KILICO VARIABLE SEPARATE ACCOUNT/IL
S-6, 1999-05-28
Previous: INSURED MUNICIPALS INC TR & INV QUAL TAX EX TR MULTI SER 51, 24F-2NT, 1999-05-28
Next: COLORADO BONDSHARES A TAX EXEMPT FUND, NSAR-A, 1999-05-28



<PAGE>   1

      AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 28, 1999

                                                 REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                               ------------------
                                    FORM S-6

            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

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

A. Exact name of trust: KILICO VARIABLE SEPARATE ACCOUNT

B. Name of depositor: KEMPER INVESTORS LIFE INSURANCE COMPANY

C. Complete address of depositor's principal executive offices:

   1 Kemper Drive
   Long Grove, Illinois 60049

D. Name and complete address of agent for service:

                             DEBRA P. REZABEK, ESQ.
                    Kemper Investors Life Insurance Company
                                 1 Kemper Drive
                           Long Grove, Illinois 60049

                                   COPIES TO:

<TABLE>
<S>                                              <C>
               FRANK JULIAN, ESQ.                              JOAN E. BOROS, ESQ.
    Kemper Investors Life Insurance Company       Jorden Burt Boros Cicchetti Berenson & Johnson
                 1 Kemper Drive                         1025 Thomas Jefferson Street, N.W.
           Long Grove, Illinois 60049                               Suite 400E
                                                              Washington, D.C. 20007
</TABLE>

E. Securities being offered:

        Variable Portion of Modified Single Premium Variable Universal Life
        Insurance Policies.

F. Approximate date of proposed public offering:

        As soon as practicable after the effective date of this registration.

     The registrant is registering an indefinite amount of securities, by reason
of Section 24(f) of the Investment Company Act of 1940.

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

     THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATES AS
MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATES AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>   2

                      CROSS REFERENCE SHEET TO PROSPECTUS

     Cross reference sheet pursuant to Rule 404(c) showing location in
Prospectus of information required by Items of Form N-8B-2.

<TABLE>
<CAPTION>
ITEM NUMBER IN FORM N-8B-2                                              CAPTION IN PROSPECTUS
- --------------------------                                              ---------------------
<S>  <C>      <C>                                                    <C>
                              ORGANIZATION AND GENERAL INFORMATION
1.   (a)      Name of trust........................................  Cover, Definitions
     (b)      Title of each class of securities issued.............  Cover, Purchase of Policy
                                                                     and Allocation of Premiums
2.            Name & address of each depositor.....................  Cover, Kemper Life Insurance
                                                                     Company
3.            Name & address of custodian..........................  Separate Account
4.            Name & address of principal underwriter..............  Distribution of Policies
5.            State in which organized.............................  Separate Account
6.            Date of organization.................................  Separate Account
9.            Material litigation..................................  Legal Proceedings
                  GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
GENERAL INFORMATION CONCERNING SECURITIES AND RIGHTS OF HOLDERS
10.  (a),(b)  Type of Securities...................................  Cover, Purchase of Policy
                                                                     and Allocation of Premiums
     (c)      Rights of security holders re: withdrawal or
              redemption...........................................  Cover, Amount Payable on
                                                                     Surrender of the Policy,
                                                                     Policy Loans, Cancellation
                                                                     (Free Look Period)
     (d)      Rights of security holders re: conversion, transfer
              or partial withdrawal................................  Cover, Cancellation (Free
                                                                     Look Period), Amount Payable
                                                                     on Surrender of the Policy,
                                                                     Partial Withdrawals,
                                                                     Allocation of Premiums,
                                                                     Transfer of Cash Value
     (e)      Rights of security holders re: lapses, default, &
              reinstatement........................................  No Lapse Guarantee and Grace
                                                                     Period; Termination;
                                                                     Reinstatement
     (f)      Provisions re: voting rights.........................  Voting Rights
     (g)      Notice to security holders...........................  Reports to Owners
     (h)      Consent of security holders..........................  Additions, Deletions, and
                                                                     Substitutions of Securities,
                                                                     Allocation of Premiums
     (i)      Other principal features.............................  Charges and Deductions,
                                                                     Policy Benefits and Rights,
                                                                     Cash Value
INFORMATION CONCERNING SECURITIES UNDERLYING TRUST'S SECURITIES
11.           Unit of specified securities in which security
              holders have an interest.............................  Cover, Separate Account
                                                                     Investments: the Portfolios
12.  (a)-(d)  Name of company, name & address of its custodian.....  Cover, Separate Account
                                                                     Investments: the Portfolios
INFORMATION CONCERNING LOADS, FEES, CHARGES & EXPENSES
13.  (a)      With respect to each load, fee, charge & expense.....  Charges and Deductions
     (b)      Deductions for sales charges.........................  Withdrawal Charge
     (c)      Sales load as percentage of amount invested..........  Withdrawal Charge
     (d)-(g)  Other loads, fees & expenses.........................  Charges and Deductions
</TABLE>

                                        i
<PAGE>   3

<TABLE>
<CAPTION>
ITEM NUMBER IN FORM N-8B-2                                              CAPTION IN PROSPECTUS
- --------------------------                                              ---------------------
<S>  <C>      <C>                                                    <C>
INFORMATION CONCERNING OPERATION OF TRUST
14.           Procedure for applications for & issuance of trust's
              securities...........................................  Application for a Policy,
                                                                     Allocation of Premiums,
                                                                     Distribution of Policies
15.           Procedure for receipt of payments from purchases of
              trust's securities...................................  Application for a Policy,
                                                                     Allocation of Premiums,
                                                                     Premiums, Transfer of Cash
                                                                     Value
16.           Acquisition and disposition of underlying
              securities...........................................  Cover, Separate Account
                                                                     Investments: the Portfolios
17.  (a)      Procedure for withdrawal.............................  Cover, Amount Payable on
                                                                     Surrender of the Policy,
                                                                     Partial Withdrawals,
                                                                     Cancellation (Free Look
                                                                     Period)
     (b)      Redemption or repurchase.............................  Cover, Amount Payable on
                                                                     Surrender of the Policy,
                                                                     Partial Withdrawals,
                                                                     Cancellation (Free Look
                                                                     Period)
     (c)      Cancellation or resale...............................  Not Applicable
18.  (a)      Income of the Trust..................................  Portfolios, Allocation of
                                                                     Premiums
19.           Procedures for keeping records & furnishing
              information to security holders......................  Portfolios, Reports to
                                                                     Owners
21.  (a)&(b)  Loans to security holders............................  Policy Loans
23.           Bonding arrangements for depositor...................  Safekeeping of the Separate
                                                                     Account's Assets
24.           Other material provisions............................  General Policy Provisions
                    ORGANIZATION, PERSONNEL & AFFILIATED PERSONS OF DEPOSITOR
ORGANIZATION & OPERATIONS OF DEPOSITOR
25.           Form, state & date of organization of depositor......  KILICO
27.           General character of business of depositor...........  KILICO
28.  (a)      Officials and affiliates of the depositor............  KILICO, Officers and
                                                                     Directors of KILICO
     (b)      Business experience of officers and directors of the
              depositor............................................  Officers and Directors of
                                                                     KILICO
COMPANIES OWNING SECURITIES OF DEPOSITOR
29.           Each company owning 5% of voting securities of
              depositor............................................  KILICO
CONTROLLING PERSONS
30.           Control of depositor.................................  KILICO
                            DISTRIBUTION & REDEMPTIONS OF SECURITIES
35.           Distribution.........................................  KILICO, Distribution of
                                                                     Policies
38.  (a)      General description of method of distribution of
              securities...........................................  Distribution of Policies
     (b)      Selling agreement between trust or depositor &
              underwriter..........................................  Distribution of Policies
     (c)      Substance of current agreements......................  Distribution of Policies
</TABLE>

                                       ii
<PAGE>   4

<TABLE>
<CAPTION>
ITEM NUMBER IN FORM N-8B-2                                              CAPTION IN PROSPECTUS
- --------------------------                                              ---------------------
<S>  <C>      <C>                                                    <C>
PRINCIPAL UNDERWRITER
39.  (a)&(b)  Principal Underwriter................................  Distribution of Policies
41.           Character of Underwriter's business..................  Distribution of Policies
OFFERING PRICE OR ACQUISITION VALUE OF SECURITIES OF TRUST
44.           Information concerning offering price or acquisition
              valuation of securities of trust. (All underlying
              securities are shares in registered investment
              companies.)..........................................  Separate Account
                                                                     Investments: the Portfolios,
                                                                     Cash Value
REDEMPTION VALUATION OF SECURITIES OF TRUST
46.           Information concerning redemption valuation of
              securities of trust. (All underlying securities are
              shares in registered investment companies.)..........  Separate Account
                                                                     Investments: the Portfolios,
                                                                     Cash Value
PURCHASE & SALE OF INTERESTS IN UNDERLYING SECURITIES
47.           Maintenance of Position..............................  Cover, Separate Account,
                                                                     Separate Account
                                                                     Investments: the Portfolios,
                                                                     Allocation of Premiums
                           INFORMATION CONCERNING TRUSTEE OR CUSTODIAN
48.           Custodian of trust...................................  Separate Account
50.           Lien on trust assets.................................  Separate Account
                           INFORMATION CONCERNING TRUSTEE OR CUSTODIAN
51.  (a)      Name & address of insurer............................  Cover, KILICO
     (b)      Types of Contracts...................................  Cover, Purchase of Policy
                                                                     and Allocation of Premiums,
                                                                     Federal Tax Considerations
     (c)      Risks insured & excluded.............................  Death Benefit, Optional
                                                                     Insurance Benefits,
                                                                     Misstatement as to Age and
                                                                     Sex, Suicide
     (d)      Coverage.............................................  Cover, Purchase of Policy
                                                                     and Allocation of Premiums
     (e)      Beneficiaries........................................  Death Benefit, Beneficiary
     (f)      Terms of cancellations & reinstatement...............  Cancellation (Free Look
                                                                     Period); No Lapse Guarantee
                                                                     and Grace Period;
                                                                     Termination; Reinstatement
     (g)      Method of determining amount of premium paid by
              holder...............................................  Purchase of Policy and
                                                                     Allocation of Premiums
                                      POLICY OF REGISTRANT
52.  (a)&(c)  Selection of Portfolio securities....................  Additions, Deletions, and
                                                                     Substitutions of Securities
REGULATED INVESTMENT COMPANY
53.  (a)      Taxable status of Trust..............................  Taxation of KILICO and the
                                                                     Separate Accounts
                              FINANCIAL AND STATISTICAL INFORMATION
59.           Financial Statements.................................  Financial Statements
</TABLE>

*  Items not listed are not applicable to this Registration Statement.

                                       iii
<PAGE>   5

                                   PROSPECTUS
- --------------------------------------------------------------------------------

                            MODIFIED SINGLE PREMIUM
                   VARIABLE UNIVERSAL LIFE INSURANCE POLICIES
                         (SINGLE LIFE AND SURVIVORSHIP)
- --------------------------------------------------------------------------------

                                   ISSUED BY

                    KEMPER INVESTORS LIFE INSURANCE COMPANY
                  THROUGH ITS KILICO VARIABLE SEPARATE ACCOUNT

        1 KEMPER DRIVE, LONG GROVE, ILLINOIS 60049       (800) 621-5001

     This prospectus describes Modified Single Premium Variable Universal Life
Insurance Policies (the "Policies") offered by Kemper Investors Life Insurance
Company ("we" or "KILICO") for prospective insured persons ages 0-90. This
prospectus describes Policies which provide insurance coverage on the life of
one Insured ("Single Life Policies") and Policies which provide insurance on the
lives of two Insureds ("Survivorship Policies"). You may pay a significant
initial Premium and, subject to certain restrictions, additional Premiums.

     Under the Single Life Policies, when the Insured dies, we will pay a Death
Benefit to a Beneficiary specified by You. Under the Survivorship Policies, the
Death Benefit is payable upon the second death, as long as the Policy is in
force. While the Policy is in force, the Death Benefit is at least the amount
shown in the Policy specifications, unless you have loans or the Net Surrender
Value is insufficient to pay the monthly expense charges. The Policy does not
have a guaranteed minimum Cash Value.

     If you choose a Policy with our No Lapse Guarantee, while this guarantee is
in effect your Policy will never lapse, regardless of changes in Net Surrender
Value. Instead, if the Net Surrender Value becomes insufficient to pay the
monthly charges, the Death Benefit payable will at least equal your total
Premiums paid (less any prior withdrawals of Premium). This guarantee is in
effect while you have no outstanding Policy Debt. If you choose a Policy without
this guarantee or if this guarantee is not in effect under your Policy, your
coverage under the Policy may end if the Net Surrender Value of your Policy
becomes insufficient to cover the monthly expense charges.

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

     THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF
     THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
     PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

                  THE DATE OF THIS PROSPECTUS IS MAY   , 1999.
<PAGE>   6

     You may allocate and reallocate your Policy's Cash Value among the
Subaccounts of the KILICO Variable Separate Account (the "Separate Account").
Each Subaccount invests exclusively in shares of one of the following
Portfolios:

Kemper Aggressive Growth Portfolio
Kemper Technology Growth Portfolio
Kemper-Dreman Financial Services Portfolio
Kemper Small Cap Growth Portfolio
Kemper Small Cap Value Portfolio
Kemper-Dreman High Return Equity Portfolio
Kemper International Portfolio
Kemper International Growth & Income Portfolio
Kemper Global Blue Chip Portfolio
Kemper Growth Portfolio
Kemper Contrarian Value Portfolio
Kemper Blue Chip Portfolio
Kemper Value+Growth Portfolio
Kemper Horizon 20+ Portfolio
Kemper Total Return Portfolio
Kemper Horizon 10+ Portfolio
Kemper High Yield Portfolio
Kemper Horizon 5 Portfolio
Kemper Global Income Portfolio
Kemper Investment Grade Bond Portfolio
Kemper Government Securities Portfolio
Kemper Money Market Portfolio
Scudder VLIF Global Discovery Portfolio
Scudder VLIF Growth and Income Portfolio
Scudder VLIF International Portfolio
Scudder VLIF Capital Growth Portfolio
Janus Aspen Growth Portfolio
Janus Aspen Growth and Income Portfolio
Warburg Emerging Markets Portfolio
Warburg Post-Venture Capital Portfolio

     You may obtain more information about these Portfolios by reading the
attached Prospectuses for the Portfolios. Not all of the Subaccounts may be
available under your Policy.

     You generally may cancel the Policy and receive a refund by returning it to
us within ten days after you receive it. In some states, however, this free look
period may be longer.

     The Policies are modified endowment contracts for Federal income tax
purposes, except in certain cases as described in "Federal Tax Considerations"
beginning on page 33. Accordingly, the death benefit under your Policy generally
is not subject to federal income tax, and federal income tax on any growth in
your Policy's Cash Value generally is deferred until you withdraw it by taking a
loan, partial withdrawal, or other distribution from your Policy during the life
of the Insured. In addition, any taxable withdrawal taken before age 59 1/2 will
also be subject to an additional ten percent federal penalty tax, with certain
exceptions.

     In certain states the Policies may be offered as group policies with
individual ownership represented by Certificates. The discussion of Policies in
this Prospectus applies equally to Certificates under group policies, unless the
context specifies otherwise.

     THE POLICIES AND THE INVESTMENTS IN THE SEPARATE ACCOUNT ARE NOT
     DEPOSITS, OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY ANY BANK.
     THE POLICIES ARE SUBJECT TO INVESTMENT RISKS, INCLUDING THE POSSIBLE
     LOSS OF THE PRINCIPAL AMOUNT INVESTED. THE POLICIES ARE NOT INSURED BY
     THE FDIC, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.

     IF YOU ALREADY OWN A VARIABLE LIFE INSURANCE POLICY, IT MAY NOT BE
     ADVANTAGEOUS FOR YOU TO BUY ADDITIONAL COVERAGE OR REPLACE YOUR
     EXISTING POLICY WITH THE POLICY DESCRIBED IN THIS PROSPECTUS.

     THIS PROSPECTUS IS VALID ONLY IF ACCOMPANIED BY THE CURRENT
     PROSPECTUSES FOR THE PORTFOLIOS LISTED ABOVE. IF ANY OF THOSE
     PROSPECTUSES ARE MISSING OR OUTDATED, PLEASE CONTACT US AND WE WILL
     SEND YOU THE PROSPECTUS YOU NEED.

     YOU CAN FIND THIS PROSPECTUS AND OTHER INFORMATION ABOUT THE SEPARATE
     ACCOUNT REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
     COMMISSION ("SEC") AT THE SEC'S WEBSITE AT http://www.sec.gov.

     PLEASE READ THIS PROSPECTUS CAREFULLY AND RETAIN IT FOR YOUR FUTURE
     REFERENCE.

     The Policies may not be available in all states.

                                        1
<PAGE>   7

TABLE OF CONTENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
DEFINITIONS.................................................
SUMMARY.....................................................
FEES AND EXPENSES...........................................
PURCHASE OF POLICY AND ALLOCATION OF PREMIUMS...............
  Application for a Policy..................................
     Simplified Underwriting................................
     Standard Underwriting..................................
  Premiums..................................................
  Allocation of Premiums....................................
  Cash Value................................................
  Accumulation Unit Value...................................
  Transfer of Cash Value....................................
  Transfers Authorized by Telephone.........................
  Automatic Dollar Cost Averaging...........................
  Automatic Asset Rebalancing...............................
INVESTMENT OPTIONS..........................................
  Separate Account Investments: the Portfolios..............
  Voting Rights.............................................
  Additions, Deletions, and Substitutions of Securities.....
  The DCA Fixed Account.....................................
POLICY BENEFITS AND RIGHTS..................................
  Death Benefit.............................................
  Accelerated Death Benefit Rider...........................
  Policy Loans..............................................
  Amount Payable on Surrender of the Policy.................
  Partial Withdrawals.......................................
  Systematic Withdrawals....................................
  Settlement Option Payments................................
  No Lapse Guarantee and Grace Period.......................
  Termination...............................................
  Maturity Benefit and Extended Maturity....................
  Reinstatement.............................................
  Cancellation (Free Look Period)...........................
  Postponement of Payments..................................
CHARGES AND DEDUCTIONS......................................
  Separate Account Charges..................................
     Mortality and Expense Risk Charge......................
     Reserve for Taxes......................................
  Monthly Deduction.........................................
     Cost of Insurance Charge...............................
     Tax Charge.............................................
     Administration Charge..................................
     Records Maintenance Charge.............................
  Portfolio Expenses........................................
  Withdrawal Charge.........................................
  Free Withdrawal Amount and Waiver of Withdrawal Charge....
  Transfer Fee..............................................
  Reduction of Charges......................................
</TABLE>

                                        2
<PAGE>   8

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
GENERAL POLICY PROVISIONS...................................
  Reports to Owners.........................................
  Limit on Right to Contest.................................
  Suicide...................................................
  Misstatement as to Age and Sex............................
  Beneficiary...............................................
  Assignment................................................
  Creditors' Claims.........................................
  Dividends.................................................
  Notice and Elections......................................
  Modification..............................................
  Survivorship Policies.....................................
FEDERAL TAX CONSIDERATIONS..................................
  Taxation of KILICO and the Separate Account...............
  Tax Status of the Policy..................................
     Diversification Requirements...........................
     Owner Control..........................................
  Tax Treatment of Life Insurance Death Benefit Proceeds....
     Accelerated Death Benefit..............................
  Tax Deferral During Accumulation Period...................
  Policies Which Are MECs...................................
     Characterization of a Policy as a MEC..................
     Tax Treatment of Withdrawals, Loans, Assignments and
      Pledges Under MECs....................................
     Penalty Tax............................................
     Aggregation of Policies................................
  Policies Which are not MECs...............................
     Tax Treatment of Withdrawals Generally.................
     Tax Treatment of Loans.................................
  Survivorship Policies.....................................
  Treatment of Maturity Benefits and Extension of Maturity
     Date...................................................
  Actions to Ensure Compliance with the Tax Law.............
  Federal Income Tax Withholding............................
  Tax Advice................................................
DESCRIPTION OF KILICO AND THE SEPARATE ACCOUNT..............
  KILICO....................................................
  Officers and Directors of KILICO..........................
  Separate Account..........................................
  Safekeeping of the Separate Account's Assets..............
  State Regulation of KILICO................................
Year 2000 MATTERS...........................................
DISTRIBUTION OF POLICIES....................................
LEGAL PROCEEDINGS...........................................
LEGAL MATTERS...............................................
REGISTRATION STATEMENT......................................
EXPERTS.....................................................
FINANCIAL STATEMENTS........................................
CHANGE OF ACCOUNTANTS.......................................
</TABLE>

     THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN
WHICH SUCH OFFERING MAY NOT BE LAWFULLY MADE. WE DO NOT AUTHORIZE ANY
INFORMATION OR REPRESENTATIONS REGARDING THE OFFERING DESCRIBED IN THIS
PROSPECTUS OTHER THAN AS BASED IN THIS PROSPECTUS.

                                        3
<PAGE>   9

                                  DEFINITIONS

     Please refer to this list for the meaning of the following terms:

     ACCUMULATION UNIT--An accounting unit of measurement which we use to
calculate the value of a Subaccount.

     ACCUMULATION UNIT VALUE--The value of an Accumulation Unit determined for a
Valuation Period according to the formula stated in your Policy.

     ANNUITY UNIT--An accounting unit of measurement which we use to calculate
the amount of variable payments under a settlement option.

     ANNUITY UNIT VALUE--The value of an Annuity Unit determined for a Valuation
Period according to the formula stated in your Policy.

     BENEFICIARY(IES)--The person(s) named by you to receive the Death Benefit
under the Policy.

     CASH VALUE--The sum of the Separate Account Value plus the Fixed Account
Value plus the Loan Account Value.

     DCA FIXED ACCOUNT--The portion of the Cash Value allocated to our general
account for purposes of participating in our Dollar Cost Averaging program.

     DEATH BENEFIT--The amount payable to the Beneficiary under the Policy upon
the death of the Insured(s), before payment of any unpaid Policy Debt or Policy
charges.

     DEDUCTION DAY--The same day in each month as the Effective Date. The day of
the month on which the Monthly Deduction is taken from your Cash Value.

     EFFECTIVE DATE--The effective date of insurance coverage under the Policy,
as stated in the Policy specifications. It is used to determine Policy
Anniversaries, Policy Years and the Deduction Day. If the Effective Date
otherwise would be the 29th, 30th or 31st of a month, the Effective Date will be
the 28th day of that month.

     FIXED ACCOUNT--The portion of the Cash Value allocated to our general
account.

     FIXED ACCOUNT VALUE--The value of the Fixed Account, including the DCA
Fixed Account and any initial Premium (plus interest) paid prior to the Issue
Date.

     GUIDELINE SINGLE PREMIUM--The "Guideline Single Premium" as defined in
Section 7702 of the Code.

     INSURED--A person whose life is insured under the Policy. Under a
Survivorship Policy, there initially are two Insureds.

     INVESTMENT EXPERIENCE FACTOR--The factor we use to determine the change in
value of an Accumulation Unit in any Valuation Period. We determine the
Investment Experience Factor separately for each Subaccount.

     ISSUE AGE--An Insured's age on his or her most recent birthday before the
Effective Date.

     ISSUE DATE--The issue date stated in the Policy specifications. It is the
date all requirements for coverage and Premium have been received, and the
Policy is approved.

     LOAN ACCOUNT--An account established for amounts transferred from the
Subaccounts as security for outstanding Policy Debt.

     LOAN ACCOUNT VALUE--The value of the Loan Account.

     MATURITY DATE--For Single Life Policies, the Policy Anniversary nearest the
Insured's 100th birthday. For Survivorship Policies, the Policy Anniversary
nearest the younger Insured's 100th birthday.

     MONTHLY DEDUCTION--The amount deducted from the Cash Value on each
Deduction Day for the cost of insurance charge, the Administration Charge, the
Tax Charge, the Records Maintenance Charge (when due), and the cost of any
benefit rider.

     NET SURRENDER VALUE--The Surrender Value minus all outstanding Policy Debt.

     NO LAPSE GUARANTEE--Our guarantee that, if you have no outstanding Policy
Debt, your Policy will never lapse regardless of changes in the Net Surrender
Value. If the Net Surrender Value becomes insufficient to

                                        4
<PAGE>   10

cover the monthly charges, however, Your Death Benefit may be reduced to equal
your total Premiums (less any prior withdrawals of Premium). The No Lapse
Guarantee is not available under all Policies.

     OWNER ("YOU, YOUR, YOURS")--The person(s) having the privileges of
ownership defined in the Policy. The Owner(s) may or may not be the same
person(s) as the Insured(s). If your Policy is issued pursuant to a retirement
plan, your ownership privileges may be modified by the plan.

     POLICY ANNIVERSARY--The same day and month as the Effective Date for each
subsequent year the Policy remains in force.

     POLICY DEBT--The sum of all unpaid Policy Loans and accrued loan interest.

     POLICY YEAR--Each twelve-month period beginning on the Effective Date and
each Policy Anniversary.

     PORTFOLIO(S)--The underlying portfolios in which the Subaccounts invest.
Each Portfolio is an investment company registered with the SEC or a separate
investment series of a registered investment company.

     PREMIUM--An amount paid to us as payment for the Policy by you or on your
behalf.

     SEC--The United States Securities and Exchange Commission.

     SEPARATE ACCOUNT--KILICO Variable Separate Account, a unit investment trust
registered with the SEC under the Investment Company Act of 1940.

     SEPARATE ACCOUNT VALUE--The sum of the Subaccount Values of the Policy on
the Valuation Date.

     SPECIFIED AMOUNT--The amount of insurance under your Policy. As of the
Effective Date, the Specified Amount is the amount shown on your Policy's
specifications page. Thereafter, the Specified Amount is reduced to reflect
partial withdrawals.

     SUBACCOUNT--A division of the Separate Account, which invests wholly in
shares of one of the Portfolios.

     SUBACCOUNT VALUE--The value of the assets held in a Subaccount.

     SURRENDER VALUE--The Cash Value less any applicable Withdrawal Charge.

     TAX CODE--The Internal Revenue Code of 1986, as amended.

     TRADE DATE--On the Trade Date, we allocate your initial Premium plus any
interest to the Subaccounts according to your instructions. In some states, the
Trade Date is the same as the Issue Date. If your state requires us to return
your Premium if you cancel Your Policy during the free look period, the Trade
Date will be after the end of the free look period, as explained at page [14]
below.

     VALUATION DATE--Each business day that applicable law requires us to value
the assets of the Separate Account. Currently this is each day that the New York
Stock Exchange is open for trading.

     VALUATION PERIOD--The period that starts at the close of a Valuation Date
and ends at the close of the next succeeding Valuation Date.

     WE, OUR, US, KILICO--Kemper Investors Life Insurance Company.

     WITHDRAWAL CHARGE--The surrender charge plus the unamortized state premium
tax charge.

     YOU, YOUR, YOURS--The party(s) named as Owner in the application, unless
later changed as provided in the Policy.

                                        5
<PAGE>   11

                                    SUMMARY

     This section summarizes some of the more important features of your Policy.
The Policy is described more fully in the remainder of this Prospectus. Please
read this Prospectus carefully. Unless otherwise indicated, the description of
the Policy contained in this Prospectus assumes that the Policy is in force,
that there is no Policy Debt, and that current federal tax laws apply.

     This Policy is a modified single premium variable universal life insurance
policy. The Policy has a Death Benefit, a Cash Value, and other features similar
to life insurance policies providing fixed benefits. The Policy permits the
Owner to pay a single significant initial Premium and, subject to restrictions,
additional Premiums. It is a "variable" Policy because the Cash Value and, in
some circumstances, the Death Benefit vary according to the investment
performance of the Subaccounts to which you have allocated your Premium. The
Cash Value is not guaranteed. This Policy provides you with the opportunity to
take advantage of any increase in your Cash Value, but you also bear the risk of
any decrease.

     We will issue Policies on the lives of prospective Insureds age 0-90 who
meet our underwriting standards. You may purchase a Policy to provide insurance
coverage on the life of one Insured ("Single Life Policy") or a Policy to
provide insurance coverage on the lives of two Insureds ("Survivorship Policy").

PAYMENT OF PREMIUM

     Your initial Premium must equal at least $10,000. You may choose a minimum
initial Premium of 90% or 100% of the Guideline Single Premium, based on the
initial Specified Amount. If you choose to pay 90% of the Guideline Single
Premium, your current cost of insurance charge will be higher and your Policy
will not include our No Lapse Guarantee. You may pay additional Premiums,
subject to the restrictions described in this Prospectus. We may refuse to
accept any Premium that would cause an increase in the Death Benefit, other than
a reinstatement Premium. We will accept any Premium at such time as it would not
cause your Policy to lose its status as a life insurance contract under the Tax
Code.

POLICY EFFECTIVE DATE

     In general, your Policy will be effective and your life insurance coverage
under the Policy will begin as of the date we receive your initial Premium,
after satisfaction of the applicable underwriting requirements. While your
application is in underwriting, if You have paid your initial Premium, we may
provide you with temporary life insurance coverage in accordance with the terms
of our conditional receipt. This temporary coverage will not exceed $500,000
plus the amount of Your initial Premium. We may decline for any lawful reason to
accept your initial Premium until the Issue Date.

     You may be eligible to purchase a Policy through simplified underwriting
without a medical examination if you meet our simplified underwriting criteria.
Simplified underwriting will only be available for Individual Policies and
Survivorship Policies involving spouses. Other survivorship cases will be
considered on a fully underwritten basis. You are not eligible for simplified
underwriting if the Insured is under 35 years old or over 80 years old at the
time of application.

     If we approve your application, and you paid all or a portion of your
initial Premium prior to the Issue Date, we will credit interest to your Initial
Premium at our then current declared rate for the period from the Effective Date
to the Issue Date. On the Trade Date, we will allocate your initial Premium to
the Subaccounts you have selected or to the DCA Fixed Account (if you have
selected it for Dollar Cost Averaging). In some states, the Trade Date will be
the same as the Issue Date. If your state requires us to return your Premium if
you cancel your Policy during the free look period, however, on the Issue Date
we will initially allocate your initial Premium (plus any interest) to the
Kemper Money Market Subaccount, and the Trade Date will depend on the length of
the free look period in your state. If the free look period is ten days, the
Trade Date will occur twenty days after the Issue Date. If the free look period
is longer, the Trade Date will occur a corresponding number of days later. We
will begin to deduct the Policy charges as of the Effective Date.

     If we reject your application, we will not issue you a Policy. We will
return any Premium you have paid, adding interest as and at the rate required in
your state. We will not subtract any Policy charges from the amount we refund to
You.

POLICY BENEFITS

     CASH VALUE. The Cash Value of your Policy on any Valuation Date is equal to
the sum of the Separate Account Value, the Fixed Account Value (if any), and the
Loan Account Value (if applicable). Your Cash Value

                                        6
<PAGE>   12

will depend on the investment performance of the Subaccounts to which you have
allocated your Premiums, the amount of interest we credit to the DCA Fixed
Account and the Loan Account (if you have any Cash Value in those Accounts), as
well as the Premiums paid, partial withdrawals, and charges assessed. We do not
guarantee a minimum Cash Value.

     SURRENDER OR PARTIAL WITHDRAWALS. While your Policy is in force, you may
surrender it for the Net Surrender Value. We also will deduct the Records
Maintenance Charge from your surrender proceeds, if your Cash Value on the last
Policy Anniversary was less than $50,000. Upon surrender, life insurance
coverage under your Policy will end. You may also withdraw part of your Cash
Value through a partial withdrawal, subject to the restrictions described in
"Partial Withdrawals" on page [23] below. If you take a partial withdrawal, we
will reduce the Specified Amount as described in this Prospectus on page [22].

     WITHDRAWAL CHARGE. If you surrender your Policy, the Withdrawal Charge will
equal a percentage of your initial Premium net of all previous withdrawal
amounts on which you paid a Withdrawal Charge. You pay a proportionate amount of
Withdrawal Charge on partial withdrawals in excess of the free withdrawal amount
described below.

     The Withdrawal Charge has two parts: (1) a surrender charge, which is
intended to cover our distribution expenses; and (2) an unamortized state
premium tax charge, which is intended to cover state premium tax expenses that
are not recovered through the Tax Charge. The rate used to determine the
Withdrawal Charge depends on the year the surrender or partial withdrawal is
made. The maximum Withdrawal Charge is 10% of the initial Premium. It declines
to zero percent after the ninth Policy Year, at the rates shown in the table on
page [30].

     FREE WITHDRAWALS. In each Policy Year, we will waive the Withdrawal Charge
for partial withdrawals equal to the greater of:

     1. Ten percent of the Cash Value; or

     2. Earnings not previously withdrawn.

     We will also waive the Withdrawal Charge for qualified medical stays and
disability. For more detail see "Amount Payable on Surrender of the Policy" and
"Partial Withdrawals" on page [23].

     POLICY LOANS. You may borrow money from us using your Policy as security
for the loan. Each Policy Loan must equal at least $1,000. Your total Policy
Loans may not exceed 90% of the Surrender Value of your Policy. In most
instances Policy Loans are treated as distributions for Federal tax purposes.
Therefore, you may incur tax liabilities if you borrow a Policy Loan. For more
detail, see "Policy Loans", on pages [22-23], and "Policies Which Are MECs", on
page [35].

     DEATH BENEFITS. Under a Single Life Policy, while the Policy is in force,
we will pay a Death Benefit to the Beneficiary upon the death of the Insured.
Under a Survivorship Policy, we will pay the Death Benefit to the Beneficiary
upon the death of the second Insured. While your Policy is in force, the Death
Benefit will equal the greater of Your Policy's then current Specified Amount
and the Cash Value multiplied by a specified percentage, except as provided
under "No Lapse Guarantee" below. Before we pay the Death Benefit, we will
subtract an amount sufficient to repay any outstanding Policy Debt and to pay
any due and unpaid charges.

NO LAPSE GUARANTEE

     Under our No Lapse Guarantee, if you do not have any outstanding Policy
Debt, your Policy will never lapse, regardless of changes in the Net Surrender
Value. Your Policy will remain in force until payment of the Death Benefit or
the Maturity Date, unless you voluntarily surrender your Policy at an earlier
date. If your Net Surrender Value is insufficient to cover a Monthly Deduction
when due, we will give you a 61-day Grace Period to pay additional Premium. If
you do not pay sufficient additional Premium, at the end of the Grace Period
your Policy will stay in force but the Death Benefit will be reduced to equal
your total Premium payments (less any prior partial withdrawals of Premium). The
No Lapse Guarantee applies to your Policy unless: (a) you paid 90% of the
Guideline Single Premium at issue for your Policy or (b) your Policy has
outstanding Policy Debt.

DURATION OF COVERAGE

     If the No Lapse Guarantee does not apply to your Policy and your Net
Surrender Value is insufficient to cover a Monthly Deduction when due, we will
give you a 61-day Grace Period to pay additional Premium. If you do not pay
sufficient additional Premium, your Policy will terminate at the end of the
Grace Period.

                                        7
<PAGE>   13

ALLOCATION OF PREMIUMS

     When you apply for the Policy, you specify in your application how to
allocate your initial Premium among the Subaccounts and/or the DCA Fixed
Account. Total allocations must equal 100%. You may allocate all or a portion of
your initial Premium to the DCA Fixed Account solely for the purpose of
subsequent transfers to the Subaccounts under our Automatic Dollar Cost
Averaging Program, as described on pages [20-21].

     We allocate any subsequent Premiums to the Subaccounts in the proportions
you specified in your application, until you give us new instructions. While
there is no limit to the number of Subaccounts open at any time, the minimum
initial investment in a Subaccount is $500. In the future, we may change these
limits. As a general rule, any subsequent Premium will be allocated to the
Subaccounts as of the date your Premium is received in our Home Office. You may
not allocate subsequent Premiums or make transfers to the DCA Fixed Account.

TRANSFERS

     You may transfer Cash Value among the Subaccounts while the Policy is in
force, by writing to us or calling us at (800) 621-5001. We currently do not
charge a transfer fee. We reserve the right to charge a fee of $25 per transfer
on each transfer after the first twelve transfers in each Policy Year, excluding
transfers under our Automatic Dollar Cost Averaging or Automatic Asset
Rebalancing Programs.

     The minimum amount that may be transferred is $100 or the remaining value
in the Subaccount, if the value that would remain in the Subaccount after the
transfer would be less than $500. For more detail, see "Transfer of Cash Value"
and "Transfers Authorized by Telephone", on page [15].

     You may also use our Automatic Dollar Cost Averaging program or our
Automatic Asset Rebalancing program. You may not use both programs at the same
time. Under the Automatic Dollar Cost Averaging program, amounts are
automatically transferred to the Subaccounts of your choice on a monthly,
quarterly, semiannual, or annual basis. For more detail, see "Automatic Dollar
Cost Averaging", on pages [16-17].

     Under the Automatic Asset Rebalancing program, you periodically can
readjust the percentage of your Cash Value allocated to each Subaccount to
maintain a pre-set level. Investment results will shift the balance of your Cash
Value allocations. If you elect Automatic Asset Rebalancing, we periodically
transfer your Cash Value back to the specified percentages annually,
semiannually, quarterly, or at your request. For more detail, see "Automatic
Asset Rebalancing", on pages [15-16].

THE SEPARATE ACCOUNT

     You can allocate and reallocate your Cash Value among the Subaccounts, each
of which in turn invests in a single Portfolio. Under the Policy, the Separate
Account currently invests in the following Portfolios:

KEMPER VARIABLE SERIES:
Kemper Aggressive Growth Portfolio
Kemper Technology Growth Portfolio
Kemper-Dreman Financial Services Portfolio
Kemper Small Cap Growth Portfolio
Kemper Small Cap Value Portfolio
Kemper-Dreman High Return Equity Portfolio
Kemper International Portfolio
Kemper International Growth & Income Portfolio
Kemper Global Blue Chip Portfolio
Kemper Growth Portfolio
Kemper Contrarian Value Portfolio
Kemper Blue Chip Portfolio
Kemper Value+Growth Portfolio
Kemper Horizon 20+ Portfolio
Kemper Total Return Portfolio
Kemper Horizon 10+ Portfolio
Kemper High Yield Portfolio
Kemper Horizon 5 Portfolio
Kemper Global Income Portfolio
Kemper Investment Grade Bond Portfolio
Kemper Government Securities Portfolio
Kemper Money Market Portfolio

SCUDDER VARIABLE LIFE INVESTMENT FUND
(CLASS A SHARES):
Scudder VLIF Global Discovery Portfolio
Scudder VLIF Growth and Income Portfolio
Scudder VLIF International Portfolio
Scudder VLIF Capital Growth Portfolio

JANUS ASPEN SERIES:
Janus Aspen Growth Portfolio
Janus Aspen Growth and Income Portfolio

WARBURG PINCUS TRUST:
Warburg Emerging Markets Portfolio
Warburg Post-Venture Capital Portfolio

     Each Portfolio holds its assets separate from the assets of the other
Portfolios. Each Portfolio has distinct investment objectives and policies,
which are described in the accompanying Prospectuses for the Portfolios.

                                        8
<PAGE>   14

CHARGES

     CHARGES ASSESSED ON THE SUBACCOUNTS. On each Valuation Date, we deduct a
Mortality and Expense Risk Charge from the Separate Account. The Mortality and
Expense Charge equals an annual rate of .90% of average daily net assets, and is
intended to compensate us for expenses incurred and certain mortality and
expense risks assumed under the Policies. See "Mortality and Expense Risk
Charge" on page [45] below.

     MONTHLY DEDUCTION. We also deduct a Monthly Deduction from your Cash Value.
The Monthly Deduction consists of the cost of insurance charge, the
Administration Charge, the Tax Charge, and the cost of any benefit rider. We
also deduct the Records Maintenance Charge on each Policy Anniversary, if your
Policy's Cash Value was less than $50,000 on the previous Policy Anniversary.
The cost of insurance charge covers our anticipated mortality costs. If your
Initial Premium exceeds $500,000, your cost of insurance charges may be lower.
The Administration Charge is intended to compensate us for some of our
administrative costs under the Policy. The Tax Charge covers state premium tax
expenses under the Policies and certain federal tax liabilities resulting from
our receipt of Premiums under the Policies, as required by law. The Records
Maintenance Charge reimburses us for certain administrative costs associated
with the Policies. See "Monthly Deduction", on pages [28-29] below.

