands):

<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Premium and annuity considerations for the variable
annuity products and variable universal life
product for which the contract holder, rather than
the Company, bears the investment risk............. $ 1,757,476 $ 1,208,038
Assets of the separate accounts owned by the
Company, at fair value............................. 24,009 4,872
------------ ------------
$ 1,781,485 $ 1,212,910
------------ ------------
------------ ------------
</TABLE>

10. STATUTORY ACCOUNTING PRACTICES
Reconciliations of net income and shareholder's equity on the basis of statutory
accounting to the related amounts presented in the accompanying statements were
as follows (in thousands):

<TABLE>
<CAPTION>
SHAREHOLDER'S EQUITY
NET INCOME
------------------------------- --------------------
1995 1994 1993 1995 1994
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Based on statutory accounting practices............ $ 30,576 $ 49,759 $ 46,605 $ 377,040 $ 304,231
Deferred policy acquisition costs.................. 15,100 19,783 9,338 237,509 232,198
Investment valuation differences................... 330 370 520 114,413 (85,944)
Deferred and uncollected premiums.................. 303 (14) 1,655 (7,372) (8,393)
Unearned premiums.................................. 1,829 1,126 7,035 (11,179) (13,008)
Loading and equity in unearned premiums............ (56) 316 (179) 94 85
Property and equipment............................. (178) (204) (63) 27,172 22,027
Policy reserves.................................... (31,011) (26,655) (38,558) (103,174) (72,192)
Current income taxes payable....................... (1,294) -- 4,656 (7,895) (4,786)
Deferred income taxes.............................. 11,769 2,356 9,776 (9,538) 48,509
Realized gains (losses) on investments............. 1,938 (1,052) 3,651 -- --
Realized gains (losses) transferred to the Interest
Maintenance Reserve (IMR), net of tax............. 31,711 (18,456) 40,459 -- --
Amortization of IMR, net of tax.................... (5,261) (5,479) (3,777) -- --
Interest maintenance reserve....................... -- -- -- 53,814 27,364
Asset valuation reserve............................ -- -- -- 48,507 32,011
Cumulative effect of accounting changes............ -- -- 3,563 -- --
Other, net......................................... (1,886) 1,007 (2,974) (8,293) (7,905)
--------- --------- --------- --------- ---------
$ 53,870 $ 22,857 $ 81,707 $ 711,098 $ 474,197
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>

11. REINSURANCE
The maximum amount that the Company retains on any one life is $750,000 of life
insurance including accidental death. Amounts in excess of $750,000 are
reinsured with other life insurance companies on a yearly renewable term basis.

Ceded reinsurance premiums were as follows (in thousands):

<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Life Insurance.................................. $ 4,661 $ 5,571 $ 4,366
Accident & Health Insurance..................... 3,410 36,782 37,088
--------- --------- ---------
$ 8,071 $ 42,353 $ 41,454
--------- --------- ---------
--------- --------- ---------
</TABLE>

46
<PAGE>
11. REINSURANCE (CONTINUED)
Recoveries under reinsurance contracts were as follows (in thousands):

<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Life Insurance.................................. $ 2,489 $ 1,650 $ 6,963
Accident & Health Insurance..................... 8,807 19,913 15,448
--------- --------- ---------
$ 11,296 $ 21,563 $ 22,411
--------- --------- ---------
--------- --------- ---------
</TABLE>

Reinsurance ceded would become a liability of the Company in the event the
reinsurers are unable to meet the obligations assumed under the reinsurance
agreements. To minimize its exposure to significant losses from reinsurance
insolvencies, the Company evaluates the financial condition of its reinsurers
and monitors concentrations of credit risk arising from similar geographic
regions, activities or economic characteristics of the reinsurers.

12. STATUTORY INFORMATION
Dividend distributions to parent are restricted as to amount by state regulatory
requirements. The Company had $37,204,000 free from such restrictions at
December 31, 1995. Distributions in excess of this amount would require
regulatory approval.

Statutory-basis financial statements are prepared in accordance with accounting
practices prescribed or permitted by Minnesota Insurance regulatory authorities.
Prescribed statutory accounting practices include a variety of publications of
the National Association of Insurance Commissioners ("NAIC"), as well as state
laws, regulations and general administrative rules. Permitted statutory
accounting practices encompass all accounting practices not so prescribed; such
practices may differ from state to state, may differ from company to company
within a state, and may change in the future. The NAIC is currently in the
process of codifying statutory accounting practices. This project, which is
expected to be completed in 1996, may result in changes to the accounting
practices that insurance enterprises use to prepare their statutory-basis
financial statements.

Insurance enterprises are required by State Insurance Departments to adhere to
minimum risk-based capital ("RBC") requirements developed by the NAIC. All of
the Company's insurance subsidiaries exceed minimum RBC requirements.

13. TRANSACTIONS WITH AFFILIATED COMPANIES
The Company receives various services from Fortis, Inc. These services include
assistance in benefit plan administration, corporate insurance, accounting, tax,
auditing, investment and other administrative functions. The fees paid to
Fortis, Inc. for these services for the years ended December 31, 1995, 1994, and
1993, were $10,074,000 , $8,944,000, and $8,595,000 respectively.

In conjunction with the marketing of its variable annuity products, the Company
paid $59,308,000, $57,307,000, and $27,931,000, in commissions to its affiliate,
Fortis Investors, Inc. for the years ended December 31, 1995, 1994, and 1993,
respectively.

14. FAIR VALUE DISCLOSURES

VALUATION METHODS AND ASSUMPTIONS: Investments are reported in the accompanying
balance sheets on the following basis:

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

Mortgage loans are reported at unpaid principal balance less allowances for
possible losses. The fair values of mortgage loans are estimated using
discounted cash flow analyses, using interest rates currently being offered for
similar loans to borrowers with similar credit ratings. Loans with similar
characteristics are aggregated for purposes of the calculations. The fair values
for the Company's policy reserves under investment products are determined using
cash surrender value.

47
<PAGE>
14. FAIR VALUE DISCLOSURES (CONTINUED)
The fair values under all insurance contracts are taken into consideration in
the Company's overall management of interest rate risk, such that the Company's
exposure to changing interest rates is minimized through the matching of
investment maturities with amounts due under insurance contracts.

<TABLE>
<CAPTION>
DECEMBER 31
---------------------------------------------------------
1995 1994
--------------------------- ---------------------------
CARRYING CARRYING
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Assets:
Investments:
Securities available-for-sale:
Fixed maturities................. $ 2,075,624 $ 2,075,624 $ 1,674,782 $ 1,674,782
Equity securities................ 78,852 78,852 64,552 64,552
Mortgage loans on real estate...... 562,697 605,501 452,547 434,503
Policy loans....................... 53,863 53,863 49,221 49,221
Short-term investments............. 153,499 153,499 117,562 117,562
Cash............................... 1 1 10,888 10,888
Assets held in separate accounts... 1,781,485 1,781,485 1,212,910 1,212,910
Liabilities:
Individual and group annuities
(subject to discretionary
withdrawal)......................... 865,623 834,621 692,196 657,454
</TABLE>

15. COMMITMENTS AND CONTINGENCIES
The Company is named as a defendant in a number of legal actions arising
primarily from claims made under insurance policies. These actions have been
considered in establishing policy benefit and loss reserves. Management and its
legal counsel are of the opinion that the settlement of these actions will not
have a material adverse effect on the Company's financial position or results of
operations.

16. RETIREMENT AND OTHER EMPLOYEE BENEFITS
The Company participates in the Fortis, Inc. noncontributory defined benefit
pension plan covering substantially all of its employees. Benefits are based on
years of service and the employee's compensation during such years of service.
Fortis, Inc. is not able to segregate Company specific benefit obligations or
plan assets. On an aggregate basis, the fair value of plan assets exceeded the
accumulated benefit obligations as of December 31, 1995.

The Company has a profit sharing plan covering substantially all employees which
provides benefits payable to participants on retirement or disability and to
beneficiaries of participants in event of the participant's death. Amounts
contributed to the plan and expensed by the Company were $3,765,000, $3,536,000
and $3,399,000 in 1995, 1994, and 1993, respectively.

48
<PAGE>
BALANCE SHEETS
FORTIS BENEFITS INSURANCE COMPANY
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31,
1996 1995
----------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Investments
Fixed maturities, at fair value (amortized cost: $2,012,573 at March 31, 1996 $1,951,204
at December 31, 1995).................................................................. $2,042,316 $2,075,624
Equity securities, at fair value (cost: $77,223 at March 31, 1996, $60,935 at December
31, 1995).............................................................................. 97,359 78,852
Mortgage loans on real estate........................................................... 556,903 562,697
Policy loans............................................................................ 55,408 53,863
Short-term investments.................................................................. 92,906 153,499
Real estate and other investments....................................................... 16,736 11,918
----------- ------------
2,861,628 2,936,453

Cash...................................................................................... 2,877 1
Receivables:
Uncollected premium..................................................................... 61,046 55,992
Reinsurance recoverable on paid and unpaid losses....................................... 11,169 11,812
Due from affiliates..................................................................... 148 388
Other................................................................................... 18,066 14,581
----------- ------------
90,429 82,773

Accrued investment income................................................................. 42,706 41,209
Deferred policy acquisition costs......................................................... 244,092 237,509
Property and equipment, at cost, less accumulated depreciation............................ 59,815 60,031
Recoverable federal income taxes.......................................................... 19,127 --
Deferred federal income taxes............................................................. 26,202 --
Other assets.............................................................................. 2,773 3,551
Assets held in separate accounts.......................................................... 1,928,571 1,781,485
----------- ------------
$5,278,220 $5,143,012
----------- ------------
----------- ------------
</TABLE>

See accompanying notes.

49
<PAGE>
BALANCE SHEETS (CONTINUED)
FORTIS BENEFITS INSURANCE COMPANY
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
----------- ------------
(UNAUDITED)
<S> <C> <C>
RESERVES, LIABILITIES AND SHAREHOLDER'S EQUITY
POLICY RESERVES AND LIABILITIES AND SHAREHOLDER'S EQUITY
Future policy benefit reserves:
Traditional life insurance............................................................ $ 404,071 $ 407,706
Interest sensitive and investment products............................................ 1,117,337 1,101,931
Accident and health................................................................... 820,066 832,925
----------- ------------
2,341,474 2,342,562

Unearned premiums....................................................................... 11,847 13,044
Other policy claims and benefits payable................................................ 234,562 196,403
Policyholder dividends payable.......................................................... 8,217 7,930
----------- ------------
2,596,100 2,559,939
Accrued expenses........................................................................ 46,237 68,441
Current income taxes payable............................................................ -- 5,375
Deferred federal income taxes........................................................... -- 9,538
Other liabilities....................................................................... 81,596 31,145
Liabilities related to separate accounts................................................ 1,903,941 1,757,476
----------- ------------
4,627,874 4,431,914

SHAREHOLDER'S EQUITY
Common stock, $5 par value, 1,000,000 shares authorized, issued and outstanding......... 5,000 5,000
Additional paid-in capital.............................................................. 408,000 408,000
Retained earnings....................................................................... 206,972 207,421
Unrealized gain on available-for-sale securities, net of deferred tax expense of $15,750
at March 31, 1996 and tax benefit of $47,455 at December 31, 1995...................... 29,250 88,131
Unrealized gain on assets held in separate accounts, net of deferred taxes of $605 at
March 31, 1996 and $1,371 at December 31, 1995......................................... 1,124 2,546
----------- ------------
650,346 711,098
----------- ------------
$5,278,220 $5,143,012
----------- ------------
----------- ------------
</TABLE>

See accompanying notes.

50
<PAGE>
STATEMENTS OF INCOME
FORTIS BENEFITS INSURANCE COMPANY
(IN THOUSANDS)
(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1996 1995
--------- ---------
<S> <C> <C>
REVENUES
Insurance operations:
Traditional life insurance premiums.............................. $ 61,744 $ 57,095
Interest sensitive and investment product policy charges......... 13,575 11,205
Accident and health premiums..................................... 251,577 215,084
--------- ---------
326,896 283,384
Net investment income.............................................. 50,539 47,519
Realized gains (losses) on investments............................. 6,866 (492)
Other income....................................................... 8,444 8,320
--------- ---------
TOTAL REVENUES................................................. 392,745 338,731

BENEFITS AND EXPENSES
Benefits to policyholders:
Traditional life insurance....................................... 59,258 46,355
Interest sensitive and investment products....................... 23,506 16,155
Accident and health.............................................. 210,176 169,382
--------- ---------
292,940 231,892
Policyholder dividends............................................. 1,134 748
Amortization of deferred policy acquisition costs.................. 10,941 8,746
Insurance commissions.............................................. 25,481 22,862
General and administrative expenses................................ 63,122 57,815
--------- ---------
TOTAL BENEFITS AND EXPENSES.................................... 393,618 322,063
--------- ---------
INCOME BEFORE INCOME TAX EXPENSE..................................... (873) 16,668
INCOME TAX EXPENSE (BENEFITS)
Current............................................................ 2,845 6,578
Deferred........................................................... (3,269) (1,079)
(424) 5,499
--------- ---------
NET INCOME..................................................... $ (449) $ 11,169
--------- ---------
--------- ---------
</TABLE>

See accompanying notes.

51
<PAGE>
STATEMENTS OF CASH FLOW
FORTIS BENEFITS INSURANCE COMPANY
(IN THOUSANDS)
(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1996 1995
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net income....................................................... $ (449) $ 11,169
Adjustments to reconcile net income to net cash provided by
operating activities:
Increase in future policy benefit reserves for traditional and
interest sensitive products................................... (62,021) 29,206
Increase in other policy claims, benefits and policyholder
dividends payable............................................. 38,446 2,085
Decrease in deferred federal income taxes...................... (3,269) (1,079)
Increase (decrease) in income taxes payable.................... (24,502) (2,212)
Amortization of policy acquisition costs....................... 10,941 8,746
Policy acquisition costs deferred.............................. (15,704) (16,715)
Provision for depreciation..................................... 4,593 3,558
Accrual of discount, net....................................... 676 (972)
Change in uncollected premiums, accrued investment income,
other receivables, unearned premiums, accrued expenses, and
other liabilities............................................. 17,897 36,699
Realized (gains) losses on investments......................... (6,866) 492
Other.......................................................... 778 293
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES.................... (39,480) 71,270
INVESTING ACTIVITIES
Purchases of fixed maturity investments.......................... (625,023) (426,066)
Sales or maturities of fixed maturity investments................ 564,633 365,312
(Increase) decrease in short-term investments.................... 60,693 (21,534)
Purchase of other investments.................................... (46,828) (102,940)
Sales or maturities of other investments......................... 31,979 17,241
Purchase of property and equipment............................... (4,395) (3,299)
Other............................................................ 364 --
--------- ---------
NET CASH USED BY INVESTING ACTIVITIES........................ (18,577) (171,286)
FINANCING ACTIVITIES
Activities related to investment products:
Considerations received........................................ 58,767 90,987
Surrenders and death benefits.................................. (13,369) (9,698)
Interest credited to policyholders............................. 15,535 11,269
Dividends paid to shareholder.................................... 0 --
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES.................... 60,933 92,558
--------- ---------
INCREASE IN CASH............................................. 2,876 (7,458)
Cash and cash equivalents at beginning of period................... 1 10,888
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD................... $ 2,877 $ 3,430
--------- ---------
--------- ---------
</TABLE>

See accompanying notes.

52
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FORTIS BENEFITS INSURANCE COMPANY
MARCH 31, 1996
(UNAUDITED)

GENERAL: The accompanying unaudited financial statements of Fortis Benefits
Insurance Company contain all adjustments necessary to present fairly the
balance sheet as of March 31, 1996 and the related statement of income for the
three months ended March 31, 1996, and cash flows for the three months ended
March 31, 1996 and 1995.

ACQUIRED BUSINESS: In October, 1991 the Company purchased certain assets and
assumed certain liabilities from the Mutual Benefit Life Insurance Company in
Rehabilitation (MBL). The seller transferred to Fortis Benefits the assets and
liabilities relating to the group life, accident and health, disability and
dental insurance business of MBL. The acquisition was accounted for as a
purchase.

Fortis Benefits purchased this business for $318 million and issued a promissory
note in the maximum amount of $200 million. Most of the purchase price was
funded by a capital contribution of $225 million from Fortis, Inc.

In accordance with the contractual agreement, additional payments were paid to
MBL based upon the persistency of the long term disability portion of the
business. Under terms of this agreement, the Company paid $6,644,000, $5,521,000
and $8,685,000 in 1994, 1993, and 1992, respectively. This additional purchase
price was accounted for as deferred policy acquisition costs. No additional
payments will be made.

Income tax payments for the three months ended March 31, 1996 and March 31, 1995
were $27,347,000 and $8,790,000 respectively.

The classification of fixed maturity investments is to be made at the time of
purchase and, prospectively, that classification is expected to be reevaluated
as of each balance sheet date. At March 31, 1996, all fixed maturity and equity
securities are classified as available-for-sale and carried at fair value.

The amortized cost and fair values of investments available-for-sale were as
follows at March 31, 1996 (in thousands):

<TABLE>
<CAPTION>
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAIN LOSS VALUE
----------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Fixed Income Securities:
Governments.............................. $ 517,801 $ 6,889 $ 4,431 $ 520,259
Public Utilities......................... 67,593 3,170 632 70,131
Industrial and miscellaneous............. 1,418,231 34,880 10,939 1,442,172
Other.................................... 8,948 894 88 9,754
----------- ----------- ----------- ---------
Total................................ 2,012,573 45,833 16,090 2,042,316
Equity Securities........................ 77,223 21,943 1,807 97,359
----------- ----------- ----------- ---------
$2,089,796 $ 67,776 $ 17,897 $2,139,675
----------- ----------- ----------- ---------
----------- ----------- ----------- ---------
</TABLE>

53
<PAGE>
The amortized cost and fair value of fixed maturities at March 31, 1996, by
contractual maturity, are shown below (in thousands). Expected maturities will
differ from contractual maturities because borrower may have the right to call
or prepay obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
AMORTIZED FAIR
COST VALUE
----------- ---------
<S> <C> <C>
Due in one year or less........................... $ 41,610 $ 41,784
Due after one year through five years............. 551,455 557,967
Due after five years through ten years............ 738,868 749,600
Due after ten years............................... 680,640 692,965
----------- ---------
$2,012,573 $2,042,316
----------- ---------
----------- ---------
</TABLE>

Proceeds from sales and maturities of investments in fixed maturities in the
three month period ended March 31, 1996 were $546,685,950, and $17,948,000
respectively. Gross gains of $13,094,428 and gross losses of $8,949,756 were
realized on sales.

MORTGAGE LOANS: The Company has issued commercial mortgage loans on properties
located throughout the country. Currently, approximately 27% of outstanding
principal is concentrated in the states of California, Florida and Illinois. The
Company has a diversified loan portfolio with a small average size, which
greatly reduces any loss exposure. The Company has established a reserve for
mortgage loans.

In 1995 the Company adopted FASB 114 and 118, "Accounting by Creditors for
Impairment of a Loan." Statements 114 and 118 require that impaired loans are to
be valued at the present value of expected future cash flows discounted at the
loan's effective interest rate, or, as a practical expedient, at the loan's
observable market price, or the fair market value of the collateral if the loan
is collateral dependent. Adoption of these statements did not materially impact
the financial position or operating results of the Company.

NET INVESTMENT INCOME AND REALIZED GAINS (LOSSES) ON INVESTMENTS: Major
categories of net investment income and realized gains and losses on investments
for the first three months of each year were as follows (in thousands):

<TABLE>
<CAPTION>
REALIZED GAIN (LOSS)
INVESTMENT INCOME
ON INVESTMENTS
-------------------- --------------------
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Fixed maturities..................................... $ 35,421 $ 33,456 $ 1,628 $ (1,002)
Preferred stocks..................................... 51 186 250
Common stocks........................................ 620 415 2,266 264
Mortgage loans on real estate........................ 13,351 11,066 (144)
Policy loans......................................... 818 784
Short-term investments............................... 2,102 2,415 57
Real estate and other investments.................... 239 844 2,809 246
--------- --------- --------- ---------
52,602 49,166 $ 6,866 $ (492)
--------- --------- --------- ---------
Expenses............................................. (2,063) (1,647)
--------- --------- --------- ---------
--------- ---------
$ 50,539 $ 47,519
--------- ---------
--------- ---------
</TABLE>

54
<PAGE>
REPORT OF INDEPENDENT AUDITORS

Board of Directors
Fortis Benefits Insurance Company

We have audited the accompanying statement of net assets of Fortis Benefits
Insurance Company Variable Account C (comprising, respectively, the Fortis
Series Fund, Inc.'s Growth Stock, U.S. Government Securities, Money Market,
Asset Allocation, Diversified Income, Global Growth, Aggressive Growth, Growth &
Income, High Yield, Global Asset Allocation, Global Bond, and International
Stock Subaccounts and the Norwest Select Fund's Small Company Stock Subaccount)
as of December 31, 1995, and the related statements of changes in net assets for
each of the three years then ended, except for the Fortis Series Fund, Inc.'s
Aggressive Growth, Growth & Income, and High Yield Subaccounts which are for the
years ended December 31, 1995 and 1994, and the Fortis Series Fund, Inc.'s
Global Asset Allocation, Global Bond, and International Stock Subaccounts and
the Norwest Select Fund's Small Company Stock Subaccount which are for the year
ended December 31, 1995. These financial statements are the responsibility of
the management of Fortis Benefits Insurance Company. Our responsibility is to
express an opinion on these 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. Our procedures included
confirmation of securities owned as of December 31, 1995 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 referred to above present fairly, in
all material respects, the financial position of Fortis Benefits Insurance
Company Variable Account C at December 31, 1995, and the changes in the net
assets for the periods described in the first paragraph, in conformity with
generally accepted accounting principles.

[SIGNATURE]
March 22, 1996

55
<PAGE>
STATEMENT OF NET ASSETS
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
DECEMBER 31, 1995

<TABLE>
<CAPTION>
ATTRIBUTABLE ATTRIBUTABLE NET ASSET VALUE
TO FORTIS TO VARIABLE FOR VARIABLE LIFE
BENEFITS LIFE ACCUMULATION INSURANCE
INSURANCE INSURANCE UNITS POLICIES PER
NET ASSETS COMPANY POLICIES OUTSTANDING ACCUMULATION UNIT
---------- ------------- ------------- ------------- -----------------
<S> <C> <C> <C> <C> <C>
Investments in Fortis Series
Fund, Inc., at market value
(Note 2):
Growth Stock Series (4,069,900
shares; cost--$85,836,221)... $114,336,114 $1,626,134 $112,709,980 5,597,835 $20.13
U.S. Government Securities
Series (773,801 shares;
cost-- $8,216,067)........... 8,637,241 -- 8,637,241 563,792 15.32
Money Market Series (448,336
shares; cost--$4,872,591).... 4,853,912 -- 4,853,912 380,101 12.77
Asset Allocation Series
(1,517,676 shares;
cost--$20,665,868)........... 24,130,134 783,299 23,346,835 1,319,746 17.69
Diversified Income Series
(408,851 shares;
cost--$4,732,097)............ 4,986,624 -- 4,986,624 317,914 15.69
Global Growth Series
(2,326,115 shares;
cost--$29,749,600)........... 37,150,378 650,869 36,499,509 2,298,743 15.88
Aggressive Growth Series
(724,997 shares;
cost--$7,999,913)............ 9,189,333 760,602 8,428,731 672,460 12.53
Growth & Income Series
(387,727 shares;
cost--$4,356,563)............ 4,975,884 770,231 4,205,653 322,904 13.02
High Yield Series (285,845
shares; cost--$2,860,695).... 2,783,523 1,266,202 1,517,321 137,850 11.01
Global Asset Allocation Series
(627,400 shares;
cost--$6,424,554)............ 7,167,294 5,712,197 1,455,097 125,237 11.62
Global Bond Series (576,688
shares; cost--$5,900,696).... 6,508,904 5,643,468 865,436 73,311 11.81
International Stock Series
(737,128 shares;
cost--$7,533,474)............ 8,308,832 5,636,625 2,672,207 236,244 11.31
Investment in Norwest Select
Fund, at market value (Note 2):
Small Company Stock Fund
(103,433 shares;
cost--$1,038,350)............ 1,159,487 1,159,487 -- -- --
</TABLE>

See notes to financial statements.

56
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
GROWTH STOCK SUBACCOUNT
Investment income:
Dividend income............................................................... $ 510,059 $ 524,850 $ 186,295
Mortality and expense and policy advance charges (Note 3)..................... (1,093,454) (630,146) (406,385)
------------ ------------ ------------
NET INVESTMENT LOSS......................................................... (583,395) (105,296) (220,090)
Net realized gain on redemption of Fortis Series Fund, Inc. portfolio
shares....................................................................... 542,606 193,238 315,227
Net change in unrealized appreciation (depreciation) on investments........... 20,881,118 (1,837,695) 3,121,509
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS....................... 20,840,329 (1,749,753) 3,216,646
Capital transactions:
Purchase of Variable Account C units.......................................... 23,231,047 24,347,849 18,848,153
Redemption of Variable Account C units........................................ (2,402,006) (1,554,311) (1,856,898)
Mortality and expense charge redeemed from Fortis Series Fund, Inc............ 1,093,454 630,146 --
Mortality and expense charge due from Fortis Series Fund, Inc................. -- -- 406,385
Dividend income distribution to Fortis Benefits Insurance Company............. (7,237) (9,364) --
------------ ------------ ------------
NET INCREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS........................ 21,915,258 23,414,320 17,397,640
------------ ------------ ------------
TOTAL INCREASE IN NET ASSETS................................................ 42,755,587 21,664,567 20,614,286
Net assets, beginning of year................................................... 71,580,527 49,915,960 29,301,674
------------ ------------ ------------
NET ASSETS, END OF YEAR..................................................... $114,336,114 $ 71,580,527 $ 49,915,960
------------ ------------ ------------
------------ ------------ ------------

YEAR ENDED DECEMBER 31
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES SUBACCOUNT
Investment income:
Dividend income............................................................... $ 379 $ 607,364 $ 523,262
Mortality and expense and policy advance charges (Note 3)..................... (95,405) (79,454) (51,142)
------------ ------------ ------------
Net investment (loss) income.................................................. (95,026) 527,910 472,120
Net realized (loss) gain on redemption of Fortis Series Fund, Inc. portfolio
shares....................................................................... (54,024) (126,731) 56,486
Net change in unrealized appreciation (depreciation) on investments........... 1,463,356 (967,547) (133,072)
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS....................... 1,314,306 (566,368) 395,534
Capital transactions:
Purchase of Variable Account C units.......................................... 2,331,839 1,951,506 4,101,566
Redemption of Variable Account C units........................................ (2,234,298) (1,984,288) (971,887)
Mortality and expense charge redeemed from Fortis Series Fund, Inc............ 95,405 79,454 --
Mortality and expense charge due from Fortis Series Fund, Inc................. -- -- 51,142
------------ ------------ ------------
NET INCREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS........................ 192,946 46,672 3,180,821
------------ ------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS..................................... 1,507,252 (519,696) 3,576,355
Net assets, beginning of year................................................... 7,129,989 7,649,685 4,073,330
------------ ------------ ------------
NET ASSETS, END OF YEAR..................................................... $ 8,637,241 $ 7,129,989 $ 7,649,685
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

See notes to financial statements.

57
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994 1993
---------- --------- ---------
<S> <C> <C> <C>
GROWTH STOCK SUBACCOUNT
Investment income:
Dividend income............................................. $ 510,059 $ 524,850 $ 186,295
Mortality and expense and policy advance charges (Note 3)... (1,093,454) (630,146) (406,385)
---------- --------- ---------
NET INVESTMENT LOSS....................................... (583,395) (105,296) (220,090)
Net realized gain on redemption of Fortis Series Fund, Inc.
portfolio shares........................................... 542,606 193,238 315,227
Net change in unrealized appreciation (depreciation) on
investments................................................ 20,881,118 (1,837,695) 3,121,509
---------- --------- ---------
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS..... 20,840,329 (1,749,753) 3,216,646
Capital transactions:
Purchase of Variable Account C units........................ 23,231,047 24,347,849 18,848,153
Redemption of Variable Account C units...................... (2,402,006) (1,554,311) (1,856,898)
Mortality and expense charge redeemed from Fortis Series
Fund, Inc.................................................. 1,093,454 630,146 --
Mortality and expense charge due from Fortis Series Fund,
Inc........................................................ -- -- 406,385
Dividend income distribution to Fortis Benefits Insurance
Company.................................................... (7,237) (9,364) --
---------- --------- ---------
NET INCREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS...... 21,915,258 23,414,320 17,397,640
---------- --------- ---------
TOTAL INCREASE IN NET ASSETS.............................. 42,755,587 21,664,567 20,614,286
Net assets, beginning of year................................. 71,580,527 49,915,960 29,301,674
---------- --------- ---------
NET ASSETS, END OF YEAR................................... $114,336,114 $71,580,527 $49,915,960
---------- --------- ---------
---------- --------- ---------

YEAR ENDED DECEMBER 31
1995 1994 1993
---------- --------- ---------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES SUBACCOUNT
Investment income:
Dividend income............................................. $ 379 $ 607,364 $ 523,262
Mortality and expense and policy advance charges (Note 3)... (95,405) (79,454) (51,142)
---------- --------- ---------
Net investment (loss) income................................ (95,026) 527,910 472,120
Net realized (loss) gain on redemption of Fortis Series
Fund, Inc. portfolio shares................................ (54,024) (126,731) 56,486
Net change in unrealized appreciation (depreciation) on
investments................................................ 1,463,356 (967,547) (133,072)
---------- --------- ---------
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS..... 1,314,306 (566,368) 395,534
Capital transactions:
Purchase of Variable Account C units........................ 2,331,839 1,951,506 4,101,566
Redemption of Variable Account C units...................... (2,234,298) (1,984,288) (971,887)
Mortality and expense charge redeemed from Fortis Series
Fund, Inc.................................................. 95,405 79,454 --
Mortality and expense charge due from Fortis Series Fund,
Inc........................................................ -- -- 51,142
---------- --------- ---------
NET INCREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS...... 192,946 46,672 3,180,821
---------- --------- ---------
TOTAL INCREASE (DECREASE) IN NET ASSETS................... 1,507,252 (519,696) 3,576,355
Net assets, beginning of year................................. 7,129,989 7,649,685 4,073,330
---------- --------- ---------
NET ASSETS, END OF YEAR................................... $8,637,241 $7,129,989 $7,649,685
---------- --------- ---------
---------- --------- ---------
</TABLE>

See notes to financial statements.

58
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------------
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
MONEY MARKET SUBACCOUNT
Investment income:
Dividend income............................................................... $ 180,105 $ -- $ 35,403
Mortality and expense and policy advance charges (Note 3)..................... (52,173) (21,446) (14,578)
------------ ------------ ------------
NET INVESTMENT INCOME (LOSS)................................................ 127,932 (21,446) 20,825
Net realized gain on redemption of Fortis Series Fund, Inc. portfolio
shares....................................................................... 176,710 13,988 4,990
Net change in unrealized (depreciation) appreciation on investments........... (98,436) 100,566 (3,006)
------------ ------------ ------------
NET INCREASE IN NET ASSETS FROM OPERATIONS.................................. 206,206 93,108 22,809
Capital transactions:
Purchase of Variable Account C units.......................................... 5,764,979 4,963,584 3,163,424
Redemption of Variable Account C units........................................ (5,395,064) (2,269,774) (3,233,030)
Mortality and expense charge redeemed from Fortis Series Fund, Inc............ 52,173 21,446 --
Mortality and expense charge due from Fortis Series Fund, Inc................. -- -- 14,578
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL TRANSACTIONS............. 422,088 2,715,256 (55,028)
------------ ------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS..................................... 628,294 2,808,364 (32,219)
Net assets, beginning of year................................................... 4,225,618 1,417,254 1,449,473
------------ ------------ ------------
NET ASSETS, END OF YEAR..................................................... $ 4,853,912 $ 4,225,618 $ 1,417,254
------------ ------------ ------------
------------ ------------ ------------

YEAR ENDED DECEMBER 31
----------------------------------------
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
ASSET ALLOCATION SUBACCOUNT
Investment income:
Dividend income............................................................... $ 924,340 $ 626,408 $ 363,460
Mortality and expense and policy advance charges (Note 3)..................... (231,545) (146,296) (91,158)
------------ ------------ ------------
NET INVESTMENT INCOME....................................................... 692,795 480,112 272,302
Net realized gain on redemption of Fortis Series Fund, Inc. portfolio
shares....................................................................... 184,857 42,277 67,563
Net change in unrealized appreciation (depreciation) on investments........... 2,815,928 (678,881) 432,499
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS....................... 3,693,580 (156,492) 772,364
Capital transactions:
Purchase of Variable Account C units.......................................... 5,135,857 5,042,184 5,311,744
Redemption of Variable Account C units........................................ (1,383,622) (488,270) (572,086)
Mortality and expense charge redeemed from Fortis Series Fund, Inc............ 231,545 146,296 --
Mortality and expense charge due from Fortis Series Fund, Inc................. -- -- 91,158
Dividend income distribution to Fortis Benefits Insurance Company............. (31,040) (26,122) --
------------ ------------ ------------
NET INCREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS........................ 3,952,740 4,674,088 4,830,816
------------ ------------ ------------
TOTAL INCREASE IN NET ASSETS................................................ 7,646,320 4,517,596 5,603,180
Net assets, beginning of year................................................... 16,483,814 11,966,218 6,363,038
------------ ------------ ------------
NET ASSETS, END OF YEAR..................................................... $ 24,130,134 $ 16,483,814 $ 11,966,218
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

See notes to financial statements.

60
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------------
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
DIVERSIFIED INCOME SUBACCOUNT
Investment income:
Dividend income............................................................... $ 155 $ 257,570 $ 120,019
Mortality and expense and policy advance charges (Note 3)..................... (49,814) (29,757) (11,358)
------------ ------------ ------------
NET INVESTMENT (LOSS) INCOME................................................ (49,659) 227,813 108,661
Net realized gain (loss) on redemption of Fortis Series Fund, Inc. portfolio
shares....................................................................... 10,234 (32,443) 16,707
Net change in unrealized appreciation (depreciation) on investments........... 639,984 (335,368) (49,202)
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS....................... 600,559 (139,998) 76,166
Capital transactions:
Purchase of Variable Account C units.......................................... 2,234,605 2,099,560 1,934,554
Redemption of Variable Account C units........................................ (1,087,689) (601,619) (509,368)
Mortality and expense charge redeemed from Fortis Series Fund, Inc............ 49,814 29,757 --
Mortality and expense charge due from Fortis Series Fund, Inc................. -- -- 11,358
------------ ------------ ------------
NET INCREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS........................ 1,196,730 1,527,698 1,436,544
------------ ------------ ------------
TOTAL INCREASE IN NET ASSETS................................................ 1,797,289 1,387,700 1,512,710
Net assets, beginning of year................................................... 3,189,335 1,801,635 288,925
------------ ------------ ------------
NET ASSETS, END OF YEAR..................................................... $ 4,986,624 $ 3,189,335 $ 1,801,635
------------ ------------ ------------
------------ ------------ ------------

YEAR ENDED DECEMBER 31
----------------------------------------
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
GLOBAL GROWTH SUBACCOUNT
Investment income:
Dividend income............................................................... $ 194,924 $ 144,687 $ 25,615
Mortality and expense and policy advance charges (Note 3)..................... (352,145) (157,000) (35,224)
------------ ------------ ------------
NET INVESTMENT LOSS......................................................... (157,221) (12,313) (9,609)
Net realized gain on redemption of Fortis Series Fund, Inc. portfolio
shares....................................................................... 155,887 490,813 33,810
Net change in unrealized appreciation (depreciation) on investments........... 7,220,951 (1,089,277) 930,476
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS....................... 7,219,617 (610,777) 954,677
Capital transactions:
Purchase of Variable Account C units.......................................... 9,569,763 14,421,587 6,887,276
Redemption of Variable Account C units........................................ (1,321,205) (698,757) (722,115)
Mortality and expense charge redeemed from Fortis Series Fund, Inc............ 352,145 157,000 --
Mortality and expense charge due from Fortis Series Fund, Inc................. -- -- 35,224
Redemption of Fortis Benefits Insurance Company investment in subaccount...... -- (2,500,000) --
Dividend income distributed to Fortis Benefits Insurance Company.............. (3,423) (3,407) --
------------ ------------ ------------
NET INCREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS........................ 8,597,280 11,376,423 6,200,385
------------ ------------ ------------
TOTAL INCREASE IN NET ASSETS................................................ 15,816,897 10,765,646 7,155,062
Net assets, beginning of year................................................... 21,333,481 10,567,835 3,412,773
------------ ------------ ------------
NET ASSETS, END OF YEAR..................................................... $ 37,150,378 $ 21,333,481 $ 10,567,835
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

See notes to financial statements.

61
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
--------------------------
1995 1994
------------ ------------
<S> <C> <C>
AGGRESSIVE GROWTH SUBACCOUNT
Investment income:
Dividend income............................................................... $ 32,999 $ 8,878
Mortality and expense and policy advance charges (Note 3)..................... (55,105) (4,484)
------------ ------------
NET INVESTMENT (LOSS) INCOME................................................ (22,106) 4,394
Net realized gain (loss) on redemption of Fortis Series Fund, Inc. portfolio
shares....................................................................... 87,207 (2,388)
Net change in unrealized appreciation on investments.......................... 1,158,725 30,648
------------ ------------
NET INCREASE IN NET ASSETS FROM OPERATIONS.................................. 1,223,826 32,654
Capital transactions:
Purchase of Variable Account C units.......................................... 6,246,152 1,858,035
Redemption of Variable Account C units........................................ (621,660) (204,115)
Mortality and expense charge redeemed from Fortis Series Fund, Inc............ 55,105 4,484
Funding of subaccount by Fortis Benefits Insurance Company.................... -- 600,000
Dividend income distributed to Fortis Benefits Insurance Company.............. (2,760) (2,388)
------------ ------------
NET INCREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS........................ 5,676,837 2,256,016
------------ ------------
TOTAL INCREASE IN NET ASSETS................................................ 6,900,663 2,288,670
Net assets, beginning of year................................................... 2,288,670 --
------------ ------------
NET ASSETS, END OF YEAR..................................................... $ 9,189,333 $ 2,288,670
------------ ------------
------------ ------------

YEAR ENDED DECEMBER 31
--------------------------
1995 1994
------------ ------------
<S> <C> <C>
GROWTH & INCOME SUBACCOUNT
Investment income:
Dividend income............................................................... $ 83,612 $ 12,968
Mortality and expense and policy advance charges (Note 3)..................... (24,640) (1,404)
------------ ------------
NET INVESTMENT INCOME....................................................... 58,972 11,564
Net realized gain on redemption of Fortis Series Fund, Inc. portfolio
shares....................................................................... 40,572 124
Net change in unrealized appreciation (depreciation) on investments........... 619,472 (222)
------------ ------------
NET INCREASE IN NET ASSETS FROM OPERATIONS.................................. 719,016 11,466
Capital transactions:
Purchase of Variable Account C units.......................................... 3,356,014 656,805
Redemption of Variable Account C units........................................ (366,822) (6,999)
Mortality and expense charge redeemed from Fortis Series Fund, Inc............ 24,640 1,404
Funding of subaccount by Fortis Benefits Insurance Company.................... -- 600,000
Dividend income distributed to Fortis Benefits Insurance Company.............. (13,202) (6,438)
------------ ------------
NET INCREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS........................ 3,000,630 1,244,772
------------ ------------
TOTAL INCREASE IN NET ASSETS................................................ 3,719,646 1,256,238
Net assets, beginning of year................................................... 1,256,238 --
------------ ------------
NET ASSETS, END OF YEAR..................................................... $ 4,975,884 $ 1,256,238
------------ ------------
------------ ------------
</TABLE>

See notes to financial statements.