     WITHDRAWAL CHARGE. We impose a Withdrawal Charge to cover a portion of our
premium tax expenses and a portion of the sales expenses we incur in
distributing the Policies. These sales expenses include agents' commissions,
advertising, and the printing of Prospectuses. See "Withdrawal Charge" on page
[7] above and in "Withdrawal Charge" on page [30] below.

     TRANSFER FEE. We currently do not charge a transfer fee. Under the Policy,
however, we reserve the right to charge a fee of $25 per transfer on each
transfer in excess of twelve transfers in a single Policy Year, excluding
Portfolio Rebalancing and Automatic Dollar Cost Averaging transfers. See
"Transfer Fee" on page [31] below.

     The charges assessed under the Policy are summarized in the table entitled
"Policy Charges and Deductions" on pages [10-11] below, and described in more
detail in "Charges and Deductions", beginning on page [28].

     In addition to our charges under the Policy, each Portfolio deducts amounts
from its assets to pay its investment advisory fee and other expenses. The
Prospectuses for the Portfolios describe their respective charges and expenses
in more detail. We may receive compensation from the investment advisers or
administrators of the Portfolios. Such compensation will be consistent with the
services we provide or the cost savings resulting from the arrangement and
therefore may differ between Portfolios. We also may receive fees from the
Portfolios to assist us in distributing the Policies.

TAX TREATMENT UNDER CURRENT FEDERAL TAX LAW

     Your Policy is structured to meet the definition of a life insurance
contract under the Tax Code. We may need to limit the amount of Premiums you pay
under the Policy to ensure that your Policy continues to meet that definition.

     In most circumstances, your Policy will be considered a "modified endowment
contract", which is a form of life insurance contract under the Tax Code.
Special rules govern the tax treatment of modified endowment contracts. Under
current tax law, death benefit payments under modified endowment contracts, like
death benefit payments under other life insurance contracts, generally are
excluded from the gross income of the beneficiary. Withdrawals and Policy Loans,
however, are treated differently. Amounts withdrawn and Policy Loans are treated
first as income, to the extent of any gain, and then as a return of Premium. The
income portion of the distribution is includable in your taxable income. Also,
an additional ten percent federal penalty tax is generally imposed on the
taxable portion of amounts received before age 59 1/2. For more information on
the tax treatment of the Policy, see "Federal Tax Considerations", beginning on
page [33], and consult your tax adviser.

FREE-LOOK PERIOD

     In most states, you may cancel your Policy by returning it to us no later
than ten days after you receive it. In other states, however, this free look
period may be longer, as provided by state law. If you return your Policy, the
Policy terminates and, in some states, we will pay you an amount equal to your
Premium (less any Policy Debt). In some other states, however, we will return
your Cash Value. Since state laws differ as to the consequences of returning a
Policy, You should refer to your Policy for specific information about your
circumstances.

ILLUSTRATION OF HOW POLICY VALUES CHANGE WITH EXPERIENCE

     At your request we will furnish you with a free, personalized illustration
of Cash Value, Surrender Value and Death Benefit. The illustration will be
personalized to reflect the proposed Insureds' age, sex, underwriting
classification, proposed initial Premium, and any available riders requested.
The illustrated Cash Value, Surrender

                                        9
<PAGE>   15

Value and Death Benefit will be based on certain hypothetical assumed rates of
return for the Separate Account. Your actual investment experience probably will
differ, and as a result the actual values under the Policy at any time may be
higher or lower than those illustrated. The personalized illustrations will
follow the methodology and format of the hypothetical illustrations that we
filed with the SEC in the registration statement.

                               FEES AND EXPENSES

     The following tables are designed to help you understand the fees and
expenses that you bear, directly or indirectly, as a Policy Owner. The first
table describes the Policy Charges and deductions you directly bear under the
Policy. The second table describes the fees and expenses of the Portfolios that
you bear indirectly when you purchase a Policy. (See "Charges and Deductions",
beginning on page [28]).

                         POLICY CHARGES AND DEDUCTIONS

CHARGES DEDUCTED FROM THE SEPARATE ACCOUNT:

Mortality and Expense Risk
  Charge:                 0.90% of average daily net assets(1)

Federal Income Tax Charge:Currently none.(2)

CHARGES DEDUCTED FROM CASH VALUE:(3)

Monthly Cost of Insurance Charge:(3)

                          CURRENT: The lower of: (i) the product of the
                          applicable current asset-based cost of insurance
                          charge times the Cash Value on the Deduction Day;(4)
                          and (ii) the product of the applicable guaranteed cost
                          of insurance rate times the net amount at risk.

                          If your initial Premium is no more than $500,000 and
                          you pay 100% of the Guideline Single Premium, the
                          current asset-based rate for Single Life Policies for
                          the Standard (NS)(5) rate class is 0.55% annually of
                          Cash Value for the first ten Policy Years and 0.25%
                          thereafter and the rate for Survivorship Policies for
                          the Standard (NS) rate class is 0.45% for the first
                          ten Policy Years and 0.20% thereafter.

                          If your initial Premium is more than $500,000 and you
                          pay 100% of the Guideline Single Premium, the current
                          asset-based rate for Single Life Policies for the
                          Standard (NS) rate class is 0.25% for the first ten
                          Policy Years and 0.10% thereafter and the rate for
                          Survivorship Policies for the Standard (NS) rate class
                          is 0.20% for the first ten Policy Years and 0.10%
                          thereafter.

                          GUARANTEED: Ranges from $.06 per $1,000 of net amount
                          at risk to $83.33 per $1,000 of net amount at risk.(6)

Administration Charge(7)  0.35% annually of average monthly Cash Value for
                          Policy Years 1-10

                          0.25% annually of average monthly Cash Value for
                          Policy Years 11 and later

Tax Charge(7)             0.40% annually of the average monthly Cash Value for
                          Policy Years 1-10

                          0.00% for Policy Years 11 and later

Records Maintenance
  Charge(8)               $30.00 per year, deducted annually, if your Cash Value
                          is less than $50,000 on the most recent Policy
                          Anniversary.

TRANSACTION CHARGES:

Transfer Fee:(9)          Currently none.

MAXIMUM WITHDRAWAL
  CHARGE:(10)             10% of the initial Premium
- ---------------

 (1) Deducted each Valuation Period at a rate equivalent to the effective annual
     rate shown, multiplied by the Separate Account Value on the relevant
     Valuation Date, times the number of days in the relevant Valuation

                                       10
<PAGE>   16

     Period. No mortality and expense risk charge is deducted from the Kemper
     Money Market II Subaccount, which is only available for Automatic Dollar
     Cost Averaging that will deplete the owner's Subaccount Value by the end of
     the first Policy Year.

 (2) We currently do not assess a charge for federal income taxes that may be
     attributed to the operations of the Separate Account. We reserve the right
     to do so in the future. See "Charges and Deductions", beginning on page
     [28].

 (3) Assessed monthly, allocated pro rata among all active Subaccounts and the
     DCA Fixed Account.

 (4) The asset-based cost of insurance rate differs depending on Policy type and
     history of tobacco use of the Insured(s). The current-asset based cost of
     insurance rates also reflect whether you pay 90% or 100% of the Guideline
     Single Premium at issue (based on the initial Specified Amount). The
     asset-based rates that we set will reflect our expectations as to mortality
     experience under the Policies and other relevant factors, such that the
     aggregate actual cost of insurance charges paid under the Policies will
     compensate us for our aggregate mortality risks under the Policies. In our
     discretion, We may change the asset-based rate used in the current cost of
     insurance formula. Even if we change the asset-based rate, however, you
     will never be charged more than the amount determined using the guaranteed
     cost of insurance tables in your Policy. For further explanation, see
     "Charges and Deductions--Monthly Deduction--Cost of Insurance Charge", on
     pages [28-29].

 (5) The Standard (NS) rate class is our best rate class for Insureds who have
     not used tobacco of any kind within the past 36 months.

 (6) The guaranteed cost of insurance charges are based on attained age, sex,
     and history of tobacco use of the Insured. The net amount at risk is the
     difference between the Death Benefit and the Cash Value. See "Charges and
     Deductions--Monthly Deduction--Cost of Insurance Charge", on pages [28-29].

 (7) Deducted monthly in an amount equal to 1/12 the annual rate shown,
     multiplied by the total Cash Value, including the Loan Account Value, on
     the relevant Deduction Day. The Administration Charge covers certain of our
     administrative expenses in connection with the Policies. The Tax Charge
     covers a portion of our state premium tax expense and certain federal
     income tax liability associated with the receipt of Premium.

 (8) The Records Maintenance Charge is deducted annually on each Policy
     Anniversary. If you surrender your Policy during a Policy Year, we will
     deduct the Records Maintenance Charge from your surrender proceeds.

 (9) We currently do not charge a transfer fee. Under the Policy, we reserve the
     right in the future to charge a transfer fee of $25 on each transfer after
     the first twelve transfers each Policy Year, excluding transfers under our
     Automatic Dollar Cost Averaging and Automatic Asset Rebalancing Programs.

(10) This charge only applies upon withdrawals of the initial Premium. It does
     not apply to withdrawals of any additional Premiums paid under a Policy.
     The Withdrawal Charge declines to zero percent after the ninth Policy
     Anniversary. It is imposed to cover a portion of our premium tax expenses
     and the sales expenses incurred by us in distributing the Policies. In any
     Policy Year, we will not charge any Withdrawal Charge on that portion of
     your withdrawals equal to the greater of (a) ten percent of the Cash Value,
     less any prior free partial withdrawal since the most recent Policy
     Anniversary, or (b) earnings not previously withdrawn. See Charges and
     Deductions--Withdrawal Charge, page [30].

                                       11
<PAGE>   17

                             PORTFOLIO EXPENSES(1)
 (As a percentage of average net assets for the period ended December 31, 1998)
   (after fee waivers and expense reimbursements, as indicated in the notes)

<TABLE>
<CAPTION>
                                                                      TOTAL FUND OTHER   TOTAL FUND ANNUAL
PORTFOLIO                                           MANAGEMENT FEES       EXPENSES           EXPENSES
- ---------                                           ---------------   ----------------   -----------------
<S>                                                 <C>               <C>                <C>
Kemper Aggressive Growth Portfolio(4).............       0.67%              0.28%              0.95%
Kemper Technology Growth Portfolio(2).............       0.66%              0.29%              0.95%
Kemper-Dreman Financial Services
  Portfolio(2)(5).................................       0.02%              0.97%              0.99%
Kemper Small Cap Growth Portfolio.................       0.65%              0.05%              0.70%
Kemper Small Cap Value Portfolio(1)...............       0.75%              0.05%              0.80%
Kemper-Dreman High Return Equity
  Portfolio(2)(5).................................       0.42%              0.45%              0.87%
Kemper International Portfolio....................       0.75%              0.18%              0.93%
Kemper International & Growth Income
  Portfolio(2)(5).................................       0.00%              1.12%              1.12%
Kemper Global Blue Chip Portfolio(2)(5)...........       0.00%              1.56%              1.56%
Kemper Growth Portfolio...........................       0.60%              0.05%              0.65%
Kemper Contrarian Value Portfolio(1)..............       0.75%              0.03%              0.78%
Kemper Blue Chip Portfolio(1)(6)..................       0.65%              0.11%              0.76%
Kemper Value+Growth Portfolio(1)..................       0.75%              0.03%              0.78%
Kemper Horizon 20 Portfolio(1)....................       0.60%              0.07%              0.67%
Kemper Total Return Portfolio.....................       0.55%              0.05%              0.60%
Kemper Horizon 10+ Portfolio(1)...................       0.60%              0.04%              0.64%
Kemper High Yield Portfolio.......................       0.60%              0.05%              0.65%
Kemper Horizon 5 Portfolio(1).....................       0.60%              0.06%              0.66%
Kemper Global Income Portfolio(2)(6)..............       0.72%              0.33%              1.05%
Kemper Investment Grade Bond Portfolio(6).........       0.60%              0.07%              0.67%
Kemper Government Securities Portfolio............       0.55%              0.11%              0.66%
Kemper Money Market Portfolio(3)..................       0.50%              0.04%              0.54%
</TABLE>

<TABLE>
Scudder VLIF Global Discovery Portfolio(7).         %          0.91   %           0.81   %            1.72
<S>                                                 <C>               <C>                <C>
Scudder VLIF Growth and Income Portfolio..........       0.47%              0.09%              0.56%
Scudder VLIF International Portfolio..............       0.87%              0.18%              1.05%
Scudder VLIF Capital Growth Portfolio.............       0.47%              0.04%              0.51%
Janus Aspen Growth Portfolio(8)...................       0.65%              0.03%              0.68%
Janus Aspen Growth and Income Portfolio(8)........       0.00%              1.25%              1.25%
Warburg Emerging Markets Portfolio(9).............       0.20%              1.20%              1.40%
Warburg Post-Venture Capital Portfolio(9).........       1.08%              0.24%              1.32%
</TABLE>

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

(1) Pursuant to their respective agreements with Kemper Variable Series, the
    investment manager and the accounting agent have agreed, for the one year
    period commencing on the date of this Prospectus, to limit their respective
    fees and to reimburse other operating expenses, in a manner communicated to
    the Board of the Fund, to the extent necessary to limit total operating
    expenses of the following described Portfolios to the amounts set forth
    after the Portfolio names: Kemper Value+Growth Portfolio (.84%), Kemper
    Contrarian Value Portfolio (.80%), Kemper Small Cap Value Portfolio (.84%),
    Kemper Horizon 5 Portfolio (.97%), Kemper Horizon 10+ Portfolio (.83%),
    Kemper Horizon 20+ Portfolio (.93%), Kemper Investment Grade Bond Portfolio
    (.80%), and Kemper Blue Chip Portfolio (.95%). The amounts set forth in the
    table above reflect actual expenses for the past fiscal year, which were
    lower than these expense limits.

(2) Pursuant to their respective agreements with Kemper Variable Series, the
    investment manager and the accounting agent have agreed, for the one year
    period commencing on the date of this Prospectus, to limit their respective
    fees and to reimburse other operating expenses, in a manner communicated to
    the Board of the Fund, to the extent necessary to limit total operating
    expenses of the Kemper Aggressive Growth, Kemper Technology Growth,
    Kemper-Dreman Financial Services, Kemper-Dreman High Return Equity, Kemper
    International Growth and Income, Kemper Global Blue Chip and Kemper Global
    Income Portfolios of Kemper Variable Series to the levels set forth in the
    table above. Without taking into effect these expense caps, for the
    Aggressive Growth, Technology Growth, Financial Services, High Return
    Equity, International Growth and Income, Global Blue Chip and Global Income
    Portfolios of Kemper Variable Series: management fees are estimated to be
    .75%, .75%, .75%, .75%, 1.00%, 1.00% and .75%. Other Expenses are estimated

                                       12
<PAGE>   18

    to be .28%, .29%, .97%, .45%, 18.54%, 11.32%, and .33%, respectively, and
    total operating expenses are estimated to be 1.03%, 1.04%, 1.72%, 1.20%,
    19.54%, 12.32%, and 1.08%, respectively. In addition, for Kemper
    International Growth and Income and Kemper Global Blue Chip, the investment
    manager has agreed to limit its management fee to .70% and .85%,
    respectively, of such portfolios for one year from the date of this
    Prospectus.

(3) This Portfolio is the underlying investment for the Kemper Money Market
    Subaccount and the Kemper Money Market II Subaccount. The Kemper Money
    Market II Subaccount is only available to allocate all or a portion of your
    initial Premium for Automatic Dollar Cost Averaging that will deplete your
    Subaccount Value by the end of the first Policy Year.

(4) Portfolio commenced operations after 5/1/99. "Other Expenses" have been
    estimated.

(5) Portfolios commenced operations on or after 5/1/98. "Other Expenses" have
    been estimated.

(6) Portfolios commenced operations 5/1/97. "Other Expenses" have been
    estimated.

(7) Until April 10, 1998, the Adviser waived a portion of its management fee to
    limit the expenses of this Portfolio to 1.50% of the average daily net
    assets.

(8) The expense figures shown are net of certain fee waivers or reductions from
    Janus Capital Corporation. Without such waivers, Management Fees, Other
    Expenses, and Total Portfolio Annual Expenses for the Portfolios for the
    fiscal year ending December 31, 1998 would have been: 0.72%, 0.03%, and
    0.75%, respectively, for the Growth Portfolio; and 0.75%, 2.31%, and 3.06%,
    respectively, for the Growth and Income Portfolio. See the prospectus and
    Statement of Additional Information of Janus Aspen Series for a description
    of these waivers.

(9) The expense figures shown are net of certain fee waivers or reductions from
    Warburg Pincus Asset Management, Inc. and its affiliates based on actual
    expenses for fiscal year ended December 31, 1998. Without such waivers,
    Management Fees, Other Expenses, and Total Portfolio Annual Expenses for the
    Portfolios for the fiscal year ended December 31, 1998 would have been:
    1.25%, 6.96%, and 8.21%, respectively, for the Emerging Markets Portfolio;
    and 1.25%, 0.45%, and 1.70%, respectively, for the Post-Venture Capital
    Portfolio. Fee waivers and expense reimbursements may be discontinued at any
    time.

                 PURCHASE OF POLICY AND ALLOCATION OF PREMIUMS

APPLICATION FOR A POLICY

     You may apply to purchase a Policy by submitting a written application to
us through one of our authorized agents. We will issue Policies to insure people
who are 90 years of age or younger. When you apply for a Policy, we will require
you to submit evidence of insurability satisfactory to us. If we do not issue a
Policy to you, we will return your Premium to you.

     In general, we will deliver your Policy only when (1) we have received your
initial Premium and (2) we have determined that your application meets our
underwriting requirements. If you are paying Premium from more than one source,
we will not issue your Policy until all Premium has been received. The Effective
Date will be the effective date of insurance coverage under your Policy. We use
the Effective Date to determine Policy Anniversaries, Policy Years, and
Deduction Days. The Effective Date usually will be the date when we have
received your initial Premium, after satisfaction of the applicable underwriting
requirements.

     We will not accept your initial Premium with your application if it exceeds
our then-current limit. In other cases, you may choose to pay the initial
Premium with your application. If you did not submit your initial Premium with
your application, we will require you to pay your entire Premium before we place
your insurance in force.

     Acceptance of your application is subject to our underwriting rules. We
reserve the right to reject your application for any lawful reason. We reserve
the right to change the terms or conditions of your Policy to comply with
differences in applicable state law. Variations from the information appearing
in this Prospectus due to individual state requirements are described in
supplements which are attached to this Prospectus or in endorsements to the
Policy, as appropriate.

     SIMPLIFIED UNDERWRITING. Under our current underwriting rules, which we may
change when and as we decide, proposed Insureds are eligible for simplified
underwriting without a medical examination, if the application responses and
requested initial Premium meet our simplified underwriting standards. Simplified
underwriting is not available if the initial Premium exceeds the limits set in
our simplified underwriting standards.

                                       13
<PAGE>   19

For Survivorship Policies, both Insureds must meet our simplified underwriting
requirements. Simplified underwriting limits may vary by state.

     STANDARD UNDERWRITING. If you are not eligible for simplified underwriting,
we will process your application in accordance with our customary underwriting
requirements. While your application is in underwriting, if you have paid your
initial Premium we may provide you with temporary life insurance coverage in
accordance with the terms of our conditional receipt. Any temporary coverage may
not exceed $500,000 plus the amount of your initial Premium. If you did not pay
your Premium with your application, we will require you to pay your entire
Premium before we place your insurance in force. If you pay Premium through more
than one source, e.g., through the rollover of another policy, we will not place
your Policy in force until all Premium has been received.

     If we approve your application, you will earn interest and/or investment
return on your Premium from the Effective Date. We will also begin to deduct the
Policy charges as of the Effective Date.

     If we reject your application, we will not issue you a Policy. We will
return any Premium you have made, adding interest as and at the rate required in
your state. We will not subtract any Policy charges from the amount we refund to
You.

PREMIUMS

     You must pay an initial Premium to purchase a Policy. You may choose a
minimum initial Premium of 90% or 100% of the Guideline Single Premium for your
Policy's initial Specified Amount. Your choice will affect your current cost of
insurance charge. In addition, if you choose to pay 90%, your Policy will not
include our No Lapse Guarantee. Under either option, the minimum initial Premium
is $10,000. We may waive or change this minimum.

     You may pay additional Premiums at any time and in any amount necessary to
avoid termination of your Policy. In addition, we will accept any additional
Premium at such time as it would not disqualify your Policy as a life insurance
contract under the Tax Code. If you wish to repay Policy Debt (if any), you must
send written instructions with your payment; otherwise, we will treat any
payment received from you as additional Premium.

ALLOCATION OF PREMIUMS

     If you pay all or a portion of your initial Premium prior to the Issue
Date, we will initially allocate your payment to our Fixed Account. If we
approve your application, we will credit interest to that amount at an effective
rate of not less from 3% annually for the period from the Effective Date to the
Issue Date.

     On the Issue Date, if your state requires us to return your Premium if you
cancel your Policy during the free look period, we will initially allocate your
initial Premium (and any interest) to the Kemper Money Market Subaccount.
Subsequently, on the Trade Date, we will allocate your Cash Value to the
Subaccounts and/or the DCA Fixed Account (if you have selected it for Dollar
Cost Averaging) in accordance with your instructions. The Trade Date will depend
on the length of the free look period. If the free look period is ten days, the
Trade Date will occur twenty days after the Issue Date. If the free look period
is longer, the Trade Date will occur a corresponding number of days later.

     In other states, on the Issue Date we will allocate your initial Premium
according to your instructions, because the Trade Date will be the same as the
Issue Date.

     You must specify your allocation percentages in your Policy application.
The total allocation must equal 100%. We will allocate your subsequent Premiums
in those proportions, until you give us new allocation instructions. You may
change your allocation instructions orally or in writing. Your initial
allocation to a Subaccount must equal at least $500. You may not allocate your
Cash Value to more than 30 Subaccounts at one time. You may not allocate
Premiums to the DCA Fixed Account after the initial Premium.

     We generally will allocate your additional Premiums to the Subaccounts as
of the date your Premium is received in our Home Office. We may refuse to accept
any Premium that would cause an increase in the Death Benefit, other than a
reinstatement Premium. We will make all valuations in connection with the
Policy, other than the initial Premium and other Premium payments requiring an
underwriting, on the date a Premium is received or your request for other action
is received at our Home Office, if that date is a Valuation Date, or on the next
succeeding Valuation Date.

CASH VALUE

     Your Cash Value on any Valuation Date is the sum of the value of your
interest in the Subaccounts you have chosen, your Fixed Account Value (if any),
plus your Loan Account Value (if any). Your Cash Value may

                                       14
<PAGE>   20

increase or decrease daily to reflect the performance of the Subaccounts you
have chosen, the addition of interest credited to the Loan Account, the addition
of Premiums, and the subtraction of partial withdrawals and charges assessed.
There is no minimum guaranteed Cash Value.

     On the Effective Date, your Cash Value will equal the initial Premium less
the Monthly Deduction for the first Policy Month.

     The Separate Account Value equals the sum of the Subaccount Values, each of
which equals:

          a. The total value of your Accumulation Units in the Subaccount; plus

          b. Any Premium received and allocated to the Subaccount during the
     current Valuation Period; plus

          c. Any amount transferred to the Subaccount during the current
     Valuation Period; minus

          d. The pro-rata portion of any Monthly Deduction charged to the
             Subaccount when the Valuation Period includes a Deduction Day;
             minus

          e. Any amount transferred from the Subaccount during the current
     Valuation Period; minus

          f. Any amount withdrawn from the Subaccount during the current
     Valuation Period; minus

          g. Any amount loaned from the Subaccount during the current Valuation
     Period.

ACCUMULATION UNIT VALUE

     The Accumulation Unit Value for each Subaccount will vary to reflect the
investment experience of the corresponding Portfolio and the deduction of
certain expenses. We will determine the Accumulation Unit Value for each
Subaccount on each Valuation Date. A Subaccount's Accumulation Unit Value for a
particular Valuation Date will equal the Subaccount's Accumulation Unit Value on
the preceding Valuation Date multiplied by the Investment Experience Factor for
that Subaccount for the Valuation Period then ended.

     The Investment Experience Factor for each Subaccount is (1) divided by (2)
minus (3), where:

     (1) is the sum of (a) the net asset value per share of the corresponding
         Portfolio at the end of the current Valuation Period plus (b) the per
         share amount of any dividend or capital gains distribution by that
         Portfolio, if the "ex-dividend" date occurs in that Valuation Period;
         plus or minus (c) a credit or charge for any taxes reserved for the
         current Valuation Period which we determine to have resulted from the
         investment operations of the Subaccount;

     (2) is the net asset value per share of the corresponding Portfolio at the
         end of the last prior Valuation Period; and

     (3) is the factor representing the Mortality and Expense Risk Charge.

     You should refer to the Prospectuses for the Portfolios which accompany
this Prospectus for a description of how the assets of each Portfolio are
valued, since that determination directly affects the investment experience of
the corresponding Subaccount and, therefore, your Cash Value.

TRANSFER OF CASH VALUE

     While the Policy is in force before the Maturity Date, you may transfer
Cash Value among the Subaccounts in writing or by telephone. We currently do not
charge a transfer fee. However, under the Policy we reserve the right to charge
a fee of $25 for each transfer in excess of twelve per Policy Year, excluding
transfers under our Automatic Dollar Cost Averaging and Automatic Asset
Rebalancing Programs. You may not transfer Cash Value to the DCA Fixed Account.

     The minimum amount that may be transferred from a single Subaccount is
$100, or the remaining value in the Subaccount, if the value that would remain
in the Subaccount after the transfer would be less than $500. We reserve the
right to waive or change these minimums.

     As a general rule, we only make transfers on days when we and the New York
Stock Exchange are open for business. If we receive your request on one of those
days, we will make the transfer that day. Otherwise, we will make the transfer
on the first subsequent day on which we and the NYSE are open. Transfers
pursuant to a Automatic Dollar Cost Averaging or Automatic Asset Rebalancing
program will be made at the intervals you have selected in accordance with the
procedures and requirements we establish. We may suspend, modify, or terminate
the transfer provisions.

                                       15
<PAGE>   21

TRANSFERS AUTHORIZED BY TELEPHONE

     You may make transfers by telephone, if you so advise us in writing on our
authorized forms. The cut off time for telephone transfer requests is 4:00 p.m.
Eastern time. Timely requests will be processed on that day at that day's price.
If we receive your request after 4:00 p.m. Eastern time, we will process your
request at the next day's price.

     We use procedures that we believe provide reasonable assurance that
telephone authorized transfers are genuine. For example, we tape telephone
conversations with persons purporting to authorize transfers and request
identifying information. Accordingly, we disclaim any liability for losses
resulting from allegedly unauthorized telephone transfers. We may suspend,
modify or terminate the telephone transfer privilege at any time without notice.

AUTOMATIC DOLLAR COST AVERAGING

     Under our Automatic Dollar Cost Averaging program, while the Policy is in
force you may authorize us to transfer a fixed dollar amount monthly, quarterly,
semiannually, or annually to the Subaccounts of your choice in accordance with
the procedures and requirements that we establish. The transfers will continue
until you instruct us to stop, or until your chosen source of transfer payments
is exhausted. The minimum Automatic Dollar Cost Averaging transfer is $100 per
transfer. Upon early termination of your Automatic Dollar Cost Averaging
program, we will allocate the remaining amount from your source account to the
Subaccounts in accordance with your instructions in our files. If you do not
give us new instructions, we will follow the allocation instructions in our
files.

     You may make Dollar Cost Averaging transfers from any Subaccount. At issue,
you may choose to allocate some or all of your initial Premium to the Kemper
Money Market II Subaccount or to the DCA Fixed Account, for purposes of
participating in the Dollar Cost Averaging Program. Amounts allocated to the
Kemper Money Market II Subaccount or the DCA Fixed Account must be transferred
to other Subaccounts by the first Policy Anniversary.

     The Kemper Money Market II Subaccount invests in the Kemper Money Market
Portfolio. However, the Mortality and Expense Risk Charge is not charged to this
Subaccount.

     We offer two DCA Fixed Account options in connection with the Automatic
Dollar Cost Averaging Program: a six-month option and a twelve-month option.
Amounts designated for one of these options will be transferred to the
Subaccounts within six months or twelve months of the Effective Date, as
appropriate. Until they are transferred, they will accrue interest at the rate
we declare. We may declare different rates for the six-month and the
twelve-month options. In our discretion, we may change the DCA Fixed Account
options that we offer under the Policy. For more information, see "The DCA Fixed
Account" on pages [20-21].

     Your request to participate in this program will be effective when we
receive your completed application at our Home Office at the address given on
the first page of this Prospectus. Call or write us for a copy of the
application and additional information concerning the program. You may not use
Automatic Dollar Cost Averaging and Automatic Asset Rebalancing at the same
time. We may change, terminate, limit or suspend Automatic Dollar Cost Averaging
at any time.

     The theory of automatic dollar cost averaging is that by spreading your
investment over time, you may be able to reduce the effect of transitory market
conditions on your investment. In addition, because a given dollar amount will
purchase more units when the unit prices are relatively low rather than when the
prices are higher, in a fluctuating market, the average cost per unit may be
less than the average of the unit prices on the purchase dates. However,
participation in this program does not assure you of a greater profit from your
purchases under the program; nor will it prevent or necessarily reduce losses in
a declining market. Moreover, other investment programs, such as our Automatic
Asset Rebalancing Program, may not work in concert with Automatic Dollar Cost
Averaging. Therefore, you should monitor your use of these programs, as well as
other transfers or withdrawals, while Automatic Dollar Cost Averaging is being
used.

AUTOMATIC ASSET REBALANCING

     Automatic Asset Rebalancing allows you to readjust the percentage of your
Cash Value allocated to each Subaccount to maintain a pre-set level. Over time,
the variations in each Subaccount's investment results will shift the balance of
your Cash Value allocations. Under the Automatic Asset Rebalancing feature, we
periodically will transfer your Cash Value, including new Premiums (unless you
specify otherwise), back to the percentages you specify in accordance with
procedures and requirements that we establish. you may select the Subaccounts to
include in an Automatic Asset Rebalancing program.

                                       16
<PAGE>   22

     You may request Automatic Asset Rebalancing when you apply for your Policy
or by submitting a completed written request to us at our Home Office at the
address given on the first page of this Prospectus. You may not use Automatic
Asset Rebalancing and Automatic Dollar Cost Averaging at the same time. We may
change, terminate, limit or suspend Automatic Dollar Cost Averaging at any time.
Please call or write us for a copy of the request form and additional
information concerning Asset Automatic Rebalancing.

     Automatic Asset Rebalancing is consistent with maintaining your allocation
of investments among market segments, although it is accomplished by reducing
your Cash Value allocated to the better performing segments. Other investment
programs may not work in concert with Automatic Asset Rebalancing. Therefore,
you should monitor your use of these programs, as well as other transfers or
withdrawals, while Automatic Asset Rebalancing is being used. We may change,
terminate, limit, or suspend Automatic Asset Rebalancing at any time.

                               INVESTMENT OPTIONS

SEPARATE ACCOUNT INVESTMENTS: THE PORTFOLIOS.

     Each of the Subaccounts invests in the shares of one of the Portfolios.
Each Portfolio is a separate investment series of an open-end management
investment company registered under the Investment Company Act of 1940. We
briefly describe the Portfolios below. You should read the current Prospectuses
for the Portfolios for more detailed and complete information concerning the
Portfolios, their investment objectives and strategies, and the investment risks
associated with the Portfolios. If you do not have a Prospectus for a Portfolio,
contact us and we will send you a copy.

     Each Portfolio holds its assets separate from the assets of the other
Portfolios, and each Portfolio has its own distinct investment objective and
policies. Each Portfolio operates as a separate investment fund, and the income,
gains, and losses of one Portfolio have no effect on the investment performance
of any other Portfolio.

     The Portfolios which currently are the permissible investments of the
Separate Account under this Policy are separate series of:

        - Kemper Variable Series;

        - Scudder Variable Life Investment Fund (Class A Shares);

        - Janus Aspen Series; and

        - Warburg Pincus Trust.

     The investment objectives of the Portfolios are briefly described below.

PORTFOLIOS OF KEMPER VARIABLE SERIES

     KEMPER AGGRESSIVE GROWTH PORTFOLIO seeks capital appreciation through the
use of aggressive investment techniques.

     KEMPER TECHNOLOGY GROWTH PORTFOLIO seeks growth of capital.

     KEMPER-DREMAN FINANCIAL SERVICES PORTFOLIO seeks long-term capital
appreciation.

     KEMPER SMALL CAP GROWTH PORTFOLIO seeks maximum appreciation of investors=
capital.

     KEMPER SMALL CAP VALUE PORTFOLIO seeks long-term capital appreciation.

     KEMPER-DREMAN HIGH RETURN EQUITY PORTFOLIO seeks to achieve a high rate of
total return.

     KEMPER INTERNATIONAL PORTFOLIO seeks total return, a combination of capital
growth and income, principally through an internationally diversified portfolio
of equity securities.

     KEMPER INTERNATIONAL GROWTH & INCOME PORTFOLIO seeks a long-term growth of
capital and current income, primarily from foreign equity securities.

     KEMPER GLOBAL BLUE CHIP PORTFOLIO seeks long-term growth of capital through
a diversified worldwide portfolio of marketable securities, primarily equity
securities, including common stocks, preferred stocks and debt securities
convertible into common stocks.

     KEMPER GROWTH PORTFOLIO seeks maximum appreciation of capital through
diversification of investment securities having potential for capital
appreciation.

     KEMPER CONTRARIAN VALUE PORTFOLIO seeks to achieve a high rate of total
return.
                                       17
<PAGE>   23

     KEMPER BLUE CHIP PORTFOLIO seeks growth of capital and of income.

     KEMPER VALUE+GROWTH PORTFOLIO seeks growth of capital. A secondary
objective of the Portfolio is the reduction of risk over a full market cycle
compared to a portfolio of only growth stocks or only value stocks.

     KEMPER HORIZON 20+ PORTFOLIO, designed for investors with approximately a
20+ year investment horizon, seeks growth of capital, with income as a secondary
objective.

     KEMPER TOTAL RETURN PORTFOLIO seeks a high total return, a combination of
income and capital appreciation.

     KEMPER HORIZON 10+ PORTFOLIO, designed for investors with approximately a
10+ year investment horizon, seeks a balance between growth of capital and
income, consistent with moderate risk.

     KEMPER HIGH YIELD PORTFOLIO seeks to provide a high level of current
income.

     KEMPER HORIZON 5 PORTFOLIO, designed for investors with approximately a
5-year investment horizon, seeks income consistent with preservation of capital,
with growth of capital as a secondary objective.

     KEMPER GLOBAL INCOME PORTFOLIO seeks to provide high current income
consistent with prudent total return asset management.

     KEMPER INVESTMENT GRADE BOND PORTFOLIO seeks high current income.

     KEMPER GOVERNMENT SECURITIES PORTFOLIO seeks high current return consistent
with preservation of capital.

     KEMPER MONEY MARKET PORTFOLIO seeks maximum current income to the extent
consistent with stability of principal from a portfolio of high quality money
market instruments. This Portfolio seeks to maintain a net asset value of $1.00
per share, but there is no assurance that the Portfolio will be able to do so.

PORTFOLIOS OF SCUDDER VARIABLE LIFE INVESTMENT FUND (CLASS A SHARES)

     SCUDDER VLIF GLOBAL DISCOVERY PORTFOLIO seeks above-average capital
appreciation over the long term by investing primarily in the equity securities
of small companies located throughout the world.

     SCUDDER VLIF GROWTH AND INCOME PORTFOLIO seeks long-term growth of capital,
current income and growth of income from a portfolio consisting primarily of
common stocks and securities convertible into common stocks.

     SCUDDER VLIF INTERNATIONAL PORTFOLIO seeks long-term growth of capital
principally from a diversified portfolio of foreign equity securities.

     SCUDDER VLIF CAPITAL GROWTH PORTFOLIO seeks to maximize long-term capital
growth from a portfolio consisting primarily of equity securities.

PORTFOLIOS OF JANUS ASPEN SERIES

     JANUS ASPEN GROWTH PORTFOLIO seeks long-term growth of capital in a manner
consistent with the preservation of capital.

     JANUS ASPEN GROWTH AND INCOME PORTFOLIO seeks long-term capital growth and
current income.

PORTFOLIOS OF WARBURG PINCUS TRUST

     WARBURG EMERGING MARKETS PORTFOLIO seeks long-term growth of capital by
investing in equity securities of emerging markets.

     WARBURG POST-VENTURE CAPITAL PORTFOLIO seeks long-term growth of capital by
investing primarily in equity securities of issuers in their
post-venture-capital stage of development and pursues an aggressive investment
strategy.

     Not all Subaccounts may be available under your Policy. You should contact
your representative for further information on the availability of the
Subaccounts.

     Scudder Kemper Investments, Inc. ("Scudder Kemper") is the investment
manager for the twenty-two available Portfolios of Kemper Variable Series and
the four available Portfolios of Scudder Variable Life Investment Fund.

     Scudder Investments (U.K.) Limited ("Scudder U.K."), an affiliate of
Scudder Kemper, is the subadviser for the Kemper International Portfolio and the
Kemper Global Income Portfolio. Under the terms of the Sub-

                                       18
<PAGE>   24

Advisory Agreement with Scudder Kemper, Scudder U.K. renders investment advisory
and management services for that portion of this Portfolio's assets that Scudder
Kemper from time to time allocates to Scudder U.K. for management, including
services related to foreign securities, foreign currency transactions, and
related investments.

     Dreman Value Management L.L.C. ("DVM") serves as sub-adviser for the
Kemper-Dreman High Return Equity and Kemper-Dreman Financial Services
Portfolios. Under the terms of the SubAdvisory Agreement between Scudder Kemper
and DVM for each Portfolio, DVM manages the investment and reinvestment of each
Portfolio's assets in accordance with its investment objectives, policies and
limitations and subject to the supervision of Scudder Kemper and the Board of
Trustees.

     Janus Capital Corporation is the investment adviser for the two available
Portfolios of the Janus Aspen Series.

     Warburg Pincus Asset Management, Inc. is the investment adviser for the two
available Portfolios of the Warburg Pincus Trust.

     We do not promise that the Portfolios will meet their investment
objectives. Amounts you have allocated to Subaccounts may grow in value, decline
in value, or grow less than you expect, depending on the investment performance
of the Portfolios in which those Subaccounts invest. You bear the investment
risk that those Portfolios possibly will not meet their investment objectives.
YOU SHOULD CAREFULLY REVIEW THE PORTFOLIOS' PROSPECTUSES BEFORE ALLOCATING
AMOUNTS TO THE SUBACCOUNTS.

     Each Portfolio is subject to certain investment restrictions and policies
which may not be changed without the approval of a majority of the shareholders
of the Portfolio. See the accompanying Prospectuses of the Portfolios for
further information.

     We automatically reinvest all dividends and capital gains distributions
from the Portfolios in shares of the distributing Portfolio at their net asset
value. The income and realized and unrealized gains or losses on the assets of
each Subaccount are separate and are credited to or charged against the
particular Subaccount without regard to income, gains or losses from any other
Subaccount or from any other part of our business. We will use the Premiums you
allocate to a Subaccount to purchase shares in the corresponding Portfolio and
will redeem shares in the Portfolios to meet Policy obligations or make
adjustments in reserves. The Portfolios are required to redeem their shares at
net asset value and to make payment within seven days.

     Some of the Portfolios have been established by investment advisers which
manage publicly traded mutual funds having similar names and investment
objectives. While some of the Portfolios may be similar to, and may in fact be
modeled after publicly traded mutual funds, you should understand that the
Portfolios are not otherwise directly related to any publicly traded mutual
fund. Consequently, the investment performance of publicly traded mutual funds
and any similarly named Portfolio may differ substantially.

     Certain of the Portfolios sell their shares to separate accounts underlying
both variable life insurance and variable annuity policies. It is conceivable
that in the future it may be unfavorable for variable life insurance separate
accounts and variable annuity separate accounts to invest in the same Portfolio.
Although neither we nor any of the Portfolios currently foresees any such
disadvantages either to variable life insurance or variable annuity owners, each
Portfolio's Board of Directors intends to monitor events in order to identify
any material conflicts between variable life and variable annuity owners and to
determine what action, if any, should be taken in response thereto. If a Board
of Directors were to conclude that separate investment funds should be
established for variable life and variable annuity separate accounts, Owners
will not bear the attendant expenses.

VOTING RIGHTS

     As a general matter, you do not have a direct right to vote the shares of
the Portfolios held by the Subaccounts to which you have allocated your Cash
Value. Under current interpretations, however, you are entitled to give us
instructions on how to vote those shares on certain matters. We will notify you
when your instructions are needed and will provide proxy materials or other
information to assist you in understanding the matter at issue. We will
determine the number of votes for which you may give voting instructions as of
the record date set by the relevant Portfolio for the shareholder meeting at
which the vote will occur.

     As a general rule, you are the person entitled to give voting instructions.
However, if you assign your Policy, the assignee may be entitled to give voting
instructions. Retirement plans may have different rules for voting by plan
participants.

     If you send us written voting instructions, we will follow your
instructions in voting the Portfolio shares attributable to your Policy. If you
do not send us written instructions, we will vote the shares attributable to
your Policy in the same proportions as we vote the shares for which we have
received instructions from other Owners.

                                       19
<PAGE>   25

We will vote shares that we hold in the same proportions as we vote the shares
for which we have received instructions from other Owners.

     We may, when required by state insurance regulatory authorities, disregard
Owner voting instructions if the instructions require that the shares be voted
so as to cause a change in the subclassification or investment objective of one
or more of the Portfolios or to approve or disapprove an investment advisory
contract for one or more of the Portfolios.

     In addition, we may disregard voting instructions given by Owners in the
investment objectives or the investment adviser of the Portfolios if we
reasonably disapprove of the proposed change. We would disapprove a proposed
change only if the proposed change is contrary to state law or prohibited by
state regulatory authorities or we reasonably conclude that the proposed change
would not be consistent with the investment objectives of the Portfolio or would
result in the purchase of securities for the Portfolio which vary from the
general quality and nature of investments and investment techniques utilized by
the Portfolio. If we disregard voting instructions, we will include a summary of
that action and our reasons for that action in the next semi-annual financial
report to You.

     This description reflects our view of currently applicable law. If the law
changes or our interpretation of the law changes, we may decide that we are
permitted to vote the Portfolio shares without obtaining instructions from our
Owners, and we may choose to do so.

ADDITIONS, DELETIONS, AND SUBSTITUTIONS OF SECURITIES

     If the shares of any of the Portfolios are no longer available for
investment by the Separate Account or if, in our judgment, further investment in
the shares of a Portfolio is no longer appropriate in view of the purposes of
the Policy, we may add or substitute shares of another Portfolio or mutual fund
for Portfolio shares already purchased or to be purchased in the future by
Premiums under the Policy. Any substitution will comply with the requirements of
the 1940 Act.

     We also reserve the right to make the following changes in the operation of
the Separate Account and the Subaccounts:

          (a) to operate the Separate Account in any form permitted by law;

          (b) to take any action necessary to comply with applicable law or
     obtain and continue any exemption from applicable laws;

          (c) to transfer assets from one Subaccount to another, or from any
     Subaccount to our General Account;

          (d) to add, combine, or remove Subaccounts in the Separate Account;

          (e) to assess a charge for taxes attributable to the operation of the
     Separate Account or for other taxes, as described in "Charges and
     Deductions--Separate Account Charges" on page [28] below; and

          (f) to change the way in which we assess other charges, as long as the
     total other charges do not exceed the maximum guaranteed charges under the
     Policies.

     If we deem it to be in the best interests of persons having voting interest
under the Policies, the Separate Account may be (a) operated as a management
company under the 1940 Act, (b) deregistered under the 1940 Act if such
registration is no longer required; or (c) combined with our other separate
accounts. To the extent permitted by law, we may also transfer assets of the
Separate Account to another separate account, or to our General Account.

     If we take any of these actions, we will comply with the then applicable
legal requirements.

THE FIXED ACCOUNT

     THE PORTION OF THE POLICY RELATING TO THE FIXED ACCOUNT IS NOT REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND THE FIXED ACCOUNT IS NOT REGISTERED AS AN
INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940. ACCORDINGLY,
NEITHER THE FIXED ACCOUNT NOR ANY INTEREST IN THE FIXED ACCOUNT IS SUBJECT TO
THE PROVISIONS OR RESTRICTIONS OF THE 1933 ACT OR THE 1940 ACT, AND THE
DISCLOSURE REGARDING THE FIXED ACCOUNT HAS NOT BEEN REVIEWED BY THE STAFF OF THE
SECURITIES AND EXCHANGE COMMISSION. THE STATEMENTS ABOUT THE FIXED ACCOUNT IN
THIS PROSPECTUS MAY BE SUBJECT TO GENERALLY APPLICABLE PROVISIONS OF THE FEDERAL
SECURITIES LAWS REGARDING ACCURACY AND COMPLETENESS.

                                       20
<PAGE>   26

     You may allocate part or all of your initial Premium to the DCA Fixed
Account, to be transferred subsequently to the Subaccounts under our Dollar Cost
Averaging Program. In addition, we allocate your initial Premium to our Fixed
Account for the period prior to the Issue Date, if you pay all or a portion of
your initial Premium prior to the Issue Date. No other Fixed Account option
currently is available under this Contract. We reserve the right to discontinue
offering or to offer additional Fixed Account options under the Contract, in
accordance with applicable law.

     The interest rate credited to amounts allocated to the Fixed Account,
including the DCA Fixed Account will be shown in your Contract. We may change
the rate credited to new Contracts at any time in our discretion. We set
interest rates in accordance with then current market conditions and other
factors.

     Amounts allocated to the Fixed Account become part of the general account
of KILICO. KILICO invests the assets of the general account in accordance with
applicable laws governing the investments of insurance company general accounts.

     We may delay payment of partial or full withdrawals from the Fixed Account
for up to six months from the date we receive your written withdrawal request.

                           POLICY BENEFITS AND RIGHTS

DEATH BENEFIT

     While your Policy is in force, we will pay the Death Benefit proceeds upon
the death of the Insured or, if your Policy is a Survivorship Policy, upon the
death of the second Insured to die. We will pay the Death Benefit proceeds to
the named Beneficiary(ies) or, if none survives, to contingent Beneficiary(ies).
We will pay the Death Benefit proceeds in a lump sum or apply them under the
Policy's settlement options, which are described in "Settlement Option Payments"
on pages [24-26].

     The Death Benefit proceeds payable to the Beneficiary equal the Death
Benefit, less any Policy Debt and less any due and unpaid charges. We will
determine the amount of the Death Benefit proceeds as of the end of the
Valuation Period following the date of death of the Insured (or second Insured).
We must receive due proof of death within 60 days after the death of an Insured,
or as soon thereafter as reasonably possible. We usually will pay the Death
Benefit proceeds within seven days after we have received all required
documentation. Payment may be postponed in certain circumstances. See
"Postponement of Payments", at page [27].

     The Death Benefit generally is the greater of: (1) the Specified Amount; or
(2) the Cash Value at the date of death multiplied by a factor from the table of
death benefit factors. The death benefit factors in the table reflect the
"corridor percentages" for the guideline premium test under the Tax Code.

     We set the death benefit factors so as to ensure that Policies will qualify
for favorable tax treatment. The death benefit factors vary according to the age
of the Insured. Under this formula, an increase in Cash Value due to favorable
investment experience may increase the Death Benefit above the Specified Amount,
and a decrease in Cash Value due to unfavorable investment experience may reduce
the Death Benefit (but not below the Specified Amount). However, as explained in
"No Lapse Guarantee and Grace Period" and "Termination" at page [26] below, if
your Policy's Net Surrender Value is insufficient to cover a Monthly Deduction
when due, the Death Benefit may be reduced to equal your total Premium payments
(less any prior withdrawals of Premium) or, if you have any outstanding Policy
Debt, your Policy may lapse.

EXAMPLES:

<TABLE>
<CAPTION>
                                                              EXAMPLE A   EXAMPLE B
                                                              ---------   ---------
<S>                                                           <C>         <C>
Specified Amount............................................  $100,000    $100,000
Insured's Age...............................................        60          60
Cash Value on Date of Death.................................  $ 80,000    $ 50,000
Applicable Death Benefit Factors............................       130%        130%
Death Benefit...............................................  $104,000    $100,000
</TABLE>

     In Example A, the Death Benefit equals $104,000, i.e., the greater of
$100,000 (the Specified Amount) and $104,000 (the Cash Value at the Date of
Death of $80,000, multiplied by the corridor percentage of 130%). This amount,
less any Policy Debt and unpaid charges, constitutes the Death Benefit proceeds
that we would pay to the Beneficiary.

                                       21
<PAGE>   27

     In Example B, the Death Benefit is $100,000, i.e., the greater of $100,000
(the Specified Amount) or $65,000 (the Cash Value of $50,000 multiplied by the
corridor percentage of 130%).

     As explained in more detail in "Federal Tax Considerations" beginning on
page [33], we have structured the Policy to satisfy the definition of life
insurance contract under Section 7702 of the Tax Code. As a result, the Death
Benefit ordinarily will be excluded from the gross income of the Beneficiary,
and any growth in the Cash Value of the Policy will not be taxable until
distributed. However, because the Policy generally will be treated as a modified
endowment contract for tax purposes, withdrawals and Policy Debt will be treated
as coming first from any gain under your Policy, and then as a return of
Premium. The income portion of the distribution is includable in your taxable
income. In addition, a ten percent federal penalty tax may apply to the taxable
portion of the distributions received before age 59 1/2. For advice about the
tax consequences of purchasing a Policy or your specific circumstances, please
consult your tax adviser.

ACCELERATED DEATH BENEFIT RIDER

     You may request payment of a portion of the Death Benefit as an Accelerated
Death Benefit if the Insured becomes terminally ill. You generally may request
an Accelerated Death Benefit of up to 50% of existing Death Benefit. In approved
states, the Accelerated Death Benefit Rider will be issued with all Policies at
no extra Premium.

     If you request an Accelerated Death Benefit, the balance of the Death
Benefit (net of the amount previously requested) is payable upon the Insured's
death. You may request an Accelerated Death Benefit only once. Under
Survivorship Policies, the Accelerated Death Benefit may not be requested until
after the death of one of the Insureds.

     In general, the tax treatment of accelerated death benefits [is the same as
the tax treatment of the Death Benefit,] as described in "Federal Tax
Considerations" beginning on page [33]. Please consult your tax adviser for more
information.

POLICY LOANS

     While the Policy is in force, you may borrow money from us using the Policy
as the only security for your loan. Loans have priority over the claims of any
assignee or any other person. You may borrow up to 90% of the Surrender Value of
your Policy as of the end of the Valuation Period in which we receive your loan
request. Any outstanding Policy Debt will count against that limit. Thus, for
example, if the Surrender Value of your Policy was $100,000 and you already had
$50,000 in Policy Debt outstanding, you could borrow an additional $40,000
($100,000 X 90% - $50,000). The minimum loan amount is $1,000. In addition, if
you have named an irrevocable Beneficiary, you must also obtain his or her
written consent before we make a Policy Loan to You.

     YOU MAY REALIZE TAXABLE INCOME WHEN YOU TAKE A POLICY LOAN. In most
instances, a Policy is treated as a "modified endowment contract" for federal
tax purposes. As a result, Policy Loans are treated as withdrawals for tax
purposes, and the amount of the loan equal to any increase in your Cash Value
may be treated as taxable income to You. In addition, you may also incur an
additional ten percent federal penalty tax. You should also be aware that
interest on Policy Loans is generally not deductible. On the other hand,
although a Policy Loan is treated as a withdrawal for tax purposes, it is
treated differently for Policy purposes. For example, under the Policy, a Policy
Loan, unlike a partial withdrawal, does not reduce the Specified Amount.
Accordingly, before you take a Policy Loan, you should consult your tax adviser
and carefully consider the potential impact of a Policy Loan on your rights and
benefits under the Policy.

     While the Policy remains in force, you may repay a Policy Loan in whole or
in part without any penalty at any time while the Insured is living.

     The loan interest rate on all Policy Loans will be 5.50% per year
compounded daily. Interest not paid will be charged on a daily basis and will be
added to the Policy Debt on this Policy and bear interest at the same rate.

     When we make a Policy Loan to You, an amount equal to the Loan will be
transferred from the Subaccounts to the Loan Account until the Loan is repaid.
Unless you instruct us otherwise, the amount of the Loan will be deducted pro
rata from the Subaccounts based on their relative Subaccount Values under your
Policy. As explained in "No Lapse Guarantee and Grace Period" at page [26]
below, if the Policy Debt outstanding under your Policy should ever equal or
exceed the Net Surrender Value, your Policy will enter the grace period and may
terminate if you do not pay sufficient additional Premium. We reserve the right
not permit you to borrow Cash Value derived from Premium paid in the form of a
check or draft for up to 30 days after we deposit that check or draft.

                                       22
<PAGE>   28

     We will credit interest at an annual rate of 5.50% to your Loan Value
attributable to "Preferred Loans". We will classify as "Preferred Loans" the
portion of your total Loan Value equal to the difference between your Policy's
Cash Value minus total Premiums paid (net of all prior withdrawals of Premium).
Your remaining Loan Value will be credited interest at an annual rate of 3.50%.
If you purchase your Policy in exchange for a policy with another insurance
company, we will accept up to 50% of the Cash Value as a rollover loan. We will
treat as a Preferred Loan the portion of the rollover loan equal to the cash
value of your old policy, minus the total premiums paid under your old policy,
plus any withdrawal of premiums under your old policy prior to the exchange.

     A Policy Loan, whether or not repaid, will have a permanent effect on the
Cash Value because the investment results of each Subaccount will apply only to
the amounts remaining in those Subaccounts. The longer a loan is outstanding,
the greater the effect is likely to be. The effect could be favorable or
unfavorable. If the Subaccounts earn more than the annual interest rate for
amounts held in the Loan Account, your Cash Value will not increase as rapidly
as it would if you had not taken a Policy Loan. If the Subaccounts earn less
than that rate, then your Cash Value will be greater than it would have been if
you had not taken a Policy Loan. Also, if you do not repay a Policy Loan, your
Policy Debt will be subtracted from the Death Benefit and Surrender Value
otherwise payable.

AMOUNT PAYABLE ON SURRENDER OF THE POLICY

     While your Policy is in force, you may fully surrender your Policy. Upon
surrender, we will pay you the Net Surrender Value determined as of the day we
receive your written request at our Home Office. Your Policy will terminate on
the day we receive your written request. We may require that you give us your
Policy document before we pay you the surrender proceeds. Before we pay a full
surrender, you must provide us with tax withholding information.

     The Net Surrender Value equals the Cash Value less any applicable
Withdrawal Charge, less any outstanding Policy Debt. We also will deduct the $30
Records Maintenance Charge, if it would otherwise be due at the end of the
current Policy Year. We will determine the Net Surrender Value as of the end of
the Valuation Period during which we received your request for surrender. We
generally will pay you the surrender proceeds of the Policy within seven days of
our receiving your complete written request or on the effective surrender date
you have requested, whichever is later. The determination of the Withdrawal
Charge is described on page [30].

     You may receive the surrender proceeds in a lump sum or under any of the
settlement options described in "Settlement Option Payments" on pages [24-26].
The tax consequences of surrendering the Policy are discussed in "Federal Tax
Considerations," beginning on page [33].

PARTIAL WITHDRAWALS

     You may receive a portion of the Surrender Value of your Policy by making a
partial withdrawal from your Policy. Your request may be by telephone or in
writing. If you request a partial withdrawal by telephone, however, the amount
withdrawn may not exceed our limit, which currently is $10,000; larger requests
must be in writing. All partial withdrawals requested by telephone will be sent
only to the address of record of the Contract owner. Your request, whether
written or telephonic, will be effective on the date we receive it at our Home
Office, provided we receive it before 4:00 p.m. Eastern time. If we are not
provided with tax withholding information, we will withhold taxes from the
amount withdrawn. We reserve the right to change the terms of telephonic
withdrawals, including our limit, at any time.

     When you request a partial withdrawal, we will pay you the amount requested
and subtract the amount requested plus any applicable Withdrawal Charge from
your Cash Value. We may waive the Withdrawal Charge on some or all of your
partial withdrawal. The determination of the Withdrawal Charge is described on
page [30].

     You may specify how much of your partial withdrawal you wish taken from
each Subaccount. The amount requested from a specific Subaccount may not exceed
the value of that option less any applicable Withdrawal Charge. If you do not
specify the option from which you wish to take your partial withdrawal, we will
take it pro rata from the Subaccounts.

     You may take an unlimited number of partial withdrawals each Policy Year.
The minimum withdrawal amount is $100 or the amount that remains in the
Subaccount if less. The minimum balance in the Subaccount after the withdrawal
is $500 unless the total Subaccount Value is withdrawn. If a partial withdrawal
would reduce your Policy's Net Surrender Value below $5,000, we will treat your
request as a request to surrender your Policy.

                                       23
<PAGE>   29

     When you take a partial withdrawal, your Specified Amount will decrease in
proportion to the resulting reduction in Cash Value. We will notify you of the
new Specified Amount. We will not permit a partial withdrawal that would reduce
the Specified Amount below the minimum specified in your Policy.

     Partial withdrawals generally will be subject to income tax and may be
subject to a ten percent federal penalty tax. The tax consequences of partial
withdrawals are discussed in "Federal Tax Considerations" beginning on page
[33].

SYSTEMATIC WITHDRAWALS

     You may enroll in our systematic withdrawal program by sending a completed
enrollment form to our Home Office at the address shown on the first page of
this Prospectus. You may choose between payout schedules of monthly, quarterly,
semiannually or annually. You may specify the amount of the withdrawal, the day
of the month for each scheduled payment, and the Subaccount(s) from which the
withdrawal will be taken. You may start, stop, increase, or decrease payment at
any time. The minimum withdrawal amount is $100.

     We will treat systematic withdrawals in the same way as other partial
withdrawals in applying the Withdrawal Charge. In our discretion we may stop
paying systematic withdrawals if your Cash Value falls below our current
minimum. We reserve the right to modify or suspend the systematic withdrawal
program. In our discretion, any change may apply to existing systematic plans.
Write us at the address shown on the first page of this Prospectus or call us at
(800) 621-5001 for more information about our Systematic Withdrawal Program.

SETTLEMENT OPTION PAYMENTS

     GENERAL. We will pay the Surrender Value or Death Benefit proceeds under
the Policy in a lump sum or under one of the settlement options that we then
offer. The option selected must result in a payment that is at least equal to
our minimum payment, according to our rules, at the time the settlement option
is chosen. If at any time the payments are less than the minimum payment, we
have the right to increase the period between payments to quarterly,
semi-annually, or annually so that the payment is at least equal to the minimum
payment, or to make payment in one lump sum.

     The amount of the payments under a settlement option are based on:

          - the settlement option table specified in the Contract;

          - the selected settlement option; and

          - the investment performance of the selected Subaccount(s) (if
            variable payments are chosen).

     Under each settlement option, you and/or the payee may choose fixed
payments or variable payments or a combination of the two. If fixed payments are
chosen, the payee receives a fixed amount each month determined in accordance
with the settlement option you have chosen. If variable payments are chosen, the
payee receives the value of a fixed number of Annuity Units each month. An
Annuity Unit's value reflects the investment performance of the Subaccount(s)
selected by the payee. The amount of each payment varies accordingly. If you do
not provide instructions, we will initially apply your Separate Account Value to
variable payments and any Fixed Account Value to fixed payments. The payee may
change the Subaccounts or the relative weighting of the Subaccounts on which
variable payments are based, or increase the portion of each payment that is a
fixed payment, subject to certain limitations, as described below under
"Settlement Option Payments--Transfers". BEFORE CHOOSING VARIABLE PAYMENTS, YOU
SHOULD CONSIDER WHETHER THE ALLOCATION OF PROCEEDS AMONG THE SUB-ACCOUNTS FOR
YOUR PERIODIC PAYMENTS IS THE ALTERNATIVE BEST SUITED TO YOUR NEEDS.

     You may request a settlement option by writing to us at our Home Office at
the address given on the first page of this Prospectus before the death of the
Insured. If you change the Beneficiary, the existing choice of settlement option
will become invalid and you may either notify us that you wish to continue the
pre-existing choice of settlement option or select a new one. We will issue a
supplementary contract reflecting the terms of the settlement option chosen. If
payment is made as a Death Benefit distribution, the effective date of the
supplementary agreement will be the date of death. Otherwise, you may choose the
effective date.

     SETTLEMENT OPTIONS. The following settlement options are available under
the Policy:

          OPTION 1--FIXED INSTALLMENT ANNUITY. We will make monthly payments for
     a fixed number of installments. Payments must be made for at least 5 years,
     but not more than 30 years.

          OPTION 2--LIFE ANNUITY. We will make monthly payments while the payee
     is alive. It is possible for the payee to receive only one payment if the
     payee dies before the second payment is due.

                                       24
<PAGE>   30

          OPTION 3--LIFE ANNUITY WITH INSTALLMENTS GUARANTEED. We will make
     monthly payments for a guaranteed period and thereafter while the payee is
     alive. The guaranteed period must be selected at the time the annuity
     option is chosen. The guaranteed periods available are 5, 10, 15, and 20
     years.

          OPTION 4--JOINT AND SURVIVOR ANNUITY. We will pay the full monthly
     income while both payees are alive. Upon the death of either payee, we will
     continue to pay the surviving payee a percentage of the original monthly
     payment. The percentage payable to the surviving payee must be selected at
     the time the annuity option is chosen. The percentages available are 50%,
     66 2/3%, 75%, and 100%. It is possible for the payees to receive only one
     payment if they both die before the second payment is due.

     OTHER OPTIONS. We may make other settlement annuity options available.
Payments are also available on a quarterly, semi-annual or annual basis.

     When the payee dies under Options 1 and 3, we will pay the commuted value
of any unpaid installments in a lump sum to the estate of the payee, unless the
supplementary agreement provides otherwise. We will determine the commuted
amount based upon an interest rate of not less than 2.5%. You may not withdraw
Cash Value once we begin making payments to you under any settlement option
involving payments to the payee for life or any combination of payments for life
and a minimum guaranteed payment period, such as options 2, 3, and 4.

     AMOUNT OF PAYMENT. The amount applied to a settlement option will equal the
Cash Value on the first day preceding the date when the first annuity payment is
due, less any applicable Withdrawal Charge and Records Maintenance Charge. The
remainder will be used to determine the fixed or variable payment in accordance
with the appropriate Settlement Option Table.

     The amount of each fixed payment is determined by multiplying the amount
applied to the settlement option by the appropriate settlement option rate. We
will use a rate at least as high as the rate shown in the appropriate Settlement
Option Table. These tables show the monthly payment for each $1,000 of Cash
Value allocated to fixed payments. The amount of each subsequent fixed payment
does not change regardless of investment, mortality or expense experience.

     The amount of the first variable payment also is determined from the
Settlement Option Tables, based on the Cash Value allocated to variable
payments. Subsequent variable payments are determined by multiplying the number
of Annuity Units in each Subaccount chosen by the payee times the Annuity Unit
Value of each such Subaccount at the Valuation Period before each variable
payment is due. The first variable payment is divided by the Annuity Unit Value
as of the Annuity Date to establish the number of Annuity Units representing
each variable payment. We determine the number of Annuity Units separately for
each Subaccount on which variable payments are based. This number does not
change, unless the payee makes a transfer as described in "Settlement Option
Payments--Transfers" below.

     The guaranteed monthly payments shown in the Settlement Option Tables are
based on an interest rate of 2.50% per year and, where mortality is involved,
the "1983 Table a", an individual mortality table developed by the Society of
Actuaries projected using Projection Scale G. Interest under a settlement option
begins to accrue on the effective date of the supplementary agreement. If the
effective date determined as described above would be the 29th, 30th or 31st day
of a month, the 28th day of that month will be deemed the Effective Date.

     TRANSFERS. While variable payments are being made under a settlement
option, the payee may request, in writing, to change the Subaccounts or the
relative weighting of the Subaccounts on which variable payments are based, or
the relative proportions of variable and fixed payments. These changes may be
effected by transferring Annuity Unit Value from one Subaccount to another or to
fixed payments, or by making transfers from fixed payments to the Subaccounts.
This type of transfer is subject to the following limitations:

          - The payee may make only one transfer during each twelve month period
     beginning on the date of the first settlement payment and each anniversary
     of that date.

          - We must receive the payee's written request at least 30 days before
     the effective date of the transfer.

          - Each transfer must consist of at least $1,000 of Annuity Unit Value
     or annuity reserve value. After the transfer, at least $1,000 of Annuity
     Unit Value or annuity reserve value must remain in the account from which
     the transfer was made, unless the entire amount is transferred.

          - After the transfer, the payee's variable payments may not be based
     on more than three Subaccounts.

     We will execute transfers using values as of the end of the Valuation
Period preceding the effective date of the transfer. Transfers among the
Subaccounts will be effected at the Annuity Unit Value of the relevant
Subaccounts. Transfers from fixed to variable payments and from variable to
fixed payments will be based in part

                                       25
<PAGE>   31

on the present value of the remaining payments under the chosen option, and will
reflect the differences in the interest rates used to calculate fixed and
variable payments. The method for calculating these transfers is described in
more detail in the Policy. We may suspend, change or terminate the transfer
privilege at any time.

     ANNUITY UNIT VALUE. Annuity Unit Value is determined independently for each
Subaccount. Annuity Unit Value for any Valuation Period is:

          - Annuity Unit Value for the immediately preceding Valuation Period;
     times

          - the net investment factor for the current Valuation Period; times

          - an interest factor of .99993235 per calendar day of the current
     Valuation Period in order to offset the effect of the assumed rate of 2.5%
     per year used in the Policy's settlement option tables.

     The net investment factor for a Subaccount for any Valuation Period is:

          (1) the sum of (a) the net asset value per share of the corresponding
     Portfolio at the end of the current Valuation Period plus (b) the per share
     amount of any dividend or capital gains distribution by that Portfolio, if
     the "ex-dividend" date occurs in that Valuation Period; plus or minus (c) a
     credit or charge for any taxes reserved for the current Valuation Period
     which we determine to have resulted from the investment operations of the
     Subaccount; divided by

          (2) is the net asset value per share of the corresponding Portfolio at
     the end of the last prior Valuation Period.

     A 2.5% per annum rate of investment earnings is assumed by the Policy's
Settlement Option tables. Under the formula for determining Annuity Unit Value,
if the actual net investment earnings rate on the selected Subaccounts exceeds
2.5% per annum, variable payments increase accordingly. Conversely, if the
actual earnings rate is less than 2.5% per annum, variable payments decrease.

     ANNUITY RESERVE VALUE. Annuity reserve value is used in calculating
transfers from variable payments to fixed payments. Annuity reserve value
equals:

          (1) the number of annuity units transferred from a Subaccount; times

          (2) the Annuity Unit Value for that Subaccount; times

          (3) the present value of $1.00 per payment period using the attained
     age of the payee(s) and any remaining unpaid guaranteed payments at the
     time of the transfer.

NO LAPSE GUARANTEE AND GRACE PERIOD

     Under our No Lapse Guarantee, we guarantee that your Policy will remain in
force regardless of changes in the Net Surrender Value, provided you have no
outstanding Policy Debt. If the Net Surrender Value of your Policy is less than
the Monthly Deduction for the next month, your Policy will enter the Grace
Period. The Grace Period lasts 61 days. If the Insured dies during the Grace
Period, the Death Benefit will be the amount determined as described in "Death
Benefit" on pages [21-22], less any due and unpaid Monthly Deduction or other
charge.

     During the Grace Period, you may pay additional Premium or loan repayment
without evidence of insurability to keep your Policy in force. Your payment must
equal at least three Monthly Deductions. No payment is required, however. This
Grace Period will begin on the day we mail notice of the Grace Period to your
last known address.

     If the No Lapse Guarantee is in effect under your Policy and you do not pay
sufficient additional Premium or loan repayment, your Policy will remain in
force, but the amount paid upon death of the Insured after the Grace Period will
be limited to the return of Premium paid (less any prior withdrawals of
Premium). You may restore the Specified Amount, however, by complying with the
reinstatement provisions. The No Lapse Guarantee applies to your Contract
unless: (a) you paid 90% of the Guideline Single Premium for your Policy or (b)
your Policy has outstanding Policy Debt.

     If the No Lapse Guarantee does not apply to your Policy and the Net
Surrender Value of your Policy is less than the Monthly Deduction for the next
month, your Policy also will enter the Grace Period, as described above.
However, if you do not make the required payment, your coverage will terminate
at the end of the Grace Period. You may reinstate your coverage by complying
with the reinstatement provisions.

                                       26
<PAGE>   32

TERMINATION

     The Policy will terminate and life insurance coverage will end when one of
the following events first occurs:

          (a) you surrender your Policy;

          (b) the Insured dies or, for Survivorship Policies, the Surviving
     Insured dies;

          (c) the Policy matures; or

          (d) the Grace Period ends and there is Policy Debt outstanding.

MATURITY BENEFIT AND EXTENDED MATURITY

     In certain states, if the Insured is still living and your Policy is in
force on the Maturity Date, we will pay you a Maturity Benefit. The Maturity
Benefit will equal the Net Surrender Value on the Maturity Date. The Maturity
Date is the Policy Anniversary after the Insured's 100th birthday.

     In states where approved, the Extended Maturity Rider will be issued with
all Policies at no extra Premium. This rider maintains life insurance benefits
beyond the Maturity Date. The Death Benefit after the Maturity Date is the
greater of the Specified Amount or the Cash Value. After the Maturity Date, we
will not charge the cost of insurance charge or the mortality and expense risk
charge. We will, however, continue to charge other charges under your Policy.

     This rider is effective only if the Net Surrender Value at age 100 equals
at least 30% of the initial Specified Amount. Otherwise, notwithstanding this
Rider, the Policy will terminate on the Maturity Date. All other riders still
active end at age 100. The tax treatment of the Maturity Benefit and the
Maturity Extension rider is discussed in "Treatment of Maturity Benefits and
Extension of Maturity Date" on page 36.

REINSTATEMENT

     If your coverage has been reduced pursuant to our No Lapse Guarantee or has
lapsed due to insufficient Cash Value (see "No Lapse Guarantee and Grace Period"
on page 26 above, you may reinstate coverage by complying with the conditions
described below. After reinstatement, your Policy will be in force and the
minimum Death Benefit will equal the Specified Amount in effect before your
coverage was reduced or lapsed. To reinstate your Policy, you must apply to us
within three years of the end of the most recent Grace Period and meet the
following conditions:

          (1) Provide evidence of insurability satisfactory to us;

          (2) Pay the unpaid Monthly Deductions due during the expired Grace
     Period;

          (3) Pay at least sufficient additional Premium to keep your Policy in
     force for three months; and

          (4) Pay or reinstate any Policy Debt that existed at the date of
     lapse.

     The effective date of reinstatement of a Policy will be the Deduction Day
that coincides with or next follows the date on which we approve your
application for reinstatement. You may not reinstate a Policy that has been
surrendered. Under Survivorship Policies, if one of the Lives Insured dies
during the lapse, upon payment of the reinstatement Premium the Policy will be
reissued as a single life permanent policy.

     The suicide and incontestability provisions will apply from the effective
date of reinstatement.

CANCELLATION (FREE-LOOK PERIOD)

     In many states, you may cancel your Policy by returning it to us within ten
days after you receive it. In some states, however, this free look period may be
longer, as provided by state law. If you return your Policy, the Policy
terminates and we will pay you your Cash Value or, in some states, an amount
equal to your Premium, (less any Policy Debt). We will pay the refund within
seven days of receiving your request. No Withdrawal Charge is imposed upon
return of a Policy within the free look period. This free look right may vary in
certain states in order to comply with the requirements of state insurance laws
and regulations. Accordingly, you should refer to your Policy for specific
information about your circumstances.

                                       27
<PAGE>   33

POSTPONEMENT OF PAYMENTS

     We may defer for up to fifteen days the payment of any amount attributable
to a Premium paid by check to allow the check a reasonable time to clear. We
ordinarily will pay any amount attributable to Separate Account Value within
seven days, except:

          (1) whenever the New York Stock Exchange ("NYSE") is closed (other
     than customary weekend and holiday closings);

          (2) when trading on the NYSE is restricted or an emergency exists, as
     determined by the SEC, so that disposal of the Separate Account's
     investments or determination of the value of its net assets is not
     reasonable practicable; or

          (3) at any other time permitted by the SEC for your protection.

                             CHARGES AND DEDUCTIONS

     We assess charges and deductions under the Policies against the Subaccounts
and the Cash Value. Additional deductions and expenses are paid out of the
Portfolios' assets, as described in the Prospectuses of the Portfolios.

SEPARATE ACCOUNT CHARGES

     MORTALITY AND EXPENSE RISK CHARGE. On each Valuation Date, we will deduct a
charge from each Subaccount at an annual rate of 0.90% of average daily net
assets for mortality and expense risks we assume.

     The mortality risk assumed in relation to the Policy includes the risk that
the cost of insurance charges specified in the Policy will be insufficient to
meet claims and the risks under the No Lapse Guarantee. We also assume a risk
that, on the Deduction Day preceding the death of an Insured, the Death Benefit
will exceed the amount on which the cost of insurance charges were based. The
expense risk assumed is that expenses incurred in issuing and administering the
Policies will exceed the Administration Charges set in the Policy.

     RESERVE FOR TAXES. We currently are not maintaining a provision for taxes
attributable to the operations of the Separate Account (as opposed to the
federal tax related to the receipt of Premiums under the Policies). In the
future, however, we may make such a charge. Charges for other taxes, if any,
attributable to the Separate Account or to this class of Policies may also be
made.

MONTHLY DEDUCTION

     On the Effective Date and on each monthly Deduction Day we will take a
Monthly Deduction from your Cash Value. The Monthly Deduction equals the sum of
the following:

          (1) The monthly cost of insurance charge for the Policy; plus

          (2) The monthly charge for any riders; plus

          (3) The Administration Charge; plus

          (4) The Tax Charge.

     On each Policy Anniversary, we also will deduct the Records Maintenance
Charge, if your Policy's Cash Value was less than $50,000 on the previous Policy
Anniversary.

     COST OF INSURANCE CHARGE. The cost of insurance charge is intended to pay
for the cost of providing life insurance coverage for the Insured(s). The
current cost of insurance charge differs based on whether you paid 90% or 100%
of the Guideline Single Premium at issue. We guarantee that this charge will not
exceed the maximum cost of insurance charge determined on the basis of the rates
shown in the mortality table guaranteed in the Policy. If your initial Premium
exceeds $500,000, your cost of insurance charge may be lower.

     The current monthly cost of insurance charge is the lesser of:

          (a) the applicable current asset-based cost of insurance rate times
     the Cash Value on the Deduction Day; or

          (b) the applicable guaranteed cost of insurance rate multiplied by the
     net amount at risk on the Deduction Day.

                                       28
<PAGE>   34

     If your initial Premium is no greater than $500,000 and you paid 100% of
the Guideline Single Premium, our current asset-based cost of insurance rate for
the Single Life Policies for the Standard Rating Class (NS) is 0.55% annually of
Cash Value for Policy Years 1-10, and 0.25% annually of Cash Value thereafter.
Our current asset-based cost of insurance rate for Second to Die Policies, when
both Insureds are in the Standard Rating Class (NS), is 0.45% annually of Cash
Value for Policy Years 1-10, and 0.20% annually of Cash Value thereafter.

     If your initial Premium is greater than $500,000 and you paid 100% of the
Guideline Single Premium, our current asset-based cost of insurance rate for the
Single Life Policies for the Standard Rating Class (NS) is 0.25% annually of
Cash Value for Policy Years 1-10, and 0.10% annually of Cash Value thereafter.
Our current asset-based cost of insurance rate for Second to Die Policies, when
both Insureds are in the Standard Rating Class (NS), is 0.20% annually of Cash
Value for Policy Years 1-10, and 0.10% annually of Cash Value thereafter.

     If you paid 90% of the Guideline Single Premium, your current cost of
insurance rates will be higher. In addition, rates for other classes may differ
based on the type of Policy and the history of tobacco use of the Insured(s).
Your guaranteed cost of insurance rates are set forth in the mortality tables in
your Policy. The net amount at risk is (a)-(b), where:

          (a) is the Death Benefit on the first day of the Policy Month; and

          (b) the Cash Value on that day before the deduction of the Monthly
     Deduction for the Cost of Insurance.

     Because your Cash Value and the net amount for which we are at risk under
your Policy may vary monthly, your cost of insurance charge is likely to differ
each month. In general, under these formulas, when your current monthly cost of
insurance charge is determined using the asset-based rate, an increase in your
Cash Value increases your current monthly cost of insurance charge, up to the
guaranteed maximum cost of insurance charge determined as described above. Since
that maximum charge is based on the net amount at risk, it declines as your Cash
Value increases, unless an increase in Cash Value also would increase the Death
Benefit under your Policy. Thus, if the asset-based charge would be higher than
the guaranteed maximum charge, further increases in your Cash Value may reduce
your current cost of insurance charge.

     The cost of insurance charge covers our anticipated mortality costs for
standard and substandard risks. We determine the current cost of insurance rates
based on our expectations as to our future mortality experience and other
factors. We guarantee, however, that we will never charge you a cost of
insurance charge higher than the amount determined using the maximum guaranteed
cost of insurance rates shown in the Policy. We base our cost of insurance rates
on the sex, issue age, Policy Year, rating class, and history of tobacco use of
the Insured. However, we issue unisex policies in Montana. Our cost of insurance
rates are based on the 1980 Commissioners Standard Ordinary ("1980 CSO")
Mortality Table based on the Insured's sex, age last birthday, and history of
tobacco use. Our cost of insurance rates for unisex Policies will never exceed a
maximum based on the 1980 CSO Table B assuming a blend of 80% male and 20%
female lives.

     TAX CHARGE. For the first ten Policy Years, on each Deduction Day, we
charge a Tax Charge equal to an annual rate of 0.40% of the average monthly Cash
Value. The Tax Charge covers a portion of our state premium tax expenses and
certain Federal income tax liability incurred as a result of the receipt of
Premium.

     We expect to recover total premium tax expenses over the life of the
Policies from the aggregate Tax Charges and the unamortized state premium tax
charge portion of the Withdrawal Charge. However, the amount of premium taxes
differ from state to state and some states have no premium tax. Accordingly, the
amount of these charges paid under your Policy may be more or less than the
premium taxes that we actually pay with respect to your Policy.

     ADMINISTRATION CHARGE. On each Deduction Day we will deduct the
Administration Charge from Cash Value. This charge will equal an annual rate of
0.35% of average monthly Cash Value for the first ten Policy Years and 0.25%
thereafter. This charge is intended to compensate us for certain administrative
expenses related to the maintenance of the Policies, accounting and
recordkeeping, and provide a reporting to Policy owners.

     RECORDS MAINTENANCE CHARGE. We charge a Records Maintenance Charge of
$30.00 per year on each Policy Anniversary. If you surrender your Policy during
a Policy Year, we will deduct the full Records Maintenance Charge from your
surrender proceeds. The Records Maintenance Charge is intended to compensate us
for administrative expenses such as salaries, postage, telephone, office
equipment and periodic reports. We currently waive the Records Maintenance
Charge on a Policy, if the Cash Value is at least $50,000 on the previous Policy
Anniversary.