62
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
--------------------------
1995 1994
------------ ------------
<S> <C> <C>
HIGH YIELD SUBACCOUNT
Investment income:
Dividend income............................................................... $ 252,046 $ 81,918
Mortality and expense and policy advance charges (Note 3)..................... (11,638) (1,463)
------------ ------------
NET INVESTMENT INCOME....................................................... 240,408 80,455
Net realized gain (loss) on redemption of Fortis Series Fund, Inc. portfolio
shares....................................................................... 7,233 (3,503)
Net change in unrealized appreciation (depreciation) on investments........... 11,854 (88,789)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS....................... 259,495 (11,837)
Capital transactions:
Purchase of Variable Account C units.......................................... 1,244,092 733,981
edemption of Variable Account C units......................................... (346,228) (229,014)
Mortality and expense charge redeemed from Fortis Series Fund, Inc............ 11,638 1,463
Funding of subaccount by Fortis Benefits Insurance Company.................... -- 1,300,000
Dividend income distributed to Fortis Benefits Insurance Company.............. (120,917) (59,150)
------------ ------------
NET INCREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS........................ 788,585 1,747,280
------------ ------------
TOTAL INCREASE IN NET ASSETS................................................ 1,048,080 1,735,443
Net assets, beginning of year................................................... 1,735,443 --
------------ ------------
NET ASSETS, END OF YEAR..................................................... $ 2,783,523 $ 1,735,443
------------ ------------
------------ ------------
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31
------------
1995
------------
<S> <C> <C>
GLOBAL ASSET ALLOCATION SUBACCOUNT
Investment income:
Dividend income............................................................... $ 199,139
Mortality and expense and policy advance charges (Note 3)..................... (7,642 )
------------
NET INVESTMENT INCOME....................................................... 191,497
Net realized gain on redemption of Fortis Series Fund, Inc. portfolio
shares....................................................................... 21,531
Net change in unrealized appreciation on investments.......................... 742,740
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS.................................. 955,768
Capital transactions:
Purchase of Variable Account C units.......................................... 1,423,812
Redemption of Variable Account C units........................................ (59,928 )
Mortality and expense charge redeemed from Fortis Series Fund, Inc............ 7,642
Funding of subaccount by Fortis Benefits Insurance Company.................... 5,000,000
Dividend income distributed to Fortis Benefits Insurance Company.............. (160,000 )
------------
NET INCREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS........................ 6,211,526
------------
TOTAL INCREASE IN NET ASSETS................................................ 7,167,294
Net assets, beginning of year................................................... --
------------
NET ASSETS, END OF YEAR..................................................... $ 7,167,294
------------
------------
</TABLE>

See notes to financial statements.

63
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1995
------------
<S> <C>
GLOBAL BOND SUBACCOUNT
Investment income:
Dividend income.................................................................. $ 349,572
Mortality and expense and policy advance charges (Note 3)........................ (5,019)
------------
NET INVESTMENT INCOME.......................................................... 344,553
Net realized gain on redemption of Fortis Series Fund, Inc. portfolio shares..... 37,910
Net change in unrealized appreciation on investments............................. 608,208
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS..................................... 990,671
Capital transactions:
Purchase of Variable Account C units............................................. 1,061,190
Redemption of Variable Account C units........................................... (242,976)
Mortality and expense charge redeemed from Fortis Series Fund, Inc............... 5,019
Funding of subaccount by Fortis Benefits Insurance Company....................... 5,000,000
Dividend income distributed to Fortis Benefits Insurance Company................. (305,000)
------------
NET INCREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS........................... 5,518,233
------------
TOTAL INCREASE IN NET ASSETS................................................... 6,508,904
Net assets, beginning of year...................................................... --
------------
NET ASSETS, END OF YEAR........................................................ $6,508,904
------------
------------

YEAR ENDED
DECEMBER 31,
1995
------------
<S> <C>
INTERNATIONAL STOCK SUBACCOUNT
Investment income:
Dividend income.................................................................. $ 117,200
Mortality and expense and policy advance charges (Note 3)........................ (13,805)
------------
NET INVESTMENT INCOME.......................................................... 103,395
Net realized gain on redemption of Fortis Series Fund, Inc. portfolio shares..... 13,134
Net change in unrealized appreciation on investments............................. 775,358
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS..................................... 891,887
Capital transactions:
Purchase of Variable Account C units............................................. 2,584,243
Redemption of Variable Account C units........................................... (101,103)
Mortality and expense charge redeemed from Fortis Series Fund, Inc............... 13,805
Funding of subaccount by Fortis Benefits Insurance Company....................... 5,000,000
Dividend income distributed to Fortis Benefits Insurance Company................. (80,000)
------------
NET INCREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS........................... 7,416,945
------------
TOTAL INCREASE IN NET ASSETS................................................... 8,308,832
Net assets, beginning of year...................................................... --
------------
NET ASSETS, END OF YEAR........................................................ $8,308,832
------------
------------
</TABLE>

See notes to financial statements.

64
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1995
------------
<S> <C>
SMALL COMPANY STOCK SUBACCOUNT
Investment income:
Dividend income.................................................................. $ 38,350
Mortality and expense and policy advance charges (Note 3)........................ --
------------
NET INVESTMENT INCOME.......................................................... 38,350
Net realized gain (loss) on redemption of Norwest Select Fund portfolio shares... --
Net change in unrealized appreciation on investments............................. 121,137
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS..................................... 159,487
Capital transactions:
Purchase of Variable Account C units............................................. --
Redemption of Variable Account C units........................................... --
Mortality and expense charge redeemed from Norwest Select Fund................... --
Funding of subaccount by Fortis Benefits Insurance Company....................... 1,000,000
------------
NET INCREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS........................... 1,000,000
------------
TOTAL INCREASE IN NET ASSETS................................................... 1,159,487
Net assets, beginning of year...................................................... --
------------
NET ASSETS, END OF YEAR........................................................ $1,159,487
------------
------------
</TABLE>

See notes to financial statements.

65
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
DECEMBER 31, 1995

1. GENERAL
Fortis Benefits Insurance Company Variable Account C (the Account) was
established as a segregated asset account of Fortis Benefits Insurance Company
(Fortis Benefits) on March 13, 1986 under Minnesota law. The Account is
registered under the Investment Company Act of 1940 as a unit investment trust.

Fortis Benefits was founded in 1910. At the end of 1995, Fortis Benefits had
approximately $86 billion of total life insurance in force. Fortis Benefits is a
Minnesota corporation and is qualified to sell life insurance and annuity
contracts in the District of Columbia and in all states except New York. Fortis
Benefits is an indirectly wholly-owned subsidiary of Fortis, Inc., which is
itself indirectly owned 50% by N.V. AMEV and 50% by Compagnie Financiere et de
Reassurance du Group AG ("Group AG"). Fortis, Inc. manages the United States
operations for these two companies.

N.V. AMEV is a diversified financial services company headquartered in Utrecht,
The Netherlands, where its insurance operations began in 1847. Group AG is a
diversified financial services company headquartered in Brussels, Belgium, where
its insurance operations began in 1824. N.V. AMEV and Group AG have merged their
operating companies under the trade name of Fortis. The Fortis group of
companies is active in insurance, banking and financial services, and real
estate development in The Netherlands, Belgium, the United States, Western
Europe, and the Pacific Rim. The Fortis group of companies had over $140 billion
in assets at the end of 1995.

Fortis Advisers, Inc. (a wholly-owned subsidiary of Fortis, Inc.) provides
investment management services to the portfolios in exchange for investment
advisory and management fees. Investment advisory and management fees are based
on each portfolio's daily net assets and decrease in reduced percentages as
average daily net assets increase. The fees represent an investment expense to
Fortis Series Fund, Inc. which reduces the portfolios' net assets. These fees
charged by Fortis Advisers, Inc. are not available on an individual variable
account basis. Fees for all variable accounts to which Fortis Advisers, Inc.
provided investment management services amounted to $7,819,224, $5,839,044 and
$3,748,274 in 1995, 1994 and 1993, respectively.

There are thirteen subaccounts within the Account. The investment objectives and
policies of each of the Account's subaccounts are as follows:

- GROWTH STOCK SUBACCOUNT--seeks growth of capital through short-term and
long-term appreciation.

- U.S. GOVERNMENT SECURITIES SUBACCOUNT--seeks to earn a high level of
current income consistent with prudent investment risk.

- MONEY MARKET SUBACCOUNT--seeks high levels of capital stability and
liquidity and, to the extent consistent with these objectives, a high
level of current income.

- ASSET ALLOCATION SUBACCOUNT--seeks favorable overall rates of return on
capital primarily through increased ownership of equity securities during
periods when stock market conditions appear favorable and short-term and
long-term debt instruments during periods when stock market conditions
are less favorable.

- DIVERSIFIED INCOME SUBACCOUNT--seeks high level of current income by
investing primarily in a diversified portfolio of government securities
and investment-grade corporate bonds.

- GLOBAL GROWTH SUBACCOUNT--seeks long-term capital appreciation in equity
securities that are allocated among diverse international markets.

- AGGRESSIVE GROWTH SUBACCOUNT--seeks long-term capital appreciation in
equity securities.

- GROWTH & INCOME SUBACCOUNT--seeks growth of capital and current income
through ownership of equity securities that provide an income component
and the potential for growth.

66
<PAGE>
1. GENERAL (CONTINUED)
- HIGH YIELD SUBACCOUNT--seeks maximum total return through current income
from, and capital appreciation of, a diversified portfolio of
high-yielding fixed-income securities.

- GLOBAL ASSET ALLOCATION SUBACCOUNT--seeks favorable overall rates of
return through ownership of foreign and domestic equity securities when
stock market conditions appear favorable and short-term and long-term
foreign and domestic debt instruments when stock market conditions are
less favorable.

- GLOBAL BOND SUBACCOUNT--seeks total return from current income and
capital appreciation by investing in a global portfolio of high-quality
fixed-income securities.

- INTERNATIONAL STOCK SUBACCOUNT--seeks capital appreciation by investing
primarily in equity securities of non-United States companies.

- SMALL COMPANY STOCK SUBACCOUNT--seeks growth of capital by investing
primarily in the common stock of small and medium-size domestic companies
that are either in the early stages of development or that produce goods
and services having a favorable prospect for growth.

Certain 1994 amounts have been reclassified to conform to the 1995 presentation.

2. INVESTMENTS
Investments in shares of Fortis Series Fund, Inc. and the Norwest Select Fund
(the Funds) are stated at market value, which is based on the percentage owned
by the Account of the net asset value of the respective portfolios of the Funds.
The Funds' net asset value is based on market quotations of the securities held
in the portfolios. The cost of investments sold and redeemed is determined using
the average cost method. Unrealized appreciation or depreciation of investments
represents the Account's share of the mutual fund's undistributed net investment
income, undistributed realized gains and losses and unrealized appreciation or
depreciation in the Funds' investments.

67
<PAGE>
2. INVESTMENTS (CONTINUED)
Purchases and sales of shares of the Funds are recorded on the trade date. The
number of shares and aggregate cost of purchases and proceeds from sales of
shares were as follows:

<TABLE>
<CAPTION>
SHARES
------------------ COST OF PROCEEDS
PURCHASED SOLD PURCHASES FROM SALES
--------- ------- ----------- ----------
<S> <C> <C> <C> <C>
Year ended December 31, 1995:
Fortis Series Fund, Inc.:
Growth Stock Series....................................... 903,891 90,700 $23,231,047 $2,409,243
U.S. Government Securities Series......................... 228,211 213,159 2,331,839 2,234,298
Money Market Series....................................... 540,043 506,551 5,764,979 5,395,064
Asset Allocation Series................................... 333,531 90,515 5,135,857 1,414,662
Diversified Income Series................................. 197,390 95,167 2,234,605 1,087,689
Global Growth Series...................................... 673,847 93,947 9,569,763 1,324,628
Aggressive Growth Series.................................. 537,853 49,233 6,246,152 624,420
Growth & Income Series.................................... 287,048 30,747 3,356,014 380,024
High Yield Series......................................... 122,624 46,105 1,244,092 467,145
Global Asset Allocation Series............................ 629,303 19,414 6,423,812 219,928
Global Bond Series........................................ 593,769 48,334 6,061,190 547,976
International Stock Series................................ 742,827 16,307 7,584,243 181,103
Norwest Select Fund:
Small Company Stock Fund.................................. 100,000 -- 1,000,000 --
</TABLE>

<TABLE>
<S> <C> <C> <C> <C>
Year ended December 31, 1994:
Fortis Series Fund, Inc.:
Growth Stock Series....................................... 1,106,287 70,314 $24,347,849 $1,563,675
U.S. Government Securities Series......................... 188,049 192,822 1,951,506 1,984,288
Money Market Series....................................... 476,828 217,878 4,963,584 2,269,774
Asset Allocation Series................................... 361,546 37,257 5,042,184 514,392
Diversified Income Series................................. 183,908 53,081 2,099,560 601,619
Global Growth Series...................................... 1,156,826 261,960 14,421,587 3,202,164
Aggressive Growth Series.................................. 254,672 21,957 2,458,035 206,503
Growth & Income Series.................................... 124,784 1,316 1,256,805 13,437
High Yield Series......................................... 203,595 28,990 2,033,981 288,164
</TABLE>

<TABLE>
<S> <C> <C> <C> <C>
Year ended December 31, 1993:
Fortis Series Fund, Inc.:
Growth Stock Series....................................... 870,748 86,741 $18,848,153 $1,856,898
U.S. Government Securities Series......................... 356,363 84,648 4,101,566 971,887
Money Market Series....................................... 305,838 312,668 3,163,424 3,233,030
Asset Allocation Series................................... 383,082 41,515 5,311,744 572,086
Diversified Income Series................................. 156,725 41,226 1,934,554 509,368
Global Growth Series...................................... 573,601 62,506 6,887,276 722,115
</TABLE>

68
<PAGE>
2. INVESTMENTS (CONTINUED)
The number of shares and cost of shares issued from reinvestment of dividends
with the Funds were as follows:

<TABLE>
<CAPTION>
COST OF
SHARES SHARES
----------- ---------
<S> <C> <C>
Year ended December 31, 1995:
Fortis Series Fund, Inc.:
Growth Stock Series................................ 18,797 $ 510,059
U.S. Government Securities Series.................. 38 379
Money Market Series................................ 17,356 180,105
Asset Allocation Series............................ 59,192 924,340
Diversified Income Series.......................... 14 155
Global Growth Series............................... 12,645 194,924
Aggressive Growth Series........................... 2,746 32,999
Growth & Income Series............................. 6,670 83,612
High Yield Series.................................. 26,030 252,046
Global Asset Allocation Series..................... 17,511 199,139
Global Bond Series................................. 31,253 349,572
International Stock Series......................... 10,608 117,200
Norwest Select Fund:
Small Company Stock Fund........................... 3,433 38,350
</TABLE>
<TABLE>
<CAPTION>
COST OF
SHARES SHARES
----------- ---------
<S> <C> <C>
Year ended December 31, 1994:
Fortis Series Fund, Inc.:
Growth Stock Series................................ 23,983 $ 524,850
U.S. Government Securities Series.................. 64,492 607,364
Money Market Series................................ -- --
Asset Allocation Series............................ 46,335 626,408
Diversified Income Series.......................... 24,758 257,570
Global Growth Series............................... 11,872 144,687
Aggressive Growth Series........................... 915 8,878
Growth & Income Series............................. 1,288 12,968
High Yield Series.................................. 8,691 81,918

COST OF
SHARES SHARES
----------- ---------
<S> <C> <C>
Year ended December 31, 1993:
Fortis Series Fund, Inc.:
Growth Stock Series................................ 8,199 $ 186,295
U.S. Government Securities Series.................. 47,700 523,262
Money Market Series................................ 3,462 35,403
Asset Allocation Series............................ 25,803 363,460
Diversified Income Series.......................... 10,051 120,019
Global Growth Series............................... 2,026 25,615
</TABLE>

69
<PAGE>
2. INVESTMENTS (CONTINUED)
Fortis Benefits' investment in the subaccounts represented the following number
of shares of the Funds held and aggregate cost of amounts invested at December
31, 1995:

<TABLE>
<CAPTION>
NUMBER COST OF
OF SHARES SHARES
----------- ---------
<S> <C> <C>
Fortis Series Fund, Inc.:
Growth Stock Series............................... 57,884 $ 606,788
Asset Allocation Series........................... 49,266 520,632
Global Growth Series.............................. 40,753 411,018
Aggressive Growth Series.......................... 60,008 600,471
Growth & Income Series............................ 60,017 602,897
High Yield Series................................. 130,028 1,293,213
Global Asset Allocation Series.................... 57,884 5,018,346
Global Bond Series................................ 49,266 5,030,752
International Stock Series........................ 40,753 5,008,084
Norwest Select Fund:
Small Company Stock Fund.......................... 103,433 1,038,350
</TABLE>

3. ORGANIZATIONAL EXPENSES AND OTHER CHARGES

ORGANIZATIONAL EXPENSES

Fortis Benefits assumes all organizational expenses of the Account.

PREMIUM EXPENSE CHARGE

For Harmony Investment Life policies a 5% sales charge and a 2.2% state premium
tax is deducted from each premium payment received by Fortis Benefits. The
resulting net premiums are allocated to the subaccounts of the Account and/or to
the Fortis Benefits General Accounts. For Wall Street Series VUL 100, VUL 220
and VUL 500 policies, Fortis Benefits reserves the right to impose a charge up
to 2.5% of each premium payment to be reimbursed for premium taxes or similar
charges it expects to pay.

MONTHLY DEDUCTIONS FROM POLICY VALUE

Monthly deductions from the net assets attributed to each policy are as follows:

- Monthly cost of insurance.

- Monthly cost of any optional insurance benefits added by rider.

For Harmony Investment Life Policies:

- Monthly administrative charge of $5.00 per policy ($3.00 for policies
applied for prior to July 1, 1988).

- For policies issued subsequent to July 1, 1988, Fortis Benefits reserves
the right to impose an expense charge of not more than $15.00 per month
and an additional per-thousand-of-face expense charge of not more than
$.08 per month for insureds age 29 or less and $.25 per month for
insureds age 30 and over during the first twelve policy months. Fortis
Benefits currently does not impose any of the expense charges described
in the preceding sentence.

- For policies issued prior to July 1, 1988, Fortis Benefits currently
imposes an expense charge of $10.00 per month and an additional
per-thousand-of-face expense charge of $.06 per month for insureds age 29
or less and $.20 per month for insureds age 30 and over during the first
twelve policy months.

For Wall Street Series VUL 100, VUL 220 and VUL 500 Policies:

- Monthly administrative charge of $4.50 per policy. Fortis Benefits
reserves the right to change this administrative charge, but it will
never exceed $7.50 per month.

70
<PAGE>
3. ORGANIZATIONAL EXPENSES AND OTHER CHARGES (CONTINUED)
- For VUL 220 and VUL 500, a monthly sales, premium tax and policy advance
charge of $4.00 per policy.

MORTALITY AND EXPENSE RISK AND POLICY ADVANCE CHARGES

Fortis Benefits deducts a daily mortality and expense risk charge from the
Account at an annual rate of .75% of the net assets representing equity of
Harmony Investment Life policyholders and .90% of the net assets representing
equity of Wall Street Series VUL 100, VUL 220 and VUL 500 policyholders held in
each account. These charges will be deducted by Fortis Benefits in return for
its assumption of expenses arising from adverse mortality experience or excess
administrative expenses in connection with policies issued. Fortis Benefits also
deducts a sales, premium tax and policy advance charge from the Account at an
annual rate of .27% of net assets representing equity of Wall Street Series VUL
100, VUL 220 and VUL 500 policyholders. These charges are included in the
statements of changes in net assets as a component of net investment income
(loss).

SURRENDER CHARGES

For Wall Street Series VUL 100, VUL 220 and VUL 500 policies surrendered within
the first eleven years of issuance, Fortis Benefits assesses a surrender charge.
The charge is the sum of any sales, premium tax, and policy advance charges not
previously deducted on a monthly or daily basis. For VUL 220 and VUL 500, there
is an additional surrender charge of $5.00 per thousand of the policy's initial
face amount plus a maximum percentage of the annualized net minimum premiums.
The percentage is 12% for VUL 220 and 22% for VUL 500. The surrender charge for
all Wall Street policies is limited to certain maximums based on the insured
person's age at the time of issuance and decreases at a constant rate on the
fifth and subsequent anniversary until it reaches zero on the eleventh policy
anniversary. A similar schedule of surrender charges is imposed on face
increases.

For Harmony Investment Life policies surrendered within the first nine years of
issuance of the policy or face increase, a surrender charge is assessed. The
charge is a maximum of 25% of the annualized net premium and decreases at a
constant rate on the fifth and subsequent anniversary until it reaches zero on
the ninth policy anniversary.

Surrender charges collected by Fortis Benefits were $2,057,483, $1,475,321 and
$730,008 in 1995, 1994 and 1993, respectively.

4. FEDERAL INCOME TAXES
The operations of the Account form a part of, and are taxed with, the operations
of Fortis Benefits, which is taxed as a life insurance company under the
Internal Revenue Code. As a result, the net asset values of the subaccounts are
not affected by federal income taxes on income distributions received by the
subaccounts.

71
<PAGE>
STATEMENT OF NET ASSETS
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ATTRIBUTABLE
TO FORTIS ATTRIBUTABLE
BENEFITS TO VARIABLE ACCUMULATION
INSURANCE LIFE INSURANCE UNITS
NET ASSETS COMPANY POLICIES OUTSTANDING
----------- -------------- -------------- ------------
<S> <C> <C> <C> <C>
Investments in Fortis Series Fund, Inc., at market value (Note
2):
Growth Stock Series (4,234,610 shares; cost--$90,810,185)...... $125,684,704 $ -- $125,684,704 $5,943,928
U.S. Government Securities Series (795,616 shares;
cost--$8,580,928)............................................. 8,640,162 -- 8,640,162 578,875
Money Market Series (483,504 shares; cost--$5,063,532)......... 5,300,416 -- 5,300,416 406,405
Asset Allocation Series (1,549,233 shares;
cost--$21,169,480)............................................ 25,093,553 -- 25,093,553 1,395,168
Diversified Income Series (402,310 shares; cost--$4.657,229)... 4,822,816 -- 4,822,816 312,808
Global Growth Series (2,513,105 shares; cost -- $32,910,165)... 42,891,413 -- 42,891,413 2,528,447
Aggressive Growth Series (877,281 shares; cost--$10,015,398)... 11,942,861 -- 11,942,861 888,049
Growth & Income Series (404,231 shares; cost--$4,740,523)...... 5,484,643 -- 5,484,643 398,899
High Yield Series (177,214 shares; cost--$1,771,019)........... 1,782,636 -- 1,782,636 156,860
Global Asset Allocation Series (171,747 shares;
cost--$1,915,609)............................................. 2,023,302 -- 2,023,302 168,951
Global Bond Series (113,995 shares; cost--$1,280,808).......... 1,253,228 -- 1,253,228 109,292
International Stock Series (350,719 shares;
cost--$3,816,758)............................................. 4,115,441 -- 4,115,441 349,734
Value Series (29,000 shares; cost--$290,000)................... 290,000 290,000 -- --
S & P 500 Series (145,000 shares; cost--$1,450,000)............ 1,450,000 1,450,000 -- --
Blue Chip Series (145,000 shares; cost--$1,450,000)............ 1,450,000 1,450,000 -- --
----------- -------------- -------------- ------------
TOTAL NET ASSETS................................................. $242,225,176 $3,190,000 $239,035,176 $13,237,416
----------- -------------- -------------- ------------
----------- -------------- -------------- ------------

NET ASSET VALUE FOR
VARIABLE LIFE
INSURANCE POLICIES
PER ACCUMULATION UNIT
---------------------
<S> <C>
Investments in Fortis Series Fund, Inc., at market value (Note
2):
Growth Stock Series (4,234,610 shares; cost--$90,810,185)...... $ 21.15
U.S. Government Securities Series (795,616 shares;
cost--$8,580,928)............................................. 14.93
Money Market Series (483,504 shares; cost--$5,063,532)......... 13.04
Asset Allocation Series (1,549,233 shares;
cost--$21,169,480)............................................ 17.99
Diversified Income Series (402,310 shares; cost--$4.657,229)... 15.42
Global Growth Series (2,513,105 shares; cost -- $32,910,165)... 16.96
Aggressive Growth Series (877,281 shares; cost--$10,015,398)... 13.45
Growth & Income Series (404,231 shares; cost--$4,740,523)...... 13.75
High Yield Series (177,214 shares; cost--$1,771,019)........... 11.36
Global Asset Allocation Series (171,747 shares;
cost--$1,915,609)............................................. 11.98
Global Bond Series (113,995 shares; cost--$1,280,808).......... 11.47
International Stock Series (350,719 shares;
cost--$3,816,758)............................................. 11.77
Value Series (29,000 shares; cost--$290,000)................... --
S & P 500 Series (145,000 shares; cost--$1,450,000)............ --
Blue Chip Series (145,000 shares; cost--$1,450,000)............ --
------
TOTAL NET ASSETS................................................. $
------
------
</TABLE>

See accompanying notes.

72
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
PERIOD ENDED MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
U.S.
GOVERNMENT ASSET DIVERSIFIED GLOBAL
GROWTH STOCK SECURITIES MONEY MARKET ALLOCATION INCOME GROWTH
OPERATIONS SERIES SERIES SERIES SERIES SERIES SERIES
- ------------------------------ ------------- ----------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Dividend Income............... $ -- $ -- $ -- $ -- $ -- $ --
Mortality and expense and
policy advance charges (Note
3)........................... (374,700) (25,904) (14,885) (75,411) (15,611) (129,569)
Net realized gain (loss) on
investments.................. 1,276,254 12,206 77,406 303,074 29,687 332,503
Net change in unrealized
appreciation or
(depreciation) of
investments.................. 5,163,466 (249,875) (17,531) 159,501 (113,125) 2,373,945
------------- ----------- ------------ ------------ ----------- ------------
Net increase (decrease) in net
assets resulting from
operations................... $ 6,065,020 $ (263,573) $ 44,990 $ 387,164 $ (99,049) $ 2,576,879
------------- ----------- ------------ ------------ ----------- ------------
------------- ----------- ------------ ------------ ----------- ------------
CAPITAL TRANSACTIONS
Purchase of Variable Account
units........................ $ 7,253,275 $ 692,717 $ 2,570,612 $ 1,496,537 $ 406,377 $ 3,994,503
Redemption of Variable Account
units........................ (633,952) (452,127) (2,183,983) (199,860) (486,747) (268,249)
Mortality and expense charge
redeemed..................... 374,700 25,904 14,885 75,411 15,611 129,569
Funding of subaccount by
Fortis Benefits Insurance
Company...................... -- -- -- -- -- --
Redemption of Fortis Benefits
Insurance Company investment
in subaccount................ (1,710,453) -- -- (795,833) -- (691,667)
Dividend income distribution
to Fortis Benefits Insurance
Company...................... -- -- -- -- -- --
------------- ----------- ------------ ------------ ----------- ------------
Increase from Capital
Transactions................. 5,283,570 266,494 401,514 576,255 (64,759) 3,164,156
------------- ----------- ------------ ------------ ----------- ------------
Net Assets at beginning of
year......................... 114,336,114 8,637,241 4,853,912 24,130,134 4,986,624 37,150,378
------------- ----------- ------------ ------------ ----------- ------------
Net Assets at end of year..... $125,684,704 $8,640,162 $ 5,300,416 $ 25,093,553 $4,822,816 $ 42,891,413
------------- ----------- ------------ ------------ ----------- ------------
------------- ----------- ------------ ------------ ----------- ------------

AGGRESSIVE
GROWTH
OPERATIONS SERIES
- ------------------------------ ------------
<S> <C>
Dividend Income............... $ --
Mortality and expense and
policy advance charges (Note
3)........................... (33,031)
Net realized gain (loss) on
investments.................. 266,646
Net change in unrealized
appreciation or
(depreciation) of
investments.................. 598,179
------------
Net increase (decrease) in net
assets resulting from
operations................... $ 831,794
------------
------------
CAPITAL TRANSACTIONS
Purchase of Variable Account
units........................ $ 3,239,639
Redemption of Variable Account
units........................ (536,987)
Mortality and expense charge
redeemed..................... 33,031
Funding of subaccount by
Fortis Benefits Insurance
Company...................... --
Redemption of Fortis Benefits
Insurance Company investment
in subaccount................ (813,949)
Dividend income distribution
to Fortis Benefits Insurance
Company...................... --
------------
Increase from Capital
Transactions................. 1,921,734
------------
Net Assets at beginning of
year......................... 9,189,333
------------
Net Assets at end of year..... $ 11,942,861
------------
------------
</TABLE>

See accompanying notes.

73
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
PERIOD ENDED MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
GROWTH & GLOBAL ASSET
INCOME HIGH YIELD ALLOCATION GLOBAL BOND INTERNATIONAL VALUE
OPERATIONS SERIES SERIES SERIES SERIES STOCK SERIES SERIES
- ----------------------------------------------- ------------ ---------- ------------ ----------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Dividend Income................................ $ -- $ -- $ -- $ -- $ -- $ --
Mortality and expense and policy advance
charges (Note 3).............................. (15,150) (5,373) (5,542) (3,461) (10,736) --
Net realized gain (loss) on investments........ 238,171 12,587 366,828 (231) 350,622 --
Net change in unrealized appreciation or
(depreciation) of investments................. 63,096 78,685 (134,980) (176,501) 20,296 --
------------ ---------- ------------ ----------- ------------ ---------
Net increase (decrease) in net assets resulting
from operations............................... $ 286,117 $ 85,899 $ 226,306 $(180,193) $ 360,182 $ --
------------ ---------- ------------ ----------- ------------ ---------
------------ ---------- ------------ ----------- ------------ ---------
CAPITAL TRANSACTIONS
Purchase of Variable Account units............. $1,281,982 $ 303,232 $ 517,154 $ 432,375 $1,302,935 $ --
Redemption of Variable Account units........... (257,397) (88,919) (4,570) (14,354) (6,501) --
Mortality and expense charge redeemed.......... 15,150 5,373 5,542 3,461 10,736 --
Funding of subaccount by Fortis Benefits
Insurance Company............................. -- -- -- -- -- 290,000
Redemption of Fortis Benefits Insurance Company
investment in subaccount...................... (817,093) (1,306,472) (5,888,424) (5,496,965) (5,860,743) --
Dividend income distribution to Fortis Benefits
Insurance Company............................. -- -- -- -- -- --
------------ ---------- ------------ ----------- ------------ ---------
Increase from Capital Transactions............. 222,642 (1,086,786) (5,370,298) (5,075,483) (4,553,573) 290,000
------------ ---------- ------------ ----------- ------------ ---------
Net Assets at beginning of year................ 4,975,884 2,783,523 7,167,294 6,508,904 8,308,832 --
------------ ---------- ------------ ----------- ------------ ---------
Net Assets at end of year...................... $5,484,643 $1,782,636 $2,023,302 $1,253,228 $4,115,441 $ 290,000
------------ ---------- ------------ ----------- ------------ ---------
------------ ---------- ------------ ----------- ------------ ---------

S & P 500
OPERATIONS SERIES
- ----------------------------------------------- -----------
<S> <C>
Dividend Income................................ $ --
Mortality and expense and policy advance
charges (Note 3).............................. --
Net realized gain (loss) on investments........ --
Net change in unrealized appreciation or
(depreciation) of investments................. --
-----------
Net increase (decrease) in net assets resulting
from operations............................... $ --
-----------
-----------
CAPITAL TRANSACTIONS
Purchase of Variable Account units............. $ --
Redemption of Variable Account units........... --
Mortality and expense charge redeemed.......... --
Funding of subaccount by Fortis Benefits
Insurance Company............................. 1,450,000
Redemption of Fortis Benefits Insurance Company
investment in subaccount...................... --
Dividend income distribution to Fortis Benefits
Insurance Company............................. --
-----------
Increase from Capital Transactions............. 1,450,000
-----------
Net Assets at beginning of year................ --
-----------
Net Assets at end of year...................... $1,450,000
-----------
-----------
</TABLE>

See accompanying notes

74
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
PERIOD ENDED MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
BLUE CHIP SMALL
STOCK COMPANY
OPERATIONS SERIES STOCK
- ----------------------------------------------------------------------------------------------------- ----------- ----------
<S> <C> <C>
Dividend Income...................................................................................... $ -- $ --
Mortality and expense and policy advance charges (Note 3)............................................ -- --
Net realized gain (loss) on investments.............................................................. -- --
Net change in unrealized appreciation or (depreciation) of investments............................... -- 88,953
----------- ----------
Net increase (decrease) in net assets resulting from operations...................................... $ -- $ 88,953
----------- ----------
----------- ----------
CAPITAL TRANSACTIONS
Purchase of Variable Account units................................................................... $ -- $ --
Redemption of Variable Account units................................................................. -- --
Mortality and expense charge redeemed................................................................ -- --
Funding of subaccount by Fortis Benefits Insurance Company........................................... 1,450,000 --
Redemption of Fortis Benefits Insurance Company investment in subaccount............................. -- (1,248,440)
Dividend income distribution to Fortis Benefits Insurance Company.................................... -- --
----------- ----------
Increase from Capital Transactions................................................................... 1,450,000 (1,248,440)
----------- ----------
Net Assets at beginning of year...................................................................... -- 1,159,487
----------- ----------
Net Assets at end of year............................................................................ $1,450,000 $ --
----------- ----------
----------- ----------

<CAPTION>
COMBINED
VARIABLE
OPERATIONS ACCOUNT
- ----------------------------------------------------------------------------------------------------- -----------
<S> <C>
Dividend Income...................................................................................... $ --
Mortality and expense and policy advance charges (Note 3)............................................ (709,373)
Net realized gain (loss) on investments.............................................................. 3,265,753
Net change in unrealized appreciation or (depreciation) of investments............................... 7,854,109
-----------
Net increase (decrease) in net assets resulting from operations...................................... $10,410,489
-----------
-----------
CAPITAL TRANSACTIONS
Purchase of Variable Account units................................................................... $23,491,338
Redemption of Variable Account units................................................................. (5,133,646)
Mortality and expense charge redeemed................................................................ 709,373
Funding of subaccount by Fortis Benefits Insurance Company........................................... 3,190,000
Redemption of Fortis Benefits Insurance Company investment in subaccount............................. (24,630,039)
Dividend income distribution to Fortis Benefits Insurance Company.................................... --
-----------
Increase from Capital Transactions................................................................... (2,372,974)
-----------
Net Assets at beginning of year...................................................................... 234,187,660
-----------
Net Assets at end of year............................................................................ $242,225,176
-----------
-----------
</TABLE>

See accompanying notes

75
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
U.S.
GOVERNMENT MONEY ASSET DIVERSIFIED GLOBAL
GROWTH STOCK SECURITIES MARKET ALLOCATION INCOME GROWTH
OPERATIONS SERIES SERIES SERIES SERIES SERIES SERIES
- ----------------------------------- ------------- ----------- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Dividend Income.................... $ 510,059 $ 379 $ 180,105 $ 924,340 $ 155 $ 194,924
Mortality and expense and policy
advance charges (Note 3).......... (1,093,454) (95,405) (52,173) (231,545) (49,814) (352,145)
Net realized gain (loss) on
investments....................... 542,606 (54,024) 176,710 184,857 10,234 155,887
Net change in unrealized
appreciation or (depreciation) of
investments....................... 20,881,118 1,463,356 (98,436) 2,815,928 639,984 7,220,951
------------- ----------- ----------- ------------ ----------- ------------
Net increase (decrease) in net
assets resulting from
operations........................ $ 20,840,329 $1,314,306 $ 206,206 $ 3,693,580 $ 600,559 $ 7,219,617
------------- ----------- ----------- ------------ ----------- ------------
------------- ----------- ----------- ------------ ----------- ------------
CAPITAL TRANSACTIONS
Purchase of Variable Account
units............................. $ 23,231,047 $2,331,839 $ 5,764,979 $ 5,135,857 $2,234,605 $ 9,569,763
Redemption of Variable Account
units............................. (2,402,006) (2,234,298) (5,395,064) (1,383,622) (1,087,689) (1,321,205)
Mortality and expense charge
redeemed.......................... 1,093,454 95,405 52,173 231,545 49,814 352,145
Funding of subaccount by Fortis
Benefits Insurance Company........ -- -- -- -- -- --
Dividend income distribution to
Fortis Benefits Insurance
Company........................... (7,237) -- -- (31,040) -- (3,423)
------------- ----------- ----------- ------------ ----------- ------------
Increase from Capital
Transactions...................... 21,915,258 192,946 422,088 3,952,740 1,196,730 8,597,280
------------- ----------- ----------- ------------ ----------- ------------
Net Assets at beginning of year.... 71,580,527 7,129,989 4,225,618 16,483,814 3,189,335 21,333,481
------------- ----------- ----------- ------------ ----------- ------------
Net Assets at end of year.......... $114,336,114 $8,637,241 $ 4,853,912 $ 24,130,134 $4,986,624 $ 37,150,378
------------- ----------- ----------- ------------ ----------- ------------
------------- ----------- ----------- ------------ ----------- ------------

AGGRESSIVE
GROWTH
OPERATIONS SERIES
- ----------------------------------- -----------
<S> <C>
Dividend Income.................... $ 32,999
Mortality and expense and policy
advance charges (Note 3).......... (55,105)
Net realized gain (loss) on
investments....................... 87,207
Net change in unrealized
appreciation or (depreciation) of
investments....................... 1,158,725
-----------
Net increase (decrease) in net
assets resulting from
operations........................ $1,223,826
-----------
-----------
CAPITAL TRANSACTIONS
Purchase of Variable Account
units............................. $6,246,152
Redemption of Variable Account
units............................. (621,660)
Mortality and expense charge
redeemed.......................... 55,105
Funding of subaccount by Fortis
Benefits Insurance Company........ --
Dividend income distribution to
Fortis Benefits Insurance
Company........................... (2,760)
-----------
Increase from Capital
Transactions...................... 5,676,837
-----------
Net Assets at beginning of year.... 2,288,670
-----------
Net Assets at end of year.......... $9,189,333
-----------
-----------
</TABLE>