                                       29
<PAGE>   35

PORTFOLIO EXPENSES

     You indirectly bear the charges and expenses of the Portfolios whose shares
are held by the Subaccounts to which you allocate your Cash Value. The Separate
Account purchases shares of the Portfolios at net asset value. Each Portfolio's
net asset value reflects investment advisory fees and administrative expenses
already deducted from the Portfolio's assets. For a summary of current estimates
of these charges and expenses, see pages [12-13] above. For more information
concerning the investment advisory fees and other charges against the
Portfolios, see the Prospectuses for the Portfolios, which are available upon
request.

     We may receive compensation from the investment advisers or administrators
of the Portfolios. Such compensation will be consistent with the services we
provide or the cost savings resulting from the arrangement and therefore may
differ between Portfolios.

WITHDRAWAL CHARGE

     If you surrender your Policy during the first nine Policy Years, we may
subtract a Withdrawal Charge from the proceeds. The Withdrawal Charge will be
calculated at the rate shown below. If you surrender your Policy, the Withdrawal
Charge will equal a percentage of your initial Premium net of all previous
withdrawal amounts on which you paid a Withdrawal Charge. The Withdrawal Charge
consists of two components: a surrender charge and an unamortized state premium
tax charge.

     The rate used to determine the Withdrawal Charge depends on the year the
withdrawal is made. The Withdrawal Charge declines to zero percent after the
ninth Policy Year. The Withdrawal Charge is assessed at the following rates:

<TABLE>
<CAPTION>
      COMPLETE                              UNAMORTIZED
    POLICY YEARS                            PREMIUM TAX    TOTAL WITHDRAWAL
 ELAPSED SINCE ISSUE    SURRENDER CHARGE      CHARGE            CHARGE
 -------------------    ----------------    -----------    ----------------
<S>                     <C>                 <C>            <C>
          1                   7.75%            2.25%            10.00%
          2                   7.75%            2.00%             9.75%
          3                   7.50%            1.75%             9.25%
          4                   6.50%            1.50%             8.00%
          5                   5.75%            1.25%             7.00%
          6                   5.00%            1.00%             6.00%
          7                   4.25%             .75%             5.00%
          8                   3.50%             .50%             4.00%
          9                   2.75%             .25%             3.00%
          9+                     0%            0.00%             0.00%
</TABLE>

     We may also charge a Withdrawal Charge on partial withdrawals. The
Withdrawal Charge will apply to any partial withdrawal in a given Policy Year in
excess of the free withdrawal amount described below.

     Additional Premiums do not increase the amount of Withdrawal Charge you may
be required to pay. Only your initial Premium is used in our formula for
calculating Withdrawal Charges.

     The Withdrawal Charge is imposed to cover a portion of our actual premium
tax expenses and sales expenses, which include agents' sales commissions and
other sales and distribution expenses. The Unamortized Premium Tax Charge,
together with a portion of the monthly Tax Charge, is intended to recover our
state premium tax expenses. We also expect to recover total sales expenses of
the Policies over the life of the Policies. However, to the extent distribution
costs are not recovered by the Withdrawal Charge, we may make up any shortfall
from the assets of our General Account, which includes funds derived from the
Mortality and Expense Risk Charge and other fees and charges under the Policies.

FREE WITHDRAWAL AMOUNT AND WAIVER OF WITHDRAWAL CHARGE

     The free withdrawal amount in a Policy Year equals the greater of:

          (a) 100% of Policy earnings not previously withdrawn; or

          (b) 10% of the Cash Value, less any prior free withdrawals since the
     beginning of that Policy Year.

     NURSING CARE WAIVER OF WITHDRAWAL CHARGE. We will waive the Withdrawal
Charge if the Insured is confined to a skilled health care facility for at least
30 consecutive days. We also will waive the Withdrawal

                                       30
<PAGE>   36

Charge after you have been released from the facility, if your request is made
within 30 days of release. This waiver is described in more detail in the
Policy.

     DISABILITY WAIVER. We will waive the Withdrawal Charge if the Insured
becomes disabled after the Policy is issued and before attaining age 65
according to the following Social Security Administration definition:

        Inability to engage in any substantial gainful activity by reason of any
        medically determinable physical or mental impairment which can be
        expected to result in death or which has lasted or can be expected to
        last for a continuous period of not less than 12 months.

     This waiver is described in more detail in the Policy.

TRANSFER FEE

     The Policy permits us to charge a transfer fee of $25 per transfer,
excluding transfers under our Automatic Dollar Cost Averaging and Automatic
Asset Rebalancing Programs, on each transfer after the first twelve transfers in
each Policy Year. We currently do not charge a transfer fee on any transfer. We
reserve the right to begin to charge the transfer fee in the future.

REDUCTION OF CHARGES

     We may reduce certain charges and credit additional amounts in special
circumstances that result in lower sales, administrative, or mortality expenses.
For example, special circumstances may exist in connection with group or
sponsored arrangements, sales to our Policy owners, sales to employees or
clients of members of the Kemper group of companies, or employees and registered
representatives (and their families) of broker-dealers (or their affiliated
financial institutions) that have entered into selling group agreements with
Investors Brokerage Services, Inc., the distributor of the Policies. The amounts
of any reductions will reflect the reduced sales effort and administrative costs
resulting from, or the different mortality experience expected as a result of,
the special circumstances. Reductions will not unfairly discriminate against any
person, including the affected Policy owners and owners of all other policies
funded by the Separate Account.

                           GENERAL POLICY PROVISIONS

REPORTS TO OWNERS

     We will maintain all records relating to the Separate Account and the
Subaccounts. At least annually we will send you a report which will include
information such as Premiums received, interest credited, investment experience,
and charges made since the last report. The report will also show the current
Death Benefit and Cash Value, as well as any other information required by
statute. If you ask us, we will send you an additional report at any time. We
may charge you up to $25 for this additional report. We will tell you the
current charge before we send you the report.

     In addition, we will send you the financial statements of the Portfolios
and other reports as specified in the Investment Company Act of 1940, as
amended. We also will mail you confirmation notices or other appropriate notices
of Policy transactions quarterly or more frequently within the time periods
specified by law. Please give us prompt written notice of any address change.
Please read your statements and confirmations carefully and verify their
accuracy and contact us promptly with any question.

LIMIT ON RIGHT TO CONTEST

     In the absence of fraud, we may not contest the insurance coverage under
the Policy after the Policy has been in force for two years after the Effective
Date while the Insured is alive. The two year incontestability period may vary
in certain states to comply with the requirements of state insurance laws and
regulations.

     If the Policy is reinstated, a new two year contestability period will
apply from the effective date of the reinstatement and will apply only to
statements made in the application for the reinstatement.

     In issuing a Policy, we rely on your application. Your statements in that
application, in the absence of fraud, are considered representations and not
warranties. In the absence of fraud, we will not use any statement made in
connection with the Policy application to void the Policy or to deny a claim,
unless that statement is a part of the application or an amendment thereto.

                                       31
<PAGE>   37

SUICIDE

     If the Insured under a Single Life Policy dies by suicide, while sane or
insane, within two years from the Effective Date, the Death Benefit proceeds
will be limited to the Premiums paid less any partial withdrawals and Policy
Debt.

     If the Insured dies by suicide, while sane or insane, within two years of
any reinstatement, our total liability with respect to such reinstatement will
be the cost of insurance.

     If the first death under a Survivorship Policy is by suicide, within two
years of the Effective Date or date of reinstatement, whether the Insured was
sane or insane, we will reissue the Policy. The new Policy on the survivor will
be a single life permanent Policy which is available at the time of reissue. The
suicide provision for the new Policy will be effective as of the original
Effective Date.

     If the second death is by suicide, within two years from the Effective
Date, whether the Insured is sane or insane, we will pay only the Premiums paid
less any partial withdrawals and Policy Debt. If the second death occurs within
two years after the date of reinstatement, our total liability with respect to
such reinstatement will be the cost of insurance since the date of
reinstatement.

MISSTATEMENT AS TO AGE AND SEX

     If the age or sex of the Insured is incorrectly stated in the application,
the Death Benefit and all Policy values will be adjusted based on what the
initial Premium would have purchased using the correct age and/or sex.

BENEFICIARY

     You name the original Beneficiary(ies) and Contingent Beneficiary(ies) in
the application for the Policy. You may change the Beneficiary or Contingent
Beneficiary at any time while the Insured is alive, except irrevocable
Beneficiaries and irrevocable Contingent Beneficiaries may not be changed
without their consent.

     You must request a change of Beneficiary in writing. We will provide a form
to be signed and filed with us. Your request for a change in Beneficiary or
Contingent Beneficiary will take effect as of the date you signed the form after
we acknowledge receipt in writing. Until we acknowledge receipt of your change
instructions, we are entitled to rely on your most recent instructions in our
files. Accordingly, we are not liable for making a payment to the person shown
in our files as the Beneficiary or treating that person in any other respect as
the Beneficiary, even if instructions that we subsequently receive from you seek
to change your Beneficiaries effective as of a date before we made the payment
or took the action in question.

     If you name more than one Beneficiary, we will divide the Death Benefit
among your Beneficiaries according to your most recent written instructions. If
you have not given us written instructions, we will pay the Death Benefit in
equal shares to the Beneficiaries. If one of the Beneficiaries dies before You,
we will divide the Death Benefit among the surviving Beneficiaries. If no
Beneficiary is living, the Contingent Beneficiary will be the Beneficiary. The
interest of any revocable Beneficiary is subject to the interest of any
assignee. If no Beneficiary or Contingent Beneficiary is living, the Beneficiary
is the Owner or the Owner's estate.

ASSIGNMENT

     While the Insured is alive, you may assign your Policy as collateral
security. You must notify us in writing if you assign the Policy. Until we
receive notice from You, we are not liable for any action we may take or
payments we may make that may be contrary to the terms of your assignment. We
are not responsible for the validity of an assignment. Your rights and the
rights of the Beneficiary may be affected by an assignment. An assignment may
result in income tax and a ten percent federal penalty tax. You should consult
your tax adviser before assigning your Policy.

CREDITOR'S CLAIMS

     To the extent permitted by law, no benefits payable under this Policy will
be subject to the claims of your or the Beneficiary's creditors.

DIVIDENDS

     We will not pay any dividend under the Policy.

                                       32
<PAGE>   38

NOTICE AND ELECTIONS

     To be effective, all notices and elections under the Policy must be in
writing, signed by You, and received by us at our Home Office. Certain
exceptions may apply. Unless otherwise provided in the Policy, all notices,
requests and elections will be effective when received at our Home Office
complete with all necessary information.

MODIFICATION

     We reserve the right to modify the Policy without your express consent, in
the circumstances described in this Prospectus or as necessary to conform to
applicable law or regulation or any ruling issued by a governmental agency. The
provisions of the Policy will be construed so as to comply with the requirements
of Section 7702 of the Tax Code.

SURVIVORSHIP POLICIES

     We offer Policies on a single life and "last survivor" basis. The
Survivorship Policy operates almost identically to the Single Life Policy. The
primary difference is that the Survivorship Policy has two Insureds and the
Death Benefit is paid only upon the death of the last surviving Insured. Other
significant differences are:

          (1) the cost of insurance charge differs because we base it on the
     anticipated mortality of two Insureds and we do not pay the Death Benefit
     until both Insureds have died;

          (2) for a Survivorship Policy to qualify for simplified underwriting,
     both Insureds must meet our standards;

          (3) under a Survivorship Policy, provisions regarding
     incontestability, suicide, and misstatements of age or sex apply to each
     Insured; and

          (4) the Accelerated Death Benefit is only available upon the Terminal
     Illness of the surviving Insured, as this term is defined in the Policy.

                           FEDERAL TAX CONSIDERATIONS

     NOTE: The following discussion is based upon our understanding of current
federal income tax law applicable to life insurance policies in general. We
cannot predict the probability that any changes in those laws will be made.
Also, we do not guarantee the tax status of the Policies. You bear the complete
risk that the Policies may not be treated as "life insurance policies" under
federal income tax laws.

     In addition, this discussion does not include a detailed description of the
federal income tax consequences of the purchase of these Policies or any
discussion of special tax rules that may apply to certain purchase situations.
We also have not tried to consider any other possibly applicable state or other
tax laws, for example, the estate tax consequences of the Policies. You should
seek tax advice concerning the effect on your personal tax liability of the
transactions permitted under the Policy, as well as any other questions you may
have concerning the tax status of the Policy or the possibility of changes in
the tax law.

TAXATION OF KILICO AND THE SEPARATE ACCOUNT

     KILICO is taxed as a life insurance company under Subchapter L of the Tax
Code. The operations of the Separate Account are taxed as part of the operations
of KILICO. Investment income and realized capital gains are not taxed to the
extent that they are applied under the Policies.

     Accordingly, we do not anticipate that KILICO will incur any federal income
tax liability attributable to the operation of the Separate Account (as opposed
to the federal tax related to the receipt of Premiums under the Policies).
Therefore, we are not making any charge or provision for federal income taxes.
However, if the tax treatment of the Separate Account is changed, we may charge
the Separate Account for its share of the resulting federal income tax.

     In several states we may incur state and local taxes on the operations of
the Separate Account. We currently are not making any charge or provision for
them against the Separate Account. We do, however, use part of the Policy
charges to offset these taxes. If these taxes should be increased, we may make a
charge or provision for them against the Subaccounts. If we do so, the
investment results of the Subaccounts will be reduced.

                                       33
<PAGE>   39

TAX STATUS OF THE POLICY

     The Policy is structured to satisfy the definition of a life insurance
policy under the Tax Code. As a result, the Death Benefit ordinarily will be
fully excluded from the gross income of the Beneficiary. The Death Benefit will
be included in your gross estate for federal estate tax purposes if the proceeds
are payable to your estate. The Death Benefit will also be included in your
estate, if the Beneficiary is not your estate but you retained incidents of
ownership in the Policy. Examples of incidents of ownership include the right to
change Beneficiaries, to assign the Policy or revoke an assignment, and to
pledge the Policy or obtain a Policy Loan. If you own and are the Insured under
a Policy and if you transfer all incidents of ownership in the Policy more than
three years before your death, the Death Benefit will not be included in your
gross estate. State and local estate and inheritance tax consequences may also
apply.

     In addition, certain transfers of the Policy or Death Benefit, either
during life or at death, to individuals (or trusts for the benefit of
individuals) two or more generations below that of the transferor may be subject
to the federal generation-skipping transfer tax.

     In addition, you may use the Policy in various arrangements, including
non-qualified deferred compensation or salary continuance plans, split dollar
insurance plans, executive bonus plans, retiree medical benefit plans and
others. The tax consequences of such plans may vary depending on the particular
facts and circumstances of each individual arrangement. Therefore, if you are
contemplating the use of a Policy in any arrangement the value of which depends
in part on its tax consequences, you should be sure to consult a qualified tax
adviser regarding the tax treatment of the proposed arrangement.

     DIVERSIFICATION REQUIREMENTS. Section 817(h) of the Tax Code requires that
the underlying assets of variable life insurance policies be diversified. The
Tax Code provides that a variable life insurance policy will not be treated as a
life insurance policy for federal income tax purposes for any period and any
subsequent period for which the investments are not adequately diversified. If
the Policy were disqualified for this reason, you would lose the tax deferral
advantages of the Policy and would be subject to current federal income taxes on
all earnings allocable to the Policy.

     The United States Treasury Department (the "Treasury Department") also has
issued regulations that establish diversification requirements for the
investment accounts underlying variable policies such as the Policies. These
regulations amplify the diversification requirements set forth in the Tax Code
and provide an alternative diversification test to the provision described
above.

     These diversification standards are applied to each Subaccount by looking
to the investments of the Portfolio underlying the Subaccount. One of our
criteria in selecting the Portfolios is that their investment managers intend to
manage them in compliance with these diversification requirements.

     OWNER CONTROL. In certain circumstances, variable life insurance owners
will be considered the Owners, for tax purposes, of separate account assets
underlying their Policies. In those circumstances, the Owners could be subject
to taxation on the income and gains from the separate account assets.

     In published rulings, the Internal Revenue Service has stated that a
variable insurance Owner will be considered the owner of separate account
assets, if the Owner possesses incidents of ownership in those assets, such as
the ability to exercise investment control over the assets. When the
diversification regulations were issued, the Treasury Department announced that
in the future, it would provide guidance on the extent to which variable Owners
could direct their investments among Subaccounts without being treated as Owners
of the underlying assets of the Separate Account. As of the date of this
Prospectus, no such guidance has been issued. We cannot predict when or whether
the Treasury Department will issue that guidance or what position the Treasury
Department will take. In addition, although regulations are generally issued
with prospective effect, it is possible that regulations may be issued with
retroactive effect.

     The ownership rights under the Policy are similar in many respects to those
described in IRS rulings in which the owners were not deemed to own the separate
account assets. In some respects, however, they differ. For example, under the
Policy you have many more investment options to choose from than were available
under the policies involved in the published rulings, and you may be able to
transfer Cash Value among the investment options more frequently than in the
published rulings. Because of these differences, it is possible that you could
be treated as the owner, for tax purposes, of the Portfolio shares underlying
your Policy and therefore subject to taxation on the income and gains on those
shares. Moreover, it is possible that the Treasury Department's position, when
announced, may adversely affect the tax treatment of existing Policies. We
therefore reserve the right to modify the Policy as necessary to attempt to
prevent you from being considered the owner for tax purposes of the underlying
assets. The remainder of this discussion assumes that the Policy will be treated
as a life insurance policy for federal tax purposes.

                                       34
<PAGE>   40

TAX TREATMENT OF LIFE INSURANCE DEATH BENEFIT PROCEEDS

     In general, the amount of the Death Benefit payable under a Policy is
excludable from gross income under the Tax Code. Certain transfers of the
Policy, however, may result in a portion of the Death Benefit being taxable.

     If the Death Benefit is not received in a lump sum and is, instead, applied
under one of the settlement options, payments generally will be prorated between
amounts attributable to the Death Benefit, which will be excludable from the
Beneficiary's income, and amounts attributable to interest (occurring after the
insured's death), which will be includable in the beneficiary's income.

     ACCELERATED DEATH BENEFIT. In general, the tax treatment of an Accelerated
Death Benefit is the same as the treatment of Death Benefits, as described
above.

TAX DEFERRAL DURING ACCUMULATION PERIOD

     Under existing provisions of the Tax Code, except as described below, any
increase in your Cash Value is generally not taxable to you unless you receive
or are deemed to receive amounts from the Policy before the Insured dies. If you
surrender your Policy, the Cash Value (less any Annual Records Maintenance
Charge paid upon surrender) will be includable in your income to the extent the
amount received exceeds the "investment in the policy." The "investment in the
policy" generally is the total Premiums and other consideration paid for the
Policy, less the aggregate amount received under the Policy previously to the
extent such amounts received were excludable from gross income. Whether partial
withdrawals (or other amounts deemed to be distributed) from the Policy
constitute income depends, in part, upon whether the Policy is considered a
"modified endowment contract" ("MEC") for federal income tax purposes.

POLICIES WHICH ARE MECS

     CHARACTERIZATION OF A POLICY AS A MEC. In general, this Policy will
constitute a MEC unless (1) it was received in exchange for another life
insurance policy which was not a MEC, (2) no Premiums or other consideration
(other than the exchanged policy) are paid into the Policy during the first 7
Policy Years, and (3) there is no withdrawal or reduction in the Death Benefit
during the first 7 Policy Years. In addition, even if the Policy initially is
not a MEC, it may, in certain circumstances, become a MEC if there is a later
increase in benefits or any other "material change" of the Policy within the
meaning of the tax law.

     TAX TREATMENT OF WITHDRAWALS, LOANS, ASSIGNMENTS AND PLEDGES UNDER
MECS. Because your Policy is a MEC, withdrawals from your Policy will be treated
first as withdrawals of income and then as a recovery of Premiums. Thus, you may
realize taxable income upon a withdrawal if the Cash Value exceeds the
investment in the Policy. You may also realize taxable income when you take a
Policy Loan, because any loan (including unpaid loan interest) under the Policy
will be treated as a withdrawal for tax purposes. In addition, if you assign or
pledge any portion of the value of your Policy (or agree to assign or pledge any
portion), the assigned or pledged portion of your Cash Value will be treated as
a withdrawal for tax purposes. Before assigning, pledging, or requesting a loan
under a Policy which is a MEC, you should consult a qualified tax adviser.

     PENALTY TAX. Generally, withdrawals (or the amount of any deemed
withdrawals) from a MEC are subject to a federal penalty tax equal to ten
percent of the portion of the withdrawal that is includable in income, unless
the withdrawals are made: (1) after you reach age 59 1/2, (2) because you have
become disabled (as defined in the tax law), or (3) as substantially equal
periodic payments over your life or life expectancy (or the joint lives or life
expectancies of you and your beneficiary, as defined in the tax law). Certain
other exceptions to the ten percent federal penalty tax may apply.

     Payments under our systematic withdrawal program possibly may not qualify
for the exception from federal penalty tax for "substantially equal periodic
payments" which is described above. Accordingly, this Policy may be
inappropriate for Owners who expect to take substantially equal periodic
payments prior to age 59 1/2. You should consult a qualified tax adviser before
entering into a systematic withdrawal plan.

     AGGREGATION OF POLICIES. All life insurance policies which are MECs and
which are purchased by the same person from us or any of our affiliates within
the same calendar year will be aggregated and treated as one policy for purposes
of determining the amount of a withdrawal (including a deemed withdrawal) that
is includable in taxable income.

POLICIES WHICH ARE NOT MECS

     TAX TREATMENT OF WITHDRAWALS GENERALLY. If your Policy is not a MEC, the
amount of any withdrawal from the Policy will be treated first as a non-taxable
recovery of premiums and then as income from the Policy. Thus,

                                       35
<PAGE>   41

only the portion of a withdrawal that exceeds the investment in the Policy
immediately before the withdrawal will be includable in taxable income.

     TAX TREATMENT OF LOANS. If your Policy is not a MEC, a loan received under
the Policy generally will be treated as indebtedness for tax purposes, rather
than a withdrawal of Cash Value. As a result, you will not realize taxable
income on any part of the loan as long as the Policy remains in force. If you
surrender your Policy, however, any outstanding loan balance will be treated as
an amount received by you as part of the Surrender Value. Accordingly, you may
be subject to taxation on the loan amount at that time. Moreover, if any portion
of your Policy Loan is a preferred loan, a portion of your Policy Loan may be
includable in your taxable income. Generally, you may not deduct interest paid
on loans under the Policy, even if you use the loan proceeds in your trade or
business.

SURVIVORSHIP POLICIES

     Although we believe that the Policy, when issued as a Survivorship Policy,
meets the definition of life insurance policy under the Tax Code, the Tax Code
does not directly address how it applies to Survivorship Policies. In the
absence of final regulations or other guidance under the Tax Code regarding this
form of Policy, there is necessarily some uncertainty whether a Survivorship
Policy will meet the Tax Code's definition of a life insurance policy. If you
are considering purchasing a Survivorship Policy, you should consult a qualified
tax adviser.

     If the Owner is the last surviving Insured, the Death Benefit proceeds will
generally be includable in the Owner's estate on his or her death for purposes
of the federal estate tax. If the Owner dies and was not the last surviving
Insured, the fair market value of the Policy may be included in the Owner's
estate. In general, the Death Benefit proceeds are not included in the last
surviving Insured's estate if he or she neither retained incidents of ownership
at death nor had given up ownership within three years before death.

TREATMENT OF MATURITY BENEFITS AND EXTENSION OF MATURITY DATE

     If your Policy does not have an Extended Maturity Rider, at the Maturity
Date, we pay the Net Surrender Value to You. Generally, the excess of the Cash
Value (less any applicable Records Maintenance Charge) over your investment in
the Policy will be includable in your taxable income at that time. If your
Policy has an Extended Maturity Rider, we believe the Policy will continue to
qualify as life insurance under the Tax Code. However, there is some uncertainty
regarding this treatment. It is possible, therefore, that you would be viewed as
constructively receiving the Surrender Value in the year in which the Insured
attains age 100 and would realize taxable income at that time, even if the
Policy proceeds were not distributed at that time.

ACTIONS TO ENSURE COMPLIANCE WITH THE TAX LAW

     We believe that the maximum amount of Premiums we intend to permit for the
Policies will comply with the Tax Code definition of a life insurance policy. We
will monitor the amount of your Premiums, and, if your total Premiums during a
Policy Year exceed those permitted by the Tax Code, [we will refund the excess
Premiums within 60 days of the end of the Policy Year and will pay interest and
other earnings (which will be includable in taxable income) as required by law
on the amount refunded.] We reserve the right to increase the Death Benefit
(which may result in larger charges under a Policy) or to take any other action
deemed necessary to ensure the compliance of the Policy with the federal tax
definition of a life insurance contract.

FEDERAL INCOME TAX WITHHOLDING

     We will withhold and remit to the federal government a part of the taxable
portion of withdrawals made under a Policy, unless the Owner notifies us in
writing at or before the time of the withdrawal that he or she chooses not to
have withholding. As Owner, you will be responsible for the payment of any taxes
and early distribution penalties that may be due on the amounts received under
the Policy, whether or not you choose withholding. You may also be required to
pay penalties under the estimated tax rules, if your withholding and estimated
tax payments are insufficient to satisfy your total tax liability.

TAX ADVICE

     This summary is not a complete discussion of the tax treatment of the
Policy. You should seek tax advice from an attorney who specializes in tax
issues.

                                       36
<PAGE>   42

                             DESCRIPTION OF KILICO
                            AND THE SEPARATE ACCOUNT

KILICO

     KILICO, 1 Kemper Drive, Long Grove, Illinois 60049, was organized in 1947
and is a stock life insurance company organized under the laws of the State of
Illinois. KILICO is a wholly-owned subsidiary of Kemper Corporation, a
nonoperating holding company. Kemper Corporation is a majority-owned (76.4%)
subsidiary of Zurich Holding Company of America ("ZHCA"), which is a
wholly-owned subsidiary of Zurich Insurance Company ("Zurich"). Zurich is a
wholly-owned subsidiary of Zurich Financial Services ("ZFS"). ZFS was formed in
the September 1998 merger of the Zurich Group with the financial services
business of B.A.T. Industries. ZFS is owned by Zurich Allied A.G. and Allied
Zurich P.L.C., fifty-seven percent and forty-three percent, respectively. KILICO
offers life insurance and annuity products and is admitted to do business in the
District of Columbia and all states except New York.

     KILICO also acts as a sponsor for [identify other separate accounts]. The
officers and employees of KILICO are covered by a fidelity bond in the amount of
$[          ].

OFFICERS AND DIRECTORS OF KILICO

     Our directors and officers are listed below, together with information as
to their dates of election and principal business occupations during the past
five or more years (if other than their present occupation). Where no dates are
given, the person has held that position for at least the past five years.

<TABLE>
<CAPTION>
            NAME AND AGE
        POSITION WITH KILICO
          YEAR OF ELECTION                OTHER BUSINESS EXPERIENCE DURING PAST 5 YEARS OR MORE
        --------------------              -----------------------------------------------------
<S>                                    <C>
John B. Scott (54)                     Chief Executive Officer, President and Director of Federal
Chief Executive Officer since          Kemper Life Assurance Company (FKLA) and Fidelity Life
February 1992. President since         Association (FLA) since 1988. Chief Executive Officer,
November 1993. Director since 1992.    President and Director of Zurich Life Insurance Company of
                                       America (ZLICA) and Zurich Direct, Inc. (ZD) since March
                                       1996. Chairman of the Board and Director of Investors
                                       Brokerage Services, Inc. (IBS) and Investors Brokerage
                                       Services Insurance Agency, Inc. (IBSIA) since 1993. Chairman
                                       of the Board of FKLA and FLA from April 1988 to January
                                       1996. Chairman of the Board of KILICO from February 1992 to
                                       January 1996. Executive Vice President and Director of
                                       Kemper Corporation (Kemper) since January 1994 and March
                                       1996, respectively. Executive Vice President of Kemper
                                       Financial Companies, Inc. from January 1994 to January 1996
                                       and Director from 1992 to January 1996.

Eliane C. Frye (51)                    Executive Vice President of FKLA and FLA since 1995.
Executive Vice President since 1995.   Executive Vice President of ZLICA and ZD since March 1996.
Director since May 1998.               Director of FLA since December 1997. Director of FKLA and
                                       ZLICA since May 1998. Director of ZD from March 1996 to
                                       March 1997. Director of IBS and IBSIA since 1995. Senior
                                       Vice President of KILICO, FKLA and FLA from 1993 to 1995.
                                       Vice President of FKLA and FLA from 1988 to 1993.

Frederick L. Blackmon (47)             Senior Vice President and Chief Financial Officer of FKLA
Senior Vice President and Chief        since December 1995. Senior Vice President and Chief
Financial Officer since December       Financial Officer of FLA since January 1996. Senior Vice
1995.                                  President and Chief Financial Officer of ZLICA since March
                                       1996. Senior Vice President and Chief Financial Officer of
                                       ZD since March 1996. Director of FLA since May 1998.
                                       Director of ZD from March 1996 to March 1997. Treasurer and
                                       Chief Financial Officer of Kemper since January 1996. Chief
                                       Financial Officer of Alexander Hamilton Life Insurance
                                       Company from April 1989 to November 1995.

James C. Harkensee (40)                Senior Vice President of FKLA and FLA since January 1996.
Senior Vice President since January    Senior Vice President of ZLICA since 1995. Senior Vice
1996.                                  President of ZD since 1995. Director of ZD from April 1993
                                       to March 1997 and since March 1998. Vice President of ZLICA
                                       from 1992 to 1995. Chief Actuary of ZLICA from 1991 to 1994.
                                       Assistant Vice President of ZLICA from 1990 to 1992. Vice
                                       President of ZD from 1994 to 1995.
</TABLE>

                                       37
<PAGE>   43

<TABLE>
<CAPTION>
            NAME AND AGE
        POSITION WITH KILICO
          YEAR OF ELECTION                OTHER BUSINESS EXPERIENCE DURING PAST 5 YEARS OR MORE
        --------------------              -----------------------------------------------------
<S>                                    <C>
James E. Hohmann (43)                  Senior Vice President of FKLA since December 1995. Chief
Senior Vice President since December   Actuary of FKLA and KILICO from December 1995 to January
1995. Director since May 1998.         1999. Senior Vice President of FLA since January 1996. Chief
                                       Actuary of FLA from January 1996 to January 1999. Senior
                                       Vice President of ZLICA and ZD since March 1996. Chief
                                       Actuary of ZLICA and ZD from March 1996 to January 1999.
                                       Director of FLA since June 1997. Director of FKLA and ZLICA
                                       since May 1998. Director of ZD from March 1996 to March
                                       1997. Managing Principal (Partner) of Tillinghast-Towers
                                       Perrin from January 1991 to December 1995.
                                       Consultant/Principal (Partner) of Tillinghast-Towers Perrin
                                       from November 1986 to January 1991.

Edward K. Loughridge (44)              Senior Vice President and Corporate Development Officer of
Senior Vice President and Corporate    FKLA and FLA since January 1996. Senior Vice President and
Development Officer since January      Corporate Development Officer for ZLICA and ZD since March
1996.                                  1996. Senior Vice President of Human Resources of
                                       Zurich-American Insurance Group from February 1992 to March
                                       1996.

Debra P. Rezabek (43)                  Senior Vice President of FKLA and FLA since March 1996.
Senior Vice President since 1996.      Corporate Secretary of FKLA and FLA since January 1996.
General Counsel since 1992. Corporate  Director of FLA since May 1998. Vice President of KILICO,
Secretary since January 1996.          FKLA and FLA since 1995. General Counsel and Director of
                                       Government Affairs of FKLA and FLA since 1992 and of KILICO
                                       since 1993. Senior Vice President, General Counsel and
                                       Corporate Secretary of ZLICA since March 1996. Senior Vice
                                       President, General Counsel and Corporate Secretary of ZD
                                       since March 1996. Director of ZD from March 1996 to March
                                       1997. Secretary of IBS and IBSIA since 1993. Director of IBS
                                       and IBSIA from 1993 to 1996. Assistant General Counsel of
                                       FKLA and FLA from 1988 to 1992. General Counsel and
                                       Assistant Secretary of KILICO, FKLA and FLA from 1992 to
                                       1996. Assistant Secretary of Kemper since January 1996.

Kenneth M. Sapp (53)                   Senior Vice President of FKLA, FLA and ZLICA since January
Senior Vice President since January    1998. Director of IBS since May 1998. Director of IBSIA
1998.                                  since September 1998. Vice President--Aetna Life Brokerage
                                       of Aetna Life & Annuity Company from February 1992 to
                                       January 1998.

George Vlaisavljevich (56)             Senior Vice President of FKLA, FLA and ZLICA since October
Senior Vice President since October    1996. Senior Vice President of ZD since March 1997. Director
1996.                                  of IBS and IBSIA since October 1996. Executive Vice
                                       President of The Copeland Companies from April 1983 to
                                       September 1996.

Loren J. Alter (60)                    Director of FKLA, FLA and Scudder Kemper Investments, Inc.
Director since January 1996.           (SKI) since January 1996. Director of ZLICA since May 1979.
                                       Executive Vice President and Chief Financial Officer of
                                       Zurich U.S. since 1979. President, Chief Executive Officer
                                       and Director of Kemper since January 1996.
</TABLE>

                                       38
<PAGE>   44

<TABLE>
<CAPTION>
            NAME AND AGE
        POSITION WITH KILICO
          YEAR OF ELECTION                OTHER BUSINESS EXPERIENCE DURING PAST 5 YEARS OR MORE
        --------------------              -----------------------------------------------------
<S>                                    <C>
William H. Bolinder (55)               Chairman of the Board and Director of FKLA and FLA since
Chairman of the Board and Director     January 1996. Chairman of the Board of ZLICA and ZD since
since January 1996.                    March 1995. Chairman of the Board and Director of Kemper
                                       since January 1996. Director of SKI since January 1996. Vice
                                       Chairman of SKI from January 1996 to 1998. Member of the
                                       Group Executive Board of Zurich Financial Services Group
                                       since 1998. Member of the Corporate Executive Board of
                                       Zurich Insurance Group from October 1994 to 1998. Chairman
                                       of Zurich American Insurance Company since 1998. Chairman of
                                       the Board of American Guarantee and Liability Insurance
                                       Company, Zurich American Insurance Company of Illinois,
                                       American Zurich Insurance Company and Steadfast Insurance
                                       Company since 1995. Chief Executive Officer of American
                                       Guarantee and Liability Insurance Company, Zurich American
                                       Insurance Company of Illinois and American Zurich Insurance
                                       Company from 1986 to June 1995. President of Zurich Holding
                                       Company of America since 1986. Manager of Zurich Insurance
                                       Company, U.S. Branch from 1986 to 1998. Underwriter for
                                       Zurich American Lloyds since 1986.

David A. Bowers (52)                   Director of FKLA and ZLICA since May 1997. Director of FLA
Director since May 1997.               since June 1997. Executive Vice President, Corporate
                                       Secretary and General Counsel of Zurich U.S. since August
                                       1985. Vice President, General Counsel and Secretary of
                                       Kemper since January 1996.

Gunther Gose (54)                      Director of FKLA, FLA and ZLICA since November 1998. Chief
Director since November 1998.          Financial Officer and Member of the Group Executive Board of
                                       Zurich Financial Services since October 1998. Member of the
                                       Corporate Executive Board of Zurich Insurance Group from
                                       April 1990 to October 1998.
</TABLE>

     The business address of each of the foregoing officers and directors is 1
Kemper Drive, Long Grove, Illinois 60049.

SEPARATE ACCOUNT

     KILICO Variable Separate Account was established on January 22, 1987, as a
separate investment account under the laws of Illinois. The Separate Account
receives and invests Premiums under the Policy. The Separate Account is
registered with the SEC as a unit investment trust under the Investment Company
Act of 1940. The SEC does not supervise the management, investment practices or
policies of the Separate Account or KILICO.

     Benefits provided under the Policies are our obligations. Although the
assets in the Separate Account are our property, they are held separately from
our other assets and are not chargeable with liabilities arising out of any
other business we may conduct. Income, capital gains and capital losses, whether
or not realized, from the assets allocated to the Separate Account are credited
to or charged against the Separate Account without regard to the income, capital
gains and capital losses arising out of any other business we may conduct.

     Thirty-one Subaccounts of the Separate Account are currently available.
Each Subaccount invests exclusively in shares of one of the corresponding
Portfolios. We may add or delete Subaccounts in the future.

     The Separate Account purchases and redeems shares from the Portfolios at
net asset value. We redeem shares of the Portfolios as necessary to provide
benefits, to deduct Policy charges and to transfer assets from one Subaccount to
another as requested by Policy owners. All dividends and capital gains
distributions received by the Separate Account from a Portfolio are reinvested
in that Portfolio at net asset value and retained as assets of the corresponding
Subaccount.

SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS

     We hold the assets of the Separate Account. We keep those assets physically
segregated and held separate and apart from our General Account assets. We
maintain records of all purchases and redemptions of shares of the Portfolios.

                                       39
<PAGE>   45

STATE REGULATION OF KILICO

     We are subject to the laws of Illinois and regulated by the Illinois
Division of Insurance. Every year we file an annual statement with the Division
of Insurance covering our operations for the previous year and our financial
condition as of the end of the year. We are inspected periodically by the
Division of Insurance to verify our Policy liabilities and reserves. We also are
examined periodically by the National Association of Insurance Commissioners.
Our books and records are subject to review by the Division of Insurance at all
times. We are also subject to regulation under the insurance laws of every
jurisdiction in which we operate.

                               YEAR 2000 MATTERS

     Many existing computer programs were originally designed without
considering the impact of the year 2000 and currently use only two digits to
identify the year in the date field. This issue affects nearly all companies and
organizations and could cause computer applications and systems to fail or
create erroneous results for any transaction with a date of January 1, 2000, or
later.

     Many companies must undertake major projects to address the year 2000
issue. Each company's costs and uncertainties will depend on a number of
factors, including its software and hardware, and the nature of the industry.
Companies must also coordinate with other entities with which they
electronically interact, including suppliers, customers, creditors and other
financial services institutions.

     If a company does not successfully address its year 2000 issues, it could
face material adverse consequences in the form of lawsuits against the company,
lost business, erroneous results and substantial operating problems after
January 1, 2000.

     We have taken substantial steps over the last several years to ensure that
our systems will be compliant for the year 2000. Such steps have included the
replacement of older systems with new systems which are already compliant. In
1996, we replaced our investment accounting system, and, in 1997, we replaced
our general ledger and accounts payable system. We have also ensured that new
systems developed to support new product introductions in 1997, 1998 and beyond
are already year 2000 compliant. Data processing expenses related solely to
bringing our systems in compliance with the year 2000 amounted to $1.3 million
in 1998. We anticipate that it will cost an additional $662,000 to bring all
remaining systems into compliance.

     Our policy administration systems have been completely renovated to be year
2000 compliant and are currently running in a test environment. Approximately 75
percent of our ancillary systems confirmed to be year 2000 compliant were in
production at December 31, 1998. We anticipate that all such systems will be in
production at April 30, 1999 or sooner. Testing procedures have confirmed the
performance, functionality, and integration of converted or replaced platforms,
applications, databases, utilities, and interfaces in an operational
environment. Our testing and verification for year 2000 compliance has
encompassed the following:

          - mainframe computing systems;

          - mainframe hardware and systems software;

          - PC/LAN computing systems;

          - PC/LAN hardware and systems software;

          - end-user computing systems;

          - interfaces to and from third parties; and

          - other miscellaneous electronic non-information systems.

     We have also taken steps requiring all other entities with which we
electronically interact, including suppliers and other financial services
institutions, to attest to us in writing that their systems are year 2000
compliant.