See accompanying notes

76
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
GROWTH & GLOBAL ASSET SMALL
INCOME HIGH YIELD ALLOCATION GLOBAL BOND INTERNATIONAL COMPANY
OPERATIONS SERIES SERIES SERIES SERIES STOCK SERIES STOCK
- ------------------------------------------------ --------- ----------- ------------ ----------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Dividend Income................................. $ 83,612 $ 252,046 $ 199,139 $ 349,572 $ 117,200 $ 38,350
Mortality and expense and policy advance charges
(Note 3)....................................... (24,640) (11,638) (7,642) (5,019) (13,805) --
Net realized gain (loss) on investments......... 40,572 7,233 21,531 37,910 13,134 --
Net change in unrealized appreciation or
(depreciation) of investments.................. 619,472 11,854 742,740 608,208 775,358 121,137
--------- ----------- ------------ ----------- ------------ ---------
Net increase (decrease) in net assets resulting
from operations................................ $ 719,016 $ 259,495 $ 955,768 $ 990,671 $ 891,887 $ 159,487
--------- ----------- ------------ ----------- ------------ ---------
--------- ----------- ------------ ----------- ------------ ---------
CAPITAL TRANSACTIONS
Purchase of Variable Account units.............. $3,356,014 $1,244,092 $1,423,812 $1,061,190 $2,584,243 $ --
Redemption of Variable Account units............ (366,822) (346,228) (59,928) (242,976) (101,103) --
Mortality and expense charge redeemed........... 24,640 11,638 7,642 5,019 13,805 --
Funding of subaccount by Fortis Benefits
Insurance Company.............................. -- -- 5,000,000 5,000,000 5,000,000 1,000,000
Dividend income distribution to Fortis Benefits
Insurance Company.............................. (13,202) (120,917) (160,000) (305,000) (80,000) --
--------- ----------- ------------ ----------- ------------ ---------
Increase from Capital Transactions.............. 3,000,630 788,585 6,211,526 5,518,233 7,416,945 1,000,000
--------- ----------- ------------ ----------- ------------ ---------
Net Assets at beginning of year................. 1,256,238 1,735,443 -- -- -- --
--------- ----------- ------------ ----------- ------------ ---------
Net Assets at end of year....................... $4,975,884 $2,783,523 $7,167,294 $6,508,904 $8,308,832 $1,159,487
--------- ----------- ------------ ----------- ------------ ---------
--------- ----------- ------------ ----------- ------------ ---------

<CAPTION>
COMBINED
VARIABLE
OPERATIONS ACCOUNT
- ------------------------------------------------ -----------
<S> <C>
Dividend Income................................. $ 2,882,880
Mortality and expense and policy advance charges
(Note 3)....................................... (1,992,385)
Net realized gain (loss) on investments......... 1,223,857
Net change in unrealized appreciation or
(depreciation) of investments.................. 36,960,395
-----------
Net increase (decrease) in net assets resulting
from operations................................ $39,074,747
-----------
-----------
CAPITAL TRANSACTIONS
Purchase of Variable Account units.............. $64,183,593
Redemption of Variable Account units............ (15,562,601)
Mortality and expense charge redeemed........... 1,992,385
Funding of subaccount by Fortis Benefits
Insurance Company.............................. 16,000,000
Dividend income distribution to Fortis Benefits
Insurance Company.............................. (723,579)
-----------
Increase from Capital Transactions.............. 65,889,798
-----------
Net Assets at beginning of year................. 129,223,115
-----------
Net Assets at end of year....................... $234,187,660
-----------
-----------
</TABLE>

See accompanying notes

77
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
U.S. GOVERNMENT MONEY ASSET DIVERSIFIED GLOBAL
GROWTH STOCK SECURITIES MARKET ALLOCATION INCOME GROWTH
OPERATIONS SERIES SERIES SERIES SERIES SERIES SERIES
- -------------------------------------------- ------------ --------------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Dividend Income............................. $ 524,850 $ 607,364 $ -- $ 626,408 $ 257,570 $ 144,687
Mortality and expense and policy advance
charges (Note 3)........................... (630,146) (79,454) (21,446) (146,296) (29,757) (157,000)
Net realized gain (loss) on investments..... 193,238 (126,731) 13,988 42,277 (32,443) 490,813
Net change in unrealized appreciation or
(depreciation) of investments.............. (1,837,695) (967,547) 100,566 (678,881) (335,368) (1,089,277)
------------ --------------- ---------- ---------- ----------- ----------
Net increase (decrease) in net assets
resulting from operations.................. $(1,749,753) $ (566,368) $ 93,108 $ (156,492) $(139,998) $ (610,777)
------------ --------------- ---------- ---------- ----------- ----------
------------ --------------- ---------- ---------- ----------- ----------
CAPITAL TRANSACTIONS
Purchase of Variable Account units.......... $24,347,849 $ 1,951,506 $4,963,584 $5,042,184 $2,099,560 $14,421,587
Redemption of Variable Account units........ (1,554,311) (1,984,288) (2,269,774) (488,270) (601,619) (698,757)
Mortality and expense charge redeemed....... 630,146 79,454 21,446 146,296 29,757 157,000
Funding of subaccount by Fortis Benefits
Insurance Company.......................... -- -- -- -- -- --
Redemption of Fortis Benefits Insurance
Company investment in subaccount........... -- -- -- -- -- (2,500,000)
Dividend income distribution to Fortis
Benefits Insurance Company................. (9,364) -- -- (26,122) -- (3,407)
------------ --------------- ---------- ---------- ----------- ----------
Increase from Capital Transactions.......... 23,414,320 46,672 2,715,256 4,674,088 1,527,698 11,376,423
------------ --------------- ---------- ---------- ----------- ----------
Net Assets at beginning of year............. 49,915,960 7,649,685 1,417,254 11,966,218 1,801,635 10,567,835
------------ --------------- ---------- ---------- ----------- ----------
Net Assets at end of year................... $71,580,527 $ 7,129,989 $4,225,618 $16,483,814 $3,189,335 $21,333,481
------------ --------------- ---------- ---------- ----------- ----------
------------ --------------- ---------- ---------- ----------- ----------

<CAPTION>
AGGRESSIVE
GROWTH
OPERATIONS SERIES
- -------------------------------------------- -----------
<S> <C>
Dividend Income............................. $ 8,878
Mortality and expense and policy advance
charges (Note 3)........................... (4,484)
Net realized gain (loss) on investments..... (2,388)
Net change in unrealized appreciation or
(depreciation) of investments.............. 30,648
-----------
Net increase (decrease) in net assets
resulting from operations.................. $ 32,654
-----------
-----------
CAPITAL TRANSACTIONS
Purchase of Variable Account units.......... $1,858,035
Redemption of Variable Account units........ (204,115)
Mortality and expense charge redeemed....... 4,484
Funding of subaccount by Fortis Benefits
Insurance Company.......................... 600,000
Redemption of Fortis Benefits Insurance
Company investment in subaccount........... --
Dividend income distribution to Fortis
Benefits Insurance Company................. (2,388)
-----------
Increase from Capital Transactions.......... 2,256,016
-----------
Net Assets at beginning of year............. 0
-----------
Net Assets at end of year................... $2,288,670
-----------
-----------
</TABLE>

See accompanying notes

78
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
YEAR ENDED DECEMBER 31, 1994 (CONTINUED)
<TABLE>
<CAPTION>
GROWTH &
INCOME HIGH YIELD
OPERATIONS SERIES SERIES
- ------------------------------------------------------------------------------------------------------ --------- -----------
<S> <C> <C>
Dividend Income....................................................................................... $ 12,968 $ 81,918
Mortality and expense and policy advance charges (Note 3)............................................. (1,404) (1,463)
Net realized gain (loss) on investments............................................................... 124 (3,503)
Net change in unrealized appreciation or (depreciation) of investments................................ (222) (88,789)
--------- -----------
Net increase (decrease) in net assets resulting from operations....................................... $ 11,466 $ (11,837)
--------- -----------
--------- -----------
CAPITAL TRANSACTIONS
Purchase of Variable Account units.................................................................... $ 656,805 $ 733,981
Redemption of Variable Account units.................................................................. (6,999) (229,014)
Mortality and expense charge redeemed................................................................. 1,404 1,463
Funding of subaccount by Fortis Benefits Insurance Company............................................ 600,000 1,300,000
Redemption of Fortis Benefits Insurance Company investment in subaccount.............................. -- --
Dividend income distribution to Fortis Benefits Insurance Company..................................... (6,438) (59,150)
--------- -----------
Increase from Capital Transactions.................................................................... 1,244,772 1,747,280
--------- -----------
Net Assets at beginning of year....................................................................... 0 0
--------- -----------
Net Assets at end of year............................................................................. $1,256,238 $1,735,443
--------- -----------
--------- -----------

<CAPTION>
COMBINED
VARIABLE
OPERATIONS ACCOUNT
- ------------------------------------------------------------------------------------------------------ -----------
<S> <C>
Dividend Income....................................................................................... $ 2,264,643
Mortality and expense and policy advance charges (Note 3)............................................. (1,071,450)
Net realized gain (loss) on investments............................................................... 575,375
Net change in unrealized appreciation or (depreciation) of investments................................ (4,866,565)
-----------
Net increase (decrease) in net assets resulting from operations....................................... $(3,097,997)
-----------
-----------
CAPITAL TRANSACTIONS
Purchase of Variable Account units.................................................................... $56,075,091
Redemption of Variable Account units.................................................................. (8,037,147)
Mortality and expense charge redeemed................................................................. 1,071,450
Funding of subaccount by Fortis Benefits Insurance Company............................................ 2,500,000
Redemption of Fortis Benefits Insurance Company investment in subaccount.............................. (2,500,000)
Dividend income distribution to Fortis Benefits Insurance Company..................................... (106,869)
-----------
Increase from Capital Transactions.................................................................... 49,002,525
-----------
Net Assets at beginning of year....................................................................... 83,318,587
-----------
Net Assets at end of year............................................................................. $129,223,115
-----------
-----------
</TABLE>

See accompanying notes

79
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
MARCH 31, 1996
(UNAUDITED)

1. GENERAL

FORTIS BENEFITS INSURANCE COMPANY

Variable Account C (the Account) was established as a segregated asset account
of Fortis Benefits Insurance Company (Fortis Benefits) on March 13, 1986 under
Minnesota law. The Account is registered under the Investment Company Act of
1940 as a unit investment trust.

N.V. AMEV is a diversified financial services company headquartered in Utrecht,
The Netherlands, where its insurance operations began in 1847. Group AG is a
diversified financial services company headquartered in Brussels, Belgium, where
its insurance operations began in 1824. N.V. AMEV and Group AG have merged their
operating companies under the trade name of Fortis. The Fortis group of
companies is active in insurance, banking, and financial services, and real
estate development in the Netherlands, Belgium, The United States, Western
Europe, and the Pacific Rim. The Fortis group of companies had over $155 billion
in assets at the end of 1995.

Fortis Advisers, Inc. (a wholly-owned subsidiary of Fortis, Inc.) provides
investment management services to the portfolios in exchange for investment
advisory and management fees. Investment advisory and management fees are based
on each portfolio's daily net assets and decrease in reduced percentages as
average daily net assets increase. The fees represent an investment expense to
Fortis Series Fund, Inc. which reduces the portfolios' net assets. These fees
charged by Fortis Advisers, Inc. are not available on an individual variable
account basis. Fees for all variable accounts to which Fortis Advisers, Inc.
provided investment management services amounted to $2,615,567 for the three
months ended March 31, 1996, and $7,819,224 and $5,839,044 for the 12 months
ended December 31, 1995 and 1994, respectively.

There are fifteen subaccounts within the Account, each of which invests only in
a corresponding portfolio of Fortis Series Fund, Inc. (the Fund). The investment
objectives and policies of each of the Account's subaccounts are as follows.

- GROWTH STOCK PORTFOLIO SUBACCOUNT--seeks growth of capital through
short-term and long-term appreciation.

- U.S. GOVERNMENT SECURITIES PORTFOLIO SUBACCOUNT--seeks to earn a high
level of current income consistent with prudent investment risk.

80
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
MARCH 31, 1996
(UNAUDITED)

1. GENERAL (CONTINUED)
- MONEY MARKET PORTFOLIO SUBACCOUNT--seeks high level of capital stability
and liquidity and, to the extent consistent with these objectives, a high
level of current income.

- ASSET ALLOCATION PORTFOLIO SUBACCOUNT--seeks favorable overall rates of
return on capital, primarily through increased ownership of equity
securities during periods when stock market conditions appear favorable,
and short-term and long-term debt instruments during periods when stock
market conditions are less favorable.

- DIVERSIFIED INCOME PORTFOLIO SUBACCOUNT--seeks high level of current
income by investing primarily in a diversified portfolio of government
securities and investment grade corporate bonds.

- GLOBAL GROWTH PORTFOLIO SUBACCOUNT--seeks growth of capital through
long-term capital appreciation, through ownership of equity securities,
allocated among diverse international markets.

- AGGRESSIVE GROWTH PORTFOLIO SUBACCOUNT--seeks long-term capital
appreciation in equity securities.

- GROWTH AND INCOME PORTFOLIO SUBACCOUNT--seeks growth of capital and
current income, through ownership of equity securities that provide an
income component and the potential for growth.

- HIGH YIELD PORTFOLIO SUBACCOUNT--seeks maximum total return through
current income and capital appreciation, through ownership of a
diversified portfolio of high-yielding fixed-income securities.

- GLOBAL ASSET ALLOCATION SUBACCOUNT--seeks favorable overall rates of
return on capital, primarily through increased ownership of foreign &
domestic equity securities during periods when stock market conditions
appear favorable, and short-term and long-term foreign & domestic debt
instruments during periods when stock market conditions are less
favorable.

- GLOBAL BOND SUBACCOUNT--seeks total return from current income and
capital appreciation, by investing in a global portfolio of high quality
fixed income securities.

- INTERNATIONAL STOCK SUBACCOUNT--seeks capital appreciation by investing
primarily in equity securities of non-United States companies.

- VALUE SUBACCOUNT--seeks growth of capital through short and long-term
capital appreciation. Investing in equity securities based on the "Value"
philosophy.

- S&P 500 INDEX SUBACCOUNT--seeks growth of capital by replicating the
total return of the Standard & Poor's 500 Composite Stock Price Index.

- BLUE CHIP STOCK SUBACCOUNT--seeks capital appreciation by investing
primarily in large and medium-sized blue chip companies.

Certain 1995 amounts have been reclassified to conform to the 1996 presentation

81
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
MARCH 31, 1996
(UNAUDITED)

2. INVESTMENTS
Investments in shares of Fortis Series Fund, Inc. are stated at market value,
which is based on the percentage owned by the Account of the net asset value of
the respective portfolios of the Funds. The Funds' net asset value is based on
market quotations of the securities held in the portfolios. The cost of
investments sold and redeemed is determined using the average cost method.
Unrealized appreciation or depreciation of investments represents the Account's
share of the mutual fund's undistributed net investment income, undistributed
realized gains and losses and unrealized appreciation or depreciation in the
Funds' investments.

Purchases and sales of shares of the Funds are recorded on the trade date. The
number of shares and aggregate cost of purchases and proceeds from sales of
shares were as follows:

Period ended March 31, 1996:

<TABLE>
<CAPTION>
SHARES
------------------- COST OF PROCEEDS
PURCHASED SOLD PURCHASES FROM SALES
---------- ------- ----------- ----------
<S> <C> <C> <C> <C>
Fortis Series Fund, Inc.:
Growth Stock Series............................. 253,125 79,415 $ 7,253,275 $2,344,405
U.S. Government Securities Series............... 62,834 41,018 692,717 452,127
Money Market Series............................. 235,755 200,587 2,570,612 2,183,983
Asset Allocation Series......................... 93,198 61,641 1,496,537 995,693
Diversified Income Series....................... 33,450 39,990 406,377 486,747
Global Growth Series............................ 244,396 57,406 3,994,503 959,916
Aggressive Growth Series........................ 255,740 103,456 3,239,639 1,350,936
Growth & Income Series.......................... 96,921 80,417 1,281,982 1,074,489
High Yield Series............................... 30,312 138,941 303,232 1,395,390
Global Asset Allocation Series.................. 44,774 500,429 517,154 5,892,994
Global Bond Series.............................. 38,605 501,299 432,375 5,511,319
International Stock Series...................... 109,830 496,238 1,251,499 5,867,244
Value Series.................................... 29,000 -- 290,000 --
S&P 500 Series.................................. 145,000 -- 1,450,000 --
Blue Chip Stock Series.......................... 145,000 -- 1,450,000 --
Norwest Select Fund:
Small Company Stock Fund........................ -- 103,433 -- 1,248,440
</TABLE>

82
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
MARCH 31, 1996
(UNAUDITED)

2. INVESTMENTS (CONTINUED)
<TABLE>
<S> <C> <C> <C> <C>
Year ended December 31, 1995:
<CAPTION>

SHARES
------------------- COST OF PROCEEDS
PURCHASED SOLD PURCHASES FROM SALES
---------- ------- ----------- ----------
<S> <C> <C> <C> <C>
Fortis Series Fund, Inc.:
Growth Stock Series............................. 903,891 90,700 $23,231,047 $2,409,243
U.S. Government Securities Series............... 228,211 213,159 2,331,839 2,234,298
Money Market Series............................. 540,043 506,551 5,764,979 5,395,064
Asset Allocation Series......................... 333,531 90,515 5,135,857 1,414,662
Diversified Income Series....................... 197,390 95,167 2,234,605 1,087,689
Global Growth Series............................ 673,847 93,947 9,569,763 1,324,628
Aggressive Growth Series........................ 537,853 49,233 6,246,152 624,420
Growth & Income Series.......................... 287,048 30,747 3,356,014 380,024
High Yield Series............................... 122,624 46,105 1,244,092 467,145
Global Asset Allocation Series.................. 629,303 19,414 6,423,812 219,928
Global Bond Series.............................. 593,769 48,334 6,061,190 547,976
International Stock Series...................... 742,827 16,307 7,584,243 181,103
Norwest Select Fund:
Small Company Stock Fund........................ 100,000 -- 1,000,000 --
Year ended December 31, 1994:
<CAPTION>

SHARES
------------------- COST OF PROCEEDS
PURCHASED SOLD PURCHASES FROM SALES
---------- ------- ----------- ----------
<S> <C> <C> <C> <C>
Fortis Series Fund, Inc.:
Growth Stock Series............................. 1,106,287 70,314 $24,347,849 $1,563,675
U.S. Government Securities Series............... 188,049 192,822 1,951,506 1,984,288
Money Market Series............................. 476,828 217,878 4,963,584 2,269,774
Asset Allocation Series......................... 361,546 37,257 5,042,184 514,392
Diversified Income Series....................... 183,908 53,081 2,099,560 601,619
Global Growth Series............................ 1,156,826 261,960 14,421,587 3,202,164
Aggressive Growth Series........................ 254,672 21,957 2,458,035 206,503
Growth & Income Series.......................... 124,784 1,316 1,256,805 13,437
High Yield Series............................... 203,595 28,990 2,033,981 288,164
</TABLE>

83
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
MARCH 31, 1996
(UNAUDITED)

2. INVESTMENTS (CONTINUED)
The number of shares and cost of shares issued from reinvestment of dividends
with the Funds were as follows:
<TABLE>
<CAPTION>
COST OF
SHARES SHARES
--------- ---------

<S> <C> <C>
Year ended December 31, 1995:
Fortis Series Fund, Inc.:
Growth Stock Series.................................................................. 18,797 $ 510,059
U.S. Government Securities Series.................................................... 38 379
Money Market Series.................................................................. 17,356 180,105
Asset Allocation Series.............................................................. 59,192 924,340
Diversified Income Series............................................................ 14 155
Global Growth Series................................................................. 12,645 194,924
Aggressive Growth Series............................................................. 2,746 32,999
Growth & Income Series............................................................... 6,670 83,612
High Yield Series.................................................................... 26,030 252,046
Global Asset Allocation Series....................................................... 17,511 199,139
Global Bond Series................................................................... 31,253 349,572
International Stock Series........................................................... 10,608 117,200
Norwest Select Fund:
Small Company Stock Fund............................................................. 3,433 38,350

Year ended December 31, 1994:

COST OF
SHARES SHARES
--------- ---------
<S> <C> <C>
Fortis Series Fund, Inc.:
Growth Stock Series.................................................................. 23,983 $ 524,850
U.S. Government Securities Series.................................................... 64,492 607,364
Money Market Series.................................................................. -- --
Asset Allocation Series.............................................................. 46,335 626,408
Diversified Income Series............................................................ 24,758 257,570
Global Growth Series................................................................. 11,872 144,687
Aggressive Growth Series............................................................. 915 8,878
Growth & Income Series............................................................... 1,288 12,968
High Yield Series.................................................................... 8,691 81,918
</TABLE>

84
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
MARCH 31, 1996
(UNAUDITED)

2. INVESTMENTS (CONTINUED)
Fortis Benefits' investment in the subaccounts represented the following number
of shares of the Funds held and aggregate cost of amounts invested at March 31,
1996:

<TABLE>
<CAPTION>
NUMBER OF COST OF
SHARES SHARES
--------- ----------
<S> <C> <C>
Fortis Series Fund, Inc.:
Value Series....................................................................... 29,000 $ 290,000
S&P 500 Series..................................................................... 145,000 1,450,000
Blue Chip Stock Series............................................................. 145,000 1,450,000
</TABLE>

3. ORGANIZATIONAL EXPENSES AND OTHER CHARGES

ORGANIZATIONAL EXPENSES

Fortis Benefits assumes all organizational expenses of the Account.

PREMIUM EXPENSE CHARGE

MONTHLY DEDUCTIONS FROM POLICY VALUE

Monthly deductions from the net assets attributed to each policy are as follows:

- Monthly cost of insurance.

- Monthly cost of any optional insurance benefits added by rider.

For Harmony Investment Life Policies:

- Monthly administrative charge of $5.00 per policy ($3.00 for policies
applied for prior to July 1, 1988).

85
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
MARCH 31, 1996
(UNAUDITED)

3. ORGANIZATIONAL EXPENSES AND OTHER CHARGES (CONTINUED)
- For policies issued prior to July 1, 1988, Fortis Benefits currently
imposes an expense charge of $10.00 per month and an additional
per-thousand-of-face expense charge of $.06 per month for insureds age 29
or less and $.20 per month for insureds age 30 and over during the first
twelve policy months.

For Wall Street Series VUL 100, VUL 220 and VUL 500 Policies:

- Monthly administrative charge of $4.50 per policy. Fortis Benefits
reserves the right to change this administrative charge, but it will
never exceed $7.50 per month.

- For VUL 220 and VUL 500, a monthly sales, premium tax and policy advance
charge of $4.00 per policy.

MORTALITY AND EXPENSE RISK AND POLICY ADVANCE CHARGES

SURRENDER CHARGES

Surrender charges collected by Fortis Benefits were $643,197 for the three
months ended March 31, 1996 and $2,057,483, and $1,475,321 for the year ended
December 31, 1995, and 1994, respectively.

86
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FORTIS BENEFITS INSURANCE COMPANY
VARIABLE ACCOUNT C
MARCH 31, 1996
(UNAUDITED)

87
<PAGE>
APPENDIX A

OPTIONAL INCOME PLANS

The insurance proceeds when the insured dies or the Surrender Value on the
maturity date or on full surrender of the Policy, instead of being paid in one
lump sum, may be applied under one or more of the following income plans. A tax
adviser should be consulted as to the differing tax consequences of each of
these plans. Values under the income plans do not depend upon the investment
experience of a separate account. Under options 3 or 4, unless a guaranteed
period or refund alternative is selected, it would be possible to receive only
one payment, in the case of the payee's early death.

OPTION 1. INTEREST PAYMENTS

Fortis Benefits will pay interest at twelve, six, three or one month intervals
for a specified period, as selected by the Policy owner. At the end of the
selected period, Fortis Benefits will pay the proceeds in a single sum or under
any other option selected when this option is chosen.

OPTION 2. PAYMENTS OF A FIXED AMOUNT OR FOR A FIXED PERIOD

Fortis Benefits will make payments in an amount the Policy owner selects when
choosing this option or equal payments for a period of from one to thirty years,
at the choice of the Policy owner. In either case, the Policy owner may request
payments at twelve, six, three or one month intervals.

OPTION 3. LIFE INCOME PAYMENTS

(1) Life Annuity: a monthly income during the lifetime of the payee; or

(2) Life Annuity with a Guaranteed Period: a monthly income with payments
guaranteed for either ten or twenty years, as the Policy owner chooses,
continuing during the payee's lifetime; or

(3) Refund Life Annuity: a monthly income with payments guaranteed for the
number of months determined by dividing the proceeds by the first monthly
payment. The payments continue during the payee's lifetime.

OPTION 4. JOINT LIFE INCOME PAYMENTS

The Policy owner names two payees to whom Fortis Benefits will pay a joint
monthly income during their joint lifetime. After either payee's death, Fortis
Benefits will make monthly payments equal to 2/3 of the joint monthly payment
during the survivor's lifetime.

For options 3 and 4, the amount of the monthly payments depends on the type of
income selected, the Ages of the payees on the settlement date and the amount of
the proceeds. The minimum amounts payable for selected Ages are set forth in the
Policy.

APPLICABLE RATES. The interest rate under options 1, 2, 3 and 4 above will
effectively be at least 3 1/2% per year. If option 1 is chosen, Fortis Benefits
may pay excess interest. If options 2, 3, or 4 are chosen and the monthly
payments are less than those provided by Fortis Benefits under settlement rates
that Fortis Benefits is then currently offering, Fortis Benefits will pay the
larger amount.

OTHER TERMS AND CONDITIONS. The Policy owner may also choose any other option
agreed to by Fortis Benefits. The Policy owner may also change or revoke a
choice of options under which payments have not yet commenced. If the Policy
owner does not choose an option before the insured dies, the beneficiary will
have the right to choose an option.

No payee has the right to change the settlement option chosen before the
insured's death. Payments may not be assigned or commuted.

If the payee dies before receiving all proceeds payable, Fortis Benefits will
pay any amount still due to the payee's estate. Fortis Benefits has the right to
pay the proceeds in a single sum if (1) the proceeds payable are less than
$2,000; or (2) payments under the settlement option chosen would be less than
$20 each. When an income plan starts, a separate contract will be issued
describing the terms of the plan, and the Policy must be returned to us at this
time. Specimen plans may be obtained from Fortis Benefits' Home Office and
reference should be made to these forms for further details.

OPTIONAL INSURANCE BENEFITS

Optional insurance benefit riders may be attached to a Policy, subject to
certain insurance underwriting requirements, approval in the state where the
Policy is sold, and the payment of additional charges. These riders are
described in general terms below. Limitations and conditions are contained in
the riders, and the description below is subject to the specific terms of the
riders. A prospective purchaser may obtain specimen riders from Fortis Benefits'
Home Office. The charges for these riders are deducted each month as part of the
Monthly Deduction from Policy Value.

A-1
<PAGE>
Any rider selected becomes a part of the Policy and is subject to all terms of
the Policy which are not inconsistent with the terms of the rider. Fortis
Benefits may decline to issue any optional insurance rider in its sole
discretion based on current underwriting guidelines and other regulatory
restrictions. Riders may be cancelled by Policy owners in accordance with the
procedures established by Fortis Benefits from time to time.

DISABILITY RIDERS. There are four disability benefit riders available under the
Policy. The Policy owner can select either an individual rider which insures
only one of the joint insureds, or a joint insured rider which provides a
benefit if either or both of the joint insureds becomes disabled. The Policy
owner can select either a Waiver of Selected Amount rider which provides for a
monthly payment to the Policy Value during disability or a Waiver of Monthly
Deductions rider which waives the monthly deduction during disability. The
Policy owner can only select one of these four riders.

If a joint insured rider is in effect and one of the joint insureds dies, the
joint insured rider will terminate and an individual rider on the Surviving
Insured will be issued in its place.

JOINT INSURED WAIVER OF MONTHLY DEDUCTIONS RIDER. If either or both of the joint
insureds are totally disabled for more than six months while this rider is in
effect, Fortis Benefits will waive subsequent Monthly Deductions, so long as the
total disability continues until Age 95 of the disabled insured. Any monthly
charges deducted after disability begins but before Fortis Benefits approves the
disability claim will be added to the Policy Value in a lump sum as of the date
of approval, based on the premium allocation percentage then in effect. For any
month that deductions are waived, otherwise applicable requirements to make
additional Minimum Premium payments will be waived. The rider does not cover
preexisting disabilities and terminates on the first Policy anniversary after
the younger insured reaches Age 60, except as to any disability commencing prior
to that time. The charges for this rider are based on the Net Amount at Risk
under a Policy from time to time and the insureds' Age and rate class. The rates
of charges for this rider are set forth in the Policy Schedule, and the rate at
which the charge is imposed increases from year to year. An increase or decrease
in the Net Amount at Risk, or the addition or cancellation of any benefits under
riders the charges for which are covered under this rider, will result in an
increase or decrease in the charges for this rider. The charges for this rider
will also be decreased if Fortis Benefits approves a more favorable rate class
for the insureds.

JOINT INSURED WAIVER OF SELECTED AMOUNT RIDER. If either or both of the joint
insureds is totally disabled for more than six months while this rider is in
effect, Fortis Benefits will apply a premium payment to the Policy on each
subsequent Monthly Anniversary and while that insured remains totally disabled
until Age 95 of the disabled insured.

The amount of the premium payment is equal to the Selected Amount chosen by the
applicant at the time of application, and shown in the Policy schedule. The
minimum Selected Amount that can be chosen is $25. The maximum Selected Amount
that can be chosen is the lesser of (1) the monthly Minimum Premium used for the
Guaranteed Death Benefit Rider's guarantee period to Age 85 or (2) $5,000. If
the Face Amount of the Policy is decreased so that the annualized benefit is
greater than the guideline annual premium, as defined by Section 7702 of the
Code, the benefit will be reduced.

The rider does not cover preexisting conditions and terminates on the first
Policy anniversary after the younger insured reaches Age 60, except as to any
disability commencing prior to that time. Monthly Deductions will be increased
to include the cost of the rider which is a specified percentage of the Selected
Amount based on the insureds' Age. In most states, the current charges will be
shown in the Policy schedule. The charges increase from year to year. Fortis
Benefits may change the rates, up to the guaranteed maximum rates set forth in
the rider.

INDIVIDUAL WAIVER OF MONTHLY DEDUCTIONS RIDER AND INDIVIDUAL WAIVER OF SELECTED
AMOUNT RIDER. These riders are in most respects similar to the corresponding
Joint Insured Waiver of Monthly Deductions Rider or Joint Insured Waiver of
Selected Amount Rider described above, except that the individual riders, rather
than covering both joint insureds, cover only one of the joint insureds, as
selected by the Policy owner in the application for the Policy. Also, the
individual rider terminates on the Policy anniversary after the individual
insured under the rider reaches Age 60.

JOINT TERM LIFE INSURANCE RIDERS. There are three different term life insurance
riders available to provide additional coverage on the lives of the joint
insureds. The Second-To-Die Rider provides a benefit upon the death of the
Surviving Insured. The First-To-Die Rider is payable upon the death of the first
joint insured. The Estate Protection Rider provides additional coverage in the
event that both joint insureds die during the first four Policy years.

The maximum combined rider coverage available on the life of any one of the
joint insureds under these riders is 7.25 times the face amount of the base
Policy. The maximum coverage under the Second-To-Die and the First-To-Die riders
is 6.0 times the Policy Face Amount. The maximum coverage under the estate
protection rider is 1.25 times the Policy Face Amount.

The charges for these riders increase from year to year. Fortis Benefits may
change the rates at which the charges for these riders are imposed, although the
resulting charges will not exceed the guaranteed maximum charges for the rider
set forth in the Policy schedule.

A-2
<PAGE>
SECOND-TO-DIE RIDER. This rider provides coverage payable on the death of the
Surviving Insured until the younger insured's Age 100. The minimum face amount
of this rider is $100,000. It is available for issue on any Policy anniversary
up to Age 70 of the younger insured while both joint insureds are alive.

At any time before the earlier of the end of the tenth year after the rider is
issued, or the younger insured's 65th birthday, the Policy owner may exchange
all or part of the coverage under this rider for a Face Amount increase in the
same amount under the base Policy.

As discussed further below, coverage obtained under the Second-To-Die Rider is
generally less costly initially than a comparable amount of additional coverage
obtained under the base Policy. However, for Policy owners who intend to retain
and make substantial premium payments under their Policies, coverage under the
base Policy will probably be more economical over the long term.

Fortis Benefits permits exchanges of less than the full coverage under the
Second-To-Die Rider, subject to a $25,000 minimum. Such partial exchanges may be
elected only once each Policy year, as of the Policy Anniversary, and only if
remaining coverage on the joint insureds under the rider will be at least
$100,000.

Fortis Benefits will waive its usual requirements for evidence of insurability
with respect to the Face Amount increase, and the increase will be based on the
same rate class as the rider. The suicide and contestability periods will run
from the original date of the transferred coverage. The coverage under the rider
will terminate when the Face Amount increase becomes effective.

Except as noted above, a Face Amount increase implemented upon an exchange from
the Second-To-Die Rider will be subject to the same procedures and charges and
in all respects have the same effect as any other Face Amount increase.

The current rates of charges for coverage under the Second-To-Die Rider are
expected to be lower than the rates of the cost of insurance charges for a
comparable amount of coverage under the base Policy. The maximum guaranteed
charges for coverage under the Second-To-Die Rider, however, are the same as the
maximum guaranteed cost of insurance rates under the base Policy.

If coverage on the joint insureds is taken pursuant to the Second-To-Die Rider,
the monthly Minimum Premium will generally be lower (unless and until such
coverage is exchanged for a Face Amount increase as described above) than if the
same amount of Face Amount were purchased under the base Policy. This means that
a smaller amount of premiums will generally be required to maintain the
Guaranteed Death Benefit Rider. See "Minimum Premiums" under "Guaranteed Death
Benefit." Reduced premium payments, of course, will tend to result in lower
amounts of charges that are based on premium payments or a Policy's Policy
Value. See "Charges and Deductions." However, reducing the amount of premiums
paid under a Policy has a number of potential disadvantages: (1) the amount of
Policy Value available to participate in the investment performance of the
Separate Account or each a return in the General Account is reduced; (2) the tax
advantages afforded under the Policy to any such positive investment results or
return are correspondingly reduced; (3) the amount of any Premium Based Bonuses
and Policy Value Bonuses will be reduced; (4) under an Option A death benefit
the dollar amount of cost of insurance charges for the base Policy Face Amount
will be higher; (5) under an Option B death benefit, the amount of death benefit
proceeds will increase more slowly; (6) if less than the Minimum Premium is
paid, the likelihood that the Policy will lapse during the period of any
Guaranteed Death Benefit is increased; (7) payment of lower amounts of premiums
also increases the likelihood that the Policy will lapse during any period when
no Guaranteed Death Benefit is in effect under the Policy. Accordingly, we do
not recommend use of the Second-To-Die Rider solely as a means of paying lower
premiums.

Moreover, although, as discussed above, use of a Second-To-Die Rider can reduce
certain charges, this may not be in the Policy owner's long-term interest. For
example, the amount of cumulative premiums on which Premium Based Bonuses are
based is limited to the cumulative amount of Maximum Bonus Premiums. Because the
Maximum Bonus Premiums are not increased by any coverage under the Second-To-Die
Rider, taking coverage under that rider, rather than under the base Policy,
reduces the potential amount of Premium Based Bonuses. Similarly, Policy Value
Bonuses are based on the Policy's size band, which is not affected by the
Second-To-Die Rider. Accordingly, taking coverage under the rider, rather than
under the base Policy, can place the Policy in a smaller size band, thus
reducing somewhat the potential Policy Value Bonuses. Therefore, coverage under
the base Policy can be economically more advantageous, in the long run, for
Policy owners who plan to retain their coverage, especially for those whose
premiums are at least at the level of the Maximum Bonus Premium. On the other
hand, purchasers who require only temporary coverage or who wish to pay premiums
at relatively low levels should consider taking a portion of their coverage
under the Second-To-Die Rider. It should be noted, however, that the coverage
that is taken under the Second-To-Die Rider is not eligible for the Policy Split
Opinion.

FIRST-TO-DIE RIDER. This rider provides coverage upon the death of the first
joint insured. It is available for issue on any Policy anniversary up to Age 70
of the older insured while both joint insureds are alive. In most other respects
it is similar to the Second-To-Die Rider described above. The other significant
difference is that this rider cannot be exchanged or converted to coverage under
the base Policy or to another Fortis Benefit life insurance policy. It is not
available if the combined rating under the base Policy is in excess of 400% of
the standard rating.

ESTATE PROTECTION RIDER. This rider is available only at issuance of the Policy
for estate planning purposes, and cannot be converted or exchanged. The maximum
amount of coverage under the rider is 125% of the face amount of the base
policy. The minimum face amount is $100,000.

A-3
<PAGE>
The term of this rider is four years from the issue date of the Policy. Its
purpose is to provide an additional death benefit in the early Policy years in
order to pay any estate tax liability that may arise from having established
ownership of the Policy in a trust in anticipation of death.

ADDITIONAL INSURED RIDER PLUS

This rider provides fixed amounts of insurance until Age 95 on the life of one
or more persons other than the joint insureds who are members of the primary
insureds' immediate family, or individuals in whom the owner has an insurable
interest. In the event an insured under this rider is not a family member,
certain special tax rules will apply. For a brief description of these tax rules
see "Federal Tax Matters." The number of insureds that may be covered by this
rider is limited to five. Subject to Fortis Benefits' underwriting requirements,
coverage on persons not already insured may be added on a Policy Anniversary.
Combined coverage for all additional insureds under this rider may not exceed
six times the base Policy's Face Amount. Coverage on additional insureds will
automatically be reduced pro-rata, to the extent necessary to ensure that this
limit is not exceeded.

The charges increase from year to year. Fortis Benefits may change the rates at
which the charges for this rider are imposed, although the resulting charges
will not exceed the guaranteed maximum charges for this rider set forth in the
Policy schedule.

The Policy owner may convert the coverage on an additional insured to a variable
universal life insurance policy offered by us at any time before the later of
the end of the fifth Policy year or the additional insured's 65th birthday. The
conversion is not available more than 31 days after the death of the Surviving
Insured. Fortis Benefits permits conversion of less than the full coverage on an
additional insured. However, partial conversions are subject to a $25,000
minimum and may be elected only on the Policy Anniversary, and only if remaining
coverage on the additional insured under the Rider will be at least $25,000.

Fortis Benefits will waive its usual requirement for evidence of insurability
with respect to an amount of the new policy's Face Amount that is not in excess
of the amount of rider coverage canceled, and the new coverage will be based on
the same rate class as under the rider. The suicide and contestability periods
will run from the original date of the transferred coverage. The coverage under
the rider will terminate when the new coverage becomes effective. Any amounts
deducted for the rider coverage for periods beyond such time will be refunded.
Except as noted above, the customary procedures and charges for issuing a new
policy will apply to a conversion from the Additional Insured Rider Plus.

PRIMARY INSURED RIDER PLUS

This rider is in most respects similar to the Additional Insured Rider Plus
described immediately above, except that is provides fixed amounts of insurance
until Age 95 on the individual life of either of both of the joint insureds.
Also, this rider is available only at the time the Policy is first issued.
Combined coverage under this rider for all insureds may not exceed six times the
base Policy's Face Amount. Coverage will automatically be reduced pro-rata, to
the extent necessary to ensure that this limit is not exceeded.

A-4
<PAGE>
APPENDIX B--ILLUSTRATIONS OF DEATH BENEFITS, POLICY VALUES, SURRENDER VALUES AND
ACCUMULATED PREMIUMS

The tables on pages B-3 to B-6 illustrate the way in which a Policy's death
benefit, Policy Value and Surrender Value could vary over an extended period of
time, assuming that all premiums are allocated to the Subaccounts of the
Separate Account for the entire period shown and assuming hypothetical gross
investment rates of return for the underlying Fortis Series Portfolios (i.e.,
investment income and capital gains and losses, realized and unrealized)
equivalent to constant gross annual rates of 0%, 4%, 8% and 12%.