     If we do not successfully address our year 2000 issues, we could face
material adverse consequences from lawsuits, lost business, erroneous results
and substantial operating problems after January 1, 2000. Although we fully
expect to be year 2000 compliant by the close of 1999, we are currently
developing contingency plans to handle the most reasonably likely worst case
scenarios. These contingency plans are scheduled for completion in the third
quarter of 1999.

                                       40
<PAGE>   46

                            DISTRIBUTION OF POLICIES

     Investors Brokerage Services, Inc. ("IBS") serves as distributor of the
Policies. IBS is located at 1 Kemper Drive, Long Grove, Illinois 60010. IBS is
our wholly-owned subsidiary. It is registered as a broker-dealer under the
Securities Exchange Act of 1934 (the "1934 Act"), and is a member of the
National Association of Securities Dealers, Inc.

     The Policies described in this Prospectus are sold by registered
representatives of broker-dealers or bank employees who are licensed insurance
agents appointed by the Company, either individually or through an incorporated
insurance agency. IBS enters into selling agreements with the unaffiliated
broker-dealers and banks whose personnel participate in the offer and sale of
the Policies. In some states, the Policies may be sold by representatives or
employees of banks which may be acting as broker-dealers without separate
registration under the 1934 Act, pursuant to legal and regulatory exceptions.

     The maximum sales compensation payable by the Company is not more than the
equivalent of 7.5% percent of each Premium. Trail Commissions of up to 1.0% of
Cash Value may also be paid where a lower commission rate applies to Premiums.
In addition, we may pay or permit other promotional incentives, in cash, or
credit or other compensation. We also may pay asset-based expense allowances and
service fees.

     The distribution agreement with IBS provides for indemnification of IBS by
KILICO and the Separate Account for liability arising out of allegedly untrue
statements in, or omissions of material fact from, the prospectus or the
Registration Statement. IBS agrees to indemnify KILICO and the Separate Account
against claims arising from the conduct of IBS or unaffiliated broker-dealers
that sell Policies.

     The name and position of each officer and director of IBS as of May 1,
1999, are as follows:

<TABLE>
<S>                                                            <C>
John B. Scott...............................................   Chairman and Director
Otis R. Heldman, Jr.........................................   President and Director
Michael A. Kelly............................................   Vice President
David S. Jorgensen..........................................   Vice President and Treasurer
Debra P. Rezabek............................................   Secretary
Frank J. Julian.............................................   Assistant Secretary
Kenneth M. Sapp.............................................   Director
Eliane C. Frye..............................................   Director
George Vlaisavljevich.......................................   Director
</TABLE>

                               LEGAL PROCEEDINGS

     There are no pending legal proceedings affecting the Separate Account.
KILICO is engaged in routine law suits which, in our management's judgment, are
not of material importance to its total assets or material with respect to the
Separate Account.

                                 LEGAL MATTERS

     All matters of Illinois law pertaining to the Policy, including the
validity of the Policy and our right to issue the Policy under Illinois law,
have been passed upon by Frank Julian, Esq., our Associate General Counsel. The
law firm of Jorden Burt Boros Cicchetti Berenson & Johnson, 1025 Thomas
Jefferson St., Suite 400, East Lobby, Washington, D.C. 20007-5201, serve as
special counsel to KILICO with regard to the federal securities laws.

                             REGISTRATION STATEMENT

     We have filed a registration statement with the SEC, Washington, D.C.,
under the Securities Act of 1933 as amended, with respect to the Policies
offered by this Prospectus. This Prospectus does not contain all the information
set forth in the registration statement and the exhibits filed as part of the
registration statement. You should refer to the registration statement and the
exhibits for further information concerning the Separate Account, KILICO, and
the Policies. The descriptions in this Prospectus of the Policies and other
legal instruments are summaries. You should refer to those instruments as filed
for their precise terms.

                                       41
<PAGE>   47

                                    EXPERTS

     The consolidated balance sheets of KILICO as of December 31, 1998 and 1997
and the related consolidated statements of operations, comprehensive income,
stockholder's equity, and cash flows for the years ended December 31, 1998 and
1997 have been included herein and in the registration statement in reliance
upon the report of PricewaterhouseCoopers LLP, independent public accountants,
appearing elsewhere herein, and upon the authority of said firm as experts in
accounting and auditing. The consolidated statements of operations,
comprehensive income, stockholder's equity, and cash flows of KILICO and
subsidiaries for the period from January 4, 1996 to December 31, 1996 and the
financial statement schedules as of December 31, 1996 have been included herein
and in the registration statement in reliance upon the report of KPMG LLP,
independent certified public accountants, appearing elsewhere herein, and upon
the authority of said firm as experts in accounting and auditing.

     The statements of assets and liabilities and policy owners' equity of the
Separate Account as of December 31, 1998 and the related statements of
operations for the year then ended and the statements of changes in policy
owners' equity for the year then ended and for each of the period presented has
been included herein in reliance upon the report of PricewaterhouseCoopers LLP,
independent certified public accountants, appearing elsewhere herein, and upon
the authority of said firm as experts in accounting and auditing.

     Actuarial matters included in this prospectus have been examined by Steven
D. Powell, FSA, as stated in the opinion filed as an exhibit to the Registration
Statement.

                              FINANCIAL STATEMENTS
                    [TO BE FILED BY PRE-EFFECTIVE AMENDMENT]

     The included financial statements of the Separate Account do not reflect
any assets attributable to the Policy, because we did not sell the Policy during
the period covered by those financial statements. The included financial
statements for KILICO only bear on our ability to meet our obligations under the
Policy. They do not relate to the investment performance of the assets held in
the Separate Account.

                             CHANGE OF ACCOUNTANTS

     On September 12, 1997, KILICO appointed PricewaterhouseCoopers LLP
("PricewaterhouseCoopers"), formerly Coopers & Lybrand, L.L.P., as independent
accountants for the year ended December 31, 1997 to replace KPMG LLP effective
with such appointment. Our Board of Directors approved their selection as the
new independent accountants. Management had not consulted with
PricewaterhouseCoopers on any accounting, auditing or reporting matter, prior to
that time.

     During the fiscal year ended December 31, 1996, there were no disagreements
with KPMG LLP on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure or any reportable events.
KPMG LLP's report on the financial statements for 1996 contained no adverse
opinion or disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles.

     There were no disagreements with PricewaterhouseCoopers on accounting or
financial disclosures for the years ended December 31, 1998 or 1997.

                                       42
<PAGE>   48

                           PART II--OTHER INFORMATION

                          UNDERTAKING TO FILE REPORTS

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

                     REPRESENTATION AS TO FEES AND CHARGES

     KILICO hereby represents that the fees and charges deducted under the
Modified Single Premium Variable Universal Life Insurance Policies hereby
registered by this Registration Statement in the aggregate are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by KILICO.

                    REPRESENTATION PURSUANT TO RULE 6E-3(T)

     This filing is made pursuant to Rule 6e-3(T) under the Investment Company
Act of 1940, as amended (the "1940 Act").

                       UNDERTAKING AS TO INDEMNIFICATION

     Pursuant to the Distribution Agreement filed as Exhibit 1-A(3)(a) to this
Registration Statement, KILICO and the Separate Account will agree to indemnify
Investors Brokerage Services, Inc. ("IBS") against any claims, liabilities and
expenses which IBS may incur under the Securities Act of 1933, common law or
otherwise, arising out of or based upon any alleged untrue statements of
material fact contained in any registration statement or prospectus of the
Separate Account, or any omission to state a material fact therein, the omission
of which makes any statement contained therein misleading. IBS will agree to
indemnify KILICO and the Separate Account against any and all claims, demands,
liabilities and expenses which KILICO or the Separate Account may incur, arising
out of or based upon any act or deed of IBS or of any registered representatives
of an NASD member investment dealer which has an agreement with IBS and is
acting in accordance with KILICO's instructions.

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

                                      II-1
<PAGE>   49

                       CONTENTS OF REGISTRATION STATEMENT

     This Registration Statement comprises the following Papers and Documents:

            The Facing sheet.

            Reconciliation and tie between items in N-8B-2 and Prospectus.

            Prospectus consisting of      pages.

            The undertaking to file reports.

            Undertaking as to indemnification pursuant to Rule 484(b)(1) under
     the Securities Act of 1933.

               Representation Regarding Fees and Charges Pursuant to Section 26
               of the Investment Company Act of 1940.

            The signatures.

            Written consents of the following persons:

            A. Frank J. Julian, Esq. (included in Opinion filed as Exhibit
               3(a)).

            B. PricewaterhouseCoopers LLP, independent accountants (to be filed
               as Exhibit 6(a)).

            C. KPMG LLP, Independent Auditors (to be filed as Exhibit 6(b)).

            D. Steven D. Powell, FSA (included in Opinion to be filed as Exhibit
               3(b)(I)).

            The following exhibits:

<TABLE>
          <S>                           <C>
           (1) 1-A(1)                   KILICO Resolution establishing the Separate Account
           (2) 1-A(3)(a)                Distribution Agreement between KILICO and Investors Brokerage
                                        Services, Inc. (IBS)
           (3) 1-A(3)(b)                Specimen Selling Group Agreement of IBS
            1-A(3)(c)                   Schedules of commissions (to be filed by pre-effective amendment)
           (3) 1-A(3)(d)                General Agent Agreement
            1-A(5)(a)                   Form of Individual Policy
            1-A(5)(b)                   Form of Survivorship Policy
            1-A(5)(c)                   Accelerated Death Benefit Rider (to be filed by pre-effective amend-
                                        ment)
            1-A(5)(c)                   Extended Maturity Rider (to be filed by pre-effective amendment)
            1-A(5)(d)                   Nursing Care Waiver of Withdrawal Charge Rider (to be filed by
                                        pre-effective amendment)
            1-A(5)(e)                   Disability Waiver Rider (to be filed by pre-effective amendment)
           (1) 1-A(6)(a)                KILICO Articles of Incorporation
           (3) 1-A(6)(b)                By-Laws of KILICO
           (4) 1-A(8)(a)                Participation Agreement between KILICO and Scudder Variable Life
                                        Investment Fund
           (4) 1-A(8)(b)                Participating Contract and Policy Agreement between KILICO and Scudder
                                        Kemper Investments, Inc.
           (4) 1-A(8)(c)                Indemnification Agreement between KILICO and Scudder Kemper
                                        Investments, Inc.
           (5) 1-A(8)(d)                Fund Participation Agreement among KILICO, Janus Aspen Series and
                                        Janus Capital Corporation
           (6) 1-A(8)(e)                Service Agreement between KILICO and Janus Capital Corporation
           (7) 1-A(8)(f)                Participation Agreement By and Among KILICO and Warburg, Pincus Trust
                                        and Warburg Pincus Asset Management Inc. (f/k/a Warburg, Pincus
                                        Counsellors, Inc.) and Counsellors Securities, Inc.
           (8) 1-A(8)(g)                Service Agreement between Warburg Pincus Asset Management Inc. (f/k/a
                                        Warburg, Pincus Counsellors, Inc.) and Federal Kemper Life Assurance
                                        Company and KILICO
</TABLE>

                                      II-2
<PAGE>   50
<TABLE>
          <S>                           <C>
           (7) 1-A(8)(h)                Fund Participation Agreement among KILICO, Investors Fund Series
                                        (formerly known as Kemper Investors Fund), Zurich Kemper Investments,
                                        Inc. and Kemper Distributors, Inc.
             1-A(10)                    Application for Policy (to be filed by pre-effective amendment)
           (2) 2                        Specimen Notice of Withdrawal Right
            3(a)                        Opinion and consent of legal officer of KILICO as to legality of
                                        policies being registered (to be filed by pre-effective amendment)
            3(b)                        Opinion and consent of actuarial officer of KILICO regarding
                                        illustrations and actuarial matters (to be filed by pre-effective
                                        amendment)
            6(a)                        Consents of PricewaterhouseCoopers LLP, independent accountants (to be
                                        filed by pre-effective amendment)
            6(b)                        Consent of KPMG LLP, independent auditors (to be filed by pre-
                                        effective amendment)
            8                           Procedures Memorandum, pursuant to Rule 6e-3(T)(b)(12)(iii) (to be
                                        filed by pre-effective amendment)
            9                           Illustrations
</TABLE>

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

(1) Incorporated by reference to the Registration Statement of the Registrant on
    Form S-6 filed on or about December 26, 1995 (File No. 33-65399).

(2) Incorporated by reference to Pre-Effective Amendment No. 1 to the
    Registration Statement of the Registrant on Form S-6 filed on or about June
    5, 1996 (File No. 33-65399).

(3) Incorporated by reference to Amendment No. 2 to the Registration Statement
    of KILICO on Form S-1 (File No. 333-02491) filed on or about April 23, 1997.

(4) Incorporated by reference to Amendment No. 5 to the Registration Statement
    of KILICO on Form S-1 filed on or about April 20, 1999 (File No. 333-22389).

(5) Incorporated by reference to Post-Effective Amendment No. 23 to the
    Registration Statement of KILICO Variable Annuity Separate Account on Form
    N-4 filed on or about September 14, 1995 (File No. 2-72671).

(6) Incorporated by reference to Post-Effective Amendment No. 25 to the
    Registration Statement of KILICO Variable Annuity Separate Account on Form
    N-4 filed on or about April 28, 1997 (File No. 2-72671).

(7) Incorporated by reference to Amendment No. 3 to the Registration Statement
    of KILICO on Form S-1 filed on or about April 8, 1998 (File No. 333-22389).

(8) Incorporated by reference to Post-Effective Amendment No. 4 to the
    Registration Statement of FKLA Variable Separate Account on Form S-6 filed
    on or about April 30, 1997 (File No. 33-79808).

                                      II-3
<PAGE>   51

                                   SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the Registrant,
KILICO Variable Separate Account, has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Long Grove and State of Illinois on the 27th day of May, 1999.

                                          KILICO VARIABLE SEPARATE ACCOUNT
                                          (Registrant)

                                          By: Kemper Investors Life Insurance
                                              Company
                                            (Depositor)

                                          By:       /s/ JOHN B. SCOTT
                                            ------------------------------------
                                            John B. Scott, Chief Executive
                                              Officer
                                            and President

     Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following directors and
principal officers of Kemper Investors Life Insurance Company in the capacities
indicated on the 27th day of May, 1999:

<TABLE>
<CAPTION>
                       SIGNATURE                                         TITLE
                       ---------                                         -----
<S>                                                         <C>                                <C>
/s/ JOHN B. SCOTT                                           Chief Executive Officer, President and Director
- --------------------------------------------------------    (Principal Executive Officer)
John B. Scott

/s/ W. H. BOLINDER                                          Chairman of the Board and Director
- --------------------------------------------------------
William H. Bolinder

/s/ FREDERICK L. BLACKMON                                   Senior Vice President and Chief Financial
- --------------------------------------------------------    Officer (Principal Financial Officer and
Frederick L. Blackmon                                       Principal Accounting Officer)

/s/ LOREN J. ALTER                                          Director
- --------------------------------------------------------
Loren J. Alter

/s/ DAVID A. BOWERS                                         Director
- --------------------------------------------------------
David A. Bowers

/s/ ELIANE C. FRYE                                          Director
- --------------------------------------------------------
Eliane C. Frye

/s/ GUNTHER GOSE                                            Director
- --------------------------------------------------------
Gunther Gose

/s/ JAMES E. HOHMANN                                        Director
- --------------------------------------------------------
James E. Hohmann
</TABLE>

                                      II-4
<PAGE>   52

                                  EXHIBIT LIST

<TABLE>
<S>          <C>
1.A(5)(A)    Form of Individual Policy
1.A(5)(B)    Form of Survivorship Policy
9            Illustrations
</TABLE>

                                      II-5

<PAGE>   1
                                                               Exhibit 1.A(5)(a)


KEMPER INVESTORS LIFE INSURANCE COMPANY                     [ZURICH KEMPER LOGO]
A Stock Life Insurance Company
1 Kemper Drive
Long Grove, Illinois  60049-0001






INSURED: JOHN  DOE                          ISSUE AGE:   35


EFFECTIVE DATE:   JAN 01 1999               POLICY NO:                 0000000


SINGLE PREMIUM:  $10,000                    INITIAL SPECIFIED
                                            AMOUNT:                    $100,000



RIGHT TO CANCEL - At any time within 10 days of receiving this policy, you may
return it to us or to the agent through whom it was purchased. Immediately upon
our receipt, this policy will be voided as if it had never been in force. Within
ten days we will pay an amount equal to premiums paid for this policy less any
Debt.

On the Maturity Date, if the insured is living and this policy is in force, we
will pay the Net Surrender Value to you. If the insured dies prior to the
Maturity Date and this policy is in force, we will pay to the beneficiary the
death benefit in force at the time of the insured's death. Payment made to you
or to the beneficiary will be made subject to the terms of this policy.

This policy is issued in consideration of the attached application and payment
of the single premium. The provisions on this cover and the pages that follow
are part of this policy.

Signed for Kemper Investors Life Insurance Company at its home offices in Long
Grove, Illinois.






              Secretary                       President

INDIVIDUAL MODIFIED SINGLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY

NON-PARTICIPATING

TO THE EXTENT ALLOCATIONS ARE MADE TO THE SUBACCOUNTS, THE CASH VALUE IS BASED
ON THE INVESTMENT EXPERIENCE OF THE SUBACCOUNTS AND MAY INCREASE OR DECREASE
DAILY. THIS AMOUNT IS NOT GUARANTEED. THE AMOUNTS, OR DURATION OF THE DEATH
BENEFIT MAY VARY UNDER THE CONDITIONS DESCRIBED IN THE DEATH BENEFIT AND
TERMINATION PROVISIONS.

This is a legal contract between the owner and Kemper Investors Life Insurance
Company.

READ THIS POLICY CAREFULLY.



<PAGE>   2
<TABLE>
<CAPTION>

TABLE OF CONTENTS                                                                                              PAGE NO.

<S>                                                                                    <C>
APPLICATION                                                                               Follows Policy Specifications

DEATH BENEFIT PROVISIONS                                                                                              2
    Payment of Death Benefits                                                                                         2
    Amount Payable Upon Death                                                                                         3

DEFINITIONS                                                                                                           1

ENDORSEMENTS, if any                                                                   Follows Settlement Option Table

GENERAL PROVISIONS                                                                                                1 - 2
    The Contract                                                                                                      1
    Contestability                                                                                                    1
    Assignment                                                                                                        2
    Reports                                                                                                           2

NONFORFEITURE PROVISIONS                                                                                              4

OWNERSHIP PROVISIONS                                                                                                  2
    Owner of Policy                                                                                                   2
    Change of Ownership                                                                                               2
    Beneficiary                                                                                                       2

POLICY SPECIFICATIONS                                                                                     Follows Index

PREMIUM PROVISIONS                                                                                                    3

SETTLEMENT OPTION TABLE                                                                                  Follows Page 7

TRANSFER, WITHDRAWAL AND LOAN PROVISIONS                                                                          5 - 6
    Transfers                                                                                                         5
    Withdrawals                                                                                                       5
    Withdrawal Charges                                                                                                5
    Loans                                                                                                             5
    Transfer, Withdrawal and Loan Procedures                                                                          6

VARIABLE ACCOUNT PROVISIONS                                                                                       3 - 4
    Separate Account                                                                                                  3
    Liabilities of Separate Account                                                                                   3
    Separate Account Value                                                                                            3
    Subaccounts                                                                                                       4
    Rights Reserved By The Company                                                                                    4
    Accumulation Unit Value                                                                                           4
</TABLE>



<PAGE>   3
                              POLICY SPECIFICATIONS



INSURED                    JOHN DOE          ISSUE AGE        35

EFFECTIVE DATE             JAN 01 1999       POLICY NUMBER    0000000

INITIAL SPECIFIED AMOUNT   $100,000          ISSUE DATE       JAN 01 1999




                              COVERAGE INFORMATION

<TABLE>
<CAPTION>
                               RATE     INITIAL
                               CLASS   SPECIFIED   MATURITY OR       MONTHLY
BENEFIT DESCRIPTION           PERCENT   AMOUNT     EXPIRY DATE        RATE

MODIFIED SINGLE PREMIUM
<S>                             <C>    <C>         <C>              <C>
VARIABLE LIFE*                  100    $100,000   [JAN 01 2064]     SEE PAGE D
</TABLE>









* IT IS POSSIBLE THAT COVERAGE WILL EXPIRE PRIOR TO THE MATURITY DATE SHOWN IF
PREMIUMS PAID ARE INSUFFICIENT TO CONTINUE THE COVERAGE TO SUCH DATE. EVEN IF
COVERAGE CONTINUES TO THE MATURITY DATE, THERE MAY BE NO SURRENDER VALUE TO BE
PAID ON THAT DATE.





                               PREMIUM INFORMATION



SINGLE PREMIUM                                    [ $10,000 ]


INSURED RATE CLASS                                STANDARD TOBACCO/NON-TOBACCO
<PAGE>   4
                              POLICY SPECIFICATIONS



INSURED                    JOHN DOE                  ISSUE AGE        35

EFFECTIVE DATE             JAN 01 1999               POLICY NUMBER    [000000]

MONTHLY PROCESSING DAY                               DAY 01 OF EACH MONTH

DEDUCTION PERIOD                                     [65 YEARS, 00 MONTHS]

MINIMUM SPECIFIED AMOUNT AFTER WITHDRAWAL            [$10,000]

MINIMUM WITHDRAWAL AMOUNT                            [$100.00]

MINIMUM NET SURRENDER VALUE AFTER WITHDRAWAL         [$5,000]

MINIMUM LOAN AMOUNT                                  [$1,000.00]

POLICY LOAN INTEREST CHARGED                         [ 5.50% ]

POLICY LOAN INTEREST CREDITED
       Preferred Loan Portion                        [ 5.50% ]
       Non-Preferred Loan Portion                    [ 3.50% ]

MINIMUM PREMIUM                                      [$10,000.00]

IRC SECTION 7702 TEST                                GUIDELINE PREMIUM


                         TABLE OF DEATH BENEFIT FACTORS

<TABLE>
<CAPTION>
        ATTAINED                    ATTAINED                   ATTAINED                    ATTAINED
          AGE*       PERCENT          AGE*        PERCENT        AGE*        PERCENT         AGE*         PERCENT

<S>       <C>          <C>             <C>          <C>           <C>          <C>            <C>           <C>
          0-40         250             50           185           60           130            70            115
           41          243             51           178           61           128            71            113
           42          236             52           171           62           126            72            111
           43          229             53           164           63           124            73            109
           44          222             54           157           64           122            74            107
           45          215             55           150           65           120          75-90           105
           46          209             56           146           66           119            91            104
           47          203             57           142           67           118            92            103
           48          197             58           138           68           117            93            102
           49          191             59           134           69           116            94            101
                                                                                             95+            100
</TABLE>


                 *ATTAINED AGE IS THE AGE ON LAST BIRTHDAY AS OF
                        THE BEGINNING OF THE POLICY YEAR.
<PAGE>   5
                              POLICY SPECIFICATIONS


INSURED             JOHN DOE                      ISSUE AGE       35

ISSUE DATE          JAN 01 1999                   POLICY NUMBER   [000000]


SEPARATE ACCOUNT                                  INITIAL PREMIUM ALLOCATION

KEMPER AGGRESSIVE GROWTH PORTFOLIO                           100%
KEMPER TECHNOLOGY GROWTH PORTFOLIO
KEMPER-DREMAN FINANCIAL SERVICES PORTFOLIO
KEMPER SMALL CAP GROWTH PORTFOLIO
KEMPER SMALL CAP VALUE PORTFOLIO
KEMPER-DREMAN HIGH RETURN EQUITY PORTFOLIO
KEMPER INTERNATIONAL PORTFOLIO
KEMPER INTERNATIONAL GROWTH & INCOME PORTFOLIO
KEMPER GLOBAL BLUE CHIP PORTFOLIO
KEMPER GROWTH PORTFOLIO
KEMPER CONTRARIAN VALUE PORTFOLIO
KEMPER BLUE CHIP PORTFOLIO
KEMPER VALUE+GROWTH PORTFOLIO
KEMPER HORIZON 20+ PORTFOLIO
KEMPER TOTAL RETURN PORTFOLIO
KEMPER HORIZON 10+ PORTFOLIO
KEMPER HIGH YIELD PORTFOLIO
KEMPER HORIZON 5 PORTFOLIO
KEMPER GLOBAL INCOME PORTFOLIO
KEMPER INVESTMENT GRADE BOND PORTFOLIO
KEMPER GOVERNMENT SECURITIES PORTFOLIO
KEMPER MONEY MARKET PORTFOLIO
SCUDDER VLIF GLOBAL DISCOVERY PORTFOLIO
SCUDDER VLIF GROWTH AND INCOME PORTFOLIO
SCUDDER VLIF INTERNATIONAL PORTFOLIO
SCUDDER VLIF CAPITAL GROWTH PORTFOLIO
JANUS ASPEN GROWTH PORTFOLIO
JANUS ASPEN GROWTH AND INCOME PORTFOLIO
WARBURG EMERGING MARKETS PORTFOLIO
WARBURG POST-VENTURE CAPITAL PORTFOLIO


ASSET BASED CHARGES ARE ASSESSED FOR THE ABOVE SUBACCOUNTS. FOR A COMPLETE
DISCUSSION OF ASSET BASED CHARGES, PLEASE REFER TO SCHEDULE 1.
<PAGE>   6
                              POLICY SPECIFICATIONS

INSURED         JOHN DOE                        ISSUE AGE       35

POLICY DATE     JAN 01 1999                     POLICY NUMBER   [000000]

         TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES* PER $1,000

<TABLE>
<CAPTION>

               ATTAINED          NON-                                  ATTAINED          NON-
                 AGE            TOBACCO           TOBACCO                 AGE           TOBACCO            TOBACCO
           ----------------- -------------- -- --------------- ----- -------------- ---------------- - ----------------
<S>                            <C>                <C>                     <C>          <C>                <C>
                  0            0.219480           0.219480                50           0.428690           0.837880
                  1            0.085880           0.085880                51           0.468090           0.916270
                  2            0.082540           0.082540                52           0.513380           1.004870
                  3            0.080880           0.080880                53           0.565410           1.105400
                  4            0.077540           0.077540                54           0.623350           1.215380
                  5            0.073370           0.073370                55           0.688070           1.333150
                  6            0.069200           0.069200                56           0.758730           1.457890
                  7            0.065030           0.065030                57           0.833670           1.589640
                  8            0.062530           0.062530                58           0.917110           1.728430
                  9            0.061690           0.061690                59           1.010780           1.877720
                  10           0.062530           0.062530                60           1.115550           2.044410
                  11           0.067530           0.067530                61           1.232310           2.232910
                  12           0.076700           0.076700                62           1.367070           2.445950
                  13           0.089220           0.089220                63           1.519910           2.684600
                  14           0.103400           0.103400                64           1.690090           2.946500
                  15           0.113420           0.146810                65           1.876860           3.224930
                  16           0.123430           0.163510                66           2.079500           3.517450
                  17           0.130940           0.175200                67           2.297270           3.821590
                  18           0.135950           0.184390                68           2.534600           4.141890
                  19           0.139290           0.190240                69           2.798580           4.490890
                  20           0.140130           0.193580                70           3.098170           4.877870
                  21           0.138460           0.193580                71           3.441600           5.314990
                  22           0.135950           0.190240                72           3.839990           5.812080
                  23           0.132610           0.186890                73           4.293280           6.366660
                  24           0.129280           0.181880                74           4.794460           6.979050
                  25           0.125100           0.176030                75           5.333740           7.638620
                  26           0.122600           0.172690                76           5.907380           8.318710
                  27           0.120930           0.171020                77           6.511600           9.007620
                  28           0.120090           0.171020                78           7.150730           9.710250
                  29           0.120090           0.173530                79           7.845900           10.451730
                  30           0.120930           0.177710                80           8.620930           11.258160
                  31           0.123430           0.183550                81           9.498890           12.154910
                  32           0.126770           0.191070                82           10.501350          13.160810
                  33           0.131780           0.201100                83           11.628210          14.262960
                  34           0.137620           0.212790                84           12.862100          15.427670
                  35           0.144300           0.227000                85           14.178860          16.617240
                  36           0.151820           0.243720                86           15.565070          17.803170
                  37           0.161840           0.264620                87           17.002260          19.039280
                  38           0.172690           0.288040                88           18.486430          20.348230
                  39           0.184390           0.314810                89           20.041320          21.671680
                  40           0.198590           0.345780                90           21.693700          23.030110
                  41           0.213630           0.379270                91           23.488560          24.468300
                  42           0.229510           0.416120                92           25.504290          26.169550
                  43           0.247060           0.456350                93           27.961930          28.406850
                  44           0.266290           0.500790                94           31.383850          31.563380
                  45           0.288040           0.547780                95           36.798270          36.798270
                  46           0.311460           0.596470                96           46.588990          46.588990
                  47           0.336570           0.649400                97           67.043870          67.043870
                  48           0.364190           0.706570                98           83.333330          83.333330
                  49           0.394340           0.768830                99           83.333330          83.333330
</TABLE>

         *THE GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES SHALL BE THE
         RATES SHOWN IN THE TABLE ABOVE MULTIPLIED BY THE APPROPRIATE RATE CLASS
         PERCENT. THIS PERCENT IS SHOWN ON PAGE 1 OF THE POLICY SPECIFICATIONS.
         THE RATES ACTUALLY CHARGED MAY BE REDUCED IN ACCORDANCE WITH THE COST
         OF INSURANCE RATE SECTION.


<PAGE>   7
<TABLE>
<CAPTION>

               GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES

         --------------------------------------------------------------
                                MALE NON-TOBACCO
         --------------------------------------------------------------
           ATTAINED                        ATTAINED
             AGE                             AGE
         ------------------------------   -----------------------------
<S>                      <C>                 <C>         <C>
              0          0.219480            50          0.428690
         ------------------------------   -----------------------------
              1          0.085880            51          0.468090
         ------------------------------   -----------------------------
              2          0.082540            52          0.513380
         ------------------------------   -----------------------------
              3          0.080880            53          0.565410
         ------------------------------   -----------------------------
              4          0.077540            54          0.623350
         ------------------------------   -----------------------------
              5          0.073370            55          0.688070
         ------------------------------   -----------------------------
              6          0.069200            56          0.758730
         ------------------------------   -----------------------------
              7          0.065030            57          0.833670
         ------------------------------   -----------------------------
              8          0.062530            58          0.917110
         ------------------------------   -----------------------------
              9          0.061690            59          1.010780
         ------------------------------   -----------------------------
              10          0.062530            60          1.115550
         ------------------------------   -----------------------------
              11          0.067530            61          1.232310
         ------------------------------   -----------------------------
              12          0.076700            62          1.367070
         ------------------------------   -----------------------------
              13          0.089220            63          1.519910
         ------------------------------   -----------------------------
              14          0.103400            64          1.690090
         ------------------------------   -----------------------------
              15          0.113420            65          1.876860
         ------------------------------   -----------------------------
              16          0.123430            66          2.079500
         ------------------------------   -----------------------------
              17          0.130940            67          2.297270
         ------------------------------   -----------------------------
              18          0.135950            68          2.534600
         ------------------------------   -----------------------------
              19          0.139290            69          2.798580
         ------------------------------   -----------------------------
              20          0.140130            70          3.098170
         ------------------------------   -----------------------------
              21          0.138460            71          3.441600
         ------------------------------   -----------------------------
              22          0.135950            72          3.839990
         ------------------------------   -----------------------------
              23          0.132610            73          4.293280
         ------------------------------   -----------------------------
              24          0.129280            74          4.794460
         ------------------------------   -----------------------------
              25          0.125100            75          5.333740
         ------------------------------   -----------------------------
              26          0.122600            76          5.907380
         ------------------------------   -----------------------------
              27          0.120930            77          6.511600
         ------------------------------   -----------------------------
              28          0.120090            78          7.150730
         ------------------------------   -----------------------------
              29          0.120090            79          7.845900
         ------------------------------   -----------------------------
              30          0.120930            80          8.620930
         ------------------------------   -----------------------------
              31          0.123430            81          9.498890
         ------------------------------   -----------------------------
              32          0.126770            82         10.501350
         ------------------------------   -----------------------------
              33          0.131780            83         11.628210
         ------------------------------   -----------------------------
              34          0.137620            84         12.862100
         ------------------------------   -----------------------------
              35          0.144300            85         14.178860
         ------------------------------   -----------------------------
              36          0.151820            86         15.565070
         ------------------------------   -----------------------------
              37          0.161840            87         17.002260
         ------------------------------   -----------------------------
              38          0.172690            88         18.486430
         ------------------------------   -----------------------------
              39          0.184390            89         20.041320
         ------------------------------   -----------------------------
              40          0.198590            90         21.693700
         ------------------------------   -----------------------------
              41          0.213630            91         23.488560
         ------------------------------   -----------------------------
              42          0.229510            92         25.504290
         ------------------------------   -----------------------------
              43          0.247060            93         27.961930
         ------------------------------   -----------------------------
              44          0.266290            94         31.383850
         ------------------------------   -----------------------------
              45          0.288040            95         36.798270
         ------------------------------   -----------------------------
              46          0.311460            96         46.588990
         ------------------------------   -----------------------------
              47          0.336570            97         67.043870
         ------------------------------   -----------------------------
              48          0.364190            98         83.333330
         ------------------------------   -----------------------------
              49          0.394340            99         83.333330
         ------------------------------   -----------------------------
</TABLE>


<PAGE>   8
<TABLE>
<CAPTION>
               GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES

         --------------------------------------------------------------
                                  MALE TOBACCO
         --------------------------------------------------------------
           ATTAINED                        ATTAINED
             AGE                             AGE
         ------------------------------   -----------------------------
<S>                       <C>                 <C>        <C>
              0           0.219480            50         0.837880
         ------------------------------   -----------------------------
              1           0.085880            51         0.916270
         ------------------------------   -----------------------------
              2           0.082540            52         1.004870
         ------------------------------   -----------------------------
              3           0.080880            53         1.105400
         ------------------------------   -----------------------------
              4           0.077540            54         1.215380
         ------------------------------   -----------------------------
              5           0.073370            55         1.333150
         ------------------------------   -----------------------------
              6           0.069200            56         1.457890
         ------------------------------   -----------------------------
              7           0.065030            57         1.589640
         ------------------------------   -----------------------------
              8           0.062530            58         1.728430
         ------------------------------   -----------------------------
              9           0.061690            59         1.877720
         ------------------------------   -----------------------------
              10          0.062530            60         2.044410
         ------------------------------   -----------------------------
              11          0.067530            61         2.232910
         ------------------------------   -----------------------------
              12          0.076700            62         2.445950
         ------------------------------   -----------------------------
              13          0.089220            63         2.684600
         ------------------------------   -----------------------------
              14          0.103400            64         2.946500
         ------------------------------   -----------------------------
              15          0.146810            65         3.224930
         ------------------------------   -----------------------------
              16          0.163510            66         3.517450
         ------------------------------   -----------------------------
              17          0.175200            67         3.821590
         ------------------------------   -----------------------------
              18          0.184390            68         4.141890
         ------------------------------   -----------------------------
              19          0.190240            69         4.490890
         ------------------------------   -----------------------------
              20          0.193580            70         4.877870
         ------------------------------   -----------------------------
              21          0.193580            71         5.314990
         ------------------------------   -----------------------------
              22          0.190240            72         5.812080
         ------------------------------   -----------------------------
              23          0.186890            73         6.366660
         ------------------------------   -----------------------------
              24          0.181880            74         6.979050
         ------------------------------   -----------------------------
              25          0.176030            75         7.638620
         ------------------------------   -----------------------------
              26          0.172690            76         8.318710
         ------------------------------   -----------------------------
              27          0.171020            77         9.007620
         ------------------------------   -----------------------------
              28          0.171020            78         9.710250
         ------------------------------   -----------------------------
              29          0.173530            79         10.451730
         ------------------------------   -----------------------------
              30          0.177710            80         11.258160
         ------------------------------   -----------------------------
              31          0.183550            81         12.154910
         ------------------------------   -----------------------------
              32          0.191070            82         13.160810
         ------------------------------   -----------------------------
              33          0.201100            83         14.262960
         ------------------------------   -----------------------------
              34          0.212790            84         15.247670
         ------------------------------   -----------------------------
              35          0.227000            85         16.617240
         ------------------------------   -----------------------------
              36          0.243720            86         17.803170
         ------------------------------   -----------------------------
              37          0.264620            87         19.039280
         ------------------------------   -----------------------------
              38          0.288040            88         20.348230
         ------------------------------   -----------------------------
              39          0.314810            89         21.671680
         ------------------------------   -----------------------------
              40          0.345780            90         23.030110
         ------------------------------   -----------------------------
              41          0.379270            91         24.468300
         ------------------------------   -----------------------------
              42          0.416120            92         26.169550
         ------------------------------   -----------------------------
              43          0.456350            93         28.406850
         ------------------------------   -----------------------------
              44          0.500790            94         31.563380
         ------------------------------   -----------------------------
              45          0.547780            95         36.798270
         ------------------------------   -----------------------------
              46          0.596470            96         46.588990
         ------------------------------   -----------------------------
              47          0.649400            97         67.043870
         ------------------------------   -----------------------------
              48          0.706570            98         83.333330
         ------------------------------   -----------------------------
              49          0.768830            99         83.333330
         ------------------------------   -----------------------------
</TABLE>

<PAGE>   9

<TABLE>
<CAPTION>

               GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES

         --------------------------------------------------------------
                               FEMALE NON-TOBACCO
         --------------------------------------------------------------
           ATTAINED                        ATTAINED
             AGE                             AGE
         ------------------------------   -----------------------------
         ------------------------------   -----------------------------
<S>                       <C>                 <C>        <C>
              0           0.156830            50         0.362520
         ------------------------------   -----------------------------
              1           0.070030            51         0.390150
         ------------------------------   -----------------------------
              2           0.066700            52         0.421990
         ------------------------------   -----------------------------
              3           0.065030            53         0.457190
         ------------------------------   -----------------------------
              4           0.064190            54         0.493240
         ------------------------------   -----------------------------
              5           0.062530            55         0.531830
         ------------------------------   -----------------------------
              6           0.060860            56         0.570440
         ------------------------------   -----------------------------
              7           0.059190            57         0.608230
         ------------------------------   -----------------------------
              8           0.058360            58         0.646040
         ------------------------------   -----------------------------
              9           0.057520            59         0.688910
         ------------------------------   -----------------------------
              10          0.056690            60         0.739370
         ------------------------------   -----------------------------
              11          0.058360            61         0.801660
         ------------------------------   -----------------------------
              12          0.060860            62         0.879170
         ------------------------------   -----------------------------
              13          0.064190            63         0.974480
         ------------------------------   -----------------------------
              14          0.068360            64         1.081730
         ------------------------------   -----------------------------
              15          0.071700            65         1.197600
         ------------------------------   -----------------------------
              16          0.075040            66         1.317890
         ------------------------------   -----------------------------
              17          0.077540            67         1.440910
         ------------------------------   -----------------------------
              18          0.080040            68         1.568370
         ------------------------------   -----------------------------
              19          0.082540            69         1.710530
         ------------------------------   -----------------------------
              20          0.084210            70         1.877720
         ------------------------------   -----------------------------
              21          0.085880            71         2.082070
         ------------------------------   -----------------------------
              22          0.086720            72         2.333340
         ------------------------------   -----------------------------
              23          0.088380            73         2.635430
         ------------------------------   -----------------------------
              24          0.090050            74         2.984600
         ------------------------------   -----------------------------
              25          0.091720            75         3.376280
         ------------------------------   -----------------------------
              26          0.094220            76         3.802330
         ------------------------------   -----------------------------
              27          0.095890            77         4.261570
         ------------------------------   -----------------------------
              28          0.098400            78         4.761660
         ------------------------------   -----------------------------
              29          0.101730            79         5.319450
         ------------------------------   -----------------------------
              30          0.104240            80         5.958680
         ------------------------------   -----------------------------
              31          0.107580            81         6.700420
         ------------------------------   -----------------------------
              32          0.110910            82         7.564140
         ------------------------------   -----------------------------
              33          0.115090            83         8.550150
         ------------------------------   -----------------------------
              34          0.120090            84         9.651690
         ------------------------------   -----------------------------
              35          0.125940            85         10.861090
         ------------------------------   -----------------------------
              36          0.134280            86         12.174410
         ------------------------------   -----------------------------
              37          0.144300            87         13.594640
         ------------------------------   -----------------------------
              38          0.155160            88         15.128280
         ------------------------------   -----------------------------
              39          0.166850            89         16.793990
         ------------------------------   -----------------------------
              40          0.181050            90         18.613420
         ------------------------------   -----------------------------
              41          0.196080            91         20.640050
         ------------------------------   -----------------------------
              42          0.211120            92         22.968510
         ------------------------------   -----------------------------
              43          0.226170            93         25.797340
         ------------------------------   -----------------------------
              44          0.241210            94         29.586210
         ------------------------------   -----------------------------
              45          0.257930            95         35.366190
         ------------------------------   -----------------------------
              46          0.275490            96         45.525080
         ------------------------------   -----------------------------
              47          0.294730            97         66.318680
         ------------------------------   -----------------------------
              48          0.314810            98         83.333330
         ------------------------------   -----------------------------
              49          0.337410            99         83.333330
         ------------------------------   -----------------------------
</TABLE>
<PAGE>   10
<TABLE>
<CAPTION>
               GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES

         --------------------------------------------------------------
                                 FEMALE TOBACCO
         --------------------------------------------------------------
           ATTAINED                        ATTAINED
             AGE                             AGE
         ------------------------------   -----------------------------
<S>                       <C>                 <C>        <C>
              0           0.156830            50         0.566250
         ------------------------------   -----------------------------
              1           0.070030            51         0.607390
         ------------------------------   -----------------------------
              2           0.066700            52         0.654440
         ------------------------------   -----------------------------
              3           0.065030            53         0.706570
         ------------------------------   -----------------------------
              4           0.064190            54         0.759570
         ------------------------------   -----------------------------
              5           0.062530            55         0.814290
         ------------------------------   -----------------------------
              6           0.060860            56         0.868210
         ------------------------------   -----------------------------
              7           0.059190            57         0.918800
         ------------------------------   -----------------------------
              8           0.058360            58         0.968570
         ------------------------------   -----------------------------
              9           0.057520            59         1.021750
         ------------------------------   -----------------------------
              10          0.056690            60         1.085110
         ------------------------------   -----------------------------
              11          0.058360            61         1.164600
         ------------------------------   -----------------------------
              12          0.060860            62         1.267040
         ------------------------------   -----------------------------
              13          0.064190            63         1.391670
         ------------------------------   -----------------------------
              14          0.068360            64         1.530960
         ------------------------------   -----------------------------
              15          0.080040            65         1.678160
         ------------------------------   -----------------------------
              16          0.084210            66         1.828210
         ------------------------------   -----------------------------
              17          0.088380            67         1.973420
         ------------------------------   -----------------------------
              18          0.092560            68         2.120610
         ------------------------------   -----------------------------
              19          0.095060            69         2.280960
         ------------------------------   -----------------------------
              20          0.097560            70         2.470900
         ------------------------------   -----------------------------
              21          0.099230            71         2.712220
         ------------------------------   -----------------------------
              22          0.101730            72         3.008860
         ------------------------------   -----------------------------
              23          0.104240            73         3.363220
         ------------------------------   -----------------------------
              24          0.106740            74         3.769070
         ------------------------------   -----------------------------
              25          0.109240            75         4.214910
         ------------------------------   -----------------------------
              26          0.113420            76         4.691660
         ------------------------------   -----------------------------
              27          0.116760            77         5.192770
         ------------------------------   -----------------------------
              28          0.120930            78         5.725870
         ------------------------------   -----------------------------
              29          0.125940            79         6.310570
         ------------------------------   -----------------------------
              30          0.131780            80         6.970840
         ------------------------------   -----------------------------
              31          0.136790            81         7.726990
         ------------------------------   -----------------------------
              32          0.142630            82         8.595770
         ------------------------------   -----------------------------
              33          0.150150            83         9.611100
         ------------------------------   -----------------------------
              34          0.158500            84         10.726950
         ------------------------------   -----------------------------
              35          0.167680            85         11.929990
         ------------------------------   -----------------------------
              36          0.181880            86         13.214160
         ------------------------------   -----------------------------
              37          0.198590            87         14.570110
         ------------------------------   -----------------------------
              38          0.217810            88         16.008410
         ------------------------------   -----------------------------
              39          0.238700            89         17.532150
         ------------------------------   -----------------------------
              40          0.263790            90         19.256820
         ------------------------------   -----------------------------
              41          0.290550            91         21.156900
         ------------------------------   -----------------------------
              42          0.317320            92         23.319700
         ------------------------------   -----------------------------
              43          0.344100            93         25.937870
         ------------------------------   -----------------------------
              44          0.370890            94         29.586210
         ------------------------------   -----------------------------
              45          0.399370            95         35.366190
         ------------------------------   -----------------------------
              46          0.428690            96         45.525080
         ------------------------------   -----------------------------
              47          0.458870            97         66.318680
         ------------------------------   -----------------------------
              48          0.491570            98         83.333330
         ------------------------------   -----------------------------
              49          0.527640            99         83.333330
         ------------------------------   -----------------------------
</TABLE>
<PAGE>   11




                                   SCHEDULE 1




                             CHARGES AND DEDUCTIONS
<TABLE>
<CAPTION>



- --------------------------------------------------------------------------------
                         SCHEDULE OF ASSET BASED CHARGES
- --------------------------------------------------------------------------------
<S>                                                                        <C>
Mortality and Expense Risk Charge                                          .90%

Administration Charge                        .35% annually for Policy Years 1-10
                                     .25% annually for Policy Years 11 and later

Tax Charge                                   .40% annually for Policy Years 1-10
- --------------------------------------------------------------------------------
</TABLE>


THE ASSET BASED CHARGES WILL BE ASSESSED DAILY ON THE SEPARATE
ACCOUNT VALUE.