The tables are based on a Face Amount of $1,000,000 for a male Age 55 and a
female Age 53. Each illustration assumes that the insureds are in the non-smoker
underwriting risk classification. Illustrations for insureds in the smoker or a
substandard underwriting risk classification would show, for the same Age and
premium payments, lower Policy Values and, therefore, lower Surrender Values
and, for the Alternative Death Benefit and Death Benefit Option B, lower death
benefits. These values would be higher, however, for an otherwise comparable
Policy on the joint lives of a non-smoker female Age 55 and a male Age 53. An
otherwise comparable Policy using gender-neutral cost of insurance rates may
also show higher values than the Policies illustrated in the tables that follow.

The amounts shown for the death benefits, Policy Values and Surrender Values
take into account the deductions from premiums and the Monthly Deduction, as
well as the daily deductions from the Separate Account for premium tax, and
sales expenses equivalent to an annual rate of .35%, for mortality and expense
risks equivalent to an annual rate of 1.00% of the Policy Value in the Separate
Account, for assumed Portfolio investment advisory fees equivalent to an annual
rate of .62% and for other Portfolio operating expenses equivalent to an annual
rate of .08% of the average daily value of the aggregate net assets of the
Portfolio. (.62% is the average of the advisory fee rates paid by the currently
available Portfolios and .08% is the actual amount of other expenses that those
Portfolios incurred in 1995).

Taking account of the daily deductions for premium tax and sales expenses,
mortality and expense risks and assumed Portfolio operating expenses, the gross
annual investment rates of return of 0%, 4%, 8% and 12% correspond to actual (or
net) annual rates of: -2.05%, 1.95%, 5.95% and 9.95%, respectively.

The hypothetical returns in the tables do not reflect any charges for income
taxes against the Separate Account, since no such charges are currently made.
However, if in the future such charges are made, in order to produce the death
benefits, Policy Values and Surrender Values illustrated, the gross annual
investment rate of return would have to exceed 0%, 4%, 8% or 12% by a sufficient
amount to cover the tax charges. See "Federal Tax Matters--Taxation of Fortis
Benefits."

The second column of the tables shows the amount which would accumulate if each
year an amount equal to the sum of twelve monthly Minimum Premiums (calculated
using the Guarantee Death Benefit period to Age 85 of the younger insured) were
invested to earn interest, after taxes, at 5% compounded annually. The
difference between Policy Values and Surrender Values during the first eleven
Policy years, as shown in the tables, is the amount of Surrender Charge.

Upon request, Fortis Benefits will furnish an illustration reflecting the
proposed insureds' Age and sex, the Face Amount and premium amounts requested,
frequency of premium payments, the death benefit option and any available rider
requested.

TABLE OF CONTENTS FOR ILLUSTRATIONS OF DEATH BENEFITS, POLICY VALUES, SURRENDER
VALUES AND ACCUMULATED PREMIUMS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Illustrations Based on CURRENT Charge and Bonus Schedules:
Death Benefit Option A.............................................. B-2
Death Benefit Option B.............................................. B-3
Illustrations Based on GUARANTEED Charge and Bonus Schedules:
Death Benefit Option A.............................................. B-4
Death Benefit Option B.............................................. B-5
</TABLE>

B-1
<PAGE>

MALE ISSUE AGE 55, FEMALE ISSUE AGE 53
NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $1,400,000--DEATH BENEFIT OPTION A
CURRENT CHARGE, POLICY VALUE BONUS AND PREMIUM BASED BONUS SCHEDULES

<TABLE>
<CAPTION>
PREMIUMS
ACCUMULATED AT
END OF POLICY 5% INTEREST DEATH POLICY SURRENDER DEATH POLICY SURRENDER
YEAR PER YEAR (1) BENEFIT VALUE VALUE BENEFIT VALUE VALUE
------ -------------- --------- ------- ------- --------- ------- ----------
0% (1)(2)(3)(4) 4% (1)(2)(3)(4)
--------------------------- ------------------------------
VALUES BASED ON ASSUMED HYPOTHETICAL GROSS ANNUAL
INVESTMENT RATES OF RETURN OF
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 26,250 1,400,000 23,505 13,277 1,400,000 24,483 14,258
2 53,813 1,400,000 46,435 34,461 1,400,000 49,350 37,386
3 82,753 1,400,000 68,814 55,174 1,400,000 74,624 61,008
4 113,141 1,400,000 90,607 76,642 1,400,000 100,265 86,300
5 145,048 1,400,000 111,854 99,884 1,400,000 126,317 114,347
6 178,550 1,400,000 132,489 122,514 1,400,000 152,712 142,737
7 213,728 1,400,000 152,927 144,947 1,400,000 179,861 171,881
8 250,664 1,400,000 173,124 167,139 1,400,000 207,735 201,750
9 289,447 1,400,000 193,241 189,251 1,400,000 236,515 232,525
10 330,170 1,400,000 212,546 210,551 1,400,000 265,493 263,498
15 566,437 1,400,000 295,545 295,545 1,400,000 412,225 412,225
20 867,981 1,400,000 347,043 347,043 1,400,000 555,443 555,443
25 1,252,836 1,400,000 358,197 358,197 1,400,000 681,135 681,135
40 3,170,994 0 0 0 1,400,000 203,658 203,658

END OF POLICY DEATH POLICY SURRENDER DEATH POLICY SURRENDER
YEAR BENEFIT VALUE VALUE BENEFIT VALUE VALUE
------ --------- --------- ---------- ---------- ---------- ----------
8% (1)(2)(3)(4) 12% (1)(2)(3)(4)
-------------------------------- ----------------------------------

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

(1) Assumes annual premium of $25,000 paid in full at the beginning of each
Policy year. The values vary from those shown if the amount or frequency of
payments vary.

(2) Assumes that no Policy loan or partial withdrawal has been made and no
optional insurance riders have been selected. Zero values in the Death
Benefit column indicate Policy lapse in the absence of sufficient additional
premium payments.

(3) Reflects Premium Based Bonuses credited according to the following schedule:

<TABLE>
<CAPTION>
END OF POLICY YEAR
-----------------------
9
AND
LATER
TO
ORIGINAL
MATURITY
ISSUE AGE OF DATE OF
YOUNGEST INSURED 0-6 7 8 POLICY
---------------- ---- --- --- ----
<S> <C> <C> <C> <C> <C>
18-50 0% 2% 2% 4%
51-60 0 2 4 7
61-70 0 5 7 10
71-85 0 5 5 5
</TABLE>

(4) Reflects Policy Value Bonuses credited on each monthly Anniversary after the
monthly deduction is made according to the following schedule:

ANNUAL RATE OF POLICY VALUE BONUSES AS A PERCENT OF NET CASH VALUE
<TABLE>
<CAPTION>
BAND 1
-------------------------
POLICY BAND 2 BAND 3 BAND 4
SURRENDER VALUE YEARS ----------------------------- ----------------------------- -------------
ON DATE OF POLICY YEARS 20 AND POLICY YEARS POLICY YEARS POLICY YEARS POLICY YEARS POLICY YEARS
MONTHLY BONUS 1 - 19 LATER 1 - 19 20 AND LATER 1 - 19 20 AND LATER 1 - 19
- ----------------- ------------- --------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
$0 - $9,999 .00% .35% .00% .35% .00% .35% .00%
$10,000 - $49,999 .00% .35% .00% .35% .05% .40% .05%
$50,000 - $99,999 .05% .40% .05% .40% .10% .45% .10%
$100,000 or more .10% .45% .10% .45% .15% .50% .20%

SURRENDER VALUE
ON DATE OF POLICY YEARS
MONTHLY BONUS 20 AND LATER
- ----------------- -------------
<S> <C>
$0 - $9,999 .35%
$10,000 - $49,999 .40%
$50,000 - $99,999 .45%
$100,000 or more .55%
</TABLE>

(5) Alternative Death Benefit applies: See "Policy Benefits--Death Benefit
Options" for further details.

IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE
OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON A NUMBER OF FACTORS INCLUDING THE
PREMIUM AND POLICY VALUE ALLOCATIONS MADE BY AN OWNER AND THE DIFFERENT RATES OF
RETURN OF THE PORTFOLIOS. THE DEATH BENEFIT, POLICY VALUE AND SURRENDER VALUE
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATES
OF RETURN AVERAGED 0%, 4%, 8%, AND 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS OR IF ANY PREMIUMS
WERE ALLOCATED OR POLICY VALUE TRANSFERRED TO THE GENERAL ACCOUNT. NO
REPRESENTATIONS CAN BE MADE BY FORTIS BENEFITS OR FORTIS SERIES THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.

B-2
<PAGE>

MALE ISSUE AGE 55, FEMALE ISSUE AGE 53
STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $1,400,000--DEATH BENEFIT OPTION B
CURRENT CHARGE, POLICY VALUE BONUS AND PREMIUM BASED BONUS SCHEDULES

<TABLE>
<CAPTION>
PREMIUMS
ACCUMULATED AT
END OF POLICY 5% INTEREST DEATH POLICY SURRENDER DEATH POLICY SURRENDER
YEAR PER YEAR (1) BENEFIT VALUE VALUE BENEFIT VALUE VALUE
------ -------------- --------- ------- --------- --------- ------- ---------
0% (1)(2)(3)(4) 4% (1)(2)(3)(4)
----------------------------- -----------------------------
VALUES BASED ON ASSUMED HYPOTHETICAL GROSS ANNUAL INVESTMENT
RATES OF RETURN OF
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 26,250 1,423,576 23,576 13,349 1,424,557 24,557 14,332
2 53,813 1,446,640 46,640 34,667 1,449,570 49,570 37,606
3 82,753 1,469,210 69,210 55,571 1,475,059 75,059 61,445
4 113,141 1,491,240 91,240 77,275 1,500,980 100,980 87,015
5 145,048 1,512,761 112,761 100,791 1,527,371 127,371 115,401
6 178,550 1,533,696 133,696 123,721 1,554,152 154,152 144,177
7 213,728 1,554,444 154,444 146,464 1,581,723 181,723 173,743
8 250,664 1,574,944 174,944 168,959 1,610,035 210,035 204,050
9 289,447 1,595,335 195,335 191,345 1,639,242 239,242 235,252
10 330,170 1,614,857 214,857 212,862 1,668,599 268,599 266,604
15 566,437 1,696,808 296,808 296,808 1,814,523 414,523 414,523
20 867,981 1,738,675 338,675 338,675 1,942,652 542,652 542,652
25 1,252,836 1,755,706 355,706 355,706 2,067,480 667,480 667,480
40 3,170,994 0 0 0 1,562,048 162,048 162,048

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

(1) Assumes annual premium of $25,000 paid in full at the beginning of each
Policy year. The values vary from those shown if the amount or frequency of
payments vary.

(3) Reflects Premium Based Bonuses credited according to the following schedule:

<TABLE>
<CAPTION>
END OF POLICY YEAR
-----------------------
9
AND
LATER
TO
ORIGINAL
MATURITY
AGE OF DATE OF
YOUNGEST INSURED 0-6 7 8 POLICY
---------------- ---- --- --- ----
<S> <C> <C> <C> <C>
18-50 0% 2% 2% 4%
51-60 0 2 4 7
61-70 0 5 7 10
71-85 0 5 5 5
</TABLE>

(4) Reflects Policy Value Bonuses credited on each monthly Anniversary after the
monthly deduction is made.

ANNUAL RATE OF CASH VALUE BONUSES AS A PERCENT OF NET CASH VALUE
<TABLE>
<CAPTION>
BAND 1
-------------------------
POLICY BAND 2 BAND 3 BAND 4
SURRENDER VALUE YEARS ----------------------------- ----------------------------- -------------
ON DATE OF POLICY YEARS 20 AND POLICY YEARS POLICY YEARS POLICY YEARS POLICY YEARS POLICY YEARS
MONTHLY BONUS 1 - 19 LATER 1 - 19 20 AND LATER 1 - 19 20 AND LATER 1 - 19
- ----------------- ------------- --------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
$0 - $9,999 .00% .35% .00% .35% .00% .35% .00%
$10,000 - $44,999 .30% .65% .30% .65% .35% .70% .35%
$50,000 - $99,999 .35% .70% .35% .70% .40% .75% .40%
$100,000 or more .40% .75% .40% .75% .45% .80% .50%

SURRENDER VALUE
ON DATE OF POLICY YEARS
MONTHLY BONUS 20 AND LATER
- ----------------- -------------
<S> <C>
$0 - $9,999 .35%
$10,000 - $44,999 .70%
$50,000 - $99,999 .75%
$100,000 or more .85%
</TABLE>

(5) Alternative Death Benefit applies: See "Policy Benefits--Death Benefit
Options" for further details.

B-3
<PAGE>

MALE ISSUE AGE 55, FEMALE AGE 53
STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $1,400,000--DEATH BENEFIT OPTION A
GUARANTEED CHARGE, POLICY VALUE BONUS AND PREMIUM BASED BONUS SCHEDULES

<TABLE>
<CAPTION>
PREMIUMS
ACCUMULATED AT
END OF POLICY 5% INTEREST DEATH POLICY SURRENDER DEATH POLICY SURRENDER
YEAR PER YEAR (1) BENEFIT VALUE VALUE BENEFIT VALUE VALUE
------ -------------- --------- ------- -------- --------- ------- --------
0% (1)(2)(3)(4) 4% (1)(2)(3)(4)
---------------------------- ----------------------------
VALUES BASED ON ASSUMED HYPOTHETICAL GROSS ANNUAL
INVESTMENT RATES OF RETURN OF
----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 26,250 1,400,000 19,469 9,031 1,400,000 20,328 9,892
2 53,813 1,400,000 38,413 26,004 1,400,000 40,921 28,520
3 82,753 1,400,000 56,808 42,494 1,400,000 61,754 47,460
4 113,141 1,400,000 74,671 60,706 1,400,000 82,840 68,875
5 145,048 1,400,000 91,945 79,975 1,400,000 104,118 92,148
6 178,550 1,400,000 108,644 98,669 1,400,000 125,615 115,640
7 213,728 1,400,000 125,146 117,166 1,400,000 147,675 139,695
8 250,664 1,400,000 141,375 135,390 1,400,000 170,248 164,263
9 289,447 1,400,000 157,473 153,483 1,400,000 193,485 189,495
10 330,170 1,400,000 172,676 170,681 1,400,000 216,645 214,650
15 566,437 1,400,000 231,813 231,813 1,400,000 327,742 327,742
20 867,981 1,400,000 244,043 244,043 1,400,000 412,770 412,770
25 1,252,836 1,400,000 200,762 200,762 1,400,000 438,562 438,562
40 3,170,994 0 0 0 0 0 0

END OF POLICY DEATH POLICY SURRENDER DEATH POLICY SURRENDER
YEAR BENEFIT VALUE VALUE BENEFIT VALUE VALUE
------ --------- --------- ---------- --------- --------- ----------
8% (1)(2)(3)(4) 12% (1)(2)(3)(4)
-------------------------------- --------------------------------

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

(1) Assumes annual premium of $25,000 paid in full at the beginning of each
Policy year. The values vary from those shown if the amount or frequency of
payments vary.

(3) Reflects Premium Based Bonuses credited according to the following schedule:

<TABLE>
<CAPTION>
OPTION A PERCENTAGES
END OF POLICY YEAR
-----------------------
9
AND
LATER
TO
ORIGINAL
MATURITY
AGE OF DATE OF
YOUNGEST INSURED 0-6 7 8 POLICY
---------------- ---- --- --- ----
<S> <C> <C> <C> <C>
18-50 0% 2% 2% 4%%
51-60 0 2 4 7
61-70 0 2 4 7
71-85 0 2 4 5
</TABLE>

(4) Reflects Policy Value Bonuses credited on each monthly Anniversary after the
monthly deduction is made.

ANNUAL RATE OF CASH VALUE BONUSES AS A PERCENT OF NET CASH VALUE
<TABLE>
<CAPTION>
BAND 1
-------------------------
POLICY BAND 2 BAND 3 BAND 4
SURRENDER VALUE YEARS ----------------------------- ----------------------------- -------------
ON DATE OF POLICY YEARS 20 AND POLICY YEARS POLICY YEARS POLICY YEARS POLICY YEARS POLICY YEARS
MONTHLY BONUS 1 - 19 LATER 1 - 19 20 AND LATER 1 - 19 20 AND LATER 1 - 19
- ----------------- ------------- --------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
$0 - $9,999 .00% .00% .00% .00% .00% .00% .00%
$10,000 - $49,999 .00% .00% .00% .00% .05% .05% .05%
$50,000 - $99,999 .05% .05% .05% .05% .10% .10% .10%
$100,000 or more .10% .10% .10% .10% .15% .15% .20%

SURRENDER VALUE
ON DATE OF POLICY YEARS
MONTHLY BONUS 20 AND LATER
- ----------------- -------------
<S> <C>
$0 - $9,999 .00%
$10,000 - $49,999 .05%
$50,000 - $99,999 .10%
$100,000 or more .20%
</TABLE>

B-4
<PAGE>

MALE ISSUE AGE 55, FEMALE ISSUE AGE 53
NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $1,400,000--DEATH BENEFIT OPTION B
GUARANTEED CHARGE, POLICY VALUE BONUS AND PREMIUM BASED BONUS SCHEDULES

<TABLE>
<CAPTION>
PREMIUMS
ACCUMULATED AT
END OF POLICY 5% INTEREST DEATH POLICY SURRENDER DEATH POLICY SURRENDER
YEAR PER YEAR (1) BENEFIT VALUE VALUE BENEFIT VALUE VALUE
------ -------------- --------- --------- -------- --------- ------- --------
0% (1)(2)(3)(4) 4% (1)(2)(3)(4)
------------------------------ ----------------------------
VALUES BASED ON ASSUMED HYPOTHETICAL GROSS ANNUAL INVESTMENT
RATES OF RETURN OF
------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 26,250 1,419,506 19,506 9,068 1,420,388 20,388 9,951
2 53,813 1,438,563 38,563 26,155 1,441,103 41,103 28,703
3 82,753 1,457,115 57,115 42,802 1,462,112 62,112 47,821
4 113,141 1,475,168 75,168 61,203 1,483,424 83,424 69,459
5 145,048 1,492,657 92,657 80,687 1,504,967 104,967 92,997
6 178,550 1,509,590 109,590 99,615 1,526,758 126,758 116,783
7 213,728 1,526,313 126,313 118,333 1,549,124 149,124 141,144
8 250,664 1,542,742 142,742 136,757 1,571,994 171,994 166,009
9 289,447 1,558,994 158,994 155,004 1,595,490 195,490 191,500
10 330,170 1,574,278 174,278 172,283 1,618,830 218,830 216,835
15 566,437 1,631,220 231,220 231,220 1,727,260 327,260 327,260
20 867,981 1,631,638 231,638 231,638 1,792,506 392,506 392,506
25 1,252,836 1,592,766 192,766 192,766 1,822,784 422,784 422,784
40 3,170,994 0 0 0 0 0 0

END OF POLICY DEATH POLICY SURRENDER DEATH POLICY SURRENDER
YEAR BENEFIT VALUE VALUE BENEFIT VALUE VALUE
------ --------- ------- -------- --------- --------- ----------
8% (1)(2)(3)(4) 12% (1)(2)(3)(4)
---------------------------- --------------------------------

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

(1) Assumes annual premium of $25,000 paid in full at the beginning of each
Policy year. The values vary from those shown if the amount or frequency of
payments vary.

(3) Reflects Premium Based Bonuses credited according to the following schedule:

(4) Reflects Policy Value Bonuses credited on each monthly Anniversary after the
monthly deduction is made.

ANNUAL RATE OF CASH VALUE BONUSES AS A PERCENT OF NET CASH VALUE
<TABLE>
<CAPTION>
BAND 1
-------------------------
POLICY BAND 2 BAND 3 BAND 4
SURRENDER VALUE YEARS ----------------------------- ----------------------------- -------------
ON DATE OF POLICY YEARS 20 AND POLICY YEARS POLICY YEARS POLICY YEARS POLICY YEARS POLICY YEARS
MONTHLY BONUS 1 - 19 LATER 1 - 19 20 AND LATER 1 - 19 20 AND LATER 1 - 19
- ----------------- ------------- --------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
$0 - $9,999 .00% .00% .00% .00% .00% .00% .00%
$10,000 - $49,999 .30% .30% .30% .30% .35% .35% .35%
$50,000 - $99,999 .35% .35% .35% .35% .40% .40% .45%
$100,000 or more .40% .40% .40% .40% .45% .45% .50%

SURRENDER VALUE
ON DATE OF POLICY YEARS
MONTHLY BONUS 20 AND LATER
- ----------------- -------------
<S> <C>
$0 - $9,999 .00%
$10,000 - $49,999 .35%
$50,000 - $99,999 .45%
$100,000 or more .50%
</TABLE>

B-5
<PAGE>
APPENDIX C--THE GENERAL ACCOUNT

A POLICY OWNER MAY ALLOCATE PREMIUMS OR TRANSFER POLICY VALUE TO THE GENERAL
ACCOUNT, WHICH CONSISTS OF ALL FORTIS BENEFITS' ASSETS NOT HELD IN THE SEPARATE
ACCOUNT OR OTHER SEGREGATED ASSET ACCOUNTS. BECAUSE OF EXEMPTIVE AND
EXCLUSIONARY PROVISIONS, INTERESTS IN THE GENERAL ACCOUNT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND THE GENERAL ACCOUNT HAS NOT
BEEN REGISTERED AS AN INVESTMENT COMPANY UNDER THE 1940 ACT. ACCORDINGLY,
NEITHER THE GENERAL ACCOUNT NOR ANY INTERESTS THEREIN ARE GENERALLY SUBJECT TO
THE PROVISIONS OF THOSE ACTS AND FORTIS BENEFITS HAS BEEN ADVISED THAT THE STAFF
OF THE SECURITIES AND EXCHANGE COMMISSION HAS NOT REVIEWED THE DISCLOSURES IN
THIS PROSPECTUS RELATING TO THE GENERAL ACCOUNT. DISCLOSURES REGARDING THE
GENERAL ACCOUNT MAY, HOWEVER, BE SUBJECT TO CERTAIN GENERALLY APPLICABLE
PROVISIONS OF THE FEDERAL SECURITIES LAWS RELATING TO THE ACCURACY AND
COMPLETENESS OF STATEMENTS MADE IN PROSPECTUSES.

This prospectus is generally intended to serve as a disclosure document only for
the aspects of the Policy involving the Separate Account and contains only
selected information regarding the General Account. More information regarding
the General Account may be obtained from Fortis Benefits' Home Office or from
your sales representatives.

GENERAL DESCRIPTION

Subject to applicable law, Fortis Benefits has sole discretion over the
investment of the assets of the General Account. Unlike the assets of the
Separate Account, the assets of the General Account are chargeable with
liabilities arising out of any other business of Fortis Benefits.

The allocation or transfer of amounts to the General Account does not entitle a
Policy owner to share in the investment experience of the General Account.
Instead, Fortis Benefits guarantees that Policy Value in the General Account
will accrue interest at an effective annual rate of at least 4%, independent of
the actual investment experience of the General Account. Fortis Benefits is not
obligated to credit interest at any higher rate, although Fortis Benefits, in
its sole discretion, may do so. The rates of interest actually credited to any
amount in the General Account from time to time may vary depending on when that
amount was first allocated to the General Account.

The Policy owner may select either Death Benefit Option A or B under the Policy
and may change such option or the Policy's Face Amount, subject to satisfactory
evidence of insurability where required and subject to all the conditions and
limitations applicable to such transactions generally. See "Policy Benefits."

GENERAL ACCOUNT POLICY VALUE

The Policy Value in the General Account will reflect the amount and frequency of
premium payments allocated to the General Account, the amount of interest and
any Premium Based Bonuses and Policy Value Bonuses credited to amounts in the
General Account, any partial withdrawals, or accelerated death benefit payments,
any transfers from or to the Separate Account, any Policy loans and the Monthly
Deduction imposed on amounts in the General Account in connection with the
Policy. Charges under a Policy are the same as when the Separate Account is
being used, except that no daily charges for mortality and expense risk or
premium tax and sales expenses are imposed on amounts of Policy Value in the
General Account. See "Charges and Deductions."

TRANSFERS, SURRENDERS AND POLICY LOANS

Amounts in the General Account are generally subject to the same rights and
limitations and will be subject to the same charges as are amounts allocated to
the Subaccounts of the Separate Account with respect to transfers, total
surrenders, partial withdrawals, and Policy loans. See "Payment and Allocation
of Premiums--Allocation of Premiums and Policy Value," "Loan Privileges," and
"Surrender and Partial Withdrawal." One exception is that transfers out of the
General Account are limited to one transfer in each Policy year, which may not
be for more than 50% of the Policy Value in the General Account (excluding the
amount of General Account Policy Value attributable to Policy loans) at the date
of transfer. However, if the unloaned General Account Policy Value at the date
of transfer is less than $1,000, the entire unloaned balance may be transferred
from the General Account to the Separate Account. See "Payment and Allocation of
Premiums--Allocation of Premiums and Policy Value." Fortis Benefits reserves the
right to review these limits on an annual basis and, subject to the limits in
the Policy, to reduce them.

C-1
<PAGE>

VARIABLE UNIVERSAL LIFE SERVICE REQUEST

* The Policy owner(s) may use this form to request services for a NEW or
EXISTING policy.

* CONTRACT INFORMATION and SIGNATURES must be completed to allow us to
complete the service request.

1. TELEPHONE TRANSFER AUTHORIZATION

/ / Check this box to authorize telephone transfer by owner(s) or
registered representative.

/ / Check this box to authorize telephone transfer by owner(s) only.

The owner(s) and/or registered representative may transfer by telephone
amount investment choices. I have read the telephone transfer authorization
terms in the prospectus and elect telephone transfers.

2. TRANSFER REQUEST

Move all or part of your existing asset balances from one subaccount to
another.

* Specify dollar amounts OR whole percentages

* Transfers from the General Account to the Separate Account ONLY are
subject to the following:

1. Maximum transfer is 50% of your unloaned General Account value once
per policy year.

2. If unloaned General Account value is less than $1,000, you may
transfer the entire unloaned balance.

TRANSFER FROM TRANSFER TO
BOND INVESTMENTS
$_________________ General Account $_____________%
$_________________ Money Market $_____________%
$_________________ U.S. Government $_____________%
$_________________ Diversified Income $_____________%
$_________________ Global Bond $_____________%
$_________________ High Yield $_____________%

STOCK INVESTMENTS
$_________________ Asset Allocation $_____________%
$_________________ Global Asset Allocation $_____________%
$_________________ Value $_____________%
$_________________ Growth & Income $_____________%
$_________________ S&P 500 Index $_____________%
$_________________ Blue Chip Stock $_____________%
$_________________ Global Growth $_____________%
$_________________ Growth Stock $_____________%
$_________________ International Stock $_____________%
$_________________ Aggressive Growth $_____________%

CONTRACT INFORMATION:

Policy Number _______________________________________________
/ / New Policy / / Existing

_____________________________________________________________
Name of Policy Owner

_____________________________________________________________
Name of Joint Owner (if applicable)

_____________________________________________________________
Social Security Number of Owner

_____________________________________________________________
Address

_____________________________________________________________
City State Zip Code

Telephone Number (_______) __________________________________

/ / Citizen of U.S. / / Resident Alien of U.S.
/ / Other __________________________________________________

3. SYSTEMATIC TRANSFER (DOLLAR COST AVERAGING):

Automatically move assets among investment choices.

* Specify dollar amounts only

* $5,000 minimum beginning balance, minimum transfer: $50

* General Account: Monthly amount must be less than or equal to 1/36 of the
principal.

* Frequency: Monthly

TRANSFER $___________________ on the 1st day of each month from the
____________________________ account to the following accounts:

BOND INVESTMENTS
$_________________ General Account
$_________________ Money Market
$_________________ U.S. Government
$_________________ Diversified Income
$_________________ Global Bond
$_________________ High Yield

STOCK INVESTMENTS
$_________________ Asset Allocation
$_________________ Global Asset Allocation
$_________________ Value
$_________________ Growth & Income
$_________________ S&P 500 Index
$_________________ Blue Chip Stock
$_________________ Global Growth
$_________________ Growth Stock
$_________________ International Stock
$_________________ Aggressive Growth

<PAGE>

VARIABLE UNIVERSAL LIFE SERVICE REQUEST, CONTINUED

INSTRUCTIONS FOR SECTIONS 4, 5 & 6:

A. Use whole percentages
B. Must equal 100%

4. CHANGE OF PREMIUM ALLOCATION:

Indicate which subaccount(s) incoming premium dollars should be allocated
to future payments.

* Specify future premium allocations.

BOND INVESTMENTS
____% General Account
____% Money Market
____% U.S. Government
____% Diversified Income
____% Global Bond
____% High Yield

STOCK INVESTMENTS
____% Asset Allocation
____% Global Asset Allocation
____% Value
____% Growth & Income
____% S&P 500 Index
____% Blue Chip Stock
____% Global Growth
____% Growth Stock
____% International Stock
____% Aggressive Growth
100 % TOTAL

5. PRIVILEGED ACCOUNT SERVICE:

Automatically rebalances the assets within your policy.
Note: This does not change future Premium Allocations.

* $2,000 minimum policy value.

FREQUENCY
/ / Quarterly (3/31, 6/30, 9/30, 12/31)
/ / Semi-Annual (6/30, 12/31)
/ / Annual (12/31)

BOND INVESTMENTS
____% General Account
____% Money Market
____% U.S. Government
____% Diversified Income
____% Global Bond
____% High Yield

6. SPECIFY MONTHLY DEDUCTIONS

Indicate which subaccount you want the monthly deductions from.

* Loans and withdrawals will also follow this unless otherwise stated.

* If the subaccount chosen does not have sufficient amount to cover
monthly charges, pro rata allocation will be automatically used.

BOND INVESTMENTS
____% General Account
____% Money Market
____% U.S. Government
____% Diversified Income
____% Global Bond
____% High Yield

_____________________________________________________________________________

SIGNATURES:

___________________________________________ _________
Policy Owner's Signature Date

___________________________________________ _________
Joint Owner's Signature Date

(______) ____________________________________________
Daytime Telephone Number

REPRESENTATIVE INFORMATION (IF KNOWN):

___________________________________________ _________
Registered Representative's Signature Date

_____________________________________________________
Registered Representative's Name (please print)

_____________________________________________________
Representative's Contract Number

(______) ____________________________________________
Registered Representative's Telephone Number

FORTIS-Registered Trademark-

FORTIS BENEFITS INSURANCE COMPANY
VARIABLE UNIVERSAL LIFE
P.O. BOX 64582
ST. PAUL, MN 55164
(800) 800-2638 98009 (4/96)

<PAGE>

CONTENTS OF REGISTRATION STATEMENT

This Registration Statement comprises the following papers and
documents:

Facing Sheet.

Cross-Reference Table. (Filed as a part of the initial Form S-6
Registration Statement on December 21, 1995).

Prospectus, consisting of 97 pages.

Undertaking to File Reports. (Filed as a part of the initial Form S-6
Registration Statement on December 21, 1995).

Undertaking pursuant to Rule 484(b)(1) under the Securities
Act of 1933. (Filed as a part of the initial Form S-6
Registration Statement on December 21, 1995).

Representations and Undertakings pursuant to Rule 6e-
3(T)(b)(13) (iii)(F) under the Investment Company Act of
1940. (Filed as a part of the initial Form S-6
Registration Statement on December 21, 1995).

Signatures.

Written Consents of the following persons:

Renee C. West, FSA, MAAA.

Douglas R. Lowe, Esq. (filed with Exhibit 3 below).

Ernst & Young LLP, Independent Auditors.

The following exhibits:

1A. (1) --Resolution of Board of Directors of Fortis
Benefits (under its prior name, Western Life
Insurance Company) effecting the establishment of
Variable Account C (incorporated by reference from
Exhibit 1.A(1) to registrant's Form S-6
Registration Statement, File No. 33-28551, filed
on May 5, 1989).

(2) --Not applicable

(3) --(a) Distribution Agreement between Fortis
Benefits and Fortis Investors, Inc. (incorporated
by reference from Exhibit No. 3(a) to Post-
Effective Amendment No. 9 to registrant's Form S-6
registration statement, File No. 33-28551, filed
April 29, 1994).

--(b) Form of Dealer Sales Agreement (incorporated
by reference from Post-Effective Amendment No. 12
to registrant's Form N-4 registration statement,
File No. 33-19421, filed December 22, 1994).

--(c) Schedule of sales commissions (incorporated
by reference from "Distribution of the Policies"
in the attached prospectus).

(4) --Not applicable

<PAGE>

(5) --(a) Specimen Flexible Premium Survivorship
Variable Life Insurance Policy.

--(b) Form of Guaranteed Benefit Rider,
Joint Insured Waiver of Monthly Deductions Rider,
Joint Insured Waiver of Selected Amount Rider,
Second-To-Die Rider, First-To-Die Rider,
Estate Protector Rider, Extended Maturity Option
Endorsement, Joint Aviation Exclusion Rider,
Accelerated Benefit Rider, Additional Insured
Rider, and Primary Insured Rider.

--(c) Form of Waiver of Monthly Deductions Rider
(incorporated by reference from Exhibit 1.A(5)(c)
to Pre-Effective Amendment No. 1 to registrant's
Form S-6 Registration Statement, File No. 33-
28551, filed on August 18, 1989).

--(d) Form of Waiver of Selected Amount Rider
(incorporated by reference from Exhibit 5(d) to
Post-Effective Amendment No. 9 to the registrant's
Form S-6 Registration Statement, File No. 33-28551,
filed April 29, 1994).

(6) --(a) Articles of Incorporation of Fortis Benefits
(incorporated by reference from Exhibit 1.A(6)(a)
to the initial filing of registrant's Form S-6
Registration Statement, File No. 33-03919, filed
on March 17, 1986).

--(b) Bylaws of Fortis Benefits (incorporated by
reference from Exhibit 1.A(6)(b) to the initial
filing of registrant's Form S-6 Registration
Statement, File No. 33-03919, filed on March 17,
1986).

--(c) Amendment to Articles of Incorporation and
Bylaws dated November 21, 1991 (incorporated by
reference from Exhibit 1.A(6)(c) to registrant's
Post-Effective Amendment No. 4 to Form S-6
Registration Statement, File No. 33-28551, filed
on March 2, 1992).

(7) --Not applicable.

(8) --Not applicable.

(9) --Not applicable.

(10) --(a) Application Form for Flexible Premium
Survivorship Variable Life Insurance Policy and
Form of Temporary Insurance Agreement.

--(b) Policy Change Application, Transfer Request
Form, and Change of Premium Allocation Form
(incorporated by reference from Exhibit 1.A(10)(b)
to registrant's Post-Effective Amendment No. 4 to
Form S-6 Registration Statement, File 33-28851,
filed on March 2, 1992).

<PAGE>

2. --See Exhibit 1.A(5) above.

3. --Opinion and consent of counsel as to the legality of
Securities being registered. (Filed as part of
Pre-Effective Amendment No. 1 to this Form S-6 Registration
Statement on February 16, 1996).

4. --Not applicable.

5. --Not applicable.

6. --Opinion and consent of actuary (Filed as part of the initial
filing of this Form S-6 Registration Statement on December 21,
1995).

7. --Forms of Notice of Cancellation Right and Request for
Cancellation pursuant to Rule 6e-3(T)(b)(13)(viii)
under the Investment Company Act of 1940.

8. --Method of computing exchange pursuant to Rule 6e-
3(T)(b)(13) (v)(B) under the Investment Company Act of
1940. (Not required because there will be no cash value
adjustments in connection with the right to transfer
Policy Value to the General Account, which registrant
intends to satisfy the requirements of said provision.)

9. --Undertaking of Fortis Benefits required by Rule 27d-2
under the Investment Company Act of 1940 (part of
Exhibit 1.A(3)(a)).

10. --Memorandum of Certain Procedures with Respect to
Pricing and Processing of Transactions Pursuant to Rule
6e-3(T)(b)(12) (iii).

11. --Power of Attorney for Messrs, Freedman, Gaddy,
Mackin, Keller, Clayton, Mahoney, Clancy, Meler and
Greiter (incorporated by reference from Exhibit 11 to
registrant's Form S-6 Registration Statement, File No.
33-73138, filed on December 17, 1993).

12. --Statement of Fortis Benefits Insurance Company
pursuant to Rule 27d-2 under the Investment Company Act
of 1940.

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, FORTIS BENEFITS
INSURANCE COMPANY has duly caused this amended Registration Statement to be
signed on its behalf by the undersigned thereunto duly authorized, and its seal
to be hereunto affixed and attested all in the City of St. Paul, State of
Minnesota, this 24th day of May, 1996.

FORTIS BENEFITS INSURANCE COMPANY

By: /s/ Robert Brian Pollock
---------------------------------
Robert Brian Pollock, President

Attest: /s/ Douglas R. Lowe
-----------------------------
Douglas R. Lowe
Associate General Counsel --
Life and Investment Products

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 on May 24, 1996.

/s/ Robert Brian Pollock
- ---------------------------------------------
Robert Brian Pollock, President and Director
(Chief Executive Officer)

/s/ Michael John Peninger
- ---------------------------------------------
Michael John Peninger, Senior Vice President,
Chief Financial Officer and Director
(Principal Financial and Accounting Officer)

/s/ Dean Conrad Kopperud
- ---------------------------------------------
Dean Conrad Kopperud, Director

*
--------------------------------------------
Allen Royal Freedman, Chairman of the Board

*
--------------------------------------------
Thomas Michael Keller, Director

--------------------------------------------
Arie Aristide Fakkert, Director

*
--------------------------------------------
Henry Carroll Mackin, Director

* By: /s/ Robert Brian Pollock
----------------------------------------
Robert Brian Pollock -- Attorney-in-Fact

<PAGE>

Pursuant to the requirements of the Securities Act of 1933, the registrant,
VARIABLE ACCOUNT C of Fortis Benefits Insurance Company, has duly caused this
amended Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, and its seal to be hereunto affixed and attested, all
in the City of St. Paul, State of Minnesota this 24th day of May, 1996.

VARIABLE ACCOUNT C
OF FORTIS BENEFITS INSURANCE COMPANY

By: FORTIS BENEFITS INSURANCE COMPANY
(Depositor)

By: /s/ Robert Brian Pollock
------------------------------------
Robert Brian Pollock, President

Attest: /s/ Douglas R. Lowe
------------------------------------
Douglas R. Lowe,
Associate General Counsel-
Life and Investment Products
<PAGE>

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated February 14, 1996 on the financial statements of
Fortis Benefits Insurance Company and our report dated March 22, 1996 on the
financial statements of Fortis Benefits Insurance Company Variable Account C
(Account C) in Pre-Effective Amendment No. 2 to the Registration Statement
(Form S-6 No. 33-65243) and the related Prospectus being filed under the
Securities Act of 1933 for the registration of an indefinite amount of
interests in Account C pursuant to variable life insurance policies.

/s/ Ernst & Young LLP

Minneapolis, Minnesota
May 24, 1996
<PAGE>

INDEX TO EXHIBITS

1A. (5)(a) Specimen Policy

(5)(b) Specimen Riders

(10)(a) Specimen Application

6. Opinion and Consent of Actuary

7. Notice of Cancellation Right and
Request for Cancellation

10. Memorandum of Certain Procedures with Respect to
Pricing and Processing Pursuant to
Rule 6c-3(T)(b)(12)(iii)

12. Rule 27d-2 Statement

<PAGE>

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

FORTIS BENEFITS
INSURANCE COMPANY

St. Paul, Minnesota
A Stock Company

WALL STREET SURVIVOR SERIES
VARIABLE UNIVERSAL LIFE-LAST SURVIVOR

We will pay the proceeds if we receive due proof that both the first and
surviving insureds died while this policy was in force. THE AMOUNT AND DURATION
OF THE DEATH BENEFIT MAY INCREASE OR DECREASE DEPENDING ON INVESTMENT RESULTS OF
THE SUBACCOUNTS OF THE SEPARATE ACCOUNT AND ON THE DEATH BENEFIT OPTION SELECTED
AS DESCRIBED IN THE DEATH BENEFIT SECTION. SEE THE POLICY VALUES PROVISION FOR
THE DETAILS OF YOUR VARIABLE BENEFITS.

THE SURRENDER VALUE UNDER THIS POLICY INCREASES OR DECREASES DEPENDING ON
INVESTMENT RESULTS OF THE SUBACCOUNTS OF THE SEPARATE ACCOUNT. THERE IS NO
GUARANTEED MINIMUM SURRENDER VALUE IN THE SEPARATE ACCOUNT. THE
GENERAL ACCOUNT DOES HAVE GUARANTEED MINIMUM SURRENDER VALUES.

RIGHT TO RETURN POLICY

This policy may be returned to us any time prior to the latest of: (a) 10 days
after its delivery to you; or (b) 10 days after delivery of a Notice of
Withdrawal Right. The policy may be returned by delivery or
mail, to our Home Office along with a written notice to cancel it. We will
refund the premium paid.

Signed for Fortis Benefits Insurance Company, St. Paul, Minnesota, to take
effect on the policy date.

/s/ Dean Kopperud /s/ Tony Rotondi
--------------------- ---------------------
Dean Kopperud Tony Rotondi
Senior Vice President Senior Vice President

FLEXIBLE PREMIUM SURVIVORSHIP VARIABLE LIFE POLICY. FLEXIBLE PREMIUMS PAYABLE
DURING THE LIFETIME OF THE SURVIVING INSURED UNTIL THE MATURITY DATE. DEATH
BENEFIT PAYABLE AT DEATH OF SURVIVING INSURED PRIOR TO MATURITY DATE.
ADJUSTABLE DEATH BENEFIT. SURRENDER VALUE PAYABLE ON MATURITY DATE.
NONPARTICIPATING. SOME BENEFITS REFLECT INVESTMENT RESULTS.

ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR
OTHER PERSON, FILES AN APPLICATION OR STATEMENT OF CLAIM CONTAINING ANY
MATERIALLY FALSE INFORMATION, OR CONCEALS FOR THE PURPOSE
OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO COMMITS A
FRAUDULENT INSURANCE ACT, WHICH IS A CRIME AND SUBJECTS SUCH PERSON TO CRIMINAL
AND CIVIL PENALTIES.

L28 56708

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

<PAGE>

READ YOUR POLICY CAREFULLY

This policy is a legal contract between the owner and Fortis Benefits Insurance
Company

TABLE OF CONTENTS

Page # Page #

Annual Report. . . . . . . . . 5 Policy Split Option . . . . . 19
Assignments. . . . . . . . . . 4 Policy Values. . . . . . . . . 10
Beneficiary. . . . . . . . . . 4 Policy Value Bonus . . . . . . 13
Cost of Insurance. . . . . . . 10 Premium Based Bonuses. . . . . 13
Death Benefit. . . . . . . . . 8 Premiums . . . . . . . . . . . 6
Deductions . . . . . . . . . . 10 Reinstatement. . . . . . . . . 6
Definitions. . . . . . . . . . 2 Rights Reserved by Us. . . . . 8
Grace Period . . . . . . . . . 6 Separate Account . . . . . . . 7
Incontestable. . . . . . . . . 5 Settlement Options . . . . . . 16
Maturity Date. . . . . . . . . 19 Suicide. . . . . . . . . . . . 5
Policy Issuance Expense. . . . 10 Surrenders . . . . . . . . . . 14
Policy Loans . . . . . . . . . 14 Transfers. . . . . . . . . . . 8
Policy Owner . . . . . . . . . 4 Withdrawals. . . . . . . . . . 15

Any policy amendments or endorsements follow the policy schedule. Additional
benefits added by rider follow the Policy Split Option. The application is the
last page of this policy.

You, Your
The owner of this policy.

We, Us, Our
Fortis Benefits Insurance Company.

<PAGE>

POLICY SCHEDULE
Policy Number: WMH80003

L28 Flexible Premium Survivorship Variable Life
Additional Coverage Insured Coverage Amount
- ------------------- ------- ---------------
L111 Guaranteed Death Benefit Rider
L108 Estate Protection Rider Joint $1,000,000
L107 Joint 2nd-To-Die Term Rider Joint $1,500,000
L109 Joint 1st-To-Die Term Rider Joint $250,000
L113 Primary Insured Rider John Doe $750,000
L112 Additional Insured Rider James Doe $250,000
L112 Additional Insured Rider Jill Doe $250,000
L101 Waiver of Monthly Deductions Rider Joint
L110 Accelerated Benefit Rider

Owner(s): John Doe
Jane Doe

Joint Insured Issue Age Sex Premium Class Policy Split Option %
- ------------- --------- --- ------------- ---------------------
John Doe 35 Male Non-Smoker 50%
Jane Doe 33 Female Smoker 50%

<TABLE>

<S> <C> <C> <C>
Policy Date: February 10, 1996 Initial Face Amount: $1,500,000

Original Maturity Date(OMD): February 10, 2063 Initial Death Benefit Option: A

Maturity Date: February 10, 2063

</TABLE>

Maturity Date is the policy anniversary following the younger Joint Insured's
100th birthday. It is possible that coverage will expire prior to the date shown
if either: Premiums paid following payment of the initial premium, or investment
results on the designated subaccounts, and interest credited on the General
Account are insufficient to continue coverage to such date.

<PAGE>

Policy Number: WMH80003

Face Amount Bands: Band 1 $ 100,000-$ 499,999
Band 2 $ 500,000-$ 999,999
Band 3 $1,000,000-$4,999,999
Band 4 $5,000,000+

Minimum Face Amount: $100,000
Minimum Face Amount Increase: $25,000

Initial Premium: $10,000.00
Planned Periodic Premium: $1,400.00
Premium Frequency: Monthly

DETAIL ON MONTHLY PREMIUMS:
Current Guaranteed
------- ----------
Initial Monthly Minimum Premium: $1,117.13 $1,213.47
Base Policy: $828.13 $828.13
Riders: $289.00 $385.34

The initial monthly minimum premium increases each year by all rider's cost of
insurance charges. If the cumulative minimum premium requirement is met, the
Guaranteed Death Benefit will remain in effect until February 10, 2048.

ANNUAL MAXIMUM BONUS PREMIUM: $9,937.50. This is used in determining
the Premium Based Bonuses and
will change when the Face
Amount is changed.

PREMIUM BASED BONUS PERCENTAGE:
Younger Joint Insured Year 7 Year 8 Year 9 to OMD
Age At Issue Current Guaranteed Current Guaranteed Current Guaranteed
------------ ------- ---------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
18 - 50 2% 2% 2% 2% 4% 4%
51 - 60 2% 2% 4% 4% 7% 7%
61 - 70 5% 2% 7% 4% 10% 7%
71 - 85 5% 2% 5% 4% 5% 5%

</TABLE>

Policy Loan Interest Rate: 5.66% payable in advance.
Lower Rate on Certain Loans: 3.85% payable in advance.
Lower Rate is available if Surrender Value is greater than $10,000 after the 2nd
policy year or after 12 years.

<PAGE>

Policy Number: WMH80003

POLICY VALUE BONUSES: Annual Bonus Rate as a Percentage of Net Cash Value
Death Benefit Option A Death Benefit Option B
Surrender Value Minimum Band 1 Band 2 Band 3 Band 4 Band 1 Band 2 Band 3 Band 4
- ----------------------- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$0 - $9,999 .00% .00% .00% .00% .00% .00% .00% .00%
$10,000 - $49,999 .00% .00% .05% .05% .30% .30% .35% .35%
$50,000 - $99,999 .05% .05% .10% .10% .35% .35% .40% .40%
$100,000 + .10% .10% .15% .20% .40% .40% .45% .50%

</TABLE>

In the Policy Years 20 to OMD, an additional .35% will be added to the Bonus
Rate for both Death Benefit Options A and B but this percentage is NOT
guaranteed.

When the Death Benefit Option is changed, the Policy Value Bonus will be a
weighted average of bonus rates based on the number of months the policy was
under each Death Benefit Option. When the Face Amount is changed, the
appropriate band will be determined by using a weighted average of Face Amounts
based on the number of months the policy was under each Face Amount.

INITIAL PREMIUM ALLOCATIONS:
Aggressive Growth Subaccount 5%
International Stock Subaccount 5%
Growth Stock Subaccount 5%
Global Growth Subaccount 5%
Blue Chip Stock Subaccount 5%
S&P 500 Index Subaccount 15%
Growth and Income Subaccount 5%
Value Subaccount 15%
Global Asset Allocation Subaccount 5%
Asset Allocation Subaccount 5%
High Yield Subaccount 5%
Global Bond Subaccount 5%
Diversified Income Subaccount 5%
U.S. Government Securities Subaccount 5%
Money Market Subaccount 5%
General Account 5%
-----
TOTAL 100%

Information on this Policy Schedule applies to the Initial Face Amount and Rider
Coverage Amounts. If you make a Policy Change that affects these benefits,
we will send you an amendment.

As declared by the Company, the initial General Account Interest Rate as of
February 10, 1996 is 6.5%

<PAGE>

POLICY CHARGES

Policy Number: WMH80003

<TABLE>
<CAPTION>
Guaranteed
Current Maximum
------- ----------
<S> <C> <C>

Premium Expense Charge: 0.0% 7.5%
Monthly Deductions: Administrative Charge $6.00 $ 7.50
Administrative Charge $0.00 $195.00*
Policy Issuance Expense Charge $75.00 $75.00**
Sales and Premium Tax Charges $4.00 $ 4.00***
Other Deductions: Transfer Charge $0.00 $25.00
Withdrawal Charge $0.00 $25.00

</TABLE>

* Charge is calculated as $0.13 per $1,000 of Face Amount. If the Face Amount
changes, this charge is recalculated.
** A charge per $1,000 of Initial Face Amount that varies by band and remains in
effect for 10 years. If the Face Amount increases, an additional layer of
charges will be assessed using the same schedule determined by the new Total
Face Amount Band In Force at the effective date of increase. The charges are
$0.10 per $1000 of Face Increase for Band 1, $0.08 per $1000 of Face Increase
for Band 2, $0.05 per $1000 of Face Increase for Band 3, and $0.03 per $1000 of
Face Increase for Band 4. Face decreases do NOT reduce these expense charges.
***Sales and Premium Tax Monthly and Daily Deductions are waived when they
exceed 11.2% of premiums paid. This percentage may be increased by the company,
but in no event will it exceed 12%. Daily Deductions will not exceed .0027398%
(1.00% per year) of the separate account value for mortality and expense risks,
and .0009589% (0.35% per year) for sales and premium tax.

MONTHLY CHARGES FOR RIDERS: SEE RIDER CHARGES AND BENEFITS SECTION

<TABLE>
<CAPTION>
SURRENDER CHARGES:
Maximum Surrender Surrender
Policy Year Charge@ Charge@
- ----------- ------- -------
<S> <C> <C>
1 $15,750.00 =the sum of the
2 $14,175.00 remaining Policy
3 $12,600.00 Issuance Expense
4 $11,025.00 Charge still uncollected
5 $9,450.00 plus 12% of all
6 $7,875.00 premiums paid less
7 $6,300.00 monthly and daily
8 $4,725.00 deductions already
9 $3,150.00 charged for sales
10 $1,575.00 premium tax charges.
11+ $0.00

</TABLE>

@ The actual surrender charge is the lesser of the maximum surrender charge and
the surrender charge shown above.

The above table applies to the Initial Face Amount for the first 11 years.
Additional Charges will apply to each increase in the Face Amount for 11 years
after the effective date of increase. A decrease in Face Amount reduces the
amount of maximum surrender charge by the difference between the maximum
surrender charge and the actual surrender charge multiplied by the proportion of
the amount of decrease to the original Face Amount.

Information on this Policy Schedule applies to the Initial Face Amount and Rider
Coverage Amounts. If you make a policy change that affects these charges, we
will send you an amendment.

<PAGE>

TABLE OF MAXIMUM COST OF INSURANCE RATES
FLEXIBLE PREMIUM SURVIVORSHIP VARIABLE LIFE

Policy Number: WMH80003

The Monthly Rate reflects the maximum cost of insurance per $1,000 of Net Amount
at Risk. The monthly cost of insurance calculations will use these rates.
These rates do not include possible Combined Flat Ratings.

Policy year Monthly Rate Policy Year Monthly Rate
- ----------- ------------ ----------- ------------
<S> <C> <C> <C>
1 $0.000389 42 $3.697507
2 0.001249 43 4.242710
3 0.002262 44 4.834032
4 0.003502 45 5.470720
5 0.005016 46 6.159632
6 0.006894 47 6.914621
7 0.009171 48 7.752261
8 0.011995 49 8.680734
9 0.015392 50 9.701785
10 0.019414 51 10.831636
11 0.024169 52 12.028548
12 0.029671 53 13.273678
13 0.036149 54 14.559373
14 0.043698 55 15.881600
15 0.052448 56 17.254552
16 0.062778 57 18.688400
17 0.075061 58 20.301580
18 0.089618 59 22.088620
19 0.107098 60 24.151177
20 0.127473 61 26.684798
21 0.151899 62 30.250473
22 0.180113 63 35.903078
23 0.212353 64 45.745986
24 0.249218 65 66.318676
25 0.290956 66 83.333333
26 0.338407
27 0.392876
28 0.457448
29 0.534678
30 0.627702
31 0.738426
32 0.866912
33 1.012673
34 1.176173
35 1.357137
36 1.560125
37 1.791920
38 2.063476
39 2.386843
40 2.766044
41 3.203291

</TABLE>

<PAGE>

RIDER CHARGES AND BENEFITS

Policy Number: WMH80003

Maximum Individual Insured Term Rider Ratio = 6 times Base Policy Face Amount
Maximum Combined Rider Ratio = 6 times Base Policy Face Amount

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

GUARANTEED DEATH BENEFIT RIDER:
Effective Date: February 10, 1996
Expiry Date: February 10, 2048
Monthly Charge for first 10 Policy Years: $0.00
Monthly Charge after 10th Policy Year: $15.83

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

PRIMARY INSURED RIDER (PIR): $750,000 See PIR/AIR Rider Cost of Insurance
Rates
Name: John Doe Effective Date: February 10, 1996
Age: 35 Expiry Date: February 10, 2056
Sex: Male
Class: Non-Smoker

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

ADDITIONAL INSURED RIDER (AIR): $250,000 See PIR/AIR Rider Cost of Insurance
Rates
Name: James Doe Effective Date: February 10, 1996
Age: 10 Expiry Date: February 10, 2063
Sex: Male
Class: Non-Smoker

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

<PAGE>

RIDER CHARGES AND BENEFITS

Policy Number: WMH80003

Maximum Individual Insured Term Rider Ratio = 6 times Base Policy Face Amount
Maximum Combined Rider Ratio = 6 times Base Policy Face Amount

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

ADDITIONAL INSURED RIDER (AIR): $250,000 See PIR/AIR Rider Cost of Insurance
Rates
Name: Jill Doe Effective Date: February 10, 1996
Age: 12 Expiry Date: February 10, 2063
Sex: Female
Class: Non-Smoker

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

ACCELERATED BENEFIT RIDER:
Monthly Charge: $0.00
Administrative Claim Charge: Current: $50.00
Guaranteed: $300.00

- --------------------------------------------------------------------------------
<PAGE>
RIDER SCHEDULE PAGE FOR ESTATE PROTECTION RIDER

Policy Number: WMH 80003

Joint Insureds: Refer to the Policy Schedule Face Amount: $1,000,000
Effective Date: February 10, 1986 Maximum Estate Protection Rider
------------------------------
Ratio
-----

Expiry Date: February 10, 2000 1.25 times Base Policy Face
Amount

The Monthly Rate reflects the cost of insurance per $1,000. The monthly cost of
insurance calculations will use these rates.

Guaranteed Guaranteed
Policy Year Monthly Rate Policy Year Monthly Rate
- ----------- ------------ ----------- ------------

1 $0.020833 3 $0.020833
2 0.020833 4 0.020833

<PAGE>

RIDER SCHEDULE PAGE FOR JOINT 2ND-TO-DIE TERM RIDER

Policy Number: WMH80003

Joint Insureds: Refer to the Policy Schedule Face Amount: $1,500,000
Effective Date: February 10, 1996
Expiry Date: February 10, 2063

The Monthly Rate reflects the cost of insurance per $1,000. The monthly cost of
insurance calculations will use these rates.

Guaranteed Guaranteed
Policy Year Monthly Rate Policy Year Monthly Rate
- ----------- ------------ ----------- -------------
1 $0.020833 42 3.610154
2 0.020833 43 4.127986
3 0.020833 44 4.685506
4 0.020833 45 5.281050
5 0.020833 46 5.919943
6 0.020833 47 6.613617
7 0.020833 48 7.375358
8 0.020833 49 8.210140
9 0.020833 50 9.116697
10 0.020833 51 10.106062
11 0.024165 52 11.138587
12 0.029666 53 12.195994
13 0.036140 54 13.270267
14 0.043685 55 14.356759
15 0.052430 56 15.465646
16 0.062752 57 16.603134
17 0.075024 58 17.858252
18 0.089565 59 19.218854
19 0.107023 60 20.751262
20 0.127367 61 22.579571
21 0.015750 62 25.055301
22 0.179902 63 28.758895
23 0.212060 64 34.613670
24 0.248814 65 44.770000
25 0.290407 66 61.996667
26 0.337663
27 0.391874
28 0.456090
29 0.532825
30 0.625148
31 0.734893
32 0.862047
33 1.006038
34 1.167230
35 1.345241
36 1.544419
37 1.771222
38 2.036064
39 2.350221
40 2.716948

<PAGE>

RIDER SCHEDULE PAGE FOR JOINT 1ST-TO-DIE TERM RIDER

Policy Number: WMH80003

Joint Insureds: Refer to the Policy Schedule Face Amount $250,000
Effective Date: February 10, 1996
Expiry Date: February 10, 2063

The Monthly Rate reflects the cost of insurance per $1,000. The monthly cost of
insurance calculations will use these rates.

Guaranteed Guaranteed
Policy Year Monthly Rate Policy Year Monthly Rate
- ----------- ------------ ----------- -------------
1 $0.383322 42 $12.376371
2 0.404108 43 13.603234
3 0.429048 44 14.885541
4 0.460632 45 16.243292
5 0.496778 46 17.709183
6 0.537900 47 19.322692
7 0.583995 48 21.118475
8 0.634642 49 23.098291
9 0.690252 50 25.236463
10 0.747505 51 27.510447
11 0.809301 52 29.857352
12 0.873977 53 32.232638
13 0.942357 54 34.619716
14 1.015682 55 37.026999
15 1.093116 56 39.476059
16 1.180448 57 41.997007
17 1.279733 58 44.694900
18 1.388885 59 47.704017
19 1.512432 60 51.398260
20 1.649515 61 56.403327
21 1.803403 62 63.853009
22 1.966647 63 75.306582
23 2.137574 64 91.402080
24 2.321124 65 101.549167
25 2.516057 66 92.525417
26 2.727279
27 2.960068
28 3.229072
29 3.541470
30 3.902652
31 4.308226
32 4.750639
33 5.221198
34 5.721034
35 6.253817
36 6.838650
37 7.493509
38 8.253807
39 9.134323
40 10.125651
41 11.210006

<PAGE>

RIDER SCHEDULE PAGE FOR WAIVER OF MONTHLY DEDUCTIONS RIDER (LAST SURVIVOR)

Policy Number: WMH80003

Joint Insureds: Refer to the Policy Schedule
Effective Date: February 10, 1996
Expiry Date: February 10, 2023

The Monthly Rate reflects the cost of insurance per $1,000 of Net Amount at
Risk. The monthly cost of insurance calculations will use these rates.

Guaranteed Guaranteed
Policy Year Monthly Rate Policy Year Monthly Rate
- ----------- ------------ ----------- -------------
1 $0.393317 19 $2.065387
2 0.419981 20 2.581335
3 0.456645 21 3.246835
4 0.501641 22 4.053396
5 0.554969 23 5.009119
6 0.608295 24 6.113746
7 0.661621 25 6.320000
8 0.714946 26 6.320000
9 0.786601
10 0.876587
11 0.984901
12 1.119874
13 1.281502
14 1.478113
15 1.719700
16 2.014586
17 2.372759
18 2.864159

<PAGE>

AIR/PIR RIDER COST OF INSURANCE RATES
GUARANTEED MONTHLY COST OF INSURANCE RATES
SMOKER RATES PER $1,000
<TABLE>
<CAPTION>

MONTHLY MONTHLY MONTHLY
GUARANTEED GUARANTEED GUARANTEED
AGE RATE AGE RATE AGE RATE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MALE 21 0.20250 46 0.62250 71 5.38000
22 0.19917 47 0.67750 72 5.86500
23 0.19583 48 0.73667 73 6.40167
24 0.19000 49 0.80167 74 6.99000
25 0.18417 50 0.87333 75 7.61917
26 0.18083 51 0.95417 76 8.26167
27 0.17917 52 1.04583 77 8.90667
28 0.17917 53 1.15000 78 9.55833
29 0.18167 54 1.26333 79 10.24083
30 0.18583 55 1.38500 80 10.97500
31 0.19167 56 1.51333 81 11.78250
32 0.20000 57 1.64833 82 12.67667
33 0.21000 58 1.79083 83 13.64417
34 0.22250 59 1.94333 84 14.65167
35 0.23750 60 2.11333 85 15.66500
36 0.25500 61 2.30583 86 16.66083
37 0.27667 62 2.52250 87 17.68167
38 0.30083 63 2.76417 88 18.74667
39 0.32917 64 3.02833 89 19.80417
40 0.36167 65 3.30833 90 20.87167
41 0.39667 66 3.60167 91 21.98250
42 0.43500 67 3.90583 92 23.27000
43 0.47667 68 4.22417 93 24.92167
44 0.52333 69 4.57000 94 27.17417
45 0.57167 70 4.95167
- --------------------------------------------------------------------------------
FEMALE 21 0.10417 46 0.44750 71 2.79167
22 0.10667 47 0.47917 72 3.09167
23 0.10917 48 0.51333 73 3.44750
24 0.11167 49 0.55083 74 3.85333
25 0.11417 50 0.59083 75 4.29667
26 0.11833 51 0.63417 76 4.76833
27 0.12250 52 0.68250 77 5.26083
28 0.12667 53 0.73667 78 5.78083
29 0.13167 54 0.79167 79 6.34750
30 0.13833 55 0.84833 80 6.98250
31 0.14333 56 0.90417 81 7.70250
32 0.14917 57 0.95667 82 8.52167
33 0.15750 58 1.00833 83 9.46667
34 0.16583 59 1.06333 84 10.49167
35 0.17583 60 1.12917 85 11.58083
36 0.19000 61 1.21083 86 12.72417
37 0.20750 62 1.31667 87 13.91167
38 0.22750 63 1.44500 88 15.14833
39 0.25000 64 1.58833 89 16.43417
40 0.27583 65 1.73917 90 17.86000
41 0.30417 66 1.89250 91 19.39500
42 0.33167 67 2.04083 92 21.09750
43 0.36000 68 2.19167 93 23.09667
44 0.38750 69 2.35417 94 25.77417
45 0.41750 70 2.54750
</TABLE>

For insureds with other than a standard rating classification, the guaranteed
monthly cost of insurance rates are the above rates multiplied by the
substandard rating factor shown in the policy schedule.

56949

<PAGE>

AIR/PIR RIDER COST OF INSURANCE RATES

GUARANTEED MONTHLY COST OF INSURANCE RATES
NON-SMOKER RATES PER $1,000

MONTHLY MONTHLY MONTHLY
GUARANTEED GUARANTEED GUARANTEED
AGE RATE AGE RATE AGE RATE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MALE 21 0.14500 46 0.32583 71 3.52583
22 0.14250 47 0.35167 72 3.92417
23 0.13917 48 0.38083 73 4.37500
24 0.13500 49 0.41167 74 4.87000
25 0.13083 50 0.44750 75 5.39833
26 0.12833 51 0.48917 76 5.95750
27 0.12667 52 0.53583 77 6.54167
28 0.12583 53 0.59000 78 7.15417
29 0.12583 54 0.65000 79 7.81500
30 0.12667 55 0.71750 80 8.54500
31 0.12917 56 0.79083 81 9.36333
32 0.13250 57 0.86833 82 10.28583
33 0.13833 58 0.95500 83 11.30917
34 0.14417 59 1.05167 84 12.41250
35 0.15083 60 1.16000 85 13.57083
36 0.15917 61 1.28083 86 14.77000
37 0.16917 62 1.41917 87 15.99000
38 0.18083 63 1.57667 88 17.22750
39 0.19333 64 1.75167 89 18.49833
40 0.20750 65 1.94250 90 19.82167
41 0.22333 66 2.14917 91 21.22833
42 0.24000 67 2.37083 92 22.77000
43 0.25833 68 2.61167 93 24.59750
44 0.27833 69 2.87917 94 27.04833
45 0.30083 70 3.18167
- --------------------------------------------------------------------------------
FEMALE 21 0.09000 46 0.28833 71 2.15167
22 0.09083 47 0.30833 72 2.40750
23 0.09250 48 0.32917 73 2.71417
24 0.09417 49 0.35250 74 3.06667
25 0.09583 50 0.37917 75 3.46083
26 0.09833 51 0.40750 76 3.88667
27 0.10000 52 0.44083 77 4.34333
28 0.10333 53 0.47750 78 4.83750
29 0.10667 54 0.51500 79 5.38500
30 0.10917 55 0.55500 80 6.00750
31 0.11250 56 0.59500 81 6.72333
32 0.11583 57 0.63500 82 7.54833
33 0.12083 58 0.67417 83 8.47833
34 0.12583 59 0.71833 84 9.50417
35 0.13167 60 0.77083 85 10.61417
36 0.14083 61 0.83583 86 11.80000
37 0.15083 62 0.91583 87 13.05917
38 0.16250 63 1.01417 88 14.39417
39 0.17500 64 1.12500 89 15.81500
40 0.18917 65 1.24500 90 17.33167
41 0.20500 66 1.36917 91 18.98083
42 0.22083 67 1.49583 92 20.82417
43 0.23667 68 1.62667 93 22.99083
44 0.25250 69 1.77250 94 25.77417
45 0.27000 70 1.94333
</TABLE>

<PAGE>

AIR/PIR RIDER COST OF INSURANCE RATES

GUARANTEED MONTHLY COST OF INSURANCE RATES
STANDARD RATES PER $1,000

MONTHLY MONTHLY MONTHLY
GUARANTEED GUARANTEED GUARANTEED
AGE RATE AGE RATE AGE RATE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MALE 0 0.23000 32 0.16333 64 2.11917
1 0.09000 33 0.17000 65 2.32417
2 0.08667 34 0.17917 66 2.54333
3 0.08500 35 0.18917 67 2.77500
4 0.08083 36 0.20250 68 3.02500
5 0.07667 37 0.21750 69 3.30083
6 0.07250 38 0.23417 70 3.61167
7 0.06833 39 0.25333 71 3.96583
8 0.06583 40 0.27500 72 4.37167
9 0.06500 41 0.29833 73 4.83167
10 0.06583 42 0.32417 74 5.33417
11 0.07083 43 0.35167 75 5.87083
12 0.08000 44 0.38167 76 6.43417
13 0.09333 45 0.41333 77 7.01667
14 0.10833 46 0.44667 78 7.62333
15 0.12417 47 0.48250 79 8.27250
16 0.13917 48 0.52083 80 8.98667
17 0.15000 49 0.56417 81 9.78583
18 0.15917 50 0.61083 82 10.68667
19 0.16417 51 0.66583 83 11.68417
20 0.16583 52 0.72750 84 12.75667
21 0.16583 53 0.79667 85 13.87917
22 0.16417 54 0.87417 86 15.03417
23 0.16083 55 0.95667 87 16.21417
24 0.15750 56 1.04500 88 17.41917
25 0.15250 57 1.13833 89 18.65583
26 0.15000 58 1.23833 90 19.94250
27 0.14917 59 1.34583 91 21.31083
28 0.14833 60 1.46667 92 22.82333
29 0.15000 61 1.60250 93 24.63000
30 0.15250 62 1.75667 94 27.06083
31 0.15750 63 1.92833
</TABLE>

Female rates on reserve side.

For insureds with other than a standard rating classification, the guaranteed
monthly cost of insurance rates are the above
rates multiplied by the substandard rating factor shown in the policy schedule.

56951

<PAGE>

AIR/PIR RIDER COST OF INSURANCE RATES

GUARANTEED MONTHLY COST OF INSURANCE RATES
STANDARD RATES PER $1,000

MONTHLY MONTHLY MONTHLY
GUARANTEED GUARANTEED GUARANTEED
AGE RATE AGE RATE AGE RATE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FEMALE 0 0.16417 32 0.12833 64 1.21500
1 0.07333 33 0.13417 65 1.33500
2 0.07000 34 0.14083 66 1.45917
3 0.06833 35 0.14833 67 1.58250
4 0.06750 36 0.15917 68 1.71000
5 0.06583 37 0.17083 69 1.85333
6 0.06333 38 0.18583 70 2.02167
7 0.06167 39 0.20250 71 2.22917
8 0.06083 40 0.22083 72 2.48583
9 0.06000 41 0.24000 73 2.79250
10 0.05917 42 0.26000 74 3.14750
11 0.06083 43 0.27917 75 3.54083
12 0.06333 44 0.30000 76 3.96750
13 0.06750 45 0.32167 77 4.42417
14 0.07167 46 0.34250 78 4.91667
15 0.07583 47 0.36583 79 5.46250
16 0.08000 48 0.39083 80 6.08250
17 0.08417 49 0.41833 81 6.79500
18 0.08750 50 0.44750 82 7.61667
19 0.09000 51 0.48000 83 8.54667
20 0.09250 52 0.51667 84 9.57000
21 0.09417 53 0.55667 85 10.67583
22 0.09583 54 0.59833 86 11.85750
23 0.09750 55 0.64000 87 13.11083
24 0.10000 56 0.68083 88 14.43833
25 0.10250 57 0.72000 89 15.84833
26 0.10500 58 0.75917 90 17.36000
27 0.10833 59 0.80333 91 19.00417
28 0.11167 60 0.85583 92 20.83833
29 0.11500 61 0.92000 93 22.99583
30 0.12000 62 1.00333 94 25.77417
31 0.12417 63 1.10250
</TABLE>

<PAGE>

DEFINITIONS

AGE

An insured's age as of his or her last birthday.

FUND

Each fund is a separate investment portfolio of Fortis Series Funds, Inc.,
a "series" type management investment company registered under the Investment
Company Act of 1940.

GENERAL ACCOUNT

Amounts allocated to the General Account will be invested with all of our
assets, which are not allocated to a segregated investment account.

HOME OFFICE

Our Office at 500 Bielenberg Drive, Woodbury, Minnesota 55125 (mailing
address: P.O. Box 64582, St. Paul, MN 55164). Payments and other communications
received at the Home Office after the end of a valuation date will be deemed to
have been received on the next valuation date.

JOINT INSUREDS

The persons named as joint insureds shown in the policy schedule.

LAPSE

Termination of the policy at the end of the Grace Period.

NET PREMIUM

The net premium is the premium paid less the premium expense charges shown
in your policy schedule.

POLICY DATE

The date shown in the policy schedule which is used to determine policy
anniversaries, monthly anniversaries, and policy years.

PRO-RATA BASIS

Allocation among the general account and the subaccounts in the same
proportion that the unloaned policy value in the general account and the policy
value in each subaccount bears to the total unloaned policy value.

REALLOCATION DATE

The reallocation date is 20 days after we release the policy to an active
status in our processing system.

SEPARATE ACCOUNT

A segregated investment account entitled Variable Account C. This account
was established by us pursuant to applicable law.

56923

<PAGE>

SUBACCOUNT

The subaccounts of the separate account to which policy value may be
allocated and may earn a return. Each subaccount invests all of its
assets in a portfolio having the same investment policies and
objectives as that subaccount.

SURVIVING INSURED

The joint insured who remains alive after the other joint insured has died.

VALUATION DATE

Each Fortis Benefits business day that the New York Stock Exchange is open
for trading.

VALUATION PERIOD

The period commencing at the close of the New York Stock Exchange on one
valuation date and continuing to the close of the New York Stock Exchange
on the next succeeding valuation date.

<PAGE>

THE CONTRACT

THE CONTRACT
This policy, the attached application, amendments, endorsements, and riders
make up the entire contract. Any statements made by you or any insured in the
application will be considered representations and not warranties. No
statement made by you or any insured will be used by us to defend against a
claim under this policy unless it is contained in the application.

POLICY CHANGES
Any change or waiver of this policy or its provisions must be made in writing
and signed by an Officer of the Company. No agent has the right to change or
waive any provision of this policy.

POLICY OWNER
The owner is as shown in the policy schedule, unless later changed as provided
in this policy. As owner, you have all rights, privileges and benefits under
this policy while any insured is living. If there is more than one owner named,
all owners must consent to the exercise of any of the rights, privileges and
benefits under this policy. If a successor owner is not named, and all owners
die while either insured is alive, the estate of the last surviving owner will
become the owner. All notices will be sent to you at the address of record.
Please notify us of any change of address.

SUCCESSOR OWNER
You may name a successor owner who will take over your rights under this policy
at your death.

BENEFICIARY
When the surviving insured dies, we will pay the proceeds of this policy to the
beneficiary. The beneficiary will be as shown in the application unless you have
changed the beneficiary. Benefits added by rider are subject to the beneficiary
provisions of that rider.

The proceeds will be paid to you or your estate if the surviving insured dies
and (1) no beneficiary survives the surviving insured; or (2) no beneficiary was
ever named.

CHANGE OF BENEFICIARY OR SUCCESSOR OWNER
While either insured is living, you may change or revoke the beneficiary or
successor owner. You must make the change in writing in a form satisfactory to
us. The change won't take effect unless we receive and record it at our Home
Office.

When we record it, the change will take effect as of the date you sign it,
whether or not either insured is living. The change will be subject to any
action we take before we record the change.

ASSIGNMENTS
You may assign this policy while either insured is alive. No assignment will
take effect unless it is in writing and a copy is sent to our Home Office.

When we record it, the assignment will take effect as of the date you sign it,
whether or not you are living. The assignment will be subject to any action we
take before we record it.

We are not responsible for the validity of any assignment. Any unpaid loans and
interest due against this policy will be paid before we pay any claim made by
the person to whom you have assigned this policy.

If you want the beneficiary or successor owner changed when you assign this
policy, you must make the change in writing with the assignment.

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<PAGE>

MISSTATEMENT OF AGE OR SEX
If either the age or sex is misstated for any insured, the amount we will pay
will be the amount that the last cost of insurance deductions would have
purchased using the most recent cost of insurance rates at the correct
attained age and sex for each insured.

CLAIMS ON PROCEEDS
To the extent permitted by law, no payment we make will be subject to claims
against any payee. No payee has any ownership rights to the payments before they
are received.

PAYMENTS BY US
All benefits under this policy are payable at our Home Office.

INCONTESTABLE
This policy will be incontestable after it has been in force for two years from
the policy date during the lifetime of each insured. Two years from the date of
issue, we will provide the policyowner a notice to verify that both insureds are
living.

Any increase in face amount or any reinstatement will be incontestable after
that increase or reinstatement has been in force two years from its effective
date during the lifetime of each insured. If this policy lapses, we will
reinstate it within five years of lapse, only while both insureds are living, or
if one insured is alive and the policy lapsed after the first death. Any contest
will then be based on only the application for the increase or reinstatement.

Failure to notify us of an insured's death will not prevent us from contesting
the validity of this policy.

SUICIDE
If either insured commits suicide, while sane or insane, within two years of the
policy date (one year in Colorado and North Dakota), our total liability under
this policy will be the premiums paid, minus any policy loan, plus any unearned
loan interest, minus any prior withdrawals.

If either insured commits suicide, while sane or insane, within two years (one
year in Colorado and North Dakota), from the effective date of any increase in
face amount or reinstatement, our total liability with respect to such increase
or reinstatement will be the cost of insurance for the increase or
reinstatement.

ANNUAL REPORT
Once a year we will send you an annual report free of charge. This report will
show your policy status as of a date no more than 60 days earlier than the date
of mailing. It will include (1) your policy value, surrender value, and death
benefit as of the date of the report; and (2) the premiums paid, performance of
your subaccounts, interest credited to the general account, premium based
bonuses, policy value bonuses and the loans, withdrawals, transfers, and charges
since the last report.

<PAGE>

PREMIUMS, GRACE PERIOD AND REINSTATEMENT

PAYMENT OF PREMIUMS
The first monthly minimum premium is due on the policy date. The amount and
frequency of planned periodic premium payments are shown in the policy
schedule. You may make changes in frequency and you may increase or decrease
the amount of planned periodic premium payments subject to our guidelines.

This policy will not take effect until it has been delivered and the first
premium has been paid prior to either insured's death and prior to any change in
health as shown in the application. All premiums are payable at the Home Office.
We will send you premium payment reminder notices.

Additional premium payments may be made at any time prior to the original
maturity date of this policy. We reserve the right to limit the number and
amount of additional premium payments. Premiums will be credited on the
valuation date they are received at our Home Office. All net premiums credited
to this policy prior to the reallocation date will be allocated to the general
account.

On the reallocation date, the value in the general account will be allocated to
the various subaccounts or the general account according to your requested
premium allocation. If we do not receive a premium allocation request, the money
will stay in the general account until we receive other insstructions.

Section 101(a) of the Internal Revenue Code of 1986, (hereinafter referred to
as "The Code") as amended, provides for the exclusion of death benefits from
gross income for life insurance contracts. Section 7702 of the Code defines
the term "life insurance contract." It provides a maximum limitation of
premiums which may not be exceeded if this policy is to qualify for the
exclusion. Any portion of a premium payment received by us in excess of that
limitation will be refunded with any interest or applied as otherwise agreed
to. However, premium is always accepted to avoid policy lapse.

GRACE PERIOD
If the net cash value on a monthly anniversary is not enough to cover the
monthly deductions for the following month, a grace period of 61 days after the
date of monthly deduction was due will be allowed for the payment of a premium
sufficient to cover the monthly deductions until the end of the grace period.

We will notify you when a premium payment is necessary to cover the monthly
deductions. The notice will be mailed to your last known address on any
monthly anniversary day on which there is not enough net cash value to pay
the monthly deductions. If such premium is not paid within the grace period,
all coverage under this policy will lapse with no value. If a death claim
becomes payable under this policy during the grace period, any overdue
monthly deductions will be subtracted from the proceeds.