The Annual Record Maintenance Charge of $30 is deducted from your Cash Value at
the end of the Policy Year.

<TABLE>
<CAPTION>

- ----------------------------------------------------------------------------
                     SCHEDULE OF PREMIUM WITHDRAWAL CHARGES
- ----------------------------------------------------------------------------
       POLICY YEARS       SURRENDER    PREMIUM TAX     TOTAL WITHDRAWAL
    ELAPSED SINCE ISSUE     CHARGE        CHARGE            CHARGE
- ----------------------------------------------------------------------------
<S>          <C>            <C>           <C>               <C>
             1              7.75%         2.25%             10.00%
             2              7.75%         2.00%             9.75%
             3              7.50%         1.75%             9.25%
             4              6.50%         1.50%             8.00%
             5              5.75%         1.25%             7.00%
             6              5.00%         1.00%             6.00%
             7              4.25%          .75%             5.00%
             8              3.50%          .50%             4.00%
             9              2.75%          .25%             3.00%
          over 9              0%            0%                0%
- ----------------------------------------------------------------------------
</TABLE>



THE WITHDRAWAL CHARGE PERCENTAGES ARE APPLIED AGAINST THE ORIGINAL SINGLE
PREMIUM AMOUNT. A FREE PARTIAL WITHDRAWAL OF THE GREATER OF 10% OF CASH VALUE OR
CASH VALUE LESS PREMIUM PAID IS AVAILABLE EACH YEAR. "PREMIUM PAID" FOR THIS
PURPOSE IS THE PREMIUM SUBJECT TO A WITHDRAWAL CHARGE MINUS WITHDRAWALS
PREVIOUSLY ASSESSED [A WITHDRAWAL CHARGE].

<PAGE>   12
  DEFINITIONS

                           ACCUMULATION UNIT - An accounting unit of measure
                           used to calculate the value of each Subaccount.

                           ACCUMULATION UNIT VALUE - The value of a Subaccount
                           determined for a Valuation Period according to the
                           formula stated in this policy.

                           ADMINISTRATION CHARGE - A charge deducted from the
                           Cash Value for a portion of Our administrative costs.

                           CASH VALUE - The sum of the Separate Account Value
                           plus the Fixed Account Value plus the Loan Account
                           Value.

                           DEBT - The principal of any outstanding loan plus any
                           loan interest due or accrued.

                           DEDUCTION DAY - The Deduction Day is stated in the
                           policy specifications. It is the same day in each
                           month as the Effective Date. It is the day from which
                           policy months are determined.

                           EFFECTIVE DATE - The Effective Date is shown on the
                           front of Your policy. It is the date coverage becomes
                           effective. If the Effective Date would have been the
                           29th, 30th or 31st of the month, the Effective Date
                           will be the 28th day of that month.

                           FIXED ACCOUNT - The portion of the Cash Value
                           allocated to our General Account, including amounts
                           allocated to our DCA Fixed Account to be transferred
                           to the Subaccounts under the automatic Dollar Cost
                           Averaging program.

                           FIXED ACCOUNT VALUE - The value of the Fixed Account.

                           FUND - An investment company or separate series
                           thereof, in which the Subaccounts of the Separate
                           Account invest.

                           GENERAL ACCOUNT - Our assets other than those
                           allocated to the Separate Account or any other
                           Separate Account.

                           GUIDELINE SINGLE PREMIUM - The Guideline Single
                           Premium as defined in Section 7702 of the Internal
                           Revenue Code.

                           ISSUE AGE - The attained age as of the insured's last
                           birthday on the Effective Date.

                           ISSUE DATE - The issue date stated in the policy
                           specifications. It is the date all requirements for
                           coverage and Premium have been received, and the
                           policy is approved.

                           LOAN ACCOUNT - The account established for amounts
                           transferred from the Subaccounts as security for
                           outstanding Policy Debt.

                           LOAN ACCOUNT VALUE - The value of the Loan Account.


                                                                          Page 1

<PAGE>   13


                                                                          Page 2


                           MATURITY DATE - The Maturity Date is stated in the
                           policy specifications. It is the policy anniversary
                           nearest the insured's 100th birthday.

                           MORTALITY AND EXPENSE CHARGE - A charge deducted in
                           the calculation of the accumulation unit value. It is
                           for Our assumption of mortality risks and expense
                           guarantees.

                           NET SURRENDER VALUE - The Surrender Value minus any
                           Debt.

                           OWNER - See "You, Your, Yours" below.

                           POLICY YEAR - Each twelve-month period beginning on
                           the Effective Date and each Policy Anniversary.

                           PREFERRED LOAN - The portion of any loan as to which
                           the loan account is credited a higher rate of
                           interest. The maximum amount available as a Preferred
                           Loan is the Separate Account Value minus premium paid
                           plus any prior withdrawal of premium.

                           PREMIUM - The dollar amount We receive in U.S.
                           currency to buy the benefits this policy provides.

                           RECORDS MAINTENANCE CHARGE - A charge assessed
                           against Your policy as specified in the policy
                           specifications.

                           RECEIVED - Received by Kemper Investors Life
                           Insurance Company at its home office in Long Grove,
                           Illinois.

                           SEPARATE ACCOUNT - A unit investment trust registered
                           with the Securities and Exchange Commission under the
                           Investment Company Act of 1940 known as the KILICO
                           Variable Annuity Separate Account.

                           SEPARATE ACCOUNT VALUE - The sum of the Subaccount
                           Values of this policy on the Valuation Date.

                           SUBACCOUNTS - The Separate Account has several
                           Subaccounts. The available Subaccounts are stated in
                           the policy specifications.

                           SUBACCOUNT VALUE - The value of each Subaccount
                           calculated separately according to the formula stated
                           in this policy.

                           SURRENDER VALUE - The Surrender Value of this policy
                           is the Cash Value minus any applicable withdrawal
                           charge.

                           TAX EXPENSE CHARGE - A charge deducted from the Cash
                           Value to pay applicable state and local Premium taxes
                           and federal taxes imposed under Section 848 of the
                           Internal Revenue Code of 1986, as amended (the
                           "Code").

                           TRADE DATE - The Trade Date is ten (10) days plus the
                           number of days in your right to cancel period after
                           the Issue Date. It is the date that your initial
                           premium plus any interest will be allocated to the
                           Subaccounts according to your instructions. The right
                           to cancel period is shown on the front of Your
                           policy.

                           VALUATION DATE - Each business day that applicable
                           law requires that We value the assets of the Separate
                           Account. Currently this is each day that the New York
                           Stock Exchange is open for trading.

                           VALUATION PERIOD - The period that starts at the
                           close of a Valuation Date and ends at the close of
                           the next succeeding Valuation Date.

                           WE, OUR, US - Kemper Investors Life Insurance
                           Company, Long Grove, Illinois.




<PAGE>   14



                           YOU, YOUR, YOURS - The party(s) named as owner in the
                           application unless later changed as provided in this
                           policy. The owner, prior to the distribution of any
                           death benefit, has the exclusive right to exercise
                           every option and right conferred by this policy.

  GENERAL PROVISIONS

  THE POLICY               The policy, the attached application and any
                           supplemental application(s) constitute the entire
                           contract between the parties. All statements made in
                           the application and supplemental application(s) are
                           deemed representations and not warranties. No
                           misstatement will void this policy or be used as a
                           defense of a claim unless it is contained in the
                           application or any supplemental application.

  MODIFICATION OF          Only Our president, secretary and assistant
  POLICY                   secretaries have the power to approve a change or
                           waive any provisions of this policy. Any such
                           modifications must be in writing. No agent or person
                           other than the officers named has the authority to
                           change or waive the provisions of this policy.

  CONTESTABILITY           We cannot contest this policy after it has been in
                           force for two years from the Effective Date.

                           If the policy is reinstated, a new two year
                           contestability period will apply from the Effective
                           Date of the reinstatement and will apply only to
                           statements made in the application for the
                           reinstatement.

  MISSTATEMENT OF AGE      If the age and/or sex of the Insured was misstated,
  AND/OR SEX               the death benefit and all policy values will be
                           adjusted based on what the initial Premium would have
                           purchased using the correct ages and/or sexes.

  SUICIDE                  If the Insured dies by suicide, while sane or insane,
                           within two years from the Effective Date, the death
                           benefit proceeds will be limited to the Premiums paid
                           less any withdrawals and Debt.

                           If the Insured dies by suicide, while sane or insane,
                           within two years of any reinstatement, Our total
                           liability with respect to such reinstatement will be
                           the cost of insurance.

  EFFECTIVE DATE           The Effective Date of coverage under this policy is
                           the Effective Date. If the OF COVERAGE Effective Date
                           would have been the 29th, 30th, or 31st of the month,
                           the Effective Date will be the 28th day of that
                           month. Incontestability and suicide periods are
                           measured from the Effective Date. We will deduct the
                           first monthly deduction on the Effective Date.

  TERMINATION              All coverage under this policy terminates when any
                           one of the following occurs:

                           1. You request that coverage terminates;

                           2. The insured dies;

                           3. This policy matures, or

                           4. The grace period ends and there is Debt
                              outstanding.

  ASSIGNMENT               No assignment of this policy is binding unless We
                           receive written notice of the assignment. We assume
                           no responsibility for the validity or sufficiency of
                           any assignment. Once notice of the assignment is
                           recorded, the rights of the owner, annuitant and
                           beneficiary are subject to the assignment. Any claim
                           is subject to proof of interest of the assignee.

  DUE PROOF OF DEATH       We must receive written proof of death within sixty
                           days of the death of the insured, or as soon
                           thereafter as is reasonably possible, when a death
                           benefit is payable. The proof may be a certified
                           death certificate, the written statement of a
                           physician, or any other proof satisfactory to Us.


                                                                          Page 3

<PAGE>   15


                                                                          Page 4


  RESERVES, CASH VALUES    All reserves are equal to or greater than those
  AND DEATH BENEFITS       required by statute. Any available Cash Value and
                           death benefit are not less than the minimum benefits
                           required by the statutes of the  state in which this
                           policy is delivered.

  BASIS OF COMPUTATIONS    A detailed statement of the method of computations of
                           cash values under this policy has been filed with the
                           insurance department of the state in which this
                           policy is delivered. The 1980 Commissioner's Standard
                           Ordinary Smoker or Nonsmoker Mortality tables, age
                           last birthday, is the basis for minimum Cash Values,
                           death benefits, and guaranteed maximum cost of
                           insurance rates under this policy.

  TAX TREATMENT            This policy is intended to qualify as a life
                           insurance policy under the Internal Revenue Code
                           ("Code"). We may return Premiums which would
                           disqualify the policy from tax treatment as a life
                           insurance policy. This policy may be endorsed to
                           reflect any change in the Code and its regulations
                           and rulings. You will receive a copy of any such
                           endorsement or when a federal income tax should
                           apply, we may impose charges for federal income taxes
                           attributed to the Separate Account. Charges for other
                           taxes, if any, attributed to this policy may also be
                           made.

  NON-PARTICIPATING        This policy does not pay dividends. It will not share
                           in Our surplus or earnings.

  REPORTS                  At least once each Policy Year We will send You a
                           statement showing Premiums received, interest
                           credited, investment experience, and charges made
                           since the last report. The report will also show the
                           current death benefit and Cash Value, as well as any
                           other information required by statute.

  OWNERSHIP PROVISIONS

  OWNERS OF POLICY         The insured is the original policy owner unless
                           otherwise provided in the application. You have the
                           right to cancel or amend this policy if We agree. You
                           may exercise every option and right conferred by this
                           policy including the right of assignment. The joint
                           owners must agree to any change if more than one
                           owner is named.

  CHANGE OF OWNERSHIP      You may change the owner by written request at any
                           time during the lifetime of the Insured. You must
                           furnish information sufficient to clearly identify
                           the new owner to Us. The change is subject to any
                           existing assignment of this policy. When We record
                           the effective date of the change, it will be the date
                           the notice was signed except for action taken by Us
                           prior to receiving the request. Any change is subject
                           to the payment of any proceeds. We may require You to
                           return this policy to Us for endorsement of a change.

  BENEFICIARY              The application for this policy shows the original
  DESIGNATION AND          beneficiary. You may change the beneficiary if You
  CHANGE OF BENEFICIARY    send Us a written change form. Changes are subject to
                           the  following:

                           1. The change must be filed while the insured is
                              alive;

                           2. This policy must be in force at the time You file
                              a change;

                           3. Such change must not be prohibited by the terms of
                              an existing assignment, beneficiary designation or
                              other restriction;

                           4. Such change will take effect when We receive it;

                           5. After We receive the change, it will take effect
                              on the date the change form was signed. However,
                              action taken by Us before the change form was
                              received will remain in effect; and

                           6. The request for change must provide information
                              sufficient to identify the new beneficiary.

                           We may require You to return this policy for
                           endorsement of a change.



<PAGE>   16



  DEATH OF BENEFICIARY     The interest of a beneficiary who dies before the
                           distribution of the death benefit will pass to the
                           other beneficiaries, if any, share and share alike,
                           unless otherwise provided in the beneficiary
                           designation. If no beneficiary survives, or if no
                           beneficiary is named, the distribution will be made
                           to the insured's estate.

                           If a beneficiary dies within ten days of the date of
                           the insured's death, the death benefit will be paid
                           as if the insured had survived the beneficiary.

  DEATH BENEFIT PROVISIONS

  PAYMENT OF DEATH         We will pay a death benefit to the beneficiary when
  BENEFITS                 We receive due proof of death, if the insured dies
                           while this policy is inforce. The return of this
                           policy is required before a payment is made.

                           We will pay the death benefit in a lump sum. This sum
                           may be deferred for up to five years from the date of
                           death. During this time, it will continue to accrue
                           interest at the normal rate for death benefits left
                           on deposit with Us.

                           Instead of a lump sum payment the beneficiary may
                           elect to have the death benefit distributed under a
                           settlement option. The beneficiary must make this
                           choice within sixty days of the time We receive due
                           proof of death.

  AMOUNT PAYABLE           We compute the death benefit at the end of the
  UPON DEATH               Valuation Period following Our receipt of due proof
                           of death and the return of this policy.

                           As long as there is positive Net Surrender Value, or
                           during the Grace Period, the death benefit is the
                           greater of:

                           1. the specified amount on the date of the Insured's
                              death, and

                           2. the cash value on the date of the insured's death
                              multiplied by the applicable death benefit factor
                              at the time of death.

                           The death benefit proceeds equal a. minus b. minus
                           c., where:

                           a. is the death benefit

                           b. is any monthly deductions due during the grace
                              period

                           c. is any Debt.

                           The initial specified amount and the table of cash
                           value corridors are shown in the policy
                           specifications. The specified amount is the initial
                           specified amount, unless reduced by a withdrawal.

                           If there is no positive Net Surrender Value, no Debt
                           outstanding, you paid 100% of the Guideline Single
                           Premium as your initial Premium, and your policy is
                           not in the Grace Period, the death benefit will be
                           your total Premium paid, less any withdrawal.

  DEFERMENT OF DEATH       The payment of death benefits in excess of the
  BENEFITS                 specified amount may be deferred: (a) for up to 6
                           months from the date requested if these benefits are
                           based upon policy values which do not depend on the
                           investment performance of the Separate Account or (b)
                           otherwise, (1) during any period when the New York
                           Stock Exchange is closed other than customary weekend
                           and holiday closings; (2) when trading in the markets
                           normally utilized is restricted, or an emergency
                           exists as determined by the Securities and Exchange
                           Commission, so that disposal of investments or
                           determination of the accumulation unit value is not
                           practical; or (3) for such other periods as the
                           Securities and Exchange Commission may permit for
                           protection of owners.

  PREMIUM PROVISIONS
                           The owner may choose a minimum initial Premium of 90%
                           or 100% of the Guideline Single Premium (based on the
                           initial specified amount).




                                                           Page 5

<PAGE>   17
                                                                          Page 6


  ADDITIONAL PREMIUM       Payment of additional Premium of at least $1,000 will
                           be permitted under the following circumstances:

                           1. An additional Premium payment is required to
                              maintain or reinstate coverage, as described in
                              the GRACE PERIOD and REINSTATEMENT provisions.

                           2. The Premium payment would not cause the policy to
                              fail to meet the definition of a life insurance
                              under Section 7702 of the Internal Revenue Code
                              ("Code").

                           We reserve the right to require satisfactory evidence
                           of insurability before accepting any additional
                           Premium that increases the death benefit. Premium
                           which does not meet the tax qualification guidelines
                           for life insurance under the Code will not be applied
                           to the policy.

                           If there is current Debt on the policy, additional
                           moneys will be considered repayment of Debt first,
                           unless You state otherwise.

  PLACE OF PAYMENT         All Premiums under this policy must be paid to Us at
                           Our home office or such other location as We may
                           select. We will notify You and any other interested
                           parties in writing of such other locations. Premiums
                           received by an agent will be allocated to the
                           Subaccounts only after We receive them.

  PREMIUM ALLOCATION       If you paid all or a portion of Your initial Premium
                           before the Issue Date of your Policy, we credit
                           interest to your initial Premium for the period prior
                           to the Issue Date at a rate not less than 3%
                           annually. On the Issue Date (unless the Trade Date is
                           the same as the Issue Date), we allocate the premium
                           and any accumulations to the Kemper Money Market
                           Subaccount. The Subaccount value of the Kemper Money
                           Market Subaccount will be allocated to the
                           Subaccounts, according to the Premium allocation
                           shown in the policy specifications, on the Trade
                           Date. You may temporarily allocate a portion of Your
                           initial Premium to any single Subaccount or to our
                           Fixed Account to be transferred to the Subaccounts
                           under our automatic dollar cost averaging program.
                           Only initial Premiums may be allocated to the Fixed
                           Account, and only for the purpose of subsequent
                           transfers to the Subaccounts under our automatic
                           dollar cost averaging program. (If the Issue Date is
                           the same as the Trade Date, the Premium will be
                           immediately allocated to the Subaccounts).

  GRACE PERIOD             If the net Surrender Value immediately proceeding a
                           is less than the monthly deduction for that month, a
                           grace period of 61 days will be allowed for the
                           payment, without evidence of insurability, of
                           Premium payment or loan repayment equal to at least
                           three monthly deductions.

                           This grace period will begin on the day We mail
                           notice of the required payment to Your last known
                           address.

                           If there is no current Debt on the policy, you paid
                           100% of the Guideline Single Premium as your Initial
                           Premium, and payment is not received within the grace
                           period, coverage under this policy will remain in
                           force, but the amount paid upon death of the insured
                           after the grace period will be limited to the return
                           of Your total Premiums paid less any prior partial
                           withdrawals. The Specified Amount coverage can be
                           restored according to the REINSTATEMENT provision
                           below.

                           If there is any Debt on the policy or you paid 90% of
                           the Guideline Single Premium as your Initial Premium,
                           and payment is not received within the grace period,
                           coverage under this policy will terminate at the end
                           of the grace period in accordance with the
                           NONFORFEITURE provisions.

                           If death of the Insured occurs within the grace
                           period, any amount payable will be reduced by any
                           unpaid monthly deductions.

  REINSTATEMENT            If this policy enters insufficient fund value status
                           as defined on Page 10 below, and has not been
                           surrendered for its Net Surrender Value, it may be
                           reinstated to the Specified Amount at any time within
                           3 years after entering that status. The policy may
                           also be reinstated within 3 years of policy lapse if
                           it has not been surrendered for its Net Surrender
                           Value. Either type of reinstatement is subject to:
<PAGE>   18



                           1. receipt of evidence of insurability satisfactory
                              to Us;

                           2. payment of enough Premium to pay the unpaid
                              monthly deductions due during the last expired
                              grace period;

                           3. payment of a minimum Premium sufficient to keep
                              this policy in force for three months; and

                           4. payment of any Debt against this policy which
                              existed at the date of termination of coverage.

                           The effective date of reinstatement of a policy will
                           be the Deduction Day that coincides with or next
                           follows the date the application for reinstatement is
                           approved by Us.

                           The SUICIDE and CONTESTABILITY provisions will apply
                           from the effective date of reinstatement.

  VARIABLE ACCOUNT PROVISIONS

  SEPARATE ACCOUNT         The variable benefits under this policy are provided
                           through the KILICO Variable Separate Account. This is
                           called the Separate Account. The Separate Account is
                           registered with the Securities and Exchange
                           Commission as a unit investment trust under the
                           Investment Company Act of 1940. It is a separate
                           investment account maintained by Us into which a
                           portion of Our assets has been allocated for this
                           policy and may be allocated for certain other
                           policies.

  LIABILITIES OF SEPARATE  The assets equal to the reserves and other
  ACCOUNT                  liabilities of the Separate Account will not be
                           charged with liabilities arising out of any other
                           business We may conduct. If the assets of the
                           Separate Account exceed the liabilities under the
                           policies supported by the separate Account, then the
                           excess may be used to cover the liabilities of Our
                           General Account. We will value the assets of the
                           Separate Account on each Valuation Date.

  SEPARATE ACCOUNT         On any Valuation Date, the Separate Account Value is
  VALUE                    the sum of its Subaccount Values.

  SUBACCOUNTS              The Separate Account consists of several Subaccounts
                           as shown in the policy specifications. We may, from
                           time to time, combine or remove Subaccounts in the
                           Separate Account and establish additional Subaccounts
                           of the Separate Account.

                           In such event, We may permit You to select other
                           Subaccounts under this policy. However, the right to
                           select any other Subaccount is limited by the terms
                           and conditions We may impose such transactions.

  SUBACCOUNT VALUE         On any Valuation Date, the Subaccount value in a
                           Subaccount equals:

                           1. the Subaccount value on the previous Valuation
                              Date multiplied by the investment experience
                              factor for the end of the current Valuation
                              Period; plus

                           2. any net Premiums received and allocated to the
                              Subaccount during the current Valuation Period;
                              plus

                           3. any amounts transferred to the Subaccount during
                              the current Valuation Period; minus


                                                                          Page 7
<PAGE>   19



                                                                          Page 8


                           4. the pro-rata portion of any monthly deduction
                              charged to the Subaccount when the Valuation
                              Period includes a Deduction Day; minus

                           5. any amounts transferred or withdrawn from the
                              Subaccount during the current Valuation Period;
                              minus

                           6. any amounts loaned from the Subaccount during the
                              current Valuation Period.

  FUND                     Each Subaccount of the Separate Account will buy
                           shares of an investment company registered under the
                           Investment Company Act of 1940 as an open-end
                           diversified management investment company or shares
                           of a separate series thereof. Each such investment
                           company or series represents a separate investment
                           portfolio which corresponds to one of the Subaccounts
                           of the Separate Account.

                           If We establish additional Subaccounts, each new
                           Subaccount will invest in shares of an additional
                           series or investment company. We may also substitute
                           other investment companies.

  RIGHTS RESERVED BY       We reserve the right, subject to compliance with the
  THE COMPANY              current law or as it may be  changed in the future:

                           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 comply with or
                              obtain and continue any exemptions from the
                              Investment Company Act of 1940 or to comply with
                              any other applicable law;

                           3. To transfer any assets in any Subaccount to
                              another Subaccount or to one or more Separate
                              Accounts, or the General Account, or to add,
                              combine or remove Subaccounts in the Separate
                              Account.

                           4. To delete the shares of any of the portfolios of
                              the fund or any other open- end investment company
                              and to substitute, for the fund shares held in any
                              Subaccount, the shares of another portfolio of the
                              fund or the shares of another investment company
                              or any other investment permitted by law; and

                           5. To change the way We assess charges, but not to
                              increase the aggregate amount above that currently
                              charged to the Separate Account and the fund in
                              connection with the policies.

                           When required by law, We will obtain Your approval of
                           such changes and the approval of any regulatory
                           authority.

  ACCUMULATION UNIT        Each Subaccount has an accumulation unit value. When
  VALUE                    Premiums or other amounts are allocated to a
                           Subaccount, a number of units are purchased based on
                           the accumulation unit value of the Subaccount at the
                           end of the Valuation Period during which the
                           allocation is made. When amounts are transferred out
                           of or deducted from a Subaccount, units are redeemed
                           in a similar manner.

                           The accumulation unit value for each subsequent
                           Valuation Period is the investment experience factor
                           for that period multiplied by the accumulation unit
                           value for the period immediately preceding. Each
                           Valuation Period has a single accumulation unit value
                           that is applied to each day in the period. The number
                           of accumulation units will not change as a result of
                           investment experience.



<PAGE>   20



  INVESTMENT EXPERIENCE    Each Subaccount has its own investment experience
  FACTOR                   factor. The investment experience of a Subaccount is
                           calculated by applying the investment experience
                           factor to the value in each Subaccount during the
                           Valuation Period.

                           The investment experience factor of a Subaccount for
                           a Valuation Period is determined by dividing 1. by 2.
                           and subtracting 3. from the result, where:

                           1. is the net result of:

                              a. the net asset value per share of the investment
                                 held in the Subaccount determined at the end of
                                 the current Valuation Period; plus

                              b. the per share amount of any dividend or capital
                                 gain distributions made by the investment held
                                 in the Subaccount, if the "ex-dividend" date
                                 occurs during the current Valuation Period;
                                 plus or minus

                              c. a charge or credit for any taxes reserved for
                                 the current Valuation Period which We determine
                                 resulted from the investment operations of the
                                 Subaccount;

                           2. is the net asset value per share of the investment
                              held in the Subaccount, determined at the end of
                              the last Valuation Period;

                           3. is the factor representing the sum of the
                              Mortality and Expense Risk Charge, stated in the
                              policy specifications, for the number of days in
                              the Valuation Period.

  NONFORFEITURE PROVISIONS

  CASH VALUE               The cash value of this policy is equal to the sum of
                           the Separate Account Value, plus the Loan Account
                           Value, plus the Fixed Account Value.

  MONTHLY DEDUCTION        On each Deduction Day, a monthly deduction will be
                           made equal to the sum of the following:

                           1. the monthly cost of insurance charge for this
                              policy; plus

                           2. the monthly charge for any riders; plus

                           3. the monthly Administration Charge; plus

                           4. the monthly Tax Expense Charge.

                           The monthly deduction will be deducted from the
                           Subaccounts and Fixed Account in proportion to the
                           value that each Subaccount and Fixed Account bears to
                           the Separate Account Value.

  COST OF INSURANCE        We calculate the cost of insurance on each Deduction
                           Day.

                           The maximum cost of insurance charge equals a. times
                           the result of b. minus c. where:

                           a. is the maximum cost of insurance rate per $1,000
                              for the initial specified amount;

                           b. is the death benefit; and

                           c. is the cash value.


                                                                          Page 9
<PAGE>   21


                                                                         Page 10



  COST OF INSURANCE        The cost of insurance rate is based on the insured's
  RATE                     sex, issue age, coverage year, and rate class. The
                           cost of insurance is also based on whether 90% or
                           100% of the Guideline Single Premium has been paid at
                           issue.

                           Any change in the cost of insurance rate will be on a
                           uniform basis for all insureds of the same: 1. sex;
                           2. attained age at start of coverage; 3. coverage
                           year; and 4. rate class. However, the cost of
                           insurance rates will not exceed those shown in the
                           Table of Guaranteed Maximum Monthly Cost of Insurance
                           Rates per $1,000 multiplied by any rate class percent
                           over 100.

                           These rates are found in the policy specifications.
                           These rates are based on the Commissioners 1980
                           Standard Ordinary Smoker and Nonsmoker Mortality
                           Tables, Age Last Birthday.

  RIDERS                   The monthly charges for any riders are shown in the
                           policy specifications.

  MORTALITY AND EXPENSE    These charges are shown in the policy specifications.
  RISK CHARGE, ADMIN-
  ISTRATION CHARGE, TAX
  CHARGE, AND ANNUAL
  RECORDS MAINTENANCE
  CHARGE

  INSUFFICIENT FUND        This policy will enter the insufficient fund value
  VALUE STATUS             status as provided in the GRACE PERIOD provision if
                           the Net Surrender Value immediately preceding a
                           deduction is:

                           1. insufficient to cover the monthly deduction, and

                           2. no Premium payment or loan payment sufficient to
                              cover at least three monthly deductions is
                              received before the end of the grace period.

                           Any monthly deduction after entering insufficient
                           fund value status will not be considered a
                           reinstatement of this policy.

  TRANSFER, WITHDRAWAL
  AND LOAN PROVISIONS

  TRANSFERS                You may direct all or part of one Subaccount's value
                           to another Subaccount.

                           Transfers will also be subject to the following
                           conditions:

                           1. The minimum amount which may be transferred is
                              $100 or, if smaller, the remaining value in a
                              Subaccount;

                           2. No partial transfer will be made if the remaining
                              value of any Subaccount will be less than $500
                              unless the transfer will eliminate Your interest
                              in such account;

                           3. We reserve the right to charge $25 for each
                              transfer in excess of 12 in a policy year.

                           Any transfer request must clearly specify:

                           1. the amount which is to be transferred; and

                           2. the names of the Subaccounts which are affected.



<PAGE>   22



                           We will only honor a telephone transfer request if a
                           properly executed telephone transfer authorization is
                           on file with Us. Such request for a transfer must
                           comply with the conditions of the authorization.

                           We reserve the right at any time and without notice
                           to any party, to terminate, suspend, or modify these
                           transfer rights.

  WITHDRAWALS              You may withdraw all or part of the Cash Value that
                           remains after We subtract any withdrawal charge. We
                           must receive a written request that indicates the
                           amount of the withdrawal from each Subaccount. You
                           must return the policy to Us if You elect a total
                           withdrawal.

                           Withdrawals are subject to these conditions:

                           1. Each withdrawal must be at least $100 or the value
                              that remains in the Subaccount if smaller;

                           2. A minimum of $500 must remain in the Subaccount
                              after You make a withdrawal unless the Subaccount
                              is eliminated by such withdrawal;

                           3. A minimum of $5,000 must remain in the Separate
                              Account after You make a withdrawal.

                           4. The maximum You may withdraw from any Subaccount
                              is the value of the Subaccount less the amount of
                              any withdrawal charge.

                           5. Any withdrawal amount You request will be
                              increased by the withdrawal charge.

  EFFECT OF A              The Cash Value will be reduced by the amount of the
  WITHDRAWAL               withdrawal. The specified amount will be reduced
                           proportional to the reduction in Cash Value due to
                           the partial withdrawal. We will not permit a
                           withdrawal if it will decrease the specified amount
                           to less than the Minimum Specified Amount stated in
                           the Policy Specifications.

  WITHDRAWAL CHARGES       Withdrawal charges are shown in the policy
                           specifications.

                           Any amount withdrawn which is not subject to a
                           withdrawal charge will be considered a "free partial
                           withdrawal," as referenced in the policy
                           specifications.

  POLICY LOANS             Policy loans may be made any time. We will lend up to
                           a maximum loan amount of 90% of the policy's Cash
                           Value less any applicable withdrawal charges. The
                           amount of any new loan may not exceed the maximum
                           loan amount less Debt on the date the loan is
                           granted. The Preferred Loan portion of a loan will be
                           determined on the date the loan is made, and will not
                           be subsequently redetermined. The minimum amount of a
                           loan is $1,000.

                           On the date the loan is made, an amount equal to the
                           loan will be transferred from the Subaccounts to the
                           Loan Account held in the General Account until the
                           loan is repaid. Unless directed otherwise, the loaned
                           amount will be deducted from the Subaccount in
                           proportion to the values that each account bears to
                           the Separate Account Value. Should the Debt equal or
                           exceed the Surrender Value, this policy will be
                           subject to the GRACE PERIOD provisions.

                           Cash values derived from Premium received by Us in
                           the form of a check or draft will not be available
                           for loans until 30 days after deposit of such check
                           or draft.

  POLICY LOAN INTEREST     The loan interest rate will be [5.50%] per year
                           compounded daily. Interest not paid will be charged
                           on a daily basis and will be added to the Debt on
                           this policy and bear interest at the same rate.


                                                                         Page 11
<PAGE>   23


                                                                         Page 12


                           During the existence of a loan, the portion of the
                           Loan Account Value attributable to a Preferred Loan
                           will earn [5.50%] per year. The remainder of the Loan
                           Account value will earn [3.50%] per year. Interest
                           will be earned on a daily basis and will be added to
                           the Loan Account.

                           If an Internal Revenue Code Section 1035(a) exchange
                           takes place that has an outstanding loan at the time
                           of transfer, the difference between the Cash Value
                           and the total of all Premiums paid under the
                           exchanged policy is considered a Preferred Loan.

  POLICY LOAN REPAYMENT    A Debt may be repaid in full or in part at any time
                           while this policy is in force.

                           As Debt is paid, the Loan Account Value equal to the
                           amount of repayment which exceeds the difference
                           between interest due and interest earned will be
                           allocated to the Subaccounts according to the then
                           current Premium allocation instructions. Loan
                           repayments will be considered repayment of Preferred
                           Loans last.

  EFFECTS OF POLICY        The Debt on this policy, along with the withdrawal
  LOANS                    charge will reduce the amount of Cash Value payable
                           upon surrender. The Debt on this policy will also
                           reduce the amount of Cash Value available for
                           withdrawal. The death benefit payable to the
                           beneficiary upon the death of the Insured will also
                           be reduced by the amount of Debt.

  TRANSFER, WITHDRAWAL     We will redeem the necessary number of accumulation
  AND LOAN PROCEDURES      units to achieve the dollar amount requested plus any
                           applicable charges when the withdrawal, transfer or
                           loan is made form a Subaccount. We will reduce the
                           number of accumulation units credited in each
                           Subaccount by the number of accumulation units
                           redeemed. The reduction in the number of accumulation
                           units is determined based on the accumulation unit
                           value at the end of the Valuation Period when We
                           receive the request, provided the request contains
                           all required information. We will pay the amount
                           within seven calendar days after the date We receive
                           the request, except as provided below.