REINSTATEMENT
If this policy lapses, we will reinstate it within five years after the date of
lapse, only while both insureds are living, or if one insured is alive and the
policy lapsed after the first death. The reinstatement is subject to:

1. Receipt of proof of insurability which is satisfactory to us; and
2. Payment of a premium large enough to cover:
a. an amount sufficient to keep the policy in force for at least two
months from the reinstatement date;
b. the balance needed for the monthly deductions on the monthly
anniversary date immediately before the start of the grace period, and
for the monthly deduction on any monthly anniversary date occurring
during the grace period.
3. Resumption of remaining policy issue expenses; if the policy had lapsed
before the full amount of policy issuance charges for the original face amount
or a face amount increase expense have been made, the remaining policy issuance
charges that would have been charged during the period of noncoverage.

56925

<PAGE>

If this policy is reinstated, a new Incontestable and Suicide Exclusion
provision will begin on both insureds. The contestable period and the suicide
exclusion will begin on the date this policy is reinstated and will be based on
the application taken at that time.

The effective date of a reinstatement will be the first monthly anniversary
following the day we approve the application for reinstatement. Policy value
after reinstatement will be allocated according to your instructions or to
the general account if no instructions are received.

SEPARATE ACCOUNT
SEPARATE ACCOUNT
The separate account (referred to as "the account") was established under and is
subject to the insurance laws of Minnesota. The assets of the account are owned
by us, but are kept separate from our general investment assets.

SUBACCOUNTS
The separate account has several subaccounts, each investing in one of the
corresponding funds. The subaccounts initially selected by you are listed in
the policy schedule. Premium amounts after certain deductions will be
allocated among the subaccounts and the general account according to the
percentages selected by you. Any allocation must be in whole percents. We
reserve the right to impose limitations on the amount that may be allocated
to any subaccount.

The allocation of future invested premium amounts may be changed at any time if
the policy is not in the grace period. The request for change must be in a form
suitable to us. The change will take effect on the date the request is received
in our Home Office.

The value of the assets in each subaccount will be determined on the valuation
date. If the value of the assets is needed on a day that the subaccount has not
been valued, the value on the next valuation date will be used.

SEPARATE ACCOUNT ASSETS
The value of the assets in the separate account will always be at least equal
to the sum of all policy values under policies allocating values to the
account. To the extent those assets do not exceed this amount, they are used
to support those policies; those assets are not chargeable with liabilities
arising out of and are not used to support any other business conducted by
us. The excess of this amount may be used in any other way.

CHANGE OF INVESTMENT ADVISER OR INVESTMENT POLICY
Unless otherwise required by law or regulation, the investment adviser or any
investment policy may not be changed without our consent. If required,
approval of or change of any material investment objective will be filed with
the Insurance Department of the state where this policy is delivered.

You will be notified of any material investment policy change which has been
approved. Notifiction of an investment policy change will be given in advance if
you have the right to comment on or vote on such changes.

Any substitution of the underlying investments of any subaccount will comply
with all applicable requirements of the Investment Company Act of 1940 and rules
thereunder.

<PAGE>

RIGHTS RESERVED BY US
When required by law, we will obtain your approval of changes and we will gain
approval from any appropriate regulatory authority. Such approval may not be
required in all cases, however. Examples of the changes we may make include:

1. To operate the separate account in any form permitted under the Investment
Company Act of 1940 or in any other form permitted by law.
2. To take any action necessary to keep this policy in compliance with all
applicable laws, rules, regulations, interpretations, holdings or orders.
3. To transfer or limit any assets in any subaccount to another subaccount, or
to one or more separate accounts, or to the general account.
4. To add, combine or remove subaccounts in the separate account.
5. To substitute for the fund shares held in any subaccount, the shares of
another fund of Fortis Series or the shares of another investment company
or any other investment permitted by law.
6. To make any other necessary technical changes in the policy in order to
conform with any action the above provisions permit us to take.

TRANSFERS

You may transfer amounts among the subaccounts or to and from the general
account if the policy is not in the grace period. The request to transfer
amounts must be in a form suitable to us. The transfer will take effect on
the day we receive the notice at our Home Office provided such notice is
received before the New York Stock Exchange closes. We may also permit
continuing automatic periodic transfers. The maximum transfer charge is shown
in the policy schedule. We reserve the right to limit the number and amount
of transfers or to impose charges upon transfers. If we limit transfers, the
limit will never be less than 4 transfers per policy year.

You may transfer all your policy value to the general account once without
charge within 2 years of the policy date or the date of any increase, or within
60 days of any change in the investment policies of the Fund.

TRANSFERS FROM THE GENERAL ACCOUNT
Transfers from the general account to the separate account are subject to the
following: (1) the maximum amount per account transfer is 50% of your
unloaned general account value, and (2) only one transfer may take place each
policy year. If your unloaned general account value is less than $1,000, you
may transfer the entire unloaned balance to the separate account.

DEATH BENEFIT

All proceeds are payable at the death of the surviving insured. The amount of
the death benefit payable will be the death benefit in force on the date of the
surviving insured's death, plus any premiums received after the date of death,
minus any policy loans, minus any overdue monthly deductions if death occurs
during the grace period.

The initial death benefit option and initial face amount is found in the policy
schedule. Proof of the first death must be given to us when it occurs, even if
no insurance benefits are to be paid at such time.

OPTION A (LEVEL AMOUNT)
The death benefit will be the larger of (a) the face amount or (b) the policy
value multiplied by the percentage from the table below.

OPTION B (ADDITIONAL AMOUNT)
The death benefit will be the larger of (a) the face amount plus the policy
value or (b) the policy value multiplied by the percentage from the table below.

56926

<PAGE>

PERCENTAGE OF POLICY VALUE
<TABLE>
<CAPTION>

IF ATTAINED AGE OF YOUNGER INSURED AT THEN THE PERCENT WILL DECREASE BY
BEGINNING OF THE CONTRACT YEAR IS: EQUAL STEPS FOR FOR EACH YEAR:
<S> <C> <C> <C>
More Than But not more than From To
0 40 250% 250%
40 45 250 215
45 50 215 185
50 55 185 150
55 60 150 130
60 65 130 120
65 70 120 115
70 75 115 105
75 90 105 105
90 95 105 100
</TABLE>

The initial death benefit option is found in the policy schedule.

CHANGES IN DEATH BENEFIT OPTION
After the third policy year you may change the death benefit option once each
policy year. The change will take effect on the first monthly anniversary
following the day we approve your written request at the Home Office. If you are
changing from Option A to Option B death benefit, both insureds must be alive
and we will need evidence of insurability. No change in the type of death
benefit will be allowed (1) if the resulting face amount would be less than the
minimum face amount shown in the policy schedule; or (2) if the change will
cause the policy to fail to qualify as life insurance under Section 7702 of
the Code.

If the change is from Option A to Option B, the face amount will be reduced by
the amount of the policy value on the effective date of the change. If the
change is from Option B to Option A, the face amount will be increased by the
amount of the policy value on the effective date of the change.

CHANGES IN FACE AMOUNT
The face amount may be increased at any time. It may be decreased at any time
after the third policy year, but not within one year of a face amount increase.
You must request a change in writing. Any increase or decrease will take effect
on the first monthly anniversary following the day we approve the request.
Changes are subject to the following:

1. The decrease will be applied to the initital face amount, and any increase
in face amount in reverse order in which the increases became effective.

The face amount after any requested decrease may not be less than the
minimum face amount shown in the policy schedule. It will not be allowed if
it would cause the policy to fail to qualify as life insurance under
Section 7702 of the Code.

2. Any request for a face amount increase will require proof of insurability
for both insureds which is satisfactory to us. An increase will also
require sufficient surrender value to cover the first new monthly
deduction. The minimum increase is shown in the policy schedule and is
subject to our issue rules and limits at the time of increase. Increases
will not be allowed if any disability benefit is paid under the terms of a
rider, or if there is only one surviving insured.

<PAGE>

DEDUCTIONS

MONTHLY DEDUCTION
Unless indicated otherwise, the monthly deduction for a policy month will be
allocated on a pro-rata basis.

The monthly deduction for a policy month will be equal to the sum of:

1. the cost of insurance (as described below) and the cost of additional
benefits provided by rider for the policy month;
2. monthly administrative and other expense charges shown in the policy
schedule;
3. a monthly charge shown in the policy schedule for sales and premium tax
charges; and
4. a monthly charge (as described below) for policy issuance expense.

COST OF INSURANCE
We determine the cost of insurance on a monthly basis. The cost of insurance is
determined separately for the initial face amount and any increases made later.
The policy value is considered a pro-rata portion of the initial face amount and
any subsequent face amount increases.

The cost of insurance is equal to:

a. the death benefit on the monthly anniversary divided by 1.00327374; MINUS
the policy value (or zero, if greater) on the monthly anniversary;
MULTIPLIED BY
b. the cost of insurance rate as described below; THE RESULT PLUS
c. any amount of flat extra insurance charges shown in the policy schedule.

COST OF INSURANCE RATES
The monthly cost of insurance rate is a blend of the single rates based on the
sex, issue age, duration, and risk class of both insureds. The monthly cost of
insurance rates may be changed by us from time to time. A change in the
underlying single life cost of insurance rates will apply to all persons of the
same sex, issue age, duration, and risk class. The maximum cost of insurance
rates are found in the policy schedule.

POLICY ISSUANCE EXPENSE

The initial monthly policy issuance expense charge is calculated by multiplying
the monthly policy issuance expense rate by the face amount at issue. The policy
issuance expense rate, the initial face amount, and the length of time the
charge is assessed are shown in the policy schedule.

POLICY VALUES

POLICY VALUES
Your policy value is equal to the sum of your separate account value and your
general account value.

SEPARATE ACCOUNT VALUE
The value in each subaccount as of the reallocation date is equal to the amount
of all policy values transferred from the general account to that subaccount.

At the end of each valuation period after the reallocation date, the value in a
subaccount is equal to
THE SUM OF:

1. your value in the subaccount at the last valuation;
2. your value in the subaccount at the last valuation multiplied by the net
investment factor;
3. any net premium received during the current valuation period which is
allocated to the subaccount;
4. all values transferred to the subaccount during the current valuation
period;
5. any premium based bonus or policy value bonus paid to the subaccount during
the current valuation period;

56928

<PAGE>

MINUS THE FOLLOWING:

6. all values transferred to another subaccount or the general account, and
values transferred to secure a policy loan during the current valuation
period; and
7. all partial withdrawals from the subaccount during the current valuation
period.

In addition, whenever a valuation period includes the monthly anniversary day,
the subaccount value at the end of such period is reduced by the portion of the
monthly deduction allocated to the subaccount.

NET INVESTMENT RETURN
The next investment return for each subaccount for the valuation period is
calculated as:

1. the investment income and capital gains, realized and unrealized, credited
to the subaccount assets since the last valuation;

MINUS THE FOLLOWING:

2. the capital losses, realized and unrealized, charged to the subaccount
assets since the last valuation;
3. the amount charged each subaccount for taxes attributable to the operation
of the subaccount; and
4. all fund expenses including investment management service fees paid to the
investment adviser.

NET INVESTMENT FACTOR
The net investment factor measures the net investment return of a subaccount
during a valuation period. The net investment factor is calculated as follows:

1. The net investment return for the subaccount for the valuation period;
DIVIDED BY
2. the value of the subaccount assets at the last valuation: THE RESULT MINUS
3. a charge assessed for mortality and expense risks for each day of the
valuation period, not to exceed the percentage shown in the policy schedule
page; and
4. a charge assessed for sales and premium tax charges for each day of the
valuation period, not to exceed the percentage shown in the policy
schedule.

<PAGE>

GENERAL ACCOUNT VALUE
Your value in the general account on the policy date is equal to the net premium
less the initial monthly deduction allocated to the general account. On each
monthly anniversary date, the value in the general account is equal to
THE SUM OF:

1. the value in the general acccount on the last monthly anniversary date plus
interest from the last monthly anniversary date;

2. any net premium received since the last monthly anniversary date which is
allocated to the general account plus interest from the date the net
premium is received to the monthly anniversary date;

3. all values transferred to the general account from a subaccount since the
last monthly anniversary date plus interest from the date the value is
transferred to the monthly anniversary date; and

4. any premium based bonus or policy value bonus paid to the general account
on the monthly anniversary;

MINUS the following:

5. all values transferred from the general account to a subaccount since the
last monthly anniversary day plus interest from the date the value is
transferred to the monthly anniversary date;

6. all partial withdrawals from the general account since the last monthly
anniversary date plus interest from the date of the partial withdrawal to
the monthly anniversary date; and

7. the portion of the monthly deduction allocated to the value in the general
account, to cover the policy month following the monthly anniversary date.

On any date other than a monthly anniversary date, your value will be calculated
on the same basis as on the monthly anniversary date.

GENERAL ACCOUNT INTEREST RATE
Value held in the general account will earn interest daily at an effective
annual guaranteed rate of 4%. Interest in excess of the guaranteed rate may be
applied in the calculation of the value at such increased rates as we may
determine.

No interest in excess of the guaranteed rate will be applied to any portion of
your policy value in the general account which equals any loan.

56929

<PAGE>

PREMIUM BASED BONUSES

On certain policy anniversaries, we will credit a premium based bonus to your
policy value. The amount of the bonus is expressed as a percentage of the lesser
of (a) or (b), the result divided by the policy duration, where:

(a) is the sum of all premiums paid less any cash withdrawals and less any
policy loans, and
(b) is the sum of the maximum bonus premium to date.

The percentages, durations and maximum bonus premiums are shown in the policy
schedule. These credits are applied to your policy value on a pro-rata basis
unless other options become available.

For any month during which the policy is in lapse, the maximum bonus premium
will be zero.

POLICY VALUE BONUS

We will credit a policy value bonus to your policy value on certain monthly
anniversaries. The amount of the bonus is expressed as a percentage of your
policy value. The percentages and durations are shown in the policy schedule.
These bonuses are applied to your policy value on a pro-rata basis unless other
options become available.

BASIS OF COMPUTATIONS
Minimum surrender values in the general account are based on the Commissioner's
1980 Standard Ordinary Smoker or Nonsmoker Mortality Table, Age Last Birthday,
with interest at 4% per year.

The method used in computing surrender values in the Separate Account is in
accordance with actuarial procedures that recognize the variable nature of the
Separate Account. The method used is such that if the Net Investment Factor, for
all subaccounts at all times from the policy date, is equal to an effective
annual interest rate of 4%, and if the cost of insurance rates are based on the
Commissioner's 1980 Standard Ordinary Smoker or Nonsmoker Mortality Table, Age
Last Birthday, then the surrender values in the separate account will be at
least equal to the minimum surrender values which would have been required by
the law of the state in which this policy is delivered of an equivalent policy
in which all net premiums have been allocated to the general account.

Reserves are not less than the surrender value. Interest on reserves in the
General Account will not exceed the guaranteed rate of 4%. Reserves are based on
the Commissioner's 1980 Standard Ordinary Smoker or Non-smoker Mortality Table,
Age Last Birthday.

All values under this policy are not less than the values required by the state
in which this policy was delivered. A detailed statement of the method of
computation of surrender values and reserves under this policy has been filed
with the insurance department of the state in which the policy was delivered.

<PAGE>

SURRENDERS, LOANS AND WITHDRAWALS

NET CASH VALUE
The net cash value as of any date is equal to:

1. the cash value; minus
2. any unpaid policy loan; plus
3. any unearned loan interest.

SURRENDER CHARGE
The surrender charge is shown in the policy schedule. The surrender charge will
not exceed the maximum shown in the policy schedule.

SURRENDER VALUE
The surrender value is the net cash value less the surrender charge.

SURRENDER
Upon written request, you may surrender this policy for the surrender value. It
may be surrendered at any time during the lifetime of either insured. The
surrender value will be determined as of the date we receive the request at our
Home Office.

POLICY LOANS
During the continuance of this policy, we will grant a loan against this policy
provided (1) we have received a signed loan agreement, if requested, and (2)
this policy is assigned to us.

You may borrow up to 90% of the surrender value. This policy will be the sole
security for the loan.

An amount equal to the loan will be withdrawn from the subaccounts and the
unloaned portion of the general account. This amount will be held as collateral
on a restricted basis in the general account until the loan is repaid. Unless
you specify otherwise, the loan amount will be withdrawn on a pro-rata basis.

The loan amount held in the general account will be credited interest at an
effective annual rate of 4%.

INTEREST ON POLICY LOANS
Interest on loans will be charged at the policy loan rate shown in the policy
schedule. Interest not paid when due will be added to the loan and bear interest
at the same rate.

If this policy (a) has been in force for 2 years from the policy date and has a
surrender value at least equal to that shown in the policy schedule; or (b) has
been in force for 12 years, you may borrow up to 10% of your surrender value
once each year at the lower policy loan interest rate shown in the policy
schedule.

If the policy qualifies for the lower policy loan interest rate and either of
the joint insured's age is 59 1/2 or over, you may borrow up to 15% of the
surrender value at that lower interest rate once each year. The remaining
surrender value is available at the regular loan interest rate shown in the
policy schedule, subject to the overall loan limit as stated above.

56930

<PAGE>

LOAN REPAYMENT

While the policy is in force before the death of the surviving insured or before
surrender, any indebtedness may be repaid. Any amounts received on this policy
will be considered premiums unless they are clearly marked as loan repayments.
As the loan is repaid, the amount repaid will be transferred from the loaned
portion of the general account to the subaccounts and the unloaned portion of
the general account in the same manner as premiums are allocated, unless you
direct otherwise.

WITHDRAWALS

Cash withdrawals may not be made during the first policy year. Only one
withdrawal is allowed during a policy year. You must request a withdrawal in
writing. The request will be effective on the date we receive it at our Home
Office.

A withdrawal charge may be deducted from each withdrawal amount and the balance
will be paid to you. This withdrawal charge will not exceed the charge shown in
the policy schedule.

When a withdrawal is made, the policy value shall be reduced by the amount of
the withdrawal. For death benefit Option A, the face amount will also be reduced
by the amount of the withdrawal. No withdrawal will be allowed if the resulting
face amount would be less than the minimum face amount shown in the policy
schedule. Unless otherwise specified, withdrawals will be taken on a pro-rata
basis.

DEFERRAL OF PAYMENTS
The payment of surrender value, policy loan, partial withdrawal (except when
used to pay the premiums), or variable death benefits in excess of any minimum
death benefit may be deferred:

1. for up to two months for death benefit payments or six months for all other
payments from the date of request, if such payments are based on policy
values which do not depend on the investment performances of the separate
accounts; or

2. for any period during which the New York Stock Exchange is closed for
trading (except for customary weekend and holiday closings) and for any
period during which a state of emergency exists which may make such payment
impractical or for such other periods as the Securities and Exchange
Commission may by order permit for the protection of investors.

<PAGE>

SETTLEMENT OPTIONS

CHOICE OF OPTIONS
We will pay the proceeds of this policy in a single sum unless you choose one of
the settlement options described below. You may also choose any other option
that is agreeable to both you and us. You may change your choice of option
later. If you do not choose an option before the surviving insured dies, the
beneficiary will have the right to choose an option.

We will pay interest on proceeds paid in a single sum from the date of the
surviving insured's death until the date of payment. The interest rate on these
payments and any proceeds we hold under options 1, 2, 3, and 4 below will be at
least at an effective rate of 3.5% per year.

SETTLEMENT DATE
The settlement date of this policy is the date of the surviving insured's death
or the date of any other termination of this policy.

OPTION 1. INTEREST PAYMENTS
You may leave the proceeds with us for a period of time you select when you
choose this option. Interest begins to accrue on the settlement date. We will
pay the interest at 12, 6, 3, or 1 month intervals, as you choose. At the end of
the selected period, we will pay the proceeds in a single sum or under any other
option selected when you choose this option.

OPTION 2. PAYMENTS OF A FIXED AMOUNT OR FOR A FIXED PERIOD
You may leave the proceeds with us and we will make payments in one of the ways
shown below. You may request us to make these payments at 12, 6, 3, or 1 month
intervals.

1. We will make payments in an amount you select when you choose this option;
or
2. We will make equal payments over any period of from 1 to 30 years, as you
select when you choose this option. Table 1 shows minimum payments for each
$1,000 of proceeds held under this option. Payments for any period not
shown will be furnished at your request.

TABLE 1. Payments for each $1,000 of
proceeds under Option 2

No. of Annual Monthly
Years Payments Payments
Payable
------- -------- --------
<S> <C> <C> <C>
5 $213.99 $18.12
10 116.18 9.83
15 83.89 7.10
20 67.98 5.75
25 58.62 4.96
</TABLE>

56931

<PAGE>

OPTION 3. LIFE INCOME PAYMENTS
We will pay the proceeds in one of the following ways:

1. Life Annuity: A monthly income during the life of the payee; or
2. Life Annuity with a Guaranteed Period: A monthly income with payments
guaranteed for either 10 or 20 years, as you choose, continuing during the
payee's lifetime; or
3. Refund Life Annuity: A monthly income with payments guaranteed for the
number of months determined by dividing the proceeds by the first monthly
payment. The payments continue during the payee's lifetime.

The payee is the person who will receive the income payments under Options 3 and
4. The amount of the monthly payments depends on the type of income you select,
the age of the payee on the settlement date and the amount of the proceeds.

Table 2 shows monthly minimum payments for each $1,000 of proceeds held under
this option. Monthly payments not shown will be furnished at your request.

TABLE 2. Monthly Payments for each $1,000
of Proceeds under Option 3

MALE

Age of Refund Life Annuity Certain for Life
Payee Life 10 Yr. 20Yr.
Annuity Annuity
------ ------- ------------------------ -------
<S> <C> <C> <C> <C>
50 $4.54 $4.71 $4.50 $4.79
55 4.92 5.14 4.79 5.27
60 5.39 5.68 5.10 5.91
65 6.01 6.35 5.38 6.77
70 6.83 7.17 5.63 8.00

<CAPTION>
FEMALE

Age of Refund Life Annuity Certain for Life
Payee Life 10 Yr. 20Yr.
Annuity Annuity
------ ------- ------------------------ -------
<S> <C> <C> <C> <C>
50 $4.23 $4.33 $4.23 $4.35
55 4.56 4.70 4.53 4.75
60 4.99 5.17 4.87 5.27
65 5.55 5.80 5.22 5.98
70 6.32 6.63 5.51 7.04
</TABLE>

17
<PAGE>

OPTION 4. JOINT LIFE INCOME PAYMENTS
You may name two payees to whom we will pay a joint monthly income during their
joint lifetime. After either payee's death, we will make monthly payments equal
to 2/3 of the joint monthly payment during the surviving payee's lifetime. The
amount of the monthly payment depends on the age of each payee on the settlement
date, and the amount of the proceeds.

Table 3 shows monthly minimum payments for each $1,000 of proceeds held under
this option. Amounts not shown will be furnished at your request.

TABLE 3. Monthly Payments for each
$1,000 of Proceeds under Option 4

Age of Male Payee
Age of --------------------------------
Female 5 Years Same 5 Years
Payee Younger Age Older
------ ------- ----- -------
<S> <C> <C> <C>
50 $4.19 $4.36 $4.55
55 4.52 4.75 4.99
60 4.96 5.25 5.59
65 5.53 5.94 6.43
70 6.33 6.94 7.66
</TABLE>

If you choose Options 2, 3, or 4 and the monthly payments are less than those
provided by our then current settlement rates, we will pay the larger amount.

MINIMUM AMOUNT
We have the right to pay the proceeds in a single sum if: (1) the proceeds
payable are less than $2,000; or (2) payments under the settlement option you
have chosen would be less than $50.

SUPPLEMENTARY CONTRACT
If you request a settlement option, we will prepare an agreement stating the
terms under which payment will be made. This agreement will replace this policy
when proceeds become payable. You must surrender this policy to us at our Home
Office at that time.

PROOF OF AGE
We will require proof of any payee's age under Options 3 and 4.

EXCESS INTEREST
The interest rates stated in this section of the policy are the guaranteed
minimum rates we will pay on proceeds we hold. We have the option to pay excess
interest.

COMMUTATION
No payee has the right to change the settlement option chosen before the
insured's death, unless we provide that right in this policy. Payments may not
be assigned or commuted.

DEATH OF PAYEE
If the payee dies before receiving all proceeds payable, we will pay the amount
still due to the payee's estate, unless we approve other arrangements.

56932

<PAGE>

MATURITY DATE
The maturity date is the last date insurance coverage can remain in force and
the date on which any remaining surrender value will be paid to you. The date is
shown in the policy schedule. Coverage will end prior to the maturity date if
the net cash value isn't sufficient to continue coverage to such date.

POLICY SPLIT
The policyowner may elect to split the policy and purchase two individual single
insured life policies on a form we make available. One policy will be issued on
each insured. This election may be exercised only by written notice to Fortis
Benefits' Home Office within 180 days following either:

1) the date of entry of a final decree of divorce with respect to the joint
insureds; or
2) the effective date of a change in the Federal estate tax laws that would
reduce or eliminate the unlimited marital deduction; or
3) written confirmation of a dissolution of a business partnership or closely
held corporation in which the joint insureds are partners or shareholders.

No request will be granted for events listed in items 1) and 3) above, until 60
days after the date of occurrance of the event.

1) There will be no new evidence of insurability required.
2) Premiums, charges, and bonuses for the new policies will be based on each
insured's attained age and current rate class.
3) Unloaned policy values, and the face amount of the policy, excluding any
riders, will be divided between the new policies, as indicated by the
percentages specified in the policy schedule.
4) Loans must be paid or assumed to be distributions at the time of the policy
division.
5) In no event may the combined death benefits of the new policies exceed that
provided under the policy. A return of policy value from the new policy
which results in more than its percentage share of the death benefit will
be made if necessary, to prevent this from occurring.
6) Riders on the new policies will be allowed at the discretion of Fortis
Benefits, and only if evidence of insurability is provided.
7) The owner and beneficiary of the new policies will be the same as under the
policy, unless the policyowner specifies otherwise.
8) Any existing incontestable or suicide period under the policy will continue
under the two new policies.

The Policy Split Option is NOT available under any of the following conditions:

1) Either insured is deceased or considered "uninsurable" according to Fortis
Benefits' underwriting guidelines.
2) If the individual Table ratings of the insureds when added together, exceed
Table 4. Each insured's Table rating is shown in the policy schedule.
3) Either insured is older than the issue age of the new policy's maximum
issue age.
4) The policy is in the grace period.
5) The policy is receiving benefits from any disability rider.

EXERCISING THIS OPTION MAY HAVE ADVERSE TAX CONSEQUENCES. THE POLICYOWNER SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION.

<PAGE>

FORTIS BENEFITS INSURANCE COMPANY
P.O. BOX 64271
ST. PAUL, MINNESOTA 55164

GUARANTEED DEATH BENEFIT RIDER
(LAST SURVIVOR)

This rider is a part of your policy. It is subject to the provisions of
the policy which apply and are consistent with the provisions of this
rider. While this rider is in force, the policy will not lapse as long
as the premium requirements are met. The effective date and expiry date
of this rider are shown in the policy schedule.

PREMIUM REQUIREMENTS
The premium requirements on each monthly anniversary are met if (a) is
equal to or greater than (b) where:

(a) is all premiums paid less any cash withdrawals, accumulated at an
effective annual rate of 4%, and less any loans; all premiums paid
in a policy year are deemed to be paid in the beginning of that policy
year; withdrawals made in prior policy years are assumed taken at the
end of the policy year in which they are taken; withdrawals in the current
policy year are subtracted without interest.

(b) is the monthly minimum premiums including the premium due on the
current monthly anniversary, accumulated at an effective annual rate of
4%. The minimum monthly premium for any given year is deemed to have been
paid in the beginning of that year.

The initial schedule of monthly minimum premiums is based on the joint
insureds' issue ages and risk classes, and riders if any, and is shown
in the policy schedule. The monthly minimum premium is the premium for
the base policy plus the premium for the riders.

For any month is which the deductions are being waived by our Waiver of
Monthly Deductions rider, the monthly minimum premium will be zero.

CHANGES THAT AFFECT THE PREMIUM REQUIREMENT
The monthly minimum premium will change if: (1) the face amount is
increased or decreased, but not if the change in face amount is due to a
partial withdrawal or a change in death benefit option, (2) certain
riders are added, deleted, or changed, or (3) rating classifications
change.

As stated above, the premium requirement is affected by any cash
withdrawals or loans on your policy. If the monthly minimum premium
changes, we will send you an amended policy schedule. Also, additional
premiums may be required on the date of change in order to meet the new
premium requirement.

NOTICE
If on any monthly anniversary day the premium requirement is not met, we
will send you a notice of the premium required. If the premium is not
received by us at our Home Office prior to the next monthly anniversary
day, the guaranteed death benefit will terminate. On a guaranteed
basis, the policy value at the end of the guarantee period may be
insufficient to keep the policy in force unless an additional payment is
made at that time.

L111 56816

<PAGE>

DEDUCTION
A charge for this rider is included in the monthly deductions. The
charge will not be taken if this rider is no longer in effect. The
charges based on the initial policy and rider face amounts are shown in
the policy schedule. It will change if the face amount is increased or
decreased, or if certain riders are added, changed, or terminated.

DISABILITY WAIVER
If monthly deductions on the policy are waived under the terms of any
disability benefit rider, the charges for this rider, if any, will also
be waived.

REINSTATEMENT
If this rider terminates, it may not be reinstated.

TERMINATION
This rider will terminate on the earliest of the following dates:
1. The monthly anniversary date on or next following our receipt at our
home office of your written request for termination;
2. The monthly anniversary date following the date the premium
requirement was not met;
3. When the policy terminates;
4. The policy anniversary date on or after the rider expiry date shown
in the policy schedule.

NONPARTICIPATING
This rider is nonparticipating and has no cash value.

Signed for the Company to take effect on the rider effective date.

/s/Dean C. Kopperud /s/Anthony Rotundi
SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT

L111 56816

<PAGE>

FORTIS BENEFITS INSURANCE COMPANY
P.O. BOX 64271
ST. PAUL, MINNESOTA 55164

WAIVER OF MONTHLY DEDUCTIONS RIDER
(LAST SURVIVOR)

This rider is part of your policy.

JOINT INSUREDS
The joint insureds are named in the policy schedule.

TOTAL DISABILITY
Total disability means a disability resulting from an injury sustained
or disease first manifested after the effective date of this rider. The
disability must continuously prevent either joint insured from engaging
in an occupation for compensation or profit. During the first 24 months
of total disability, "occupation" means an inability to perform the
substantial and material duties of that insured's regular occupation.
After 24 months, "occupation" means any job suited to that insured's
education, training, or experience.

WAIVER BENEFITS
We will pay the monthly deductions for the policy as long as either
joint insured is totally disabled until that insured's attained age is
95.

In order to obtain waiver benefits, you must give us proof that the
joint insured's total disability:
1) began while the policy and this rider were in force;
2) began before the first policy anniversary after the disabled joint
insured's 60th birthday; and
3) was continuous for six months or more.

Before we pay the monthly deductions, the policy and this rider must be
in force during the first six months of total disability. If the policy
enters the grace period during this six month period, you must pay the
required premium to keep the policy in force. If we approve your claim,
our payment of monthly deductions begins with the first one due after
the date we approve your claim. In the event that both insureds become
totally disabled at any time while the policy and rider are in force,
the benefit will continue as long as either joint insured meets the
conditions above.

Any monthly deductions that were deducted from the policy value of the
policy before our approval of your claim, and after the disability
began, will be added back to the policy value when your claim is
approved.

If a joint insured is totally disabled and we are paying the monthly
deductions for this policy, the policy value of the policy is calculated
as shown in the policy, except that we will not subtract the monthly
deductions.

MONTHLY DEDUCTIONS
The monthly deductions covered by this rider include the following:
1) the cost of insurance for the policy;
2) the monthly administrative and expense charges;
3) any monthly sales, premium tax, or other charges except charges based
on the separate account value;
4) The total monthly deductions for this rider and any riders which are
covered by this rider.

L101 56773

<PAGE>

MONTHLY RATE
The monthly rider rates are based on the joint insureds' attained ages
and premium class and are shown in the policy schedule. The monthly
deduction is equal to the monthly rate multiplied by the net amount at
risk and divided by 1,000. The net amount at risk is the death benefit
of the policy minus the policy value, plus the face amount of any term
riders. The rates will change at the earlier of the first death, or the
policy anniversary following the older joint insured's attained age 60.
At that time, rates will be based on the attained age and risk
classification of the joint insured still alive and under age 60.

NOTICE OF CLAIM
We must receive written notice of claim at our Home Office:

1) while the joint insured is living and is totally disabled;
2) no later than 1 year after this rider terminates; and
3) within 1 year after the due date of the benefit amount to be paid.

If you cannot give us notice within 1 year, your claim may still be
valid if you show that you gave us notice as soon as you could.

PROOF OF CONTINUED DISABILITY
We may at reasonable intervals require proof that the joint insured
continues to be totally disabled. After the joint insured has been
totally disabled for 2 years, we will not ask for proof more than once
per year. If the insured does not provide this proof, or ceases to be
totally disabled, a waiver benefit will no longer be paid.

RISKS NOT COVERED
We will not pay a benefit if total disability results from:
1) injuries intentionally self-inflicted; or
2) service in the military of any country at war, declared or
undeclared.

TERMINATION
This rider terminates on the earliest of:
1) the monthly anniversary date on or next following our receipt at our
Home Office of your written request for termination;
2) the date the policy terminates;
3) the policy anniversary following the younger joint insured's 60th
birthday;
4) the policy anniversary following the surviving insured's age 60.

After this rider terminates, we are not liable for its benefits even if
we continued to deduct the cost of insurance for this rider. Any cost
of insurance we have deducted for this rider after it terminates, will
be added to your policy value.

GENERAL PROVISIONS
All provisions in the policy which are consistent with this rider, apply
to this rider.

INCONTESTABLE
This rider will be incontestable after it has been in force for two
years (one year in Colorado and North Dakota) during the lifetime of
each insured from the later of the rider effective date or the date of
its last reinstatement. Failure to notify us of an insured's death will
not prevent us from contesting the validity of this rider.

L101 56773

<PAGE>

Signed for the Company to take effect on the rider effective date.

/s/Dean C. Kopperud /s/Anthony Rotundi
SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT

L101 56773

<PAGE>

FORTIS BENEFITS INSURANCE COMPANY
P.O. BOX 64271
ST. PAUL, MINNESOTA 55164

WAIVER OF SELECTED AMOUNT RIDER
(LAST SURVIVOR)

This rider is part of your policy.

JOINT INSUREDS
The joint insureds are named in the policy schedule.

THE WAIVER BENEFIT
If either joint insured's total disability has continued for six
consecutive months and meets the conditions stated below, we will credit
the policy once each month with the Monthly Benefit shown in the policy
schedule for each subsequent month that the disabled joint insured
remains totally disabled until that insured's attained age 95. In the
event that both joint insureds become disabled at any time while the
policy and rider are in force, the benefit under this rider will
continue as long as either joint insured meets the conditions for
benefits. In no event will more than the selected amount be credited
under this rider in any month, even if both joint insureds are disabled.

In order to obtain waiver benefits, you must give us proof that the
joint insured's total disability:

1) began while the policy and this rider were in force;
2) began before the first policy anniversary after the disabled joint
insured's 60th birthday; and
3) was continuous for six months or more.

Before we credit the Monthly Benefit, the policy and this rider must be
in force during the first six months of total disability. If the policy
enters the grace period, you must pay the required premium to keep the
policy in force until the claim is approved. There is no benefit
credited for the first six months of total disability. If the face
amount of the policy or the benefit of another rider is reduced, the
waiver benefit will be reduced so that the waiver benefit is not greater
than the new monthly minimum premium.

DEFINITION OF TOTAL DISABILITY
Total disability is a disability of either joint insured:

1) which results from bodily injury sustained or disease which first
appears while both this policy and this rider are in force;

2) which completely prevents that insured from engaging in an
occupation for compensation or profit. During the first 36 months of
total disability, "occupation" means the inability to perform the
substantial and material dutires of that insured's regular occupation.
After 36 months, "occupation" means any job suited to that insured's
education, training, or experience.

MONTHLY COST
The monthly rates for this rider are based on the joint insured's
attained ages and premium classes. The monthly rates are shown in the
policy schedule. The Monthly Deduction is the applicable rate
multiplied by the Monthly Benefit and divided by 100. The cost for this
rider will change if the waiver benefit is changed. It will also change
after the first death, or at the policy anniversary of the older joint
insured's attained age 60. At that time, rates will be based only on
the attained age and risk classification of the joint insured still
alive and under age 60.

L100 56774

<PAGE>

NOTICE OF CLAIM
We must receive written notice of claim at our Home Office:

1) while the joint insured is living and is totally disabled;
2) no later than one year after this rider terminates; and
3) within one year after the due date of the benefit amount to be paid.

If you cannot give us notice within one year, your claim may still be
valid if you show that you gave us notice as soon as you could.

PROOF OF CONTINUED DISABILITY
We may at reasonable intervals require proof that the joint insured
continues to be totally disabled. After the joint insured has been
totally disabled for three years, we will not ask for proof more than
once per year. If the joint insured does not provide this proof or
ceases to be totally disabled, a waiver benefit will no longer be paid.

RISKS NOT COVERED
We will not pay a benefit if total disability results from:
1) injuries intentionally self-inflicted; or
2) service in the military of any country at war, declared or
undeclared.

TERMINATION
This rider terminates the earliest of:
1) the monthly anniversary date on or next following our receipt at our
Home Office of your written request for termination.
2) the date the policy terminates;
3) the policy anniversary following the younger joint insured's 60th
birthday; or
4) the policy anniversary after the surviving insured's 60th birthday.

GENERAL PROVISIONS
All provisions in the policy which are consistent with this rider apply
to this rider.

Signed for the Company to take effect on the rider effective date.

/s/Dean C. Kopperud /s/Anthony Rotundi
SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT

L100 56774

<PAGE>

FORTIS BENEFITS INSURANCE COMPANY
P.O. BOX 64271
ST. PAUL, MINNESOTA 55164

JOINT 2ND-TO-DIE TERM RIDER
(LAST SURVIVOR)

This rider is a part of your policy. It is subject to the provisions of
the policy which apply and are consistent with the provisions of this
rider. It is an annually renewable term rider providing coverage to the
younger insured's age 100, payable on the death of the second insured to
die. The effective date and expiry date of this rider are shown in the
policy schedule.

JOINT INSUREDS
The joint insureds are named in the policy schedule.

RIDER BENEFIT
We will pay the current face amount of this rider to the beneficiary at
the death of the surviving insured upon our receipt of due proof that
both joint insureds died while this rider was in force.

Proof of the first death must be given to us when it occurs, even if no
insurance benefits are to be paid at such time.

FACE AMOUNT
The face amount is the amount of the death benefit provided by this
rider. The face amount for this rider is shown in the policy schedule.
The face amount may be changed at any policy anniversary.

The maximum combined rider coverage on the life of any person insured
under an optional term rider (except for the Estate Protection rider)
may not exceed the maximum individual insured term rider ratio shown in
the policy schedule. The maximum combined rider ratio on all persons
insured under an optional term rider (except for the Estate Protection
Rider) may not exceed the maximum combined term rider ratio. If the
base policy face amount is decreased, then the rider face amount will be
decreased if necessary, so that the rider maximum combined ratios set
forth above are not exceeded.