  DEFERMENT OF WITH-       If the withdrawal, transfer or loan is to be made
  DRAWAL TRANSFER OR       from a Subaccount, We may suspend the right of
  LOAN                     withdrawal or transfer or delay payment more than
                           seven calendar days:

                           1. during any period when the New York Stock Exchange
                              is closed other than customary weekend and holiday
                              closings;

                           2. when trading in the markets normally utilized is
                              restricted, or an emergency exists as determined
                              by the Securities and Exchange Commission, so that
                              disposal of investments or determination of the
                              accumulation unit value is not practical; or

                           3. for such other periods as the Securities and
                              Exchange Commission by order may permit for
                              protection of owners.

  SETTLEMENT OPTIONS

                           The Owner, or beneficiary at the death of the
                           insured, if no election by the Owner is in effect,
                           may elect to have all of the Net Surrender Value or
                           Death Benefit of this policy paid in a lump sum or
                           have the amount applied to one of the settlement
                           options noted below.

                           The beneficiary may elect to have the death benefit
                           distributed as stated in Option 1 for a period not to
                           exceed the beneficiary's life expectancy; or Options
                           2, or 3 based upon the life expectancy of the
                           beneficiary as prescribed by federal regulations. The
                           beneficiary must make this choice within sixty days
                           of the time we receive due proof of death. An option
                           can not be changed after the first of such payments
                           is made.

                           Payments must be made to a natural person, referred
                           to below as "payee." If the beneficiary is not a
                           natural person, the beneficiary must elect that the
                           entire death benefit be distributed within five years
                           of your death. Distribution of the death benefit must
                           start within one year after your death. It may start
                           later if prescribed by federal regulations.
<PAGE>   24


                           If the total death benefit proceeds are applied under
                           one of the annuity options, this contract must be
                           surrendered to us.

                           Payments for all options are derived from the
                           applicable tables. Current annuity rates will be used
                           if they produce greater payments than those shown in
                           the policy. The age in the tables is the age of the
                           payee on the last birthday before the first payment
                           is due.

                           The option selected must result in a periodic payment
                           equivalent to at least $20 per month when annuity
                           payments begin. If the annuity option selected or
                           otherwise applied should result in a periodic payment
                           less than the minimum required on the date payments
                           are scheduled to begin, we reserve the right to make
                           a lump sum payment in satisfaction of our obligation
                           to the payee under the policy.

  ELECTION OF SETTLEMENT   Election of a settlement option may be made by
  OPTION                   written notice to Us.


                           This election may be made:

                           1. by You during the lifetime of the insured;
                           2. by the beneficiary if no election made by You is
                              in effect at the time of the death of the insured;
                              or
                           3. by the beneficiary if You reserve the right to the
                              beneficiary to change an election upon the death
                              of the insured. Such change must be made prior to
                              the first settlement option payment.

                           An election in effect during the lifetime of the
                           insured will be revoked by a subsequent change of
                           beneficiary or an assignment of this policy unless
                           provided otherwise.

  OPTION 1

  FIXED INSTALLMENT        We will make monthly payments for a fixed number of
  ANNUITY                  installments. Payments must be made for at least 5
                           years, but not more than 30 years. Upon the payee's
                           death, if the beneficiary is a natural person, we
                           will automatically continue payments for the
                           remainder of the certain period to the beneficiary.
                           If the beneficiary is either an estate or trust we
                           will pay the discounted value of the remaining
                           payments in the specified period based on the
                           discount rate stated in the supplemental contract.

  OPTION 2

  LIFE ANNUITY             We will make monthly payments while the payee is
                           alive.

  OPTION 3

  LIFE ANNUITY WITH INSTAL-We will make monthly payments for a guaranteed period
  LMENTS GUARANTEED        and thereafter while the payee is alive. The
                           guaranteed period must be selected at the time the
                           settlement option is chosen. The guaranteed periods
                           available are 5, 10, 15 and 20 years. If, at the
                           death of the payee, payments have been made for less
                           than five, ten, fifteen or twenty years as elected,
                           and the beneficiary is a natural person, we will
                           automatically continue payments for the remainder of
                           the elected period to the beneficiary. If the
                           beneficiary is either an estate or trust, we will pay
                           the discounted value of the remaining payments in the
                           specified period based on the discount rate stated in
                           the supplemental contract.




                                                                         Page 13
<PAGE>   25



                                                                         Page 14


  OPTION 4

  JOINT AND SURVIVOR       We will pay the full monthly income while both payees
  ANNUITY                  are alive. Upon the death of either payee, we will
                           continue to pay the surviving payee a percentage of
                           the original monthly payment. The percentage payable
                           t the surviving payee must be selected at the time
                           the annuity option is chosen. The percentages
                           available are 50%, 66 2/3%, 75% and 100%.

  OTHER OPTIONS
                           We may make other settlement options available.
                           Payments are also available on a quarterly,
                           semi-annual or annual basis.

  VARIABLE PAYOUT          If a variable payout option is selected, the monthly
  OPTIONS                  payment will reflect the investment performance
                           of the Subaccounts in accordance with the
                           allocation of the lump sum distribution allocated to
                           those Subaccounts.

                           Allocations will not be changed thereafter, except as
                           provided in the TRANSFERS DURING THE PAYOUT PERIOD
                           provision.

                           The first monthly payment is based on the
                           guaranteed annuity option shown in the Annuity Option
                           Table. You may elect any option available.

                           The dollar amount of the subsequent payments may
                           increase or decrease depending on the investment
                           experience of each Subaccount. The number of annuity
                           units per payments will remain fixed for each
                           Subaccount.

                           The number of annuity units for each Subaccount is
                           calculated by dividing a. by b. where:

                           a. is the portion of the initial monthly payment that
                              can be attributed to that Subaccount; and

                           b. is the annuity unit value for that Subaccount at
                              the end of the Valuation Period. The Valuation
                              Period includes the date on which the payment is
                              made.

                           Monthly payments, after the first payment,
                           are calculated by summing up, for each Subaccount,
                           the product of a. times b. where:

                           a. is the number of annuity units per payment in each
                              Subaccount; and

                           b. is the annuity unit value for that Subaccount at
                              the end of the Valuation Period. The Valuation
                              Period includes the date on which the payment is
                              made.

                           After the first payment, we guarantee that the dollar
                           amount of each payment will not be affected
                           adversely by actual expenses or changes in mortality
                           experience from the expense and mortality assumptions
                           on which we based the first payment.

  ANNUITY UNIT VALUE       The value of an annuity unit for each Subaccount at
                           the end of any subsequent Valuation Period is
                           determined by multiplying the result of a. times b.
                           by c.

                           a. is the annuity unit value for the immediately
                              preceding Valuation Period; and

                           b. is the net investment factor for the Valuation
                              Period for which the annuity unit value is being
                              calculated; and

                           c. is the interest factor of .99993235 per calendar
                              day of such subsequent Valuation Period to offset
                              the effect of the assumed rate of 2.50% per year
                              used in the Annuity Option Table.




<PAGE>   26

                           The net investment factor for each Subaccount for any
                           Valuation Period is determined by dividing a. by b.
                           where:

                           a. is the value of an annuity unit of the applicable
                              Subaccount as of the end of the current Valuation
                              Period plus or minus the per share credit or
                              charge for taxes reserved; and

                           b. is the value of an annuity unit of the applicable
                              Subaccount as of the end of the immediately
                              preceding Valuation Period, plus or minus the per
                              share credit or charge for taxes reserved.

  FIXED PAYOUT             If a fixed payout option is chosen, your payment
  OPTION                   will be fixed in an amount throughout the payout
                           period. We determine the amount of your fixed
                           payment by multiplying the amount applied to
                           the option by a rate determined by Us which is not
                           less than the rate specified in the Settlement Option
                           Tables below. The amount of the payment will not
                           change throughout the payout period.


  TRANSFERS DURING         During the payout period, the payee may choose to
  THE PAYOUT PERIOD        change the Subaccounts or the relative weighting
                           of the Subaccounts on which variable payments are
                           based, or the relative proportions of fixed and
                           variable payments. A transfer may be made subject to
                           the following:

                           1. The payee must send us a written notice in a form
                              satisfactory to us;

                           2. One transfer is permitted each twelve month period
                              from the date of the first annuity payment. We
                              must receive notice of any such transfer at least
                              thirty days prior to the effective date of the
                              transfer;

                           3. A payee may not base variable payments on more
                              than three Subaccounts after any transfer;

                           4. At least $1,000 of annuity unit value or annuity
                              reserve value must be transferred from a
                              Subaccount or from the General Account; and

                           5. At least $1,000 of annuity unit value or annuity
                              reserve value must remain in the account from
                              which the transfer was made.

                           When a transfer is made between Subaccounts, the
                           number of annuity units per payment attributable to a
                           Subaccount to which a transfer is made is equal to a.
                           multiplied by b. divided by c., where:

                           a. is the number of annuity units per payment in the
                              Subaccount from which transfer is being made;

                           b. is the annuity unit value for the Subaccount from
                              which the transfer is being made; and

                           c. is the annuity unit value for the Subaccount to
                              which transfer is being made.

                           When a transfer is made from the General Acccount to
                           a Subaccount, the number of annuity units per payment
                           attributable to a Subaccount to which transfer is
                           made is equal to a. divided by b. divided by c.,
                           where:

                           a. is the General Account annuity value being
                              transferred; and

                           b. is the present value of $1.00 per payment period
                              using the attained age(s) of the payee(s) and any
                              remaining guaranteed payments that may be due at
                              the time of the transfer; and

                           c. is the annuity unit value for the Subaccount to
                              which the transfer is being made.

                           The General Account annuity value equals the present
                           value of the remaining fixed annuity payments using
                           the same interest and mortality basis used to
                           calculated the fixed annuity payments.



                                                                         Page 15

<PAGE>   27


                                                                         Page 16


                           The amount of money allocated to the General Account
                           in case of a transfer from a Subaccount equals the
                           annuity reserve for the payee's interest in such
                           Subaccount. The annuity reserve is the product of a.
                           multiplied by b. multiplied by c. where:

                           a. is the number of annuity units representing the
                              payee's interst in such Subaccount per annuity
                              payment;

                           b. is the annuity unit value for such Subaccount; and

                           c. is the present value of $1.00 per payment period
                              using the attained age(s) of the payee(s) and any
                              remaining guaranteed payemtns that may be due at
                              the time of the transfer.

                           Money allocated to the General Account upon such
                           transfer will be applied under the same annuity
                           payout option as originally elected. Guaranteed
                           period payments will be adjusted to reflect the
                           number of guaranteed payments already made. If all
                           guaranteed payments have already been made, no
                           further payments will be guaranteed.

                           All amounts and annuity unit values are determined as
                           of the end of the Valuation Period preceding the
                           effective date of the transfer.

                           We reserve the right at any time and without notice
                           to any party to terminate, suspend or modify these
                           transfer privileges.

  SUPPLEMENTARY            A supplementary agreement will be issued to reflect
  AGREEMENT                payments that will be made under a settlement option.
                           If payment is made as a death benefit distribution,
                           the effective date will be the date of death.
                           Otherwise, the effective date will be the date chosen
                           by the Owner.

  DATE OF FIRST PAYMENT    The effective date under an option will be the date
                           of death. Interest will start to accrue on the
                           effective date. If the normal effective date is the
                           29th, 30th, or 31st of the month, the effective date
                           will be the 28th day of the that month.

  EVIDENCE OF AGE, SEX     We may require satisfactory evidence of the age, sex
  AND SURVIVAL             and the continued survival of any person on whose
                           life the income is based.

  MISSTATEMENT OF AGE      If the age or sex of the payee has been misstated,
  OR SEX                   the amount payable under the annuity option selected
                           will be such as the lump sum applied would have
                           purchased at the correct age or sex. Interest not to
                           exceed 6% compounded each year will be charged to any
                           overpayment or credited to any underpayment against
                           future payments We may make under the supplementary
                           agreement for the option selected.

  BASIS OF ANNUITY         The guaranteed payments are based on an interest rate
  OPTIONS                  of 2.50% per year and, where mortality is involved,
                           the "1983 Table a" individual annuity mortality table
                           developed by the Society of Actuaries, projected
                           using Projection Scale G. We may also make available
                           variable annuity payment options based on assumed
                           investment rates other than 2.50%.

  CREDITORS                The proceeds of this policy and any payment under an
                           annuity option will be exempt from the claim of
                           creditors and from legal process to the extent
                           permitted by law.


<PAGE>   28

                              ANNUITY OPTION TABLE

           AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000 OF VALUE APPLIED

OPTION ONE - FIXED INSTALLMENT ANNUITY

<TABLE>
<CAPTION>

Number                        Number                       Number                          Number
of years       Monthly        of years     Monthly         of years       Monthly          of years        Monthly
selected       Payment        selected     Payment         selected       Payment          selected        Payment
- ------------------------------------------------------------------------------------------------------------------
<S>            <C>            <C>          <C>             <C>            <C>              <C>             <C>
5              17.69          12           8.01            19             5.48             26              4.33
6              14.92          13           7.48            20             5.27             27              4.22
7              12.94          14           7.03            21             5.08             28              4.11
8              11.46          15           6.64            22             4.90             29              4.02
9              10.31          16           6.29            23             4.74             30              3.92
10              9.39          17           5.99            24             4.59
11              8.64          18           5.72            25             4.46
</TABLE>

OPTION TWO AND THREE - LIFE ANNUITY WITH INSTALLMENTS GUARANTEED:

<TABLE>
<CAPTION>

Age of        MONTHLY PAYMENTS GUARANTEED                 Age of          MONTHLY PAYMENTS GUARANTEED
Male                                                      Female
Payee     NONE       60        120       180       240    Payee   NONE       60        120       180       240
<S>       <C>        <C>       <C>       <C>       <C>    <C>     <C>        <C>       <C>       <C>       <C>
55        4.17       4.16      4.13      4.06      3.96   55      3.87       3.86      3.84      3.81      3.75
56        4.27       4.25      4.21      4.14      4.03   56      3.95       3.94      3.92      3.88      3.82
57        4.36       4.35      4.30      4.22      4.09   57      4.03       4.02      4.00      3.95      3.88
58        4.46       4.45      4.40      4.30      4.16   58      4.11       4.11      4.08      4.03      3.95
59        4.57       4.55      4.50      4.39      4.22   59      4.21       4.20      4.17      4.11      4.01
60        4.69       4.67      4.60      4.48      4.29   60      4.30       4.29      4.26      4.19      4.08
61        4.81       4.79      4.71      4.57      4.36   61      4.41       4.40      4.35      4.28      4.15
62        4.94       4.92      4.83      4.66      4.43   62      4.52       4.50      4.46      4.37      4.23
63        5.09       5.05      4.95      4.76      4.49   63      4.64       4.62      4.56      4.46      4.30
64        5.24       5.20      5.08      4.86      4.56   64      4.76       4.74      4.68      4.56      4.37
65        5.40       5.35      5.21      4.96      4.62   65      4.90       4.87      4.80      4.66      4.45
66        5.57       5.52      5.35      5.06      4.69   66      5.04       5.01      4.93      4.77      4.52
67        5.75       5.69      5.49      5.17      4.75   67      5.19       5.16      5.06      4.87      4.59
68        5.95       5.87      5.64      5.27      4.81   68      5.36       5.32      5.20      4.98      4.66
69        6.15       6.07      5.80      5.37      4.86   69      5.53       5.49      5.35      5.10      4.73
70        6.38       6.27      5.96      5.48      4.91   70      5.72       5.68      5.51      5.21      4.80
71        6.61       6.49      6.12      5.58      4.96   71      5.93       5.87      5.67      5.33      4.86
72        6.86       6.72      6.29      5.68      5.00   72      6.15       6.08      5.85      5.44      4.92
73        7.13       6.96      6.47      5.77      5.04   73      6.39       6.31      6.03      5.56      4.97
74        7.42       7.21      6.64      5.86      5.08   74      6.65       6.55      6.21      5.67      5.02
75        7.72       7.48      6.82      5.95      5.11   75      6.93       6.81      6.41      5.78      5.06
76        8.05       7.76      7.00      6.03      5.14   76      7.24       7.08      6.60      5.88      5.10
77        8.40       8.06      7.18      6.11      5.17   77      7.57       7.38      6.80      5.98      5.13
78        8.77       8.37      7.35      6.18      5.19   78      7.92       7.69      7.01      6.07      5.16
79        9.18       8.69      7.53      6.25      5.20   79      8.31       8.02      7.21      6.15      5.18
80        9.60       9.03      7.70      6.31      5.22   80      8.72       8.37      7.41      6.23      5.20
81       10.06       9.38      7.86      6.36      5.23   81      9.17       8.74      7.61      6.30      5.22
82       10.55       9.74      8.02      6.41      5.24   82      9.66       9.13      7.80      6.35      5.23
83       11.07      10.12      8.17      6.45      5.25   83     10.20       9.54      7.98      6.41      5.24
84       11.63      10.50      8.32      6.49      5.26   84     10.77       9.96      8.15      6.45      5.25
85       12.22      10.89      8.45      6.52      5.26   85     11.39      10.40      8.31      6.49      5.26
</TABLE>

OPTION FOUR - JOINT AND 100% SURVIVOR ANNUITY

<TABLE>
<CAPTION>

Age of                                  Age of Female Payee
Male
Payee     55       60       65       70       75       80       85
<S>       <C>      <C>      <C>      <C>      <C>      <C>      <C>
55        3.49     3.66     3.81     3.93     4.02     4.08     4.12
60        3.61     3.83     4.05     4.24     4.40     4.52     4.59
65        3.69     3.97     4.28     4.57     4.84     5.05     5.20
70        3.76     4.09     4.47     4.89     5.31     5.67     5.95
75        3.80     4.17     4.63     5.16     5.75     6.34     6.83
80        3.83     4.23     4.73     5.37     6.14     6.99     7.80
85        3.84     4.26     4.80     5.51     6.44     7.55     8.75
</TABLE>

Rates for ages not shown here will be provided upon request.

<PAGE>   29

                              ANNUITY OPTION TABLE

           AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000 OF VALUE APPLIED

OPTION ONE - FIXED INSTALLMENT ANNUITY
<TABLE>
<CAPTION>


Number                     Number                  Number                   Number
of years       Monthly     of years    Monthly     of years     Monthly     of years    Monthly
selected       Payment     selected    Payment     selected     Payment     selected    Payment

<S>            <C>         <C>         <C>         <C>          <C>         <C>         <C>
5              17.69       12          8.01        19           5.48        26          4.33
6              14.92       13          7.48        20           5.27        27          4.22
7              12.94       14          7.03        21           5.08        28          4.11
8              11.46       15          6.64        22           4.90        29          4.02
9              10.31       16          6.29        23           4.74        30          3.92
10             9.39        17          5.99        24           4.59
11             8.64        18          5.72        25           4.46
</TABLE>


OPTIONS TWO AND THREE - LIFE ANNUITY WITH INSTALLMENTS GUARANTEED

                           MONTHLY PAYMENTS GUARANTEED
<TABLE>
<CAPTION>


AGE          NONE         60           120           180          240
<S>          <C>          <C>          <C>           <C>          <C>
55           4.02         4.01         3.99          3.94         3.86
56           4.11         4.10         4.07          4.01         3.92
57           4.20         4.19         4.15          4.09         3.99
58           4.29         4.28         4.24          4.17         4.05
59           4.39         4.38         4.33          4.25         4.12
60           4.50         4.48         4.43          4.34         4.19
61           4.61         4.59         4.53          4.43         4.26
62           4.73         4.71         4.64          4.52         4.33
63           4.86         4.84         4.76          4.61         4.40
64           5.00         4.97         4.88          4.71         4.47
65           5.15         5.11         5.01          4.81         4.54
66           5.30         5.26         5.14          4.92         4.61
67           5.47         5.43         5.28          5.02         4.68
68           5.65         5.60         5.43          5.13         4.74
69           5.84         5.78         5.58          5.24         4.80
70           6.05         5.97         5.74          5.35         4.86
71           6.27         6.18         5.90          5.46         4.91
72           6.50         6.40         6.07          5.56         4.96
73           6.76         6.63         6.25          5.67         5.01
74           7.03         6.88         6.43          5.77         5.05
75           7.32         7.14         6.62          5.87         5.09
76           7.64         7.42         6.80          5.96         5.12
77           7.98         7.72         6.99          6.05         5.15
78           8.34         8.03         7.18          6.13         5.17
79           8.73         8.36         7.37          6.20         5.19
80           9.16         8.70         7.56          6.27         5.21
81           9.61         9.06         7.74          6.33         5.23
82           10.10        9.44         7.91          6.38         5.24
83           10.63        9.83         8.08          6.43         5.25
84           11.19        10.23        8.24          6.47         5.25
85           11.80        10.64        8.38          6.50         5.26
</TABLE>


OPTION FOUR - JOINT AND 100% SURVIVOR ANNUITY
<TABLE>
<CAPTION>

Age of                     Age of Secondary Payee
Primary
Payee        55         60         65         70         75         80        85
<S>          <C>        <C>        <C>        <C>        <C>        <C>       <C>
55           3.51       3.64       3.76       3.85       3.92       3.96      3.99
60           3.64       3.84       4.02       4.18       4.29       4.38      4.43
65           3.76       4.02       4.29       4.54       4.75       4.90      5.00
70           3.85       4.18       4.54       4.91       5.25       5.53      5.74
75           3.92       4.29       4.75       5.25       5.77       6.26      6.64
80           3.96       4.38       4.90       5.53       6.26       7.00      7.69
85           3.99       4.43       5.00       5.74       6.64       7.69      8.76
</TABLE>


Rates for ages not shown here will be provided upon request.


<PAGE>   30











































INDIVIDUAL MODIFIED SINGLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY

NON-PARTICIPATING

TO THE EXTENT ALLOCATIONS ARE MADE TO THE SUBACCOUNTS, THE CASH VALUE IS BASED
ON THE INVESTMENT EXPERIENCE OF THE SUBACCOUNTS AND MAY INCREASE OR DECREASE
DAILY. THIS AMOUNT IS NOT GUARANTEED. THE AMOUNTS, OR DURATION OF THE DEATH
BENEFIT MAY VARY UNDER THE CONDITIONS DESCRIBED IN THE DEATH BENEFIT AND
TERMINATION PROVISIONS.

This is a legal contract between the owner and Kemper Investors Life Insurance
Company.

READ YOUR POLICY CAREFULLY.

KEMPER INVESTORS LIFE INSURANCE COMPANY
1 Kemper Drive, Long Grove, Illinois  60049-0001

<PAGE>   1

                                                              Exhibit 1 A (5)(B)


KEMPER INVESTORS LIFE INSURANCE COMPANY                    [ZURICH KEMPER -LOGO]
A Stock Life Insurance Company
1 Kemper Drive
Long Grove, Illinois  60049-0001





LIVES INSURED:    JOHN  DOE                         ISSUE AGE:                35
                  JANE DOE                                                    35

EFFECTIVE DATE:   JAN 01 1999                       POLICY NO:           0000000

SINGLE PREMIUM: $ 10,000                            INITIAL SPECIFIED
                                                    AMOUNT:            $ 100,000



RIGHT TO CANCEL - At any time within 10 days of receiving this policy, you may
return it to us or to the agent through whom it was purchased. Immediately upon
our receipt, this policy will be voided as if it had never been in force. Within
ten days we will pay an amount equal to premiums paid for this policy less any
Debt.

On the Maturity Date, if either of the Lives Insured is living and this policy
is in force, we will pay the Net Surrender Value to you. If both Lives Insured
die prior to the Maturity Date and this policy is in force, we will pay to the
beneficiary the death benefit in force at the time of the Surviving Insured's
death. Payment made to you or to the beneficiary will be made subject to the
terms of this policy.

This policy is issued in consideration of the attached application and payment
of the single premium. The provisions on this cover and the pages that follow
are part of this policy.

Signed for Kemper Investors Life Insurance Company at its home offices in Long
Grove, Illinois.






          Secretary                              President

SURVIVORSHIP, MODIFIED SINGLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
PAYABLE ON THE SECOND DEATH

NON-PARTICIPATING

TO THE EXTENT ALLOCATIONS ARE MADE TO THE SUBACCOUNTS, THE CASH VALUE IS BASED
ON THE INVESTMENT EXPERIENCE OF THE SUBACCOUNTS AND MAY INCREASE OR DECREASE
DAILY. THIS AMOUNT IS NOT GUARANTEED. THE AMOUNTS, OR DURATION OF THE DEATH
BENEFIT MAY VARY UNDER THE CONDITIONS DESCRIBED IN THE DEATH BENEFIT AND
TERMINATION PROVISIONS.

This is a legal contract between the owner and Kemper Investors Life Insurance
Company.

READ THIS POLICY CAREFULLY.




<PAGE>   2




TABLE OF CONTENTS                                                    PAGE NO.


APPLICATION                                     Follows Policy Specifications

DEATH BENEFIT PROVISIONS                                                2 - 3
    Payment of Death Benefits                                               2
    Amount Payable Upon Death                                               3

DEFINITIONS                                                                 1

ENDORSEMENTS, if any                         Follows Settlement Option Table

GENERAL PROVISIONS                                                      1 - 2
    The Contract                                                            1
    Contestability                                                          1
    Assignment                                                              2
    Reports                                                                 2

NONFORFEITURE PROVISIONS                                                  4-5

OWNERSHIP PROVISIONS                                                        2
    Owner of Policy                                                         2
    Change of Ownership                                                     2
    Beneficiary                                                             2

POLICY SPECIFICATIONS                                           Follows Index

PREMIUM PROVISIONS                                                          3

SETTLEMENT OPTION TABLE                                        Follows Page 7

TRANSFER, WITHDRAWAL AND LOAN PROVISIONS                                5 - 6
    Transfers                                                               5
    Withdrawals                                                             5
    Withdrawal Charges                                                      5
    Loans                                                                   5
    Transfer, Withdrawal and Loan Procedures                                6

VARIABLE ACCOUNT PROVISIONS                                             3 - 4
    Separate Account                                                        3
    Liabilities of Separate Account                                         3
    Separate Account Value                                                  3
    Subaccounts                                                             4
    Rights Reserved By The Company                                          4
    Accumulation Unit Value                                                 4



<PAGE>   3
                              POLICY SPECIFICATIONS



INSURED LIVES              JOHN DOE                 ISSUE AGE        35
                           JANE DOE                                  35

EFFECTIVE DATE             JAN 01 1999              POLICY NUMBER    0000000

INITIAL SPECIFIED AMOUNT   $100,000                 ISSUE DATE       JAN 01 1999




                              COVERAGE INFORMATION


                             RATE         INITIAL
                             CLASS       SPECIFIED     MATURITY OR    MONTHLY
BENEFIT DESCRIPTION         PERCENT       AMOUNT       EXPIRY DATE     RATE

MODIFIED SINGLE PREMIUM
VARIABLE LIFE*                100        $100,000      [JAN 01 2064]  SEE PAGE D








* IT IS POSSIBLE THAT COVERAGE WILL EXPIRE PRIOR TO THE MATURITY DATE SHOWN IF
PREMIUMS PAID ARE INSUFFICIENT TO CONTINUE THE COVERAGE TO SUCH DATE. EVEN IF
COVERAGE CONTINUES TO THE MATURITY DATE, THERE MAY BE NO SURRENDER VALUE TO BE
PAID ON THAT DATE.





                               PREMIUM INFORMATION



SINGLE PREMIUM                                     [$10,000]


INSURED RATE CLASS                                 STANDARD TOBACCO/NON-TOBACCO







                                                                          Page A

<PAGE>   4



                              POLICY SPECIFICATIONS



INSURED LIVES              JOHN DOE                 ISSUE AGE        35
                           JANE DOE                                  35

EFFECTIVE DATE             JAN 01 1999              POLICY NUMBER    [000000]

MONTHLY PROCESSING DAY                              DAY 01 OF EACH MONTH

DEDUCTION PERIOD                                    [65 YEARS, 00 MONTHS]

MINIMUM SPECIFIED AMOUNT AFTER WITHDRAWAL           [$10,000]

MINIMUM WITHDRAWAL AMOUNT                           [$100.00]

MINIMUM NET SURRENDER VALUE AFTER WITHDRAWAL        [$5,000]

MINIMUM LOAN AMOUNT                                 [$1,000.00]

POLICY LOAN INTEREST CHARGED                        [5.50%]

POLICY LOAN INTEREST CREDITED
      Preferred Loan Portion                        [5.50%]
      Non-Preferred Loan Portion                    [3.50%]

MINIMUM PREMIUM                                     [$10,000.00]

IRC SECTION 7702 TEST                               GUIDELINE PREMIUM


                         TABLE OF DEATH BENEFIT FACTORS

<TABLE>
<CAPTION>

ATTAINED                    ATTAINED                   ATTAINED                    ATTAINED
  AGE*       PERCENT          AGE*        PERCENT        AGE*        PERCENT         AGE*         PERCENT

<S>            <C>             <C>          <C>           <C>          <C>          <C>             <C>
  0-40         250             50           185           60           130            70            115
   41          243             51           178           61           128            71            113
   42          236             52           171           62           126            72            111
   43          229             53           164           63           124            73            109
   44          222             54           157           64           122            74            107
   45          215             55           150           65           120          75-90           105
   46          209             56           146           66           119            91            104
   47          203             57           142           67           118            92            103
   48          197             58           138           68           117            93            102
   49          191             59           134           69           116            94            101
                                                                                      95+           100
</TABLE>




*ATTAINED AGE IS THE AGE ON LAST BIRTHDAY AS OF THE BEGINNING OF THE POLICY
 YEAR.




                                                                          Page B
<PAGE>   5


                              POLICY SPECIFICATIONS


LIVES INSURED              JOHN DOE                 ISSUE AGE        35
                           JANE DOE                                  35


ISSUE DATE                 JAN 01 1999              POLICY NUMBER    [000000]


SEPARATE ACCOUNT                                    INITIAL PREMIUM ALLOCATION

KEMPER AGGRESSIVE GROWTH PORTFOLIO                             100%
KEMPER TECHNOLOGY GROWTH PORTFOLIO
KEMPER-DREMAN FINANCIAL SERVICES PORTFOLIO
KEMPER SMALL CAP GROWTH PORTFOLIO
KEMPER SMALL CAP VALUE PORTFOLIO
KEMPER-DREMAN HIGH RETURN EQUITY PORTFOLIO
KEMPER INTERNATIONAL PORTFOLIO
KEMPER INTERNATIONAL GROWTH & INCOME PORTFOLIO
KEMPER GLOBAL BLUE CHIP PORTFOLIO
KEMPER GROWTH PORTFOLIO
KEMPER CONTRARIAN VALUE PORTFOLIO
KEMPER BLUE CHIP PORTFOLIO
KEMPER VALUE+GROWTH PORTFOLIO
KEMPER HORIZON 20+ PORTFOLIO
KEMPER TOTAL RETURN PORTFOLIO
KEMPER HORIZON 10+ PORTFOLIO
KEMPER HIGH YIELD PORTFOLIO
KEMPER HORIZON 5 PORTFOLIO
KEMPER GLOBAL INCOME PORTFOLIO
KEMPER INVESTMENT GRADE BOND PORTFOLIO
KEMPER GOVERNMENT SECURITIES PORTFOLIO
KEMPER MONEY MARKET PORTFOLIO
SCUDDER VLIF GLOBAL DISCOVERY PORTFOLIO
SCUDDER VLIF GROWTH AND INCOME PORTFOLIO
SCUDDER VLIF INTERNATIONAL PORTFOLIO
SCUDDER VLIF CAPITAL GROWTH PORTFOLIO
JANUS ASPEN GROWTH PORTFOLIO
JANUS ASPEN GROWTH AND INCOME PORTFOLIO
WARBURG EMERGING MARKETS PORTFOLIO
WARBURG POST-VENTURE CAPITAL PORTFOLIO


ASSET BASED CHARGES ARE ASSESSED FOR THE ABOVE SUBACCOUNTS. FOR A COMPLETE
DISCUSSION OF ASSET BASED CHARGES, PLEASE REFER TO SCHEDULE 1.












                                                                          Page C

<PAGE>   6



                              POLICY SPECIFICATIONS

LIVES INSURED              JOHN DOE                 ISSUE AGE        35
                           JANE DOE                                  35

ISSUE DATE                 JAN 01 1999              POLICY NUMBER    [000000]

         TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES* PER $1,000

<TABLE>
<CAPTION>

    ATTAINED          NON-                                  ATTAINED          NON-
      AGE            TOBACCO           TOBACCO                 AGE           TOBACCO            TOBACCO
- ------------------------------------------------------------------------------------------------------------
<S>                 <C>                <C>                     <C>          <C>                <C>
       0            0.219480           0.219480                50           0.428690           0.837880
       1            0.085880           0.085880                51           0.468090           0.916270
       2            0.082540           0.082540                52           0.513380           1.004870
       3            0.080880           0.080880                53           0.565410           1.105400
       4            0.077540           0.077540                54           0.623350           1.215380
       5            0.073370           0.073370                55           0.688070           1.333150
       6            0.069200           0.069200                56           0.758730           1.457890
       7            0.065030           0.065030                57           0.833670           1.589640
       8            0.062530           0.062530                58           0.917110           1.728430
       9            0.061690           0.061690                59           1.010780           1.877720
       10           0.062530           0.062530                60           1.115550           2.044410
       11           0.067530           0.067530                61           1.232310           2.232910
       12           0.076700           0.076700                62           1.367070           2.445950
       13           0.089220           0.089220                63           1.519910           2.684600
       14           0.103400           0.103400                64           1.690090           2.946500
       15           0.113420           0.146810                65           1.876860           3.224930
       16           0.123430           0.163510                66           2.079500           3.517450
       17           0.130940           0.175200                67           2.297270           3.821590
       18           0.135950           0.184390                68           2.534600           4.141890
       19           0.139290           0.190240                69           2.798580           4.490890
       20           0.140130           0.193580                70           3.098170           4.877870
       21           0.138460           0.193580                71           3.441600           5.314990
       22           0.135950           0.190240                72           3.839990           5.812080
       23           0.132610           0.186890                73           4.293280           6.366660
       24           0.129280           0.181880                74           4.794460           6.979050
       25           0.125100           0.176030                75           5.333740           7.638620
       26           0.122600           0.172690                76           5.907380           8.318710
       27           0.120930           0.171020                77           6.511600           9.007620
       28           0.120090           0.171020                78           7.150730           9.710250
       29           0.120090           0.173530                79           7.845900           10.451730
       30           0.120930           0.177710                80           8.620930           11.258160
       31           0.123430           0.183550                81           9.498890           12.154910
       32           0.126770           0.191070                82           10.501350          13.160810
       33           0.131780           0.201100                83           11.628210          14.262960
       34           0.137620           0.212790                84           12.862100          15.427670
       35           0.144300           0.227000                85           14.178860          16.617240
       36           0.151820           0.243720                86           15.565070          17.803170
       37           0.161840           0.264620                87           17.002260          19.039280
       38           0.172690           0.288040                88           18.486430          20.348230
       39           0.184390           0.314810                89           20.041320          21.671680
       40           0.198590           0.345780                90           21.693700          23.030110
       41           0.213630           0.379270                91           23.488560          24.468300
       42           0.229510           0.416120                92           25.504290          26.169550
       43           0.247060           0.456350                93           27.961930          28.406850
       44           0.266290           0.500790                94           31.383850          31.563380
       45           0.288040           0.547780                95           36.798270          36.798270
       46           0.311460           0.596470                96           46.588990          46.588990
       47           0.336570           0.649400                97           67.043870          67.043870
       48           0.364190           0.706570                98           83.333330          83.333330
       49           0.394340           0.768830                99           83.333330          83.333330

</TABLE>

*THE GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES SHALL BE THE RATES SHOWN
IN THE TABLE ABOVE MULTIPLIED BY THE APPROPRIATE RATE CLASS PERCENT. THIS
PERCENT IS SHOWN ON PAGE 1 OF THE POLICY SPECIFICATIONS. THE RATES ACTUALLY
CHARGED MAY BE REDUCED IN ACCORDANCE WITH THE COST OF INSURANCE RATE SECTION.