DISABILITY WAIVER
If monthly deductions on the policy are waived under the terms of any
disability benefit rider, the charges for this rider will also be
waived.

EXCHANGE PRIVILEGE
For the purposes of this rider, the term "exchange" will refer to an
amount of coverage being terminated under this rider and added to the
base policy as a face amount increase.

You may exchange all or part of the coverage under this rider subject to
the limits outlined below. Partial exchanges are subject to a $25,000
minimum and may be elected only on the policy anniversary and only if
remaining coverage under the rider will be at least $100,000. The face
amount increase in exchange for rider coverage will be at the same risk
classification as the joint insureds at issue.

L107 56812

<PAGE>

Coverage may be exchanged only under the following conditions:

1. While this rider and the base policy are in force;
2. While both insureds are alive;
3. Before the earlier of the younger insured's age 65 or the end of the
10th policy year.

Application for the exchange must be made by written request while both
insureds are living.

INCONTESTABLE
This rider will be incontestable after it has been in force for 2 years
from the effective date of this rider during the lifetime of each
insured.

Any reinstatement will be incontestable after that reinstatement has
been in force for 2 years from its effective date during the lifetime of
the insured or each of the joint insureds. Any contest will then be
based only on the information provided on the application for
reinstatement.

Failure to notify us of an insured's death will not prevent us from
contesting the validity of this rider.

SUICIDE
If either insured dies by suicide, while sane or insane, within two
years after the effective date of this rider, (one year in Colorado and
North Dakota), our liability will be limited to an amount equal to the
total monthly deductions for this rider. In no event will this increase
the total liability set forth in the Suicide Provision of the attached
policy.

TERMINATION
This rider will terminate at the earliest of:

1. the expiry date of the rider.
2. the date the policy terminates.
3. the monthly anniversary date on or next following the date we
receive your written request to terminate this rider.
4. the date of full exchange of the coverage under this rider, as
described in Exchange Privilege.

NONPARTICIPATING
This rider is nonparticipating and has no cash value.

Signed for the Company to take effect on the rider effective date.

/s/Dean C. Kopperud /s/Anthony Rotundi
SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT

L107 56812

<PAGE>

FORTIS BENEFITS INSURANCE COMPANY
P.O. BOX 64271
ST. PAUL, MINNESOTA 55164

JOINT 1ST TO DIE TERM RIDER
(LAST SURVIVOR)

This rider is part of your policy. It is subject to the provisions of
the policy which apply and are consistent with the provisions of this
rider. It is an annually renewable term rider providing coverage to the
younger insured's age 100, payable at the death of the first insured to
die. The effective date and expiry date of this rider are shown in the
policy schedule.

JOINT INSUREDS
The joint insureds are named in the policy schedule.

RIDER BENEFIT
We will pay the current face amount of this rider to the beneficiary
upon our receipt of due proof of the death of the first joint insured to
die while this rider was in force.

The maximum combined rider coverage on the life of any one person
insured under an optional term rider (except for the Estate Protection
rider) may not exceed the maximum individual insured term rider ratio
shown in the policy schedule. The maximum combined rider coverage on
all persons insured under an optional term rider (except for Estate
Protection rider) may not exceed the maximum combined rider ratio. If
the base policy face amount is decreased, then the rider face amount
will be decreased if necessary, so that the rider maximum ratios set
forth above are not exceeded.

MONTHLY RATE
The monthly rider rates are based on the joint insureds' attained ages
and premium classes and are shown in the policy schedule. The monthly
deduction is equal to the monthly rate multiplied by the face amount of
the rider, divided by 1,000.

DISABILITY WAIVER
If monthly deductions on the policy are waived under the terms of any
disability benefit rider, the charges for this rider will also be
waived.

INCONTESTABLE
This rider will be incontestable after it has been in force for 2 years
from the effective date of this rider during the lifetime of each
insured.

Any reinstatement will be incontestable after that reinstatement has
been in force for 2 years from its effective date during the lifetime of
each insured. Any contest will then be based only on the information
provided on the application for reinstatement.

L109 56814

<PAGE>

SUICIDE
If either insured commits suicide, while sane or insame, within 2 years
after the effective date of this rider, (one year in Colorado and North
Dakota), our liability will be limited to an amount equal to the total
monthly deductions for this rider. In no event will this increase the
total liability set forth in the Suicide Provision of the attached
policy.

TERMINATION
This rider will terminate on the earliest of:

1. the expiry date of the rider,
2. the date the policy terminates,
3. the monthly anniversary date on or next following the date we receive
your written request
to terminate this rider, or
4. the payment of the death benefit upon the death of the first joint
insured to die.

NONPARTICIPATING
This rider is nonparticipating and has no cash value.

Signed for the Company to take effect on the rider effective date.

/s/Dean C. Kopperud /s/Anthony Rotundi
SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT

L109 56814

<PAGE>

FORTIS BENEFITS INSURANCE COMPANY
P.O. BOX 64271
ST. PAUL, MINNESOTA 55164

ESTATE PROTECTION RIDER
(LAST SURVIVOR)

This rider is a part of your policy. It is subject to the provisions of
the policy which apply and are consistent with the provisions of this
rider. It is an annually renewable term rider providing coverage for 4
years, payable at the death of the second insured to die. The effective
date and expiry date of this rider are shown in the policy schedule.

JOINT INSUREDS
The joint insureds are named in the policy schedule.

RIDER BENEFIT
We will pay the face amount of this rider to the beneficiary at the
death of the surviving insured upon receipt of due proof that both joint
insureds died while this rider was in force. Proof of the first death
must be given to us when it occurs, even if no insurance benefits are to
be paid at such time.

FACE AMOUNT
The face amount is the amount of the death benefit provided by this
rider. The face amount for this rider is shown in the policy schedule.

The ratio of the face amount for this rider to the base policy face
amount may not be more than the Maximum Estate Protection Rider Ratio
shown in the policy schedule. If the base policy face amount is decreased,
then the rider face amount will be decreased if necessary, so that the Maximum
Estate Protection Rider Ratio is not exceeded.

DISABILITY WAIVER
If monthly deductions on the policy are waived under the terms of any
disability benefit rider, the charges for this rider will also be
waived.

MONTHLY RATE
The monthly rider rates are based on the joint insured's attained ages
and premium class and are shown in the policy schedule. The monthly
deduction is equal to the monthly rate multiplied by the face amount of
the rider, divided by 1,000.

INCONTESTABLE
This rider will be incontestable after it has been in force for 2 years
from the effective date of this rider during the lifetime of each
insured.

Any reinstatement will be incontestable after that reinstatement has
been in force for 2 years from its effective date during the lifetime of
the insured or of each of the joint insureds. Any contest will then be
based only on the information provided on the application for
reinstatement.

Failure to notify us of an insured's death will not prevent us from
contesting the validity of this rider.

L108 56813

<PAGE>

SUICIDE
If either insured dies by suicide, while sane or insane, within 2 years
after the effective date of this rider, (one year in Colorado and North
Dakota), our liability will be limited to an amount equal to the total
monthly deductions for this rider. In no event will this increase the
total liability set forth in the Suicide Provision of the attached
policy.

TERMINATION
This rider will terminate on the earliest of:

1. the date the policy terminates.
2. the fourth anniversary of this policy.
3. the monthly anniversary date on or next following the date we receive
your written request to terminate this rider.

NONPARTICIPATING
This rider is nonparticipating and has no cash value.

Signed for the Company to take effect on the rider effective date.

/s/Dean C. Kopperud /s/Anthony Rotundi
SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT

L108 56813
<PAGE>

FORTIS BENEFITS INSURANCE COMPANY
P.O. BOX 64271
ST. PAUL, MINNESOTA 55164

EXTENDED MATURITY OPTION ENDORSEMENT
(LAST SURVIVOR)

The attached policy is hereby amended to include the following:

EXTENDED MATURITY DATE OPTION
You can extend the maturity date by submitting a written request to us
within 60 days prior to the existing maturity date. This option is
available only if your policy value is at least $2,000.

During the extension beyond the original maturity date, the following
conditions will apply:

1. The monthly minimum premium will be zero.
2. No premium payments may be made except to keep the policy in force.
3. The death benefit will be equal to the policy value multiplied by
the percentage, as stated in the death benefit provision of the policy.
4. No face amount increase or decrease, or death benefit option change
will be allowed.
5. New and existing loans will be charged at the reduced rate or
credited with the higher rate shown in the policy schedule.
6. Partial withdrawals of the surrender value are permitted as long as
the policy value remains above $2,000.
7. No bonuses other than policy value bonuses will be paid.
8. All term life or other insurance riders under the policy will
terminate on the earlier of their expiry dates or the original policy
maturity date.
9. Rider references to the policy maturity date mean the original
policy maturity date.

Expiration of this extension will be the earlier of:

1. the date specified by you;
2. the date of any written request by you to surrender the policy;
3. the date of death of the insured under an individual life policy or
the surviving insured under a joint last survivor policy.

We will pay you the surrender value as of the new maturity date
specified in the amended policy schedule.

Signed for the Company to take effect on the rider effective date.

/s/Dean C. Kopperud /s/Anthony Rotundi
SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT

L104 56780

<PAGE>

FORTIS BENEFITS INSURANCE COMPANY
P.O. BOX 64271
ST. PAUL, MINNESOTA 55164

JOINT AVIATION EXCLUSION RIDER

THIS RIDER IS A PART OF YOUR POLICY.

CONDITIONS FOR PAYMENT
The death benefit payable on this policy and on any attached riders will
be limited to the amount stated in this rider if the insured's death
results from operating or riding in or descending from any kind of
aircraft if the insured, insured's spouse, joint insured, or joint
insured's spouse:

(1) is a pilot, officer, or crew member of that aircraft; or
(2) gives or receives any kind of training; or
(3) has any duties which take place on board the aircraft or which
require descending from it.

AMOUNT OF PAYMENT
If the insured's death occurred under any of the above conditions, and
the insured is covered under a term life rider attached to this policy,
the rider death benefit will be limited to the premiums paid for that
insured under that term life rider.

If the insured's death would make the death benefit payable under the
base policy, the policy death benefit will be limited to the greater of:

1. the premiums paid on this policy, less any outstanding loan or
partial withdrawal on the policy; or
2. the surrender value under this policy.

This exclusion rider will be a part of any new policy issued as a result
of any change or conversion of this policy or attached riders.

NONPARTICIPATING
This rider is nonparticipating and has no cash value.

Signed for the Company to take effect on the rider date.

/s/Dean C. Kopperud /s/Anthony Rotundi
SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT

L105 56781

<PAGE>

FORTIS BENEFITS INSURANCE COMPANY
P.O. BOX 64271
ST. PAUL, MINNESOTA 55164

ACCELERATED BENEFIT RIDER
(LAST SURVIVOR)

BENEFITS PAID UNDER THE RIDER OR POLICY MAY BE TAXABLE. IF SO, YOU MAY
INCUR A TAX OBLIGATION. AS WITH ALL TAX MATTERS, YOU SHOULD CONSULT
YOUR PERSONAL TAX ADVISOR TO ASSESS THE IMPACT OF THIS BENEFIT.

THIS RIDER PROVIDES AN ACCELERATED PAYMENT OF LIFE INSURANCE PROCEEDS
UNDER CONDITIONS SPECIFIED IN THIS RIDER. IT IS NOT INTENDED TO PROVIDE
HEALTH, NURSING HOME OR LONG TERM CARE INSURANCE. CASH VALUES, LOAN
VALUES, IF ANY, AND DEATH BENEFITS WILL BE REDUCED IF YOU RECEIVE AN
ACCELERATED BENEFIT. BENEFIT PAYMENTS MAY AFFECT QUALIFICATIONS FOR
ENTITLEMENT PAYMENTS.

This rider is part of your policy. All definitions, provisions, and
exceptions of the policy apply to this rider unless changed by this
rider. The effective date of the rider is the same as the policy date
unless a different date is shown in the policy schedule.

DEFINITIONS

INSURED
The Insured is the surviving insured under any last survivor coverage or
any insured under any attached individual or first to die riders. For
any last survivor coverage, the rider benefit may be exercised only
after one insured has died.

TERMINAL CONDITION
A Terminal Condition is an irreversible medical condition that, with
reasonable medical certainty, can be expected to result in the Insured's
death, notwithstanding appropriate medical care, within twelve months
from the date of certification by a Physician.

ELIGIBLE AMOUNT
The Eligible Amount is the death benefit of the policy and any term
insurance rider attached to the policy that is not within two years of
original expiry and that would be payable upon the death of the insured
with the terminal condition.

PHYSICIAN
A Physician is a medical doctor or osteopath in the jurisdiction in
which the diagnosis or prognosis is rendered who is performing an act
within the scope of his or her license, and is qualified to treat the
type of condition stated. This person may not be yourself, an Insured
or a member of either's family. We reserve the right to obtain a second
medical opinion at our expense. The opinion of our Physician will
control in the event of conflicting opinions.

ADMINISTRATIVE FEES
We reserve the right to charge an administrative fee at the time we
receive the request for a Benefit. The fee will not exceed $300.

BENEFIT PERCENTAGE
The percentage of the Eligible Amount used to calculate the Benefit.
This amount is indicated by you when you apply for the Benefit.

L110 56815

<PAGE>

BENEFIT
If an Insured has a Terminal Condition, you may, by written request
while this policy is in force, request acceleration of payment of all or
a portion of the Eligible Amount. The Eligible Amount will be
determined as of the date we approve your written request for the
Benefit.
Approval of your request is subject to the following limitations:

(1) The maximum amount you may request is $500,000. The sum of the
Benefit you may request under this and any other policies issued by
us on the life of an Insured may not exceed $500,000.

(2) The Benefit will be paid in a lump sum and must be at least $2,500.

(3) Only one Benefit will be paid to you for each Insured.

(4) The face amount of the policy or rider that will remain after a
partial Benefit payment is made must be at least the minimum face
amount required under the policy or rider.

(5) No accidental death benefit will be available for acceleration.

(6) For a Benefit request on a base policy Insured, we may require you
to make a withdrawal from the policy before acceleration if the request
portion of the eligible amount plus the remaining death benefit exceeds
the death benefit prior to acceleration due to the requirement of an
increase in the remaining death benefit to comply with Section 7702 of
the Code. In such case the sum of the withdrawal, the requested portion
of the Eligible Amount, and the remaining death benefit will be equal to
the death benefit prior to the withdrawal or acceleration.

The requested portion of the Eligible Amount will be subject to
following adjustments:

(1) A 12-month discount will apply to the requested portion of the
Eligible Amount. This discount reflects the early payment of proceeds
under your policy. It will be based on an annual interest rate equal
to the lesser of the following:

(a) the applicable federal interest rate determined under Section
846(c)(2) of the Internal Revenue Code;

(b) the current maximum statutory adjustable policy loan interest rate;
or

(2) If, on the date we approve your written request, there is a policy
loan outstanding on the policy and the acceleration relates to insurance
on the life of the Insured under the base policy, a reduction to the
requested portion of the Eligible Amount will apply. This reduction
serves to repay a portion of the policy loan and is equal to the
outstanding loan multiplied by the Benefit Percentage.

(3) A deduction will be made for the Administrative Fee that is in
effect at the time we receive your written request.

L110 56815

Page 2

<PAGE>

The Benefit payable to you will be equal to the requested portion of the
Eligible Amount as may be reduced by the maximums and limitations of
this rider, (the Benefit Percentage) minus 1 through 3 immediately
above. Rather than having your Benefit reduced by 2 and 3 immediately
above, you may elect to pay these amounts.

EFFECT ON YOUR POLICY

IF THE ELIGIBLE AMOUNT INCLUDES BASE POLICY DEATH BENEFIT
If your Eligible Amount is $500,000 or less, and you request all of the
Eligible Amount as the Benefit, this policy will terminate. Any riders
on this policy that provide insurance on the life of any other person
will be administered according to the rider provisions regarding the
death of the second joint insured to die.

If your Eligible Amount is over $500,000 or only a portion of the
Eligible Amount is requested as the Benefit, this policy will remain in
force. The face amount of the base policy, face amount of any
applicable riders, loan amount and surrender value will be reduced by
the Benefit Percentage. The policy value will be reduced by the same
amount as the surrender value. The policy value in each subaccount, if
any, will be reduced on a pro-rata basis. The cost of insurance and
minimum premium will be reduced as if a loan repayment, a withdrawal and
a face decrease were made to the policy. These reductions will be made
as of the date we approve the written request for the Benefit.

IF THE ELIGIBLE AMOUNT DOES NOT INCLUDE BASE POLICY DEATH BENEFIT
If you accelerate the entire Eligible Amount with respect to an Insured,
all insurance on such Insured's life will terminate. If only a portion
of the Eligible Amount is accelerated, the amount and cost of insurance
for that Insured will be reduced by the Benefit Percentage. For any
first-to-die insurance coverage, acceleration of the entire eligible
amount will terminate such coverage. If only a portion of the eligible
amount is accelerated, the face amount and cost of insurance for the
first-to-die coverage will be reduced by the benefit percentage
requested.

We will send you information for the policy and/or rider showing the new
monthly cost and the new amount of insurance.

CLAIMS
We must receive your written request for an accelerated benefit in a
form acceptable to us. Upon receipt of your request, we will provide a
claim form within 10 working days.

CONDITIONS

The payment of any accelerated benefit is subject to the following
conditions:

(1) No Benefit is payable under this rider when the base policy or rider
for which accelerated benefits are requested is less than two years
from the original maturity date of the policy or rider.

(2) The payment of a Benefit must be approved in writing, in a form
acceptable to us, by an irrevocable beneficiary and any collateral
assignee. At our discretion, we may require written approval from
any other party whom we believe has a potential interest in the
proceeds of this policy or riders.

L110 56815

Page 3

<PAGE>

(3) This rider provides for the accelerated payment of the death benefit
of your policy or riders. This is not meant to cause you to involuntarily
access proceeds ultimately payable to the beneficiary. Therefore, you are
not eligible for this Benefit:

(a) If you are required by law to use this Benefit to meet the claims of
creditors, whether in bankruptcy or otherwise; or

(b) If you are required by a government agency to use this Benefit in
order to apply for, obtain, or otherwise keep a government benefit.

(4) We may take any action necessary to keep this rider in compliance
with all applicable laws, rules, regulations, interpretations, holdings or
orders. When required by law, we will obtain your approval of these
changes and gain approval from any appropriate regulatory authority.

(5) No Benefit is available if an Insured's Terminal Condition results
from a self-inflicted injury and such injury occurs within a two year
period (one year in Colorado and North Dakota) following the policy date.
If such injury occurs beyond such period, the amount that may be requested
with respect to such Insured may not include any part of the death benefit
that was first effective within a two year period (one year in Colorado
and North Dakota) prior to such injury.

TERMINATION

This rider ends on the first of:

(1) the termination of the policy to which this rider is attached; or

(2) our receipt, prior to the payment of a Benefit, of your written
request in a form acceptable to us to cancel this rider.

REINSTATEMENT

You may reinstate this rider as part of your policy if it is terminated.

Signed for the Company to take effect on the rider effective date.

/s/Dean C. Kopperud /s/Anthony Rotundi
SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT

L110 56815

Page 4

<PAGE>

FORTIS BENEFITS INSURANCE COMPANY
P.O. BOX 64271
ST. PAUL, MINNESOTA 55164

ADDITIONAL INSURED RIDER
(ANNUAL RENEWABLE TERM INSURANCE - LAST SURVIVOR)

This rider is a part of your policy. It is subject to the provisions of
the policy which apply to and aren't inconsistent with the provisions of
this rider. It provides annually renewable term coverage for each
Additional Insured. There is no policy value under this rider.

The effective date for the coverage of each Additional Insured under
this rider is shown on the policy schedule. Coverage for an Additional
Insured under this rider will not become effective unless, on the date
coverage is to commence, the health of the Additional Insured remains as
described in the application to the best of his or her knowledge.

ADDITIONAL INSURED

Additional Insured means each person whose life is insured by this
rider. Each Additional Insured is listed on the policy schedule. If
there is more than one Additional Insured, the provisions of this rider
will apply individually as to each Additional Insured.

The face amount is the amount of the death benefit provided by this
rider. The face amount for each additional insured is shown in the
policy schedule.

The maximum combined rider coverages on the life of any one person
insured under an optional term rider (except for the Estate Protection
Rider) may not exceed the maximum individual insured term rider ratio
shown in the policy schedule. The maximum coverage provided by this
rider for all persons covered under this rider may not exceed the
maximum combined rider ratio shown in the policy schedule. If the base
policy face amount is decreased or if other rider changes are made, the
rider face amount for each Additional Insured will be decreased if
necessary, so that the ratios set forth above are not exceeded.

RIDER BENEFIT
If we receive proof satisfactory to us that an Additional Insured died
while this rider was in force, we will pay a death benefit to the
beneficiary of this rider. The death benefit will be the face amount in
force as of the date of death of an Additional Insured. If an
Additional Insured dies during the grace period, and a death claim is
payable, any overdue charges for this rider will be subtracted from the
proceeds.

COST OF RIDER BENEFITS
The cost of this rider's benefit is the face amount divided by 1,000
times the monthly cost of insurance rate which is shown in the policy
schedule. This rate is based on the sex, issue age, duration and risk
class of the Additional Insured. Monthly cost of insurance rates may be
changed by us from time to time. A change in the cost of insurance
rates will apply to all persons of the same sex, issue age, duration and
risk class.

DISABILITY WAIVER
If monthly deductions on the policy are waived under the terms of any
disability benefit rider, the charges for this rider will also be
waived.

L112 56782

<PAGE>

CONVERSION
You may convert the coverage for a particular additional insured under
this rider without evidence of insurability to an individual variable
universal life policy offered by us subject to the limits outlined
below. The face amount of the new policy cannot exceed the face amount
of the coverage for the Additional Insured at the time of conversion.
The new policy will be at the same risk classification as the additional
insured's class under this rider.

Coverage may be converted only under the following conditions:

1. the monthly anniversary date on or next following receipt of your
written request for coverage to end; or
2. before the later of the Additional Insured's age 65 or the end of
the fifth policy year; and
3. while the base policy is in force.

TERMINATION
Coverage for an Additional Insured under this rider will terminate on
the earliest of the following:

1. the monthly anniversary date on or next following receipt of your
written request for coverage to end; or
2. the date the policy terminates for reasons other than the surviving
joint insured's death; or
3. 31 days after the surviving joint insured's death. During these 31
days we will not charge you for coverage under this rider; or
4. the date of full conversion of that coverage as provided in this
rider.

Unless terminated for some other reason, the coverage provided by this
rider will terminate on the rider expiry date shown in the policy
schedule.

REINSTATEMENT
If the policy and this rider lapse as provided in the policy's Grace
Period provision, this rider may be reinstated within five years of the
date of lapse if:

1. this rider was in effect when the policy lapsed;
2. the policy is reinstated;
3. the reinstatement date is not beyond the rider expiry date; and
4. the requirements stated below are met.

In order to reinstate coverage under this rider you must:

1. furnish satisfactory evidence of insurability for each Additional
Insured;
2. pay a premium sufficient to keep this rider in force for at least 2 months
from the reinstatement date; and
3. pay the monthly deductions that were not collected during the grace
period.

The effective date of reinstatement will be the monthly anniversary date
on or next following the date we approve the application for
reinstatement.

MISSTATEMENT OF AGE OR SEX
If the Additional Insured's age or sex is misstated, the amount we will
pay will be the amount that the last cost of insurance deductions would
have purchased using the most recent cost of insurance rates and the
correct attained age and sex.

L112 56782

<PAGE>

INCONTESTABLE
Coverage under this rider for an Additional Insured will be
incontestable after such coverage has been in force for two years from
the rider coverage effective date during the lifetime of the Additional
Insured.

Any reinstatement will be incontestable after that reinstatement has
been in force for two years from its coverage effective date during the
lifetime of the Additional Insured. Any contest will then be based only
on the information provided on the application for reinstatement.

SUICIDE
Suicide while sane or insane, within two years from the effective date
of coverage, is not covered (one year in Colorado and North Dakota). In
this event, our total liability under this rider will equal the rider
costs for that Additional Insured's coverage.

If the Additional Insured commits suicide while sane or insane within
two years after the effective date of any reinstatement (one year in
Colorado and North Dakota), our liability will equal the rider costs for
that Additional Insured taken after the reinstatement.

If the additional insured is also a joint insured, in no event will this
increase the total liability set forth in the suicide provision of the
base policy.

NON-PARTICIPATING
This rider does not participate in our profits or surplus earnings.

Signed for the Company to take effect on the rider effective date.

/s/Dean C. Kopperud /s/Anthony Rotundi
SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT

L112 56782

<PAGE>

FORTIS BENEFITS INSURANCE COMPANY
P.O. BOX 64271
ST. PAUL, MINNESOTA 55164

PRIMARY INSURED RIDER
(ANNUAL RENEWABLE TERM INSURANCE - LAST SURVIVOR)

This rider is part of your policy. It is subject to the provisions of the
policy which apply to and aren't inconsistent with the provisions of this rider.
It is an annually renewable term rider. The effective date of this rider is
also shown in the policy schedule. There is no policy value under this rider.

PRIMARY INSURED
The Primary Insured is the person or persons insured by this rider and
the base policy and is named as such in the policy schedule.

FACE AMOUNT
The face amount is the amount of the death benefit provided by this
rider. The face amount for each primary insured under this rider is
shown on the policy schedule.

The maximum combined rider coverage on the life of any person insured
under an optional term rider (except for the Estate Protection Rider)
may not exceed the maximum individual insured term rider ratio shown in
the policy schedule. The maximum coverage provided by this rider for
all persons covered under this rider may not exceed the maximum combined
rider ratio shown in the policy schedule. If the base policy face
amount is decreased or if other rider changes are made, then the rider
face amount will be decreased if necessary, so that the ratios set forth
above are not exceeded.

RIDER BENEFIT
If we receive proof satisfactory to us that a Primary Insured died while
this rider was in force, we will pay a death benefit to the beneficiary
of the policy. The death benefit will be the rider face amount in force
for that insured as of the date of death of the Primary Insured. If the
Primary Insured dies during the Grace Period, and a death claim is
payable, any overdue charges for this rider will be subtracted from the
death proceeds.

COST OF RIDER BENEFITS
The cost of this rider's benefit is the face amount divided by 1,000,
times the monthly cost of insurance rate for each primary insured. The
rates are based on the sex, issue age, duration and risk class of the
Primary Insured. The monthly cost of insurance rates may be changed by
us from time to time. A change in the cost of insurance rates will
apply to all persons of the same sex, issue age, duration and risk
class. The guaranteed Maximum Monthly Cost of Insurance Rates are shown
in the Rider Cost of Insurance Rates Table.

DISABILITY WAIVER
If monthly deductions on the policy are waived under the terms of any
disability benefit rider, the charges for this rider will also be
waived.

CONVERSION PRIVILEGES
You may convert the coverage for a particular primary insured under this
rider without evidence of insurability to an individual variable
universal life policy offered by us subject to the limits outlined
below. The face amount of the new policy cannot exceed the face amount
of the coverage for that insured under this rider at the time of
conversion.

L113 56937

<PAGE>

The new policy will be the same risk classification as the primary
insured at issue.

Coverage may be converted only under the following conditions:

1. while this rider is in force with respect to the Primary Insured;
and
2. before the later of the primary insured's age 65 or the end of the
fifth policy year; and
3. while the base policy is in force.

TERMINATION
Coverage for a particular Primary Insured under this rider will
terminate on the earliest of the following:

Unless terminated for some other reason, the coverage provided by this
rider will terminate on the expiry date shown on the policy schedule.

REINSTATEMENT
If the policy and this rider lapse as provided in the policy's Grace
Period provision, this rider may be reinstated within five years of the
date of lapse, if:

1. this rider was in effect when the policy lapsed;
2. the policy is reinstated;
3. the reinstatement date is not beyond the rider expiry date; and
4. the requirements stated below are met.

In order to reinstate coverage under this rider, you must:

1. furnish satisfactory evidence of insurability for each Primary
Insured;
2. pay a premium sufficient to keep this rider in force for at least
two months from the reinstatement date; and
3. pay the monthly deductions that were not collected during the grace
period.

The effective date of reinstatement will be the monthly anniversary date
on or next following the date we approve the application for
reinstatement.

MISSTATEMENT OF AGE OR SEX
If a Primary Insured's age or sex is misstated, the amount we will pay
will be the amount that the last cost of insurance deductions would have
purchased using the most recent cost of insurance rates and the correct
attained age and sex for that insured.

L113 56937

<PAGE>

INCONTESTABLE
This rider will be incontestable after it has been in force for two
years from the effective date of this rider during the lifetime of each
Primary Insured.

Any reinstatement will be incontestable after that reinstatement has
been in force for two years from its effective date during the lifetime
of each Primary Insured. Any contest will then be based only on the
information provided on the application for reinstatement.

SUICIDE
Suicide while sane or insane, within two years from the effective date
of this rider, is not covered (one year in Colorado and North Dakota).
In this event, our total liability with respect to that Primary Insured
under this rider will equal the rider costs for that Primary Insured's
coverage.

If the Primary Insured commits suicide while sane or insane within two
years after the effective date of any reinstatement (one year in
Colorado and North Dakota), our liability will equal the rider costs for
that primary insured from the date of reinstatement.

In no event will this increase the total liability set forth in the
suicide provision of the attached policy for that primary insured.

NON-PARTICIPATING
This rider does not participate in our profits or surplus earnings.

Signed for the Company to take effect on the rider effective date.

/s/Dean C. Kopperud /s/Anthony Rotundi
SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT

<PAGE>

Exhibit No. 1A(10)(a)

<PAGE>

<TABLE>

(Please Print) FORTIS BENEFITS INSURANCE COMPANY, P.O. BOX 64582, ST. PAUL, MN 55164 FORTIS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. 1st Joint Insured 6. 2nd Joint Insured

John Doe Jane Doe
- ---------------------------------------------------------------- ------------------------------------------------------------------
Date of Birth Height Wt. Birth- Social Security Date of Birth Height Wt. Birth- Social Security
Sex Age ------------- -------- --- place Number Sex Age ------------- -------- --- place Number
Mo. Day Yr. Ft. In. Lb. Mo. Day Yr. Ft. In. Lb.
- --- --- --- --- --- --- --- --- ------- --------------- --- --- --- --- --- --- --- --- ------- ---------------
M 40 3 22 56 6 0 180 Mpls MN XXX-XX-XXXX F 40 3 22 56 5 5 130 Mpls MN XXX-XX-XXXX
- ---------------------------------------------------------------- ------------------------------------------------------------------
2. Residence Address 7. Residence Address (Same as Item 2. /X/)

123 Anystreet, Anytown USA
- ---------------------------------------------------------------- ------------------------------------------------------------------
3. Employer's Name and Address 8. Employer's Name and Address

Bell Telephone AT&T
- ---------------------------------------------------------------- ------------------------------------------------------------------
4. Occupation/Duties 9. Occupation/Duties

Lineman Programmer
- ---------------------------------------------------------------- ------------------------------------------------------------------
5.A. Daytime telephone number B. Home telephone number 10.A. Daytime telephone number B. Home telephone number

(XXX) XXX-XXXX (XXX) XXX-XXXX (XXX) XXX-XXXX (XXX) XXX-XXXX
- ---------------------------------------------------------------- ------------------------------------------------------------------
11.A. Name of Primary Beneficiary Relationship TAX ID # B. Name of Contingent Beneficiary Relationship TAX ID #
(if living)

Jane Doe Spouse Timmy Doe Son
- ---------------------------------------------------------------- ------------------------------------------------------------------
12.A. Name of Owner C. Social Security # (Tax ID #)
XXX-XX-XXXX
John Doe ------------------------------------------------------------------
D. Relationship to Insured(s)
- ----------------------------------------------------------------
B. Address self
------------------------------------------------------------------
123 Anystreet, Anytown USA E. Daytime telephone number F. Home telephone number

( ) ( )
---- ---------------------- ---- --------------------
- ---------------------------------------------------------------- ------------------------------------------------------------------
13. VARIABLE UNIVERSAL LIFE COVERAGE 14. Allocation of Net Premium (Whole % Only)

A. Plan UUL Last Survivor STOCK INVESTMENTS BOND INVESTMENTS
-----------------------------------------------------
B. Face Amount $500,000 25% A. Aggressive Growth % H. High Yield
---------------------------------------------- --- ---
C. Planned Annual Premium $1,000 % B. International Stock % I. Global Bond
----------------------------------- --- ---
D. Death Benefit Option /X/ A (level) / / B (increasing) 25% C. Growth Stock % J. Diversified Income
--- ---
E. Riders 25% D. Global Growth % K. U.S. Government
Jt First-To-Die Term Rider Amount $ --- ---
--- ------------- % E. Growth & Income % L. Money Market
Jt Second-To-Die Term Rider Amount $ --- ---
--- ------------- 25% F. Global Asset Allocation % M. General Account
X Estate Protection Rider Amount $ --- ---
--- ------------- % G. Asset Allocation %
1st Jt Primary Insured Rider + Amount $ --- --- ------------------------
--- ------------- % %
2nd Jt Primary Insured Rider + Amount $ --- -------------------------- --- ------------------------
--- ------------- % %
Additional Insured Rider (Complete form(s) 56941) --- -------------------------- --- ------------------------
--- % %
Number of Additional Riders Attached --- -------------------------- --- ------------------------
------------------ % %
Waiver of Selected Amount Amount $ --- -------------------------- --- ------------------------
--- ------------- % %
Covering: --- -------------------------- --- ------------------------
--- / / 1st Jt Insured / /2nd Jt Insured / / Both Jt Insureds % %
X Waiver of Monthly Deductions --- -------------------------- --- ------------------------
--- % %
Covering: --- -------------------------- --- ------------------------
--- / / 1st Jt Insured / /2nd Jt Insured / / Both Jt Insureds % %
NOTE: ONLY ONE WAIVER RIDER PER POLICY, SINGLE OR BOTH --- -------------------------- --- ------------------------
JT INSUREDS COMBINED ALLOCATIONS MUST TOTAL 100%
X Guaranteed Death Benefit: ------------------------------------------------------------------
--- /X/ 10 Yr. (No Charge) / / 20. Yr. 15.A. Mode of Payment
/ / to age 85 / / / / Annual / / Semi-Annual / / Quarterly
X Policy Split Option /X/ Monthly Bank Draft / /Special Billing
--- 50% 1st Jt Insured 50% 2nd Jt Insured ------------------------------------------------------------------
--- --- B. Send mail to address in question number:
Other Amount $ /X/ 2 / / 3 / / 7 / / 8 / / 12.B.
--- ------------- -------------------
Other Amount $
--- -------------
- ------------------------------------------------------------------------------------------------------------------------------------
56940

<PAGE>
1st Jt 2nd Jt 1st Jt 2nd Jt
Insured Insured Insured Insured
- ---------------------------------------------------------------- ------------------------------------------------------------------
16.A. Is this insurance applied for to Yes No Yes No 21. During the past 10 years has any Yes No Yes No
replace or change insurance or proposed insured had or received advice
annuity in this or any other company? / / /X/ / / /X/ or treatment for:
B. Is any life insurance now pending A. chest pain, heart disease, heart
elsewhere? / / /X/ / / /X/ attack, heart murmur, palpitions,
- ---------------------------------------------------------------- angina, stroke, high blood pressure,
C. If Yes, Explain. or other circulatory disorder? / / /X/ / / /X/
B. ulcer, colitis, hepatitis, disorder
of liver, stomach or intestines? / / /X/ / / /X/
C. kidney, bladder, prostate, or other
- ---------------------------------------------------------------- urinary disorder, or reproductive / / /X/ / / /X/
17. Life Insurance in Force Type: P=Personal G=Group organs?
(if none, state "None") None B=Business D. emphysema, tuberculosis, asthma, lung
- ---------------------------------------------------------------- or respiratory disorder? / / /X/ / / /X/
Covering Policy Year E. cancer, tumor, growth, arthritis,
Company Insured #(s) Type Amount Issued disorder of muscle or skin? / / /X/ / / /X/
- ----------------- --------- ------- ---- ---------- ------ F. diabetes, disorder of thyroid,
- ----------------- --------- ------- ---- ---------- ------ endocrine glands, or sugar in urine? / / /X/ / / /X/
- ----------------- --------- ------- ---- ---------- ------ G. anemia or other disorder of blood or
- ----------------- --------- ------- ---- ---------- ------ blood vessels? / / /X/ / / /X/
- ----------------- --------- ------- ---- ---------- ------ H. anxiety or depression, epilepsy,
- ----------------- --------- ------- ---- ---------- ------ paralysis, suicide attempt, nervous
- ----------------- --------- ------- ---- ---------- ------ or brain disorder, Alzheimer's or any
- ----------------- --------- ------- ---- ---------- ------ senility disorder? / / /X/ / / /X/
- ---------------------------------------------------------------- I. any disorder of eyes, ears, amputation
18. Has any person named in Items 1 or 6: 1st Jt 2nd Jt or joint disorder? / / /X/ / / /X/
Insured Insured J. alcohol or drug use or abuse; received
-------- -------- counseling or treatment recommended;
Yes No Yes No or joined any organization for
A. flown or plan to fly as a pilot or alcohol or drug abuse? / / /X/ / / /X/
crew member? If Yes, complete / / /X/ / / /X/ K. used cocaine, heroin, marijuana, or any
questionnaire on page 7. other illegal restricted or controlled
B. done any land or water vehicle substance except as prescribed by a
competition or racing, skydiving, / / /X/ / / /X/ physician? / / /X/ / / /X/
underwater diving, or rock climbing? L. unexplained weight loss, recurrent
If Yes, complete questionnaire on fever, or chronic fatigue or diarrhea? / / /X/ / / /X/
page 7. ------------------------------------------------------------------
C. any plans to travel or live outside 22. During the past 10 years has any proposed Yes No Yes No
U.S.? / / /X/ / / /X/ insured:
D. been released from the military for A. had or been told he or she had Acquired
medical reasons? / / /X/ / / /X/ Immune Deficiency Syndrome ("AIDS"),
E. had any life insurance declined, AIDS Related Complex ("ARC"), or AIDS
postponed, or had extra premium added? / / /X/ / / /X/ related conditions? / / /X/ / / /X/
F. received payment for disability, B. received treatment in connection with
illness or injury? / / /X/ / / /X/ any of the categories named in (A.) / / /X/ / / /X/
G. been convicted of moving violations C. tested positive for antibodies to the
or had driver's license revoked or / / /X/ / / /X/ AIDS (Human T-cell Lymphotropic, HIV)
suspended in the last 5 years? virus? / / /X/ / / /X/
If Yes, list driver's license number and ------------------------------------------------------------------
state 23. Within the past 5 years has any proposed Yes No Yes No
-------------------------------- insured:
H. been convicted of a felony? / / /X/ / / /X/ A. had a physical examination,
- ---------------------------------------------------------------- electrocardiogram, x-ray, blood test, or
19.A. Does any proposed insured Yes No diagnostic test? /X/ / / /X/ / /
currently smoke cigarettes? /X/ / / B. had or been advised to have surgery or
B. If yes, list name(s): John Doe any diagnostic testing? / / /X/ / / /X/
-------------------------- C. had any medical treatment, consultation
----------------------------------------------- or exam, medication or prescribed diet,
C. If no, has any proposed insured ever smoked or health impairment not mentioned
cigarettes? / / / / above? / / /X/ / / /X/
D. If yes, list name(s): ------------------------------------------------------------------
-------------------------- 24. Name and address of last doctor consulted by:
-----------------------------------------------
E. Date ceased smoking n/a A. First Joint Insured:
----------------------------
F. Does any proposed insured use tobacco in any
form? /X/ / / Date: Dr. Jones Reason & Results
G. If yes, list names and type of tobacco used: ----------------------------
John Doe - Marlboro Lights 456 Alpine St
----------------------------------------------- Anytown, USA
-----------------------------------------------
- ----------------------------------------------------------------
20. Questions for Temporary Insurance Agreement. Yes No
Complete only if premium is collected
(see receipt). ------------------------------------------------------------------
Has any person(s) listed in Items 1 or 6: B. Second Joint Insured:
A. Within the past 90 days, been admitted to a
hospital or other medical facility, been
advised to be admitted or had surgery Date: Dr. Jones Reason & Results
performed or recommended? / / /X/ ----------------------------
B. Within the past 12 consecutive months, been 456 Alpine St
absent from work a total of 10 working days Anytown, USA
or more for health reasons? / / /X/
C. Within the past 2 years had or been treated
for heart disease, stroke, cancer, or had such
treatment recommended by a physician or other
medical practitioner? / / /X/

If any of the above questions are answered Yes for any insureds,
NO COVERAGE will take effect under this agreement. None of our
representatives is authorized to accept money for the above
persons, and NO COVERAGE will take effect under this agreement
for any proposed insureds. If any of the above questions are left
blank, NO COVERAGE will take effect for any persons listed above
as proposed insureds.
- ------------------------------------------------------------------------------------------------------------------------------------
<PAGE>

- ------------------------------------------------------------------------------------------------------------------------------------
25. Requested effective date or any additional request 27. DETAILS OF "YES" ANSWERS IN QUESTIONS 18-23. Include details
or statement: such as dates; names and addresses of insurance companies,
policy numbers, doctors, hospitals; nature of any illness or
disorder; episodes; duration; residual effects; reasons for
prior adverse insurability decisions.

Question # Name of Person Explanation
- ----------------------------------------------------------------
26. Home Office Corrections and Additions: This space will not
be used when such use is not allowed by state statutes or
insurance department regulations.

- ----------------------------------------------------------------
Changes or corrections made by the Company and noted in Item 26
are ratified by the owner upon acceptance of a contract
containing this application with the noted changes or
corrections. In those states where written consent is required
by statute or State Insurance Department regulation. (including
Maryland) amendment as to plan, amount, classification or
benefits will be made only with the owner's written consent.
- ------------------------------------------------------------------------------------------------------------------------------------
REPRESENTATIONS: To the best of my knowledge and belief, the statements and answers in this application are full, complete and true.
I acknowledge that this Part I application, along with any examination supplement or amendment make up the entire application and
will be the basis of and become part of any policy issued. I acknowledge that except as may be provided by the terms of the
Temporary Insurance Agreement, the insurance applied for will not become effective unless (1) the first full modal premium has been
paid and (2) the policy has been issued and delivered to the owner while to the best of his or her knowledge the health of the
insureds remains as described in this application. I have read and received the NOTICE OF INFORMATION PRACTICES.

I BELIEVE THAT A FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY IS CONSISTENT WITH MY INVESTMENT OBJECTIVES AND FINANCIAL NEEDS.

I UNDERSTAND THAT THE DEATH BENEFIT FOR THE FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY APPLIED FOR MAY INCREASE OR DECREASE
BASED ON THE INVESTMENT EXPERIENCE OF THE POLICY AND ON THE DEATH BENEFIT OPTION CHOSEN. I HAVE RECEIVED THE CURRENT PROSPECTUS FOR
FLEXIBLE PREMIUM VARIABLE LIFE; I AM AWARE THAT THE PROSPECTUS INCLUDES A DISCLOSURE ON THE ACCELERATED BENEFIT RIDER INCLUDED IN
THIS POLICY.

I UNDERSTAND THAT THE SURRENDER VALUE FOR THE FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY APPLIED FOR MAY INCREASE OR DECREASE
BASED ON THE INVESTMENT EXPERIENCE OF THE POLICY AND IS NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. THERE IS NO GUARANTEED MINIMUM
SURRENDER VALUE IN THE SEPARATE ACCOUNT. THE DEATH BENEFIT WILL NEVER BE LESS THAN THE FACE AMOUNT OF THE POLICY.

AUTHORIZATION TO RELEASE INFORMATION: For underwriting and claim purposes I give my permission to:

Any physician or other medical practitioner, hospital, clinic, insurance company, consumer reporting agency, MIB, Inc., or any other
organization to give Fortis Benefits or its reinsurers ALL INFORMATION on my behalf including findings on medical care, alcohol or
drug abuse information, psychiatric or psychological care or examination, or surgery, as they apply to me or any of my children who
are to be insured.

I give my permission to Fortis Benefits or its reinsurers, to:

(1) Release any information to the MIB, Inc., and to other life insurance companies I may come in contact with.
(2) Obtain an investigative consumer report on me. (By checking this box, / /, I request a personal interview by the consumer
reporting agency.) I know that I am entitled to a copy of this consumer report.
(3) Obtain personal history information on me.
(4) Obtain medical history information from my attending physician, clinic or hospital.

So that I can receive information on other insurance or investment products and services that may be of interest to me, you may
provide information about me to your affiliates. (By checking this box, / /, I do not want this information disclosed.)

I know that I have a right to a copy of this authorization. A photocopy will be as valid as the original. This authorization will be
valid for two and one half years from the date shown below.
- ------------------------------------------------------------------------------------------------------------------------------------
THE UNDERSIGNED APPLICANT(S) AND AGENT CERTIFY THAT THE APPLICANT(S) HAS READ, OR HAD READ TO, THE COMPLETED APPLICATION AND THAT
THEY REALIZE THAT ANY FALSE STATEMENT OR MISREPRESENTATION THEREIN MAY RESULT IN LOSS OF COVERAGE UNDER THE APPLIED FOR POLICY.

Dated May 1 1996 City Mpls State MN
------------------------ ------- ----------------------------------------- ------------------------
(Please Print)
Agent: Does this insurance replace any life insurance or
annuity in this or any other company? / / Yes /X/ No X John Doe
-----------------------------------------------
Signature of First Joint Insured

X John Q. Agent X Jane Doe
-------------------------------------------------------- -----------------------------------------------
Agent (Licensed agent must sign where Agent # Signature of Second Joint Insured
required by law) X
------------------------------------------------
Signature of Owner (if other than joint insured)

</TABLE>
<PAGE>

TEMPORARY INSURANCE AGREEMENT
(TO BE GIVEN TO THE APPLICANTS IF FULL MODAL PREMIUM IS MADE)

This agreement provides a LIMITED AMOUNT of insurance coverage, for a LIMITED
PERIOD of time, subject to the terms of this agreement.

AMOUNT OF LIFE INSURANCE COVERAGE -- $250,000 MAXIMUM PER LIFE

If both joint insureds and/or person(s) covered under the additional insured
rider die, while this temporary insurance is in effect, we will pay to the named
beneficiary the lesser of (a) the amount of all the death benefits applied for
in the application, including any optional benefits, if applicable, or (b)
$250,000 per life. This total benefit limit applies to all insurance applied
for under conditional receipts and temporary insurance agreements with us and
any other companies.

Temporary coverage under this agreement will provide the same benefits, and be
subject to the same terms as would apply under the policy had it become
effective, except for the following limitations on our aggregate liability.

WHEN COVERAGE BEGINS

Temporary insurance under this agreement will begin on the date this agreement
is signed but only if (1) Part I of the application has been completed on the
same date or prior to the date of this agreement, (2) Health Questions 20.A, B
and C are answered No, and (3) the full modal premium is collected.

Received $ 1,000 for insurance on /s/ John Doe
----------- ------------------------------------------
Name of First Joint Insured

/s/ Jane Doe
------------------------------------------
Name of Second Joint Insured

------------------------------------------
Name of Other Insured

Signed this 1st day of May 19 96 /s/ John Q. Agent
--------- ---------- ---- ---------------------------------
Signature of Agent
56940
- --------------------------------------------------------------------------------
NOTE: THIS FORM MUST BE GIVEN TO THE APPLICANT BEFORE THE APPLICATION IS SIGNED

NOTICE OF INFORMATION PRACTICES

To underwrite and service your insurance coverage, we need certain information
about you. The amount and type of information we collect may vary depending on
the amount and type of coverage you have applied for. In general, we will seek
information about your age, occupation, physical condition, health history, mode
of living, activities, and other personal characteristics. We may collect
information by letter, phone or personal contact.

Your application gives us most of the information we need to underwrite your
coverage. We may, however, collect or verify information by contacting other
parties. Typically, these are physicians, clinics or hospitals that have
provided care for you (or family members proposed for coverage), other insurers
to whom you may have applied for coverage, and MIB, Inc.

Your agent will complete a report giving us information about your financial
status and the purpose of the coverage. He or she may also collect information
for updating and improving your insurance or investment program.

INVESTIGATIVE CONSUMER REPORT

To verify or add to information you have given us, we may request an
investigative report for a consumer reporting agency. The report may include
information about your character, habits, residence, occupation, income,
financial status, aviation and hazardous activities, and medical history
including mental illness and the use of drugs and alcohol. Sources of this
information may include your friends, neighbors, and associates. The consumer
reporting agency may keep a copy of the report. They may disclose its contents
to others for whom they perform similar services. If you request it, we will
supply the name, address, and telephone number of the nearest disclosing unit of
the consumer reporting agency through which you may obtain a copy of the report.

Instead of requesting a commercial consumer report, we may contact you directly
to obtain information.

DISCLOSURE NOTICE -- MIB, INC. (MEDICAL INFORMATION BUREAU)

Information regarding your insurability will be treated as confidential. Fortis
benefits or its reinsurer(s) may, however, make a brief report to the MIB,
Inc., a non-profit membership organization of life insurance companies, which
operates an information exchange on behalf of its members. If you apply to
another Bureau member company for life or health insurance coverage, or a
claim for benefits is submitted to such a company, the Bureau, upon request
will supply that Company with the information in its file.

Upon receipt of a request from you, the Bureau will arrange disclosure of any
information it may have in your file. If you question the accuracy of
information in the Bureau's file, you may contact the Bureau and seek a
correction in accordance with the procedures set forth in the Federal Fair
Credit Reporting Act. The address of the Bureau's information office is Post
Office Box 105, Essex Station, Boston, Massachusetts 02112, telephone number
(617) 426-3660.

Fortis Benefits or its reinsurer(s) may also release information in its file to
other life insurance companies to whom you may apply for life or health
insurance, or to whom a claim for benefits may be submitted.

56940
<PAGE>

WHEN COVERAGE TERMINATES -- 90 DAY MAXIMUM

Temporary insurance under this agreement will terminate automatically on the
earliest of:
1. 90 days from the date of this agreement, or
2. the date that insurance begins under the policy applied for, or
3. the date a policy, other than as applied for, is offered to the applicant(s),
or
4. the date we mail the notice of termination of coverage to the premium notice
address stated in Part I of the application.

PREMIUMS
1. We will first apply premiums to all policies which become effective as a
result of the application.
2. We will refund the premiums if ALL these conditions are met:
a. No claim is paid under this agreement, and
b. No coverage becomes effective under the policy(ies) applied for, and
c. No coverage becomes effective under the policy(ies) we offer other than
the policy applied for.
3. We will keep part of the premium equal to the premium for the kind, amount,
and period of coverage (but not less than one month) given under this
agreement, if a benefit is paid under this agreement. Any remaining premium
will be refunded.
4. ALL PREMIUM CHECKS MUST BE MADE PAYABLE TO THE COMPANY. DO NOT MAKE CHECK
PAYABLE TO THE AGENT OR LEAVE THE PAYEE BLANK.

SPECIAL LIMITATIONS
1. If benefits are payable under this agreement, then no benefit relating to
that loss will be payable under any policy which is applied for.
2. Material misrepresentations or fraud in the application or in the answers to
the health questions invalidate this agreement and our only liability is
for refund of payment made.
3. No one is authorized to accept money on proposed insured(s) under 15 days of
age or over age 65 (last birthday) on the date this agreement is signed, nor
will any coverage take effect.
4. If the insured dies by suicide (in Missouri -- which we can prove was
contemplated when this application was signed) our liability under this
agreement is limited to a refund of the payment made.
5. There is no coverage under this agreement if the check or draft submitted as
payment is not honored on first presentation to the bank.
6. No one is authorized to waive or modify any of the provisions of this
agreement.

This Temporary Insurance Agreement may only be issued if (1) Part I of the
application is completed, (2) Health Questions 20.A, B and C are answered No,
and (3) the full modal premium is collected.

FORTIS BENEFITS INSURANCE COMPANY, P.O. BOX 64582, ST. PAUL, MN 55164
56940
- --------------------------------------------------------------------------------

DISCLOSURE OF INFORMATION

We treat the information we have about you as confidential. The authorization
form that you sign will permit us to send the information to MIB, to our
reinsurers, to an organization that may do a claim investigation for us, and to
other life insurance companies to whom you may apply for life or health
insurance or to whom a claim for benefits may be submitted. Only in rare cases
will we send some or all of the information to third parties without your
consent. For example, we may make it available to State Insurance Departments
in connection with their regulation of our business, or to law enforcement
officials in response to a summons or subpoena.

YOUR INSURANCE FILES

You have the right to know what information we keep in our files about you, to
have access to the information, and to obtain a copy. We are not required to
give you access to some types of information. Generally, this is information
collected in connection with a claim or when the possibility of a lawsuit
exists.

We will tell you the general nature of information in an interview report
obtained from a consumer reporting agency. If you wish, that agency will
provide you with more specific details or a copy of the report. If we contact
you directly for information, we will send you a copy of our report.

We will provide medical information through a physician that you choose.

If you want information from your files contact us. There may be a reasonable
charge for supplying copies of your records. If you want access to medical
information, give us the name of a physician we may contact.

If you think your file contains incorrect information, notify us indicating what
you believe is incorrect and your reasons. We will reinvestigate the matter and
either correct our records or place a statement from you in our files explaining
why you believe the information is incorrect. We will also notify persons or
organizations to whom we previously disclosed the information of the change or
your statement.

If you need further information or have any questions about our information
practices or your access rights contact:

FORTIS BENEFITS INSURANCE COMPANY, P.O. BOX 64582, ST. PAUL, MN 55164

56940
<PAGE>

ADDITIONAL COVERAGE SUPPLEMENT
FORTIS BENEFITS INSURANCE COMPANY
P.O. BOX 64582, ST. PAUL, MN 55164
[LOGO]Fortis
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
1. Name of Additional Insured |Sex |Age| Date of Birth |Height | Wt.| Birth- | Social Security Number
-------------- ------ ---
| | | Mo.| Day| Yr. |Ft.|In.| Lb.| Place |
Tim Doe |------------------------------------------------------------------
| | | | | | | | | Mpls |
| m |20 | 3 | 22 | 52 | 6 |1"| 170| MN | xxx-xx-xxxx
- -----------------------------------------------------------------------------------------------------------------------------------
2. Residence Address Zip Code | 3. Occupation/Duties
123 Anystreet, Anytown, USA | Plumber
- ------------------------------------------------------------------------------------------------------------------------------------
4. Employer's Name and Address Zip Code | 5. A. Daytime telephone number
| Area Code Number
ACME Plumbing, 456 Main, Mpls | (xxx ) xxx-xxxx
- ------------------------------------------------------------------------------------------------------------------------------------
6. Relationship to Primary Insureds | B. Home telephone number
| Area Code Number
Son | (xxx ) xxx-xxxx
- ------------------------------------------------------------------------------------------------------------------------------------
7. Name of Primary Beneficiary Other Insured (if living) Relationship |Name of Contingent Beneficiary Other Insured Relationship
|
Laura Doe Spouse | Mickey Doe son
- ------------------------------------------------------------------------------------------------------------------------------------
8. Additional Coverage Rider Amount |12.A Does the additional insured Yes No
| currently smoke cigarettes? / / /x/
| B. If no, has the additional insured ever
$100,000 | smoked cigarettes? / / /x/
- -------------------------------------------------------------------------- C. Date ceased smoking ___________________
9.A.Is this insurance applied for to replace or change Yes No|
insurance or annuity in this or any other company? / / /x/| D. Does the additional insured use tobacco
B.Is any life insurance now pending elsewhere? / / /x/| in any form? / / /x/
- --------------------------------------------------------------------------
C.If yes, Explain | E. If yes, what is used?__________________
|
- -------------------------------------------------------------------------| _______________________________________
10. Life Insurance in Force (if none, state "None") Type: P=Personal |
G=Group B=Business | _______________________________________
- -------------------------------------------------------------------------|----------------------------------------------------------
Name of Insurance | Policy | Amount | Type | Year |13. During the past 10 years has the additional
Company | #(S) | | | Issued | insured had or received advice or treatment
- -----------------------------|-----------|------------|-------|----------| for: Yes No
None | | | | | A.chest pain, heart disease, heart attack, heart
- -----------------------------|-----------|------------|-------|----------| murmur, palpitations, angina, stroke, high blood
| | | | | pressure, or other circulatory disorder? / / /x/
| | | | | B.ulcer, colitis, hepatitis, disorder of liver,
- -----------------------------|-----------|------------|-------|----------| stomach or intestines? / / /x/
| | | | | C.kidney, bladder, prostate, or other urinary
| | | | | disorder, or reproductive organs? / / /x/
- -----------------------------|-----------|------------|-------|----------| D.emphysema, tuberculosis, asthma, lung or
| | | | | respiratory disorder? / / /x/
| | | | | E.cancer, tumor, growth, arthritis, disorder of
- -----------------------------|-----------|------------|-------|----------| muscle or skin? / / /x/
| | | | | F.diabetes, disorder of thyroid, endocrine glands,
| | | | | or sugar in urine? / / /x/
- ------------------------------------------------------------------------- G.anemia or other disorder of blood or
11.Has the additional insured: Yes No | blood vessels? / / /x/
A.flown or plan to fly as a pilot or crew member? / / /x/ | H.anxiety or depression, epilepsy, paralysis,
If Yes, complete questionnaire on page 5. | suicide attempt, nervous or brain disorder,
B.done any land or water vehicle competition or racing, | Alzheimer or any other senility disorder? / / /x/
skydiving, underwater diving, or rock climbing? / / /x/ | I.any disorder of eyes or ears, amputation or
If Yes, complete questionnaire on page 5. | joint disorder? / / /x/
C.any plans to travel or live outside U.S.? / / /x/ | J.alcohol or drug use or abuse; received
D.been released from the military for medical reasons? / / /x/ | counseling or treatment recommended; or
E.had any life insurance declined, postponed, or | joined any organization for alcohol or
had extra premium added? / / /x/ | drug abuse? / / /x/
F.received payment for disability, illness or injury? / / / / | K.used cocaine, heroin, marijuana, or any other
G.been convicted of any moving violations or had driver's | illegal, restricted or controlled substance
license revoked or suspended in the past 5 years? / / /x/ | except as prescribed by a physician? / / /x/
If Yes, list driver's license number and state __________ | L.unexplained weight loss, recurrent fever, or
_________________________________________________________ | chronic fatigue or diarrhea? / / /x/
_________________________________________________________ |
H.been convicted of a felony? / / /x/ |
|
- ------------------------------------------------------------------------------------------------------------------------------------
<PAGE>

14. During the past 10 years has any proposed insured: Yes No |17.DETAILS OF "YES" ANSWERS IN QUESTIONS 10-15. Include
A.had or been told he or she had Acquired Immune | details such as dates; names and addresses of insurance
Deficiency Syndrome ("AIDS"), AIDS Related Complex | companies, policy numbers, doctors, hospitals; nature
("ARC"), or AIDS related conditions? / / /x/ | of any illness or disorder; episodes; duration;
B.received treatment in connection with any of the | residual effects; reasons for prior adverse
categories named in (A.) / / /x/ | insurability decisions.
C.tested positive for antibodies to the AIDS |
(Human T-cell Lymphotropic, HIV) virus? / / /x/ | Question # Explanation
- -------------------------------------------------------------------------|
15. Within the past 5 years has the additional insured: Yes No |
A.had a physical examination, electrocardiogram, x-ray, |
blood test, or diagnostic test? / / /x/ |
B.had or been advised to have surgery or any |
diagnostic testing? / / /x/ |
C.had any medical treatment, consultation or exam, |
medication or prescribed diet, or health impairment |
not mentioned above? / / /x/ |
- -------------------------------------------------------------------------|
16. Name and address of last doctor consulted by: |
|
A. Dr. Jones |
|
B.Date: 01-01-96 C. Reason Physical |
|
D.Results |
|
Normal limits |
|
|
|
|
|
|
|
|
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

AUTHORIZATION TO RELEASE INFORMATION: For underwriting and claim purposes I
give my permission to:

Any physician or other medical practitioner, hospital, clinic, insurance
company, consumer reporting agency, MIB, Inc., or any other organization to give
Fortis Benefits or its reinsurers ALL INFORMATION on my behalf including
findings on medical care, alcohol or drug abuse information, psychiatric or
psychological care or examination, or surgery, as they apply to me or any of
my children who are to be insured.

I give my permission to Fortis Benefits or its reinsurers, to:
(1) Release any information to the MIB, Inc., and to other life insurance
companies I may come in contact with.
(2) Obtain an investigative consumer report on me. (By checking this box,
/ /, I request a personal interview by the consumer reporting agency.)
I know that I am entitled to a copy of this consumer report.
(3) Obtain personal history information on me.
(4) Obtain medical history information from my attending physician, clinic
or hospital.

So that I can receive information on other insurance or investment products and
services that may be of interest to me, you may provide information about me to
your affiliates. (By checking this box, / /, I do not want this information
disclosed.)

I know that I have a right to a copy of this authorization. A Photocopy will be
as valid as the original. This authorization will be valid for two and one half
years from the date shown below.
- -------------------------------------------------------------------------------
THE UNDERSIGNED APPLICANT(S) AND AGENT CERTIFY THAT THE APPLICANT(S) HAS
READ, OR HAD READ TO, THE COMPLETED APPLICATION AND THAT THEY REALIZE THAT
ANY FALSE STATEMENT OR MISREPRESENTATION THEREIN MAY RESULT IN LOSS OF
COVERAGE UNDER THE APPLIED FOR POLICY.

Dated May 1 1996 City Mpls State MN
---------------- ----- ------------------- -------------
(Please Print)

Agent: Does this insurance replace any life insurance or
annuity in this or any other company? / / Yes / / No

/s/ Timothy Doe
x--------------------------------------------
Signature of Additional Insured (Over Age 15)
/s/ John Q. Agent
X ---------------------------
Agent
/s/ John Doe
x--------------------------------------------
Signature of Owner

--------------------------------------------
Signature of Owner

<PAGE>

Exhibit No. 6

<PAGE>

April 26, 1996

Fortis Benefits Insurance Company
P.O. Box 64271
St. Paul, Minnesota 55164

Gentlemen:

This opinion is furnished in connection with the offering by Fortis Benefits
Insurance Company of a Flexible Premium Survivorship Variable Life Insurance
Policy ("Policy"), under the Securities Act of 1933. The prospectus included in
our registration statement on Form S-6 describes the policy. I have reviewed
the Policy form and I am familiar with the registration statement, and the
exhibits thereto, as proposed to be filed.

1. The hypothetical illustrations of the Policy values, cash surrender
values, and death benefits included in Appendix B to the prospectus
are based on assumptions stated in the illustrations and are
consistent with the provisions of the Policy.

2. The Policy has not been designed so as to make the relationship
between premiums and benefits, as shown in the illustrations, appear
disproportionately more favorable to a prospective purchaser of a
Policy for a male age 55 and a female age 53, than to a prospective
purchaser of Policies for males of other ages or underwriting classes,
or for females. Nor have the particular examples set forth in the
illustrations been selected for the purpose of making this
relationship appear more favorable.

I hereby consent to the use of this opinion as an exhibit to the registration
statement and to the use of my name under the heading of "Experts" in the
prospectus.

Sincerely,

/s/ Renee C. West

Renee C. West, FSA, MAAA
Actuarial Officer
Fortis Benefits Insurance Company

/cln

<PAGE>

Exhibit No. 7

<PAGE>

NOTICE OF WITHDRAWAL RIGHT
Right of Cancellation

Owner and Address: Policy Number:WMH80003
John Doe Joint Insureds: John Doe
Jane Doe Jane Doe
5805 Clover Drive
Odessa, Texas 79760 Face Amount: $1,500,000

Date of Notice: February 10, 1996 Monthly Minimum Premium: $1,117.12

This notice is legally required by the Securities and Exchange Commission ( SEC
). Please read it carefully and retain it with your important records. Keep it
with your Flexible Premium Survivorship Variable Life Insurance Policy.

Benefits under this Policy depend on the investment experience of Variable
Account C, to the extent that net premiums are allocated to its Subaccounts.

You have the right to examine and to return this Policy to us. You may return
the Policy and the enclosed form to us by delivery or by mail postmarked within
10 days from receipt of this notice, 10 days from receipt of the Policy or 45
days from the date of the Part 1 of the application, whichever is latest. Upon
its return, you will receive within 7 days a refund equal to the premiums paid.
Such refund will not include any term conversion credits or credits for
certain groups.

PLEASE SEE THE NEXT PAGE FOR DETAILS YOU MAY WISH TO CONSIDER IN DETERMINING
WHETHER OR NOT TO EXERCISE YOUR RIGHT OF CANCELLATION.

In the event that you decide to exercise this right, complete the enclosed form
and return your Policy, as outlined in the instructions on the form, by delivery
to the Home Office or by mail postmarked on or before the latest date permitted
for cancellation as described above.

In determining whether or not to exercise your right of cancellation, you should
consider, among other things, the projected cost of your Policy and your ability
to make the payments necessary to keep it in force.

Your Policy provides a Guaranteed Death Benefit Rider. This provision
provides a no lapse guarantee until February 10, 2048. If your accumulated
premiums less withdrawals and less loans are at least equal to the
accumulation of the Monthly Minimum Premiums to date at all times within this
period, your Policy is guaranteed not to lapse during this period, regardless
of the investment performance of the Subaccounts. Accumulation of premiums
is at an effective annual rate of 4% assuming payment of all premiums at the
beginning of each policy year. Withdrawals taken in a policy year are
accumulated at 4% assuming they are taken at the earlier of the end of that
policy year or the current date.

Your policy also provides for Planned Periodic Premiums. Since the Policy is
a flexible premium policy, you can vary the premium amount or frequency of
payments. Your Policy will not lapse provided there is sufficient Net Cash
Value in the Policy to keep it in force or the Guaranteed Death Benefit
described above is in effect.

<PAGE>

The Prospectus which you have been furnished describes the charges in connection
with the Policy, including the following:

A Policy Issuance Expense Charge of $9,000.00

Sales Charges capped at 9% of premiums paid are collected as follows:
( a ) a 0% (maximum of 5%) direct assessment against premiums paid.
( b ) a monthly deduction of $4.00.
( c ) a daily asset charge at an annual rate of .35% of the net assets of the
Policy in the Separate Account.
The difference between 9% of premiums paid and the charges ( a ) through ( c
) above plus the remaining Policy Issuance Expense Charge will be collected
as part of a Surrender Charge.

The maximum Surrender Charge of $15,750.00 decreases linearly to zero in the
eleventh Policy year. The Actual Surrender Charge for the Policy is the
lesser of the applicable Maximum Surrender Charge or the Surrender Charge
indicated above.

The Prospectus describes additional administration expenses and other
charges, including a monthly administration charge of $6.00 (maximum $7.50
plus $0.13 per $1,000), service charges of $0.00 (maximum $25.00) that may be
assessed in connection with either transfers or partial withdrawals and a
2.2% (maximum 3.0%) premium tax charge that may be assessed against premiums.

<PAGE>

REQUEST FOR CANCELLATION

Policy Number: WMH00033

Joint Insureds: Gene Kelly
Audrey Meadows

Owner: Gene Kelly
Audrey Meadows

If after reading the enclosed notice you choose to return your Policy for
cancellation, you must:

1. Sign and date the bottom portion of this form.

2. Mail this form together with your Policy to the above address or
deliver them to the Home Office - VUL Underwriting at

Fortis Financial Group
500 Bielenberg Drive
Woodbury, MN 55125

3. Make certain that the form is delivered or that the postmark date on
the return envelope is on or before the last date permitted for
cancellation as described in the Notice of Withdrawal Right.

In accordance with the terms of the Notice of Withdrawal Right furnished me, I
hereby return the Policy identified above for cancellation and request for the
refund described in the Notice. I hereby release the Company from all claims
arising out of or in connection with the sale or issuance of the Policy and I
acknowledge that the Company's sole liability with respect to the Policy is the
refund to me.

__________________________ ___________________________
Signature of Owner Date

__________________________
Signature of Owner

<PAGE>

May ___, 1996

MEMORANDUM OF CERTAIN PROCEDURES
WITH RESPECT TO PRICING AND
PROCESSING OF TRANSACTIONS
PURSUANT TO RULE 6e-3(t)(b)(12)(iii)

Rule 6e-3(T)(b)(12)(iii) under the Investment Company Act of 1940 (the "1940
Act") exempts separate accounts, their investment advisers, principal
underwriters and sponsoring insurance companies from Sections 22(d), 22(e) and
27(c)(1) of the 1940 Act, and Rule 22c-1 promulgated thereunder, as necessary to
comply with Rule 6e-3(T) or with insurance laws and regulations and established
administrative procedures of the insurance company for issuance, transfer and
redemption of flexible premium variable life insurance policies, including, but
not limited to, premium rate structure and premium processing, insurance
underwriting standards and the particular benefit afforded by the policy. In
order to qualify for the exemption, the procedures must be reasonable, fair and
not discriminatory to the interests of the affected policy owners and to all
other owners of policies of the same class or series, and the procedures must be
disclosed in the registration statement filed by the separate account.

This memorandum is for the purpose of satisfying said disclosure requirement
with respect to certain procedures to be followed by Fortis Benefits Insurance
Company ("Fortis Benefits") with respect to its flexible premium variable life
insurance policies ("Policies"). Most of Fortis Benefits' procedures for
matters within the scope of Rule 6e-3(T)(b)(12)(iii), including some of the
procedures described in this memorandum, are disclosed in the prospectus forming
a part of the Form S-6 registration statement filed by Fortis Benefits and its
Variable Account C (the "Separate Account"), as amended. Accordingly, the
disclosures contained in this memorandum are supplemental in nature.

Fortis Benefits believes its procedures meet the requirements of Rule 6e-
3(T)(b)(12)(iii) and states the following:

1. Because of the insurance nature of the Policies, and due to the
requirements of state insurance law, the procedures necessarily differ
in significant respects from procedures of mutual funds and
contractual plans for which the 1940 Act and rules thereunder were
designed.

2. Many of the procedures used by Fortis Benefits have been adapted from
procedures for fixed benefit flexible premium life insurance policies
formerly issued by Fortis Benefits.

3. In structuring its procedures, Fortis Benefits has attempted to comply
with the intent and policies of the 1940 Act, and rules thereunder, to
the extent deemed feasible.

<PAGE>

4. In general, state insurance laws and regulations require that Fortis
Benefits' procedures be reasonable, fair and not discriminatory.

I. ISSUANCE OF POLICIES

Upon receipt of a completed application from a prospective Policy owner, Fortis
Benefits will follow certain insurance underwriting (i.e., evaluation of risks)
procedures designed to determine whether the proposed insured is insurable.
This process may involve such verification procedures as medical examinations
and may require that further information be provided by the proposed insured
before a determination can be made. An application cannot be accepted until
this underwriting procedure has been completed.

Where temporary insurance is provided, the "Policy Date" is generally the
date that Part I of the application or the short form application for
insurance is completed. Otherwise, the Policy Date is generally the date
three days after the application for a Policy is accepted by Fortis Benefits,
unless a different date is requested by the applicant. As of the Policy
Date, the first monthly deduction of administrative and insurance charges is
made for the Policy and any riders, and the daily deduction commence to
accrue for mortality and expense risks and any other asset-based charges,
such daily deduction being a percentage of amounts earning a return for the
Policy owner in the Separate Account. The suicide and non-contestability
periods under the Policy and under any riders issued at the same time as the
Policy also commence on the Policy Date, as do the periods for reductions in
the Policies' contingent deferred sales load and for non-lapse or guaranteed
death benefit provisions. The Policy Date also establishes the basis on
which the insured's age for most purposes under the Policy is computed. The
use of the Policy Date for these purposes is consistent with Fortis Benefits'
established insurance procedures and the annual cycle on which insured
policies are usually administered. This annual cycle is recognized,
interalia, in Rule 6e-3(T)(c)(5) under the 1940 Act.

If the intitial premium payment is paid with the application for a Policy,
temporary term insurance applies to qualified insureds, subject to the limits
and conditions in the temporary term insurance agreement. Also, the Policy
owner is credited with interest at the rate credited to the General Account from
the later of the Policy Date and the date of receipt of the premium payment.(1)
If the Policy never becomes effective, however, the applicant will be refunded
the amount of premiums paid, without crediting any interest. If a benefit is
paid under the temporary term insurance agreement, an amount will be deducted
from the returned premium as a charge for the temporary term insurance.

- --------------------
(1) This does not apply with respect to the application of certain premium
amounts as described in Part IV, or with respect to a premium paid to reinstate
a Policy. Premium payment checks for reinstatements are not cashed until the
effective date of the reinstatement.

<PAGE>

Unless otherwise required by state insurance law or concepts such as
"conditional receipt," insurance coverage under a Policy and riders commences
upon delivery of the Policy to the owner, provided that (1) the insured's health
is the same as stated in the application for insurance and (2) the first premium
payment has been paid. This is consistent with Fortis Benefit's previously-
established procedures for flexible premium life insurance policies. Fortis
Benefits expects the Policies to be delivered promptly after the Policy Date in
most cases.

II. CERTAIN POLICY BENEFIT CHANGES

Increases in face amount and certain changes in death benefit options requested
by Policy owners require evidence of insurability to be submitted to Fortis
Benefits. In general, these changes are effective as of the first monthly
anniversary following Fortis Benefits' approval of the change. The cost of
insurance charges attributable to the change commence on said effective date.

In the case of a requested increase in face amount, the following also commence
on said effective date: (1) any monthly expense charges attributable to the
increase, (2) the suicide and non-contestability periods with respect to the
increase, and (3) the period for reduction in the contingent load attributable
to the increase. Said effective date also establishes the insured's age for
purposes of computing the cost of insurance attributable to the increase.

Unless otherwise required by state insurance law or concepts such as
"conditional receipt," insurance coverage under any face amount increase or
death benefit option change requiring evidence of insurability commences upon
delivery by Fortis Benefits' agent of a Policy schedule amendment to the Policy
owner reflecting the change, provided that the insured's health is the same as
stated in the application for the change. Fortis Benefits expects the Policy
schedule amendment to be delivered promptly after the effective date of the
change in most cases.

III. IMPOSSIBLE OR IMPERMISSIBLE TRANSACTIONS

In most cases, if a Policy owner requests a transaction which is impossible
(i.e., allocation of a loan or partial withdrawal to Separate Account
subaccounts which have insufficient assets to support said allocation) or
impermissible (such as a reduction in face amount below the minimum required
face amount or the taking of any action, other than the payment of a premium,
which would cause the maximum premium limitations for federal tax law purposes
to be exceeded), Fortis Benefits will notify the Policy owner to determine what
action, if any, the Policy owner wishes to take instead.

<PAGE>

IV. TAX LIMITATIONS

If Fortis Benefits identifies a premium payment that would cause a Policy to be
a "modified endowment contract" under the Internal Revenue Code ("MEC"), it is
Fortis Benefits' administrative policy to notify the agent for the Policy owner
and offer the option of (1) accepting MEC status or (2) receiving a refund of
the disqualifying premium.

If option (2) is selected, the returned premium will include any related premium
expense or other premium tax charge, and the refunded amount will reflect any
positive net investment performance attributable to such amount prior to refund.

The total refund proceeds under option (2) will, at the election of the Policy
owner, be (a) returned to the Policy owner or (b) held by Fortis Benefits
without interest for application to the Policy upon effectiveness of a Face
Amount increase requested by the Policy owner that is sufficient to avoid MEC
status. Fortis Benefits' usual requirements and conditions for Face Amount
increases apply. If Fortis Benefits does not receive instructions within three
days, the total refund proceeds will be returned to the Policy owner.

Procedures comparable to the preceding paragraph (2), above, will also apply if
a premium payment is made in excess of amounts permitted under Section 7702 of
the Internal Revenue Code.

V. WAIVER OF MONTHLY DEDUCTIONS RIDER

For any month that Monthly Deductions are waived under the Waiver of Monthly
Deductions Rider, the Minimum Premium is deemed to be zero for all purposes,
except as noted below. The monthly Minimum Premium for computing the amount of
sales charges and additional credits to certain groups on the first Policy
Anniversary is not affected by the waiver of Monthly Deductions. At any time
while the Monthly Deduction is being waived, Face Amount decreases and partial
withdrawals will be permitted whether or not sufficient premiums have been paid
for the Policy to be otherwise eligible for these transactions.

<PAGE>

VI. VARIATIONS OF POLICY MINIMUMS, CHARGES AND CREDITS -- VUL500

Subparagraph (b)(12)(iii) of Rule 6e-3(T) (the "Rule") provides an exemption
from the necessity of maintaining a uniform offering price as set forth in
Section 22(d) of the Investment Company Act of 1940 to the extent necessary
to comply with the Rule and administrative procedures of the life insurer,
provided that any procedure or action shall be reasonable, fair, and not
discriminatory to the interests of the affected contract holder and to all
other holders of contracts of the same class or series funded by a separate
account.

The adopting release of the Rule by the SEC indicates the concurrence of the
SEC in the proposition that the above referenced sub-paragraph (b)(12)(iii)
permits variations in sales loads and charges that meet the principles of
Rule 22d-2 under the Investment Company Act of 1940.

In order to avail of the exemptions provided by Rule 22d-2, that Rule
provides that the prospectus must disclose as precisely as possible the basis
of such variations and the manner in which such entitlement shall be
determined, and it further provides that any such variations must reflect
differences in costs or services and may not unfairly discriminate against
any person.

Fortis Benefits has adopted such variation standards, as set forth in the
prospectus for its policy known as VUL 500 under the heading of "Variations
of Policy Minimums, Charges and Credits". Set forth below are the variations
which have been adopted by Fortis Benefits pursuant to the described basis of
such variations as set forth in the prospectus for VUL 500.

<PAGE>

Statement of Fortis Benefits Insurance Company
Pursuant to Rule 27d-2 Under the
Investment Company Act of 1940

The undersigned hereby states that on a monthly basis throughout its fiscal
year ended December 31, 1995, it has met the requirements of Rule 27d-2(2)(1)
under the Investment Company Act of 1940 in that it has a combined capital
paid-up, gross paid-in and contributed surplus and unassigned surplus at
least equal to $1,000,000. Such capitalization was larger than 200 percent
of the amount of the total refund obligations of Fortis Investors, Inc.
pursuant to Sections 27(d) and 27(f) under the Investment Company Act of
1940, less any liability reserve established by Fortis Benefits Insurance
Company to meet such obligations.

FORTIS BENEFITS INSURANCE COMPANY

By: /s/ John V. Egan
-------------------------------------
Name: John V. Egan
Title: Vice President - Finance,
Life Products

April 25, 1996