                                                                          Page D
<PAGE>   7

               GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES
<TABLE>
<CAPTION>


                     --------------------------------------------------------------
                                           MALE NON-TOBACCO
                     --------------------------------------------------------------
                       ATTAINED                        ATTAINED
                          AGE                             AGE
                     ------------------------------   -----------------------------
<S>                                   <C>                 <C>         <C>
                           0          0.219480            50          0.428690
                     ------------------------------   -----------------------------
                           1          0.085880            51          0.468090
                     ------------------------------   -----------------------------
                           2          0.082540            52          0.513380
                     ------------------------------   -----------------------------
                           3          0.080880            53          0.565410
                     ------------------------------   -----------------------------
                           4          0.077540            54          0.623350
                     ------------------------------   -----------------------------
                           5          0.073370            55          0.688070
                     ------------------------------   -----------------------------
                           6          0.069200            56          0.758730
                     ------------------------------   -----------------------------
                           7          0.065030            57          0.833670
                     ------------------------------   -----------------------------
                           8          0.062530            58          0.917110
                     ------------------------------   -----------------------------
                           9          0.061690            59          1.010780
                     ------------------------------   -----------------------------
                          10          0.062530            60          1.115550
                     ------------------------------   -----------------------------
                          11          0.067530            61          1.232310
                     ------------------------------   -----------------------------
                          12          0.076700            62          1.367070
                     ------------------------------   -----------------------------
                          13          0.089220            63          1.519910
                     ------------------------------   -----------------------------
                          14          0.103400            64          1.690090
                     ------------------------------   -----------------------------
                          15          0.113420            65          1.876860
                     ------------------------------   -----------------------------
                          16          0.123430            66          2.079500
                     ------------------------------   -----------------------------
                          17          0.130940            67          2.297270
                     ------------------------------   -----------------------------
                          18          0.135950            68          2.534600
                     ------------------------------   -----------------------------
                          19          0.139290            69          2.798580
                     ------------------------------   -----------------------------
                          20          0.140130            70          3.098170
                     ------------------------------   -----------------------------
                          21          0.138460            71          3.441600
                     ------------------------------   -----------------------------
                          22          0.135950            72          3.839990
                     ------------------------------   -----------------------------
                          23          0.132610            73          4.293280
                     ------------------------------   -----------------------------
                          24          0.129280            74          4.794460
                     ------------------------------   -----------------------------
                          25          0.125100            75          5.333740
                     ------------------------------   -----------------------------
                          26          0.122600            76          5.907380
                     ------------------------------   -----------------------------
                          27          0.120930            77          6.511600
                     ------------------------------   -----------------------------
                          28          0.120090            78          7.150730
                     ------------------------------   -----------------------------
                          29          0.120090            79          7.845900
                     ------------------------------   -----------------------------
                          30          0.120930            80          8.620930
                     ------------------------------   -----------------------------
                          31          0.123430            81          9.498890
                     ------------------------------   -----------------------------
                          32          0.126770            82         10.501350
                     ------------------------------   -----------------------------
                          33          0.131780            83         11.628210
                     ------------------------------   -----------------------------
                          34          0.137620            84         12.862100
                     ------------------------------   -----------------------------
                          35          0.144300            85         14.178860
                     ------------------------------   -----------------------------
                          36          0.151820            86         15.565070
                     ------------------------------   -----------------------------
                          37          0.161840            87         17.002260
                     ------------------------------   -----------------------------
                          38          0.172690            88         18.486430
                     ------------------------------   -----------------------------
                          39          0.184390            89         20.041320
                     ------------------------------   -----------------------------
                          40          0.198590            90         21.693700
                     ------------------------------   -----------------------------
                          41          0.213630            91         23.488560
                     ------------------------------   -----------------------------
                          42          0.229510            92         25.504290
                     ------------------------------   -----------------------------
                          43          0.247060            93         27.961930
                     ------------------------------   -----------------------------
                          44          0.266290            94         31.383850
                     ------------------------------   -----------------------------
                          45          0.288040            95         36.798270
                     ------------------------------   -----------------------------
                          46          0.311460            96         46.588990
                     ------------------------------   -----------------------------
                          47          0.336570            97         67.043870
                     ------------------------------   -----------------------------
                          48          0.364190            98         83.333330
                     ------------------------------   -----------------------------
                          49          0.394340            99         83.333330
                     ------------------------------   -----------------------------
</TABLE>


<PAGE>   8



               GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES
<TABLE>
<CAPTION>


                     --------------------------------------------------------------
                                             MALE TOBACCO

                     ------------------------------- -------------------------------
                       ATTAINED                        ATTAINED
                         AGE                             AGE
                     ------------------------------   -----------------------------
<S>                                   <C>                 <C>        <C>
                          0           0.219480            50         0.837880
                     ------------------------------   -----------------------------
                          1           0.085880            51         0.916270
                     ------------------------------   -----------------------------
                          2           0.082540            52         1.004870
                     ------------------------------   -----------------------------
                          3           0.080880            53         1.105400
                     ------------------------------   -----------------------------
                          4           0.077540            54         1.215380
                     ------------------------------   -----------------------------
                          5           0.073370            55         1.333150
                     ------------------------------   -----------------------------
                          6           0.069200            56         1.457890
                     ------------------------------   -----------------------------
                          7           0.065030            57         1.589640
                     ------------------------------   -----------------------------
                          8           0.062530            58         1.728430
                     ------------------------------   -----------------------------
                          9           0.061690            59         1.877720
                     ------------------------------   -----------------------------
                          10          0.062530            60         2.044410
                     ------------------------------   -----------------------------
                          11          0.067530            61         2.232910
                     ------------------------------   -----------------------------
                          12          0.076700            62         2.445950
                     ------------------------------   -----------------------------
                          13          0.089220            63         2.684600
                     ------------------------------   -----------------------------
                          14          0.103400            64         2.946500
                     ------------------------------   -----------------------------
                          15          0.146810            65         3.224930
                     ------------------------------   -----------------------------
                          16          0.163510            66         3.517450
                     ------------------------------   -----------------------------
                          17          0.175200            67         3.821590
                     ------------------------------   -----------------------------
                          18          0.184390            68         4.141890
                     ------------------------------   -----------------------------
                          19          0.190240            69         4.490890
                     ------------------------------   -----------------------------
                          20          0.193580            70         4.877870
                     ------------------------------   -----------------------------
                          21          0.193580            71         5.314990
                     ------------------------------   -----------------------------
                          22          0.190240            72         5.812080
                     ------------------------------   -----------------------------
                          23          0.186890            73         6.366660
                     ------------------------------   -----------------------------
                          24          0.181880            74         6.979050
                     ------------------------------   -----------------------------
                          25          0.176030            75         7.638620
                     ------------------------------   -----------------------------
                          26          0.172690            76         8.318710
                     ------------------------------   -----------------------------
                          27          0.171020            77         9.007620
                     ------------------------------   -----------------------------
                          28          0.171020            78         9.710250
                     ------------------------------   -----------------------------
                          29          0.173530            79         10.451730
                     ------------------------------   -----------------------------
                          30          0.177710            80         11.258160
                     ------------------------------   -----------------------------
                          31          0.183550            81         12.154910
                     ------------------------------   -----------------------------
                          32          0.191070            82         13.160810
                     ------------------------------   -----------------------------
                          33          0.201100            83         14.262960
                     ------------------------------   -----------------------------
                          34          0.212790            84         15.247670
                     ------------------------------   -----------------------------
                          35          0.227000            85         16.617240
                     ------------------------------   -----------------------------
                          36          0.243720            86         17.803170
                     ------------------------------   -----------------------------
                          37          0.264620            87         19.039280
                     ------------------------------   -----------------------------
                          38          0.288040            88         20.348230
                     ------------------------------   -----------------------------
                          39          0.314810            89         21.671680
                     ------------------------------   -----------------------------
                          40          0.345780            90         23.030110
                     ------------------------------   -----------------------------
                          41          0.379270            91         24.468300
                     ------------------------------   -----------------------------
                          42          0.416120            92         26.169550
                     ------------------------------   -----------------------------
                          43          0.456350            93         28.406850
                     ------------------------------   -----------------------------
                          44          0.500790            94         31.563380
                     ------------------------------   -----------------------------
                          45          0.547780            95         36.798270
                     ------------------------------   -----------------------------
                          46          0.596470            96         46.588990
                     ------------------------------   -----------------------------
                          47          0.649400            97         67.043870
                     ------------------------------   -----------------------------
                          48          0.706570            98         83.333330
                     ------------------------------   -----------------------------
                          49          0.768830            99         83.333330
                     ------------------------------   -----------------------------
</TABLE>



<PAGE>   9



               GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES
<TABLE>
<CAPTION>


                     --------------------------------------------------------------
                                          FEMALE NON-TOBACCO

                     --------------------------------------------------------------
                       ATTAINED                        ATTAINED
                         AGE                             AGE
                     ------------------------------   -----------------------------
<S>                                   <C>                 <C>        <C>
                          0           0.156830            50         0.362520
                     ------------------------------   -----------------------------
                          1           0.070030            51         0.390150
                     ------------------------------   -----------------------------
                          2           0.066700            52         0.421990
                     ------------------------------   -----------------------------
                          3           0.065030            53         0.457190
                     ------------------------------   -----------------------------
                          4           0.064190            54         0.493240
                     ------------------------------   -----------------------------
                          5           0.062530            55         0.531830
                     ------------------------------   -----------------------------
                          6           0.060860            56         0.570440
                     ------------------------------   -----------------------------
                          7           0.059190            57         0.608230
                     ------------------------------   -----------------------------
                          8           0.058360            58         0.646040
                     ------------------------------   -----------------------------
                          9           0.057520            59         0.688910
                     ------------------------------   -----------------------------
                          10          0.056690            60         0.739370
                     ------------------------------   -----------------------------
                          11          0.058360            61         0.801660
                     ------------------------------   -----------------------------
                          12          0.060860            62         0.879170
                     ------------------------------   -----------------------------
                          13          0.064190            63         0.974480
                     ------------------------------   -----------------------------
                          14          0.068360            64         1.081730
                     ------------------------------   -----------------------------
                          15          0.071700            65         1.197600
                     ------------------------------   -----------------------------
                          16          0.075040            66         1.317890
                     ------------------------------   -----------------------------
                          17          0.077540            67         1.440910
                     ------------------------------   -----------------------------
                          18          0.080040            68         1.568370
                     ------------------------------   -----------------------------
                          19          0.082540            69         1.710530
                     ------------------------------   -----------------------------
                          20          0.084210            70         1.877720
                     ------------------------------   -----------------------------
                          21          0.085880            71         2.082070
                     ------------------------------   -----------------------------
                          22          0.086720            72         2.333340
                     ------------------------------   -----------------------------
                          23          0.088380            73         2.635430
                     ------------------------------   -----------------------------
                          24          0.090050            74         2.984600
                     ------------------------------   -----------------------------
                          25          0.091720            75         3.376280
                     ------------------------------   -----------------------------
                          26          0.094220            76         3.802330
                     ------------------------------   -----------------------------
                          27          0.095890            77         4.261570
                     ------------------------------   -----------------------------
                          28          0.098400            78         4.761660
                     ------------------------------   -----------------------------
                          29          0.101730            79         5.319450
                     ------------------------------   -----------------------------
                          30          0.104240            80         5.958680
                     ------------------------------   -----------------------------
                          31          0.107580            81         6.700420
                     ------------------------------   -----------------------------
                          32          0.110910            82         7.564140
                     ------------------------------   -----------------------------
                          33          0.115090            83         8.550150
                     ------------------------------   -----------------------------
                          34          0.120090            84         9.651690
                     ------------------------------   -----------------------------
                          35          0.125940            85         10.861090
                     ------------------------------   -----------------------------
                          36          0.134280            86         12.174410
                     ------------------------------   -----------------------------
                          37          0.144300            87         13.594640
                     ------------------------------   -----------------------------
                          38          0.155160            88         15.128280
                     ------------------------------   -----------------------------
                          39          0.166850            89         16.793990
                     ------------------------------   -----------------------------
                          40          0.181050            90         18.613420
                     ------------------------------   -----------------------------
                          41          0.196080            91         20.640050
                     ------------------------------   -----------------------------
                          42          0.211120            92         22.968510
                     ------------------------------   -----------------------------
                          43          0.226170            93         25.797340
                     ------------------------------   -----------------------------
                          44          0.241210            94         29.586210
                     ------------------------------   -----------------------------
                          45          0.257930            95         35.366190
                     ------------------------------   -----------------------------
                          46          0.275490            96         45.525080
                     ------------------------------   -----------------------------
                          47          0.294730            97         66.318680
                     ------------------------------   -----------------------------
                          48          0.314810            98         83.333330
                     ------------------------------   -----------------------------
                          49          0.337410            99         83.333330
                     ------------------------------   -----------------------------
</TABLE>



<PAGE>   10



               GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES
<TABLE>
<CAPTION>


                     --------------------------------------------------------------
                                            FEMALE TOBACCO
                     --------------------------------------------------------------
                       ATTAINED                        ATTAINED
                         AGE                             AGE
                     ------------------------------   -----------------------------
<S>                                   <C>                 <C>        <C>
                          0           0.156830            50         0.566250
                     ------------------------------   -----------------------------
                          1           0.070030            51         0.607390
                     ------------------------------   -----------------------------
                          2           0.066700            52         0.654440
                     ------------------------------   -----------------------------
                          3           0.065030            53         0.706570
                     ------------------------------   -----------------------------
                          4           0.064190            54         0.759570
                     ------------------------------   -----------------------------
                          5           0.062530            55         0.814290
                     ------------------------------   -----------------------------
                          6           0.060860            56         0.868210
                     ------------------------------   -----------------------------
                          7           0.059190            57         0.918800
                     ------------------------------   -----------------------------
                          8           0.058360            58         0.968570
                     ------------------------------   -----------------------------
                          9           0.057520            59         1.021750
                     ------------------------------   -----------------------------
                          10          0.056690            60         1.085110
                     ------------------------------   -----------------------------
                          11          0.058360            61         1.164600
                     ------------------------------   -----------------------------
                          12          0.060860            62         1.267040
                     ------------------------------   -----------------------------
                          13          0.064190            63         1.391670
                     ------------------------------   -----------------------------
                          14          0.068360            64         1.530960
                     ------------------------------   -----------------------------
                          15          0.080040            65         1.678160
                     ------------------------------   -----------------------------
                          16          0.084210            66         1.828210
                     ------------------------------   -----------------------------
                          17          0.088380            67         1.973420
                     ------------------------------   -----------------------------
                          18          0.092560            68         2.120610
                     ------------------------------   -----------------------------
                          19          0.095060            69         2.280960
                     ------------------------------   -----------------------------
                          20          0.097560            70         2.470900
                     ------------------------------   -----------------------------
                          21          0.099230            71         2.712220
                     ------------------------------   -----------------------------
                          22          0.101730            72         3.008860
                     ------------------------------   -----------------------------
                          23          0.104240            73         3.363220
                     ------------------------------   -----------------------------
                          24          0.106740            74         3.769070
                     ------------------------------   -----------------------------
                          25          0.109240            75         4.214910
                     ------------------------------   -----------------------------
                          26          0.113420            76         4.691660
                     ------------------------------   -----------------------------
                          27          0.116760            77         5.192770
                     ------------------------------   -----------------------------
                          28          0.120930            78         5.725870
                     ------------------------------   -----------------------------
                          29          0.125940            79         6.310570
                     ------------------------------   -----------------------------
                          30          0.131780            80         6.970840
                     ------------------------------   -----------------------------
                          31          0.136790            81         7.726990
                     ------------------------------   -----------------------------
                          32          0.142630            82         8.595770
                     ------------------------------   -----------------------------
                          33          0.150150            83         9.611100
                     ------------------------------   -----------------------------
                          34          0.158500            84         10.726950
                     ------------------------------   -----------------------------
                          35          0.167680            85         11.929990
                     ------------------------------   -----------------------------
                          36          0.181880            86         13.214160
                     ------------------------------   -----------------------------
                          37          0.198590            87         14.570110
                     ------------------------------   -----------------------------
                          38          0.217810            88         16.008410
                     ------------------------------   -----------------------------
                          39          0.238700            89         17.532150
                     ------------------------------   -----------------------------
                          40          0.263790            90         19.256820
                     ------------------------------   -----------------------------
                          41          0.290550            91         21.156900
                     ------------------------------   -----------------------------
                          42          0.317320            92         23.319700
                     ------------------------------   -----------------------------
                          43          0.344100            93         25.937870
                     ------------------------------   -----------------------------
                          44          0.370890            94         29.586210
                     ------------------------------   -----------------------------
                          45          0.399370            95         35.366190
                     ------------------------------   -----------------------------
                          46          0.428690            96         45.525080
                     ------------------------------   -----------------------------
                          47          0.458870            97         66.318680
                     ------------------------------   -----------------------------
                          48          0.491570            98         83.333330
                     ------------------------------   -----------------------------
                          49          0.527640            99         83.333330
                     ------------------------------   -----------------------------
</TABLE>


<PAGE>   11
                                   SCHEDULE 1




                             CHARGES AND DEDUCTIONS



- --------------------------------------------------------------------------------
                         SCHEDULE OF ASSET BASED CHARGES
- --------------------------------------------------------------------------------
Mortality and Expense Risk Charge                                           .90%
- --------------------------------------------------------------------------------

Administration Charge                        .35% annually for Policy Years 1-10
                                     .25% annually for Policy Years 11 and later

Tax Charge                                   .40% annually for Policy Years 1-10



THE ASSET BASED CHARGES WILL BE ASSESSED DAILY ON THE SEPARATE ACCOUNT VALUE.


The Annual Record Maintenance Charge of $30 is deducted from your Cash Value at
the end of the Policy Year.

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
                     SCHEDULE OF PREMIUM WITHDRAWAL CHARGES
- ----------------------------------------------------------------------------------------------------------
       POLICY YEARS                  SURRENDER             PREMIUM TAX              TOTAL WITHDRAWAL
    ELAPSED SINCE ISSUE                CHARGE                 CHARGE                     CHARGE
- ----------------------------------------------------------------------------------------------------------
<S>          <C>                       <C>                    <C>                        <C>
             1                         7.75%                  2.25%                      10.00%
             2                         7.75%                  2.00%                      9.75%
             3                         7.50%                  1.75%                      9.25%
             4                         6.50%                  1.50%                      8.00%
             5                         5.75%                  1.25%                      7.00%
             6                         5.00%                  1.00%                      6.00%
             7                         4.25%                   .75%                      5.00%
             8                         3.50%                   .50%                      4.00%
             9                         2.75%                   .25%                      3.00%
          over 9                         0%                     0%                         0%
- ----------------------------------------------------------------------------------------------------------
</TABLE>



THE WITHDRAWAL CHARGE PERCENTAGES ARE APPLIED AGAINST THE ORIGINAL SINGLE
PREMIUM AMOUNT. A FREE PARTIAL WITHDRAWAL OF THE GREATER OF 10% OF CASH VALUE OR
CASH VALUE LESS PREMIUM PAID IS AVAILABLE EACH YEAR. PREMIUM PAID FOR THIS
PURPOSE IS THE PREMIUM SUBJECT TO A WITHDRAWAL CHARGE MINUS WITHDRAWALS
PREVIOUSLY ASSESSED [A WITHDRAWAL CHARGE].



<PAGE>   12


DEFINITIONS
                        ACCUMULATION UNIT - An accounting unit of measure used
                        to calculate the value of each Subaccount.

                        ACCUMULATION UNIT VALUE - The value of a Subaccount
                        determined for a Valuation Period according to the
                        formula stated in this policy.

                        ADMINISTRATION CHARGE - A charge deducted from the Cash
                        Value for a portion of Our administrative costs.

                        CASH VALUE - The sum of the Separate Account Value plus
                        the Fixed Account Value plus the Loan Account Value.

                        DEBT - The principal of any outstanding loan plus any
                        loan interest due or accrued.

                        DEDUCTION DAY - The Deduction Day is stated in the
                        policy specifications. It is the same day in each month
                        as the Effective Date. It is the day from which policy
                        months are determined.

                        EFFECTIVE DATE - The Effective Date is shown on the
                        front of Your policy. It is the date coverage becomes
                        effective. If the Effective Date would have been the
                        29th, 30th or 31st of the month, the Effective Date will
                        be the 28th day of that month.

                        FIXED ACCOUNT - The portion of the Cash Value allocated
                        to our General Account, including amounts allocated to
                        our DCA Fixed Account to be transferred to the
                        Subaccount under the automatic Dollar Cost Averaging
                        program.

                        FIXED ACCOUNT VALUE - The value of the Fixed Account.

                        FUND - An investment company or separate series thereof,
                        in which the Subaccounts of the Separate Account invest.

                        GENERAL ACCOUNT - Our assets other than those allocated
                        to the Separate Account or any other Separate Account.

                        GUIDELINE SINGLE PREMIUM - The Guideline Single Premium
                        as defined in Section 7702 of the Internal Revenue Code.

                        ISSUE AGE - The attained age as of the Life Insured's
                        last birthday on the Effective Date.

                        ISSUE DATE - The issue date stated in the policy
                        specifications. It is the date all requirements for
                        coverage and Premium have been received, and the policy
                        is approved.

                        LIVES INSURED - The persons whose lives are insured
                        under the policy as set forth in the policy
                        specifications.

                        LOAN ACCOUNT - The account established for amounts
                        transferred from the Subaccounts as security for
                        outstanding Policy Debt.

                        LOAN ACCOUNT VALUE - The value of the Loan Account.




                                                                          Page 1

<PAGE>   13

                                                                          Page 2


                        MATURITY DATE - The Maturity Date is stated in the
                        policy specifications. It is the policy anniversary
                        nearest the insured's 100th birthday.

                        MORTALITY AND EXPENSE CHARGE - A charge deducted in the
                        calculation of the accumulation unit value. It is for
                        Our assumption of mortality risks and expense
                        guarantees.

                        NET SURRENDER VALUE - The Surrender Value minus any
                        Debt.

                        OWNER - See "You, Your, Yours" below.

                        POLICY YEAR - Each twelve-month period beginning on the
                        Effective Date and each Policy Anniversary.

                        PREFERRED LOAN - The portion of any loan as to which the
                        loan account is credited a higher rate of interest. The
                        maximum amount available as a Preferred Loan is the
                        Separate Account Values minus premium paid plus any
                        prior withdrawal of premium.

                        PREMIUM - The dollar amount We receive in U.S. currency
                        to buy the benefits this policy provides.

                        RECORDS MAINTENANCE CHARGE - A charge assessed against
                        Your policy as specified in the policy specifications.

                        RECEIVED - Received by Kemper Investors Life Insurance
                        Company at its home office in Long Grove, Illinois.

                        SEPARATE ACCOUNT - A unit investment trust registered
                        with the Securities and Exchange Commission under the
                        Investment Company Act of 1940 known as the KILICO
                        Variable Annuity Separate Account.

                        SEPARATE ACCOUNT VALUE - The sum of the Subaccount
                        Values of this policy on the Valuation Date.

                        SUBACCOUNTS - The Separate Account has several
                        Subaccounts. The available Subaccounts are stated in the
                        policy specifications.

                        SUBACCOUNT VALUE - The value of each Subaccount
                        calculated separately according to the formula stated in
                        this policy.

                        SURRENDER VALUE - The Surrender Value of this policy is
                        the Cash Value minus any applicable withdrawal charge.

                        SURVIVING INSURED - The second Life Insured to die.

                        TAX EXPENSE CHARGE - A charge deducted from the Cash
                        Value to pay applicable state and local Premium taxes
                        and federal taxes imposed under Section 848 of the
                        Internal Revenue Code of 1986, as amended (the "Code").

                        TRADE DATE - The Trade Date is ten (10) days plus the
                        number of days in your right to cancel period after the
                        Issue Date. It is the date that your initial premium
                        plus any interest will be allocated to the Subaccounts
                        according to your instructions. The right to cancel
                        period is shown on the front of Your policy.

                        VALUATION DATE - Each business day that applicable law
                        requires that We value the assets of the Separate
                        Account. Currently this is each day that the New York
                        Stock Exchange is open for trading.

                        VALUATION PERIOD - The period that starts at the close
                        of a Valuation Date and ends at the close of the next
                        succeeding Valuation Date.




<PAGE>   14



                        WE, OUR, US - Kemper Investors Life Insurance Company,
                        Long Grove, Illinois.

                        YOU, YOUR, YOURS - The party(s) named as owner in the
                        application unless later changed as provided in this
                        policy. The owner, prior to the distribution of any
                        death benefit, has the exclusive right to exercise every
                        option and right conferred by this policy.
GENERAL PROVISIONS

THE POLICY              The policy, the attached application and any
                        supplemental application(s) constitute the entire
                        contract between the parties. All statements made in the
                        application and supplemental application(s) are deemed
                        representations and not warranties. No misstatement will
                        void this policy or be used as a defense of a claim
                        unless it is contained in the application or any
                        supplemental application.

MODIFICATION OF         Only Our president, secretary and assistant secretaries
POLICY                  have the power to approve a change or waive any
                        provisions of this policy. Any such modifications must
                        be in writing. No agent or person other than the
                        officers named has the authority to change or waive the
                        provisions of this policy.

CONTESTABILITY          We cannot contest this policy after it has been in force
                        for two years from the Effective Date.

                        If the policy is reinstated, a new two year
                        contestability period will apply from the Effective Date
                        of the reinstatement and will apply only to statements
                        made in the application for the reinstatement.

MISSTATEMENT OF AGE     If the age and/or sex of the Life Insured was misstated,
AND/OR SEX              the death benefit and all policy values will be adjusted
                        based on what the initial Premium would have purchased
                        using the correct ages and/or sexes.

SUICIDE                 If the first death is by suicide, within two years of
                        the Effective Date or date of reinstatement, whether the
                        Life Insured was sane or insane, We will reissue this
                        policy. The new policy on the Surviving Insured will be
                        a single life permanent policy which is available at
                        time of re-issue. The suicide provision for the new
                        policy will be effective as of the original issue date.

                        If the second death is by suicide, within two years from
                        the Effective Date, whether the Surviving Insured is
                        sane or insane, We will pay only the Premiums paid less
                        any withdrawal and Debt. If the second death occurs by
                        suicide within two years after the date of
                        reinstatement, Our total liability with respect to such
                        reinstatement will be the cost of insurance since the
                        date of reinstatement.

EFFECTIVE DATE          The Effective Date of coverage under this policy is the
OF COVERAGE             Effective Date. If the Effective Date would have been
                        the 29th, 30th, or 31st of the month, the Effective Date
                        will be the 28th day of that month. Incontestability and
                        suicide periods are measured from the Effective Date. We
                        will deduct the first monthly deduction on the Effective
                        Date.

TERMINATION             All coverage under this policy terminates when any one
                        of the following occurs:

                        1.      You request that coverage terminates;

                        2.      The Surviving Insured dies;

                        3.      This policy matures, or

                        4.      The grace period ends and there is Debt
                                outstanding.

ASSIGNMENT              No assignment of this policy is binding unless We
                        receive written notice of the assignment. We assume no
                        responsibility for the validity or sufficiency of any
                        assignment. Once notice of the assignment is recorded,
                        the rights of the owner, annuitant and beneficiary are
                        subject to the assignment. Any claim is subject to proof
                        of interest of the assignee.

DUE PROOF OF DEATH      The death benefit is payable when the Surviving Insured
                        dies. We must receive written proof of both deaths
                        within sixty days of the death of each of the Lives
                        Insured, or as soon thereafter as is reasonably
                        possible. The proof may be a certified death
                        certificate, the written statement of a physician, or
                        any other proof satisfactory to Us.




                                                                          Page 3

<PAGE>   15


                                                                          Page 4


RESERVES, CASH VALUES   All reserves are equal to or greater than those required
AND DEATH BENEFITS      by statute. Any available Cash Value and death benefit
                        are not less than the minimum benefits required by the
                        statutes of the state in which this policy is delivered.

BASIS OF COMPUTATIONS   A detailed statement of the method of computations of
                        cash values under this policy has been filed with the
                        insurance department of the state in which this policy
                        is delivered. The 1980 Commissioner's Standard Ordinary
                        Smoker or Nonsmoker Mortality tables, age last birthday,
                        is the basis for minimum Cash Values, death benefits,
                        and guaranteed maximum cost of insurance rates under
                        this policy.

TAX TREATMENT           This policy is intended to qualify as a life insurance
                        policy under the Internal Revenue Code ("Code"). We may
                        return Premiums which would disqualify the policy from
                        tax treatment as a life insurance policy. This policy
                        may be endorsed to reflect any change in the Code and
                        its regulations and rulings. You will receive a copy of
                        any such endorsement. If or when a federal income tax
                        should apply, we may impose charges for federal income
                        taxes attributed to the Separate Account. Charges for
                        other taxes, if any, attributed to this policy may also
                        be made.

NON-PARTICIPATING       This policy does not pay dividends. It will not share in
                        Our surplus or earnings.

REPORTS                 At least once each Policy Year We will send You a
                        statement showing Premiums received, interest credited,
                        investment experience, and charges made since the last
                        report. The report will also show the current death
                        benefit and Cash Value, as well as any other information
                        required by statute.

OWNERSHIP PROVISIONS

OWNERS OF POLICY        The insured is the original policy owner
                        unless otherwise provided in the application. You have
                        the right to cancel or amend this policy if We agree.
                        You may exercise every option and right conferred by
                        this policy including the right of assignment. The joint
                        owners must agree to any change if more than one owner
                        is named.

CHANGE OF OWNERSHIP     You may change the owner by written request at any time
                        during the lifetime of the Surviving Insured. You must
                        furnish information sufficient to clearly identify the
                        new owner to Us. The change is subject to any existing
                        assignment of this policy. When We record the effective
                        date of the change, it will be the date the notice was
                        signed except for action taken by Us prior to receiving
                        the request. Any change is subject to the payment of any
                        proceeds. We may require You to return this policy to Us
                        for endorsement of a change.

BENEFICIARY             The application for this policy shows the original
DESIGNATED AND          beneficiary. You may change the beneficiary if You send
CHANGE OF BENEFICIARY   Us a written change form. Changes are subject to the
                        following:

                        1.      The change must be filed while the Surviving
                                Insured is alive;

                        2.      This policy must be in force at the time You
                                file a change;

                        3.      Such change must not be prohibited by the terms
                                of an existing assignment, beneficiary
                                designation or other restriction;

                        4.      Such change will take effect when We receive it;

                        5.      After We receive the change, it will take effect
                                on the date the change form was signed. However,
                                action taken by Us before the change form was
                                received will remain in effect; and

                        6.      The request for change must provide information
                                sufficient to identify the new beneficiary.

                        We may require You to return this policy for endorsement
                        of a change.



<PAGE>   16




DEATH OF BENEFICIARY    The interest of a beneficiary who dies before the
                        distribution of the death benefit will pass to the other
                        beneficiaries, if any, share and share alike, unless
                        otherwise provided in the beneficiary designation. If no
                        beneficiary survives, or if no beneficiary is named, the
                        distribution will be made to the insured's estate.

                        If a beneficiary dies within ten days of the date of the
                        Surviving Insured's death, the death benefit will be
                        paid as if the Surviving Insured had survived the
                        beneficiary.

DEATH BENEFIT PROVISIONS

PAYMENT OF DEATH        We will pay a death benefit to the beneficiary when We
BENEFITS                receive due proof of death, if the Surviving Insured
                        dies while this policy is inforce. The return of this
                        policy is required before a payment is made.

                        We will pay the death benefit in a lump sum. This sum
                        may be deferred for up to five years from the date of
                        death. During this time, it will continue to accrue
                        interest at the normal rate for death benefits left on
                        deposit with Us.

                        Instead of a lump sum payment the beneficiary may elect
                        to have the death benefit distributed under a settlement
                        option. The beneficiary must make this choice within
                        sixty days of the time We receive due proof of death.

AMOUNT PAYABLE          We compute the death benefit at the end of the Valuation
UPON DEATH              Period following Our receipt of due proof of death of
                        the Surviving Insured and the return of this policy.

                        As long there is positive Net Surrender Value or during
                        the Grace Period, the death benefit is the greater of:

                        1.      the specified amount on the date of the
                                Surviving Insured's death, and

                        2.      the cash value on the date of the Surviving
                                Insured's death multiplied applicable death
                                benefit factor at the time of death.

                        The death benefit proceeds equal a. minus b. minus c.,
                        where:

                        a.      is the death benefit

                        b.      is any monthly deductions due during the grace
                                period

                        c.      is any Debt.

                        The initial specified amount and the table of cash value
                        corridors are shown in the policy specifications. The
                        specified amount is the initial specified amount, unless
                        reduced by a withdrawal.

                        If there is no positive Net Surrender Value, no Debt
                        outstanding, you paid 100% of the Guideline Single
                        Premium as your initial Premium, and your policy is not
                        in the Grace Period, the death benefit will be your
                        total Premium payments paid, less any withdrawal prior
                        partial withdrawals of Premium.

DEFERMENT OF DEATH      The payment of death benefits in excess of the specified
BENEFITS                amount may be deferred: (a) for up to 6 months from the
                        date requested if these benefits are based upon policy
                        values which do not depend on the investment performance
                        of the Separate Account or (b) (1) during any period
                        when the New York Stock Exchange is closed other than
                        customary weekend and holiday closings; (2) when
                        trading in the markets normally utilized is restricted
                        or an emergency exists as determined by the Securities
                        and Exchange Commission, so that disposal of
                        investments or determination of the accumulation unit
                        value is not practical; or (3) for such other periods
                        as the Securities and Exchange Commission may permit
                        for protection of owners.

PREMIUM PROVISIONS
                        The owner may choose a minimum initial Premium of 90% or
                        100% of the Guideline Single Premium (based on the
                        initial specified amount).




                                                                          Page 5

<PAGE>   17


                                                                          Page 6


ADDITIONAL PREMIUM      Payment of additional Premium of at least $1,000 will be
                        permitted under the following circumstances:

                        1.      An additional Premium payment is required to
                                maintain or reinstate coverage, as described in
                                the GRACE PERIOD and REINSTATEMENT provisions.

                        2.      The Premium payment would not cause the policy
                                to fail to meet the definition of a life
                                insurance under Section 7702 of the Internal
                                Revenue Code ("Code").

                        We reserve the right to require satisfactory evidence of
                        insurability before accepting any additional Premium
                        that increases the death benefit. Premium which does not
                        meet the tax qualification guidelines for life insurance
                        under the Code will not be applied to the policy.

                        If there is current Debt on the policy, additional
                        moneys will be considered additional premium, unless You
                        state otherwise.

PLACE OF PAYMENT        All Premiums under this policy must be paid to Us at Our
                        home office or such other location as We may select. We
                        will notify You and any other interested parties in
                        writing of such other locations. Premiums received by an
                        agent will be allocated to the Subaccounts only after We
                        receive them.

PREMIUM ALLOCATION      If you paid all or a portion of Your initial Premium
                        before the Issue Date of your Policy, we credit interest
                        to your initial Premium for the period prior to the
                        Issue Date at a rate not less than 3% annually. On the
                        Issue Date (unless the Trade Date is the same as the
                        Issue Date), we allocate the premium and any
                        accumulations to the Kemper Money Market Subaccount. The
                        Subaccount value of the Kemper Money Market Subaccount
                        will be allocated to the Subaccounts, according to the
                        Premium allocation shown in the policy specifications,
                        on the Trade Date. You may temporarily allocate a
                        portion of Your initial Premium to any single Subaccount
                        or to our Fixed Account to be transferred to the
                        Subaccounts under our automatic dollar cost averaging
                        program. Only initial Premiums may be allocated to the
                        Fixed Account, and only for the purpose of subsequent
                        transfers to the Subaccounts under our automatic dollar
                        cost averaging program. (If the Issue Date is the same
                        as the Trade Date, the Premium will be immediately
                        allocated to the Subaccounts).

GRACE PERIOD            If the net Surrender Value immediately proceeding a
                        deduction is less than the monthly deduction for that
                        month, a grace period of 61 days will be allowed for
                        the payment, without evidence of insurability, of
                        Premium payment or loan repayment equal to at least
                        three monthly deductions.

                        This grace period will begin on the day We mail notice
                        of the required payment to Your last known address.

                        If there is no current Debt on the policy, you paid 100%
                        of the Guideline Single Premium as your Initial Premium,
                        and payment is not received within the grace period,
                        coverage under this policy will remain inforce, but the
                        amount paid upon death of the insured after the grace
                        period will be limited to the return of Your total
                        Premiums paid less any prior partial withdrawals of
                        premium. The Specified Amount coverage can be restored
                        according to the REINSTATEMENT provision below.

                        If there is any Debt on the policy or you paid 90% of
                        the Guideline Single Premium as your Initial Premium and
                        payment is not received within the grace period,
                        coverage under this policy will terminate at the end of
                        the grace period in accordance with the NONFORFEITURE
                        provisions.

                        If death of the Surviving Insured occurs within the
                        grace period, any amount payable will be reduced by any
                        unpaid monthly deductions.

REINSTATEMENT           If this policy enters insufficient fund value status as
                        defined on Page 10 below, and has not been surrendered
                        for its Net Surrender Value, it may be reinstated to the
                        Specified Amount at any time within 3 years after
                        entering that status. The policy may also be reinstated
                        within 3 years of policy lapse if it has not been
                        surrendered for its Net Surrender Value. If one of the
                        Lives Insured dies during the lapse, the policy will be
                        re-issued as a single life permanent policy. Either type
                        of reinstatement is subject to:




<PAGE>   18





                        1.      receipt of evidence of insurability satisfactory
                                to Us;

                        2.      payment of enough Premium to pay the unpaid
                                monthly deductions due during the last expired
                                grace period;

                        3.      payment of a minimum Premium sufficient to keep
                                this policy in force for three months; and

                        4.      payment of any Debt against this policy which
                                existed at the date of termination of coverage.

                        The effective date of reinstatement of a policy will be
                        the Deduction Day that coincides with or next follows
                        the date the application for reinstatement is approved
                        by Us.

                        The SUICIDE and CONTESTABILITY provisions will apply
                        from the effective date of reinstatement.

VARIABLE ACCOUNT PROVISIONS

SEPARATE ACCOUNT        The variable benefits under this policy are provided
                        through the KILICO Variable Separate Account. This is
                        called the Separate Account. The Separate Account is
                        registered with the Securities and Exchange Commission
                        as a unit investment trust under the Investment Company
                        Act of 1940. It is a separate investment account
                        maintained by Us into which a portion of Our assets has
                        been allocated for this policy and may be allocated for
                        certain other policies.

LIABILITIES OF SEPARATE The assets equal to the reserves and other
ACCOUNT                 liabilities of the Separate Account will not be charged
                        with liabilities arising out of any other business We
                        may conduct. If the assets of the Separate Account
                        exceed the liabilities under the policies supported by
                        the separate Account, then the excess may be used to
                        cover the liabilities of Our General Account. We will
                        value the assets of the Separate Account on each
                        Valuation Date.

SEPARATE ACCOUNT        On any Valuation Date, the Separate Account Value is the
VALUE                   sum of its Subaccount Values.

SUBACCOUNTS             The Separate Account consists of several Subaccounts as
                        shown in the policy specifications. We may, from time to
                        time, combine or remove Subaccounts in the Separate
                        Account and establish additional Subaccounts of the
                        Separate Account.

                        In such event, We may permit You to select other
                        Subaccounts under this policy. However, the right to
                        select any other Subaccount is limited by the terms and
                        conditions We may impose such transactions.

SUBACCOUNT VALUE        On any Valuation Date, the Subaccount value in a
                        Subaccount equals:

                        1.      the Subaccount value on the previous Valuation
                                Date multiplied by the investment experience
                                factor for the end of the current Valuation
                                Period; plus

                        2.      any net Premiums received and allocated to the
                                Subaccount during the current Valuation Period;
                                plus

                        3.      any amounts transferred to the Subaccount during
                                the current Valuation Period; minus





                                                                          Page 7
<PAGE>   19


                                                                          Page 8


                        4.      the pro-rata portion of any monthly deduction
                                charged to the Subaccount when the Valuation
                                Period includes a Deduction Day; minus

                        5.      any amounts transferred or withdrawn from the
                                Subaccount during the current Valuation Period;
                                minus

                        6.      any amounts loaned from the Subaccount during
                                the current Valuation Period.

FUND                    Each Subaccount of the Separate Account will buy shares
                        of an investment company registered under the Investment
                        Company Act of 1940 as an open-end diversified
                        management investment company of shares of a separate
                        series thereof. Each such investment company with or
                        series represents a separate investment portfolio which
                        corresponds to one of the Subaccounts of the Separate
                        Account.

                        If We establish additional Subaccounts, each new
                        Subaccount will invest in a new series of the Kemper
                        Investors Fund or in shares of another investment
                        company. We may also substitute other investment
                        companies.

RIGHTS RESERVED BY      We reserve the right, subject to compliance with the
                        current law or as it may be changed in the future:

                        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 comply with or
                                obtain and continue any exemptions from the
                                Investment Company Act of 1940 or to comply with
                                any other applicable law;

                        3.      To transfer any assets in any Subaccount to
                                another Subaccount or to one or more Separate
                                Accounts, or the General Account, or to add,
                                combine or remove Subaccounts in the Separate
                                Account.

                        4.      To delete the shares of any of the portfolios of
                                the fund or any other open-end investment
                                company and to substitute, for the fund shares
                                held in any Subaccount, the shares of another
                                portfolio of the fund or the shares of another
                                investment company or any other investment
                                permitted by law; and

                        5.      To change the way We assess charges, but not to
                                increase the aggregate amount above that
                                currently charged to the Separate Account and
                                the fund in connection with the policies.

                        When required by law, We will obtain Your approval of
                        such changes and the approval of any regulatory
                        authority.

ACCUMULATION UNIT       Each Subaccount has an accumulation unit value. When
VALUE                   Premiums or other amounts are allocated to a Subaccount,
                        a number of units are purchased based on the
                        accumulation unit value of the Subaccount at the end of
                        the Valuation Period during which the allocation is
                        made. When amounts are transferred out of or deducted
                        from a Subaccount, units are redeemed in a similar
                        manner.

                        The accumulation unit value for each subsequent
                        Valuation Period is the investment experience factor for
                        that period multiplied by the accumulation unit value
                        for the period immediately preceding. Each Valuation
                        Period has a single accumulation unit value that is
                        applied to each day in the period. The number of
                        accumulation units will not change as a result of
                        investment experience.



<PAGE>   20




INVESTMENT EXPERIENCE   Each Subaccount has its own investment experience
                        factor. The investment experience of a Subaccount is
                        calculated by applying the investment experience factor
                        to the value in each Subaccount during the Valuation
                        Period.

                        The investment experience factor of a Subaccount for a
                        Valuation Period is determined by dividing 1. by 2. and
                        subtracting 3. from the result, where:

                        1.      is the net result of:

                                a.       the net asset value per share of the
                                         investment held in the Subaccount
                                         determined at the end of the current
                                         Valuation Period; plus

                                b.       the per share amount of any dividend or
                                         capital gain distributions made by the
                                         investment held in the Subaccount, if
                                         the "ex-dividend" date occurs during
                                         the current Valuation Period; plus or
                                         minus

                                c.       a charge or credit for any taxes
                                         reserved for the current Valuation
                                         Period which We determine resulted from
                                         the investment operations of the
                                         Subaccount;

                        2.      is the net asset value per share of the
                                investment held in the Subaccount, determined at
                                the end of the last Valuation Period;

                        3.      is the factor representing the sum of the
                                Mortality and Expense Risk Charge, stated in the
                                policy specifications, for the number of days in
                                the Valuation Period.

NONFORFEITURE PROVISIONS

CASH VALUE              The cash value of this policy is equal to the sum of the
                        Separate Account Value, plus the Loan Account Value,
                        plus the Fixed Account Value.

MONTHLY DEDUCTION       On each Deduction Day, a monthly deduction will be made
                        equal to the sum of the following:

                        1.      the monthly cost of insurance charge for this
                                policy; plus

                        2.      the monthly charge for any riders; plus

                        3.      the monthly Administration Charge; plus

                        4.      the monthly Tax Expense Charge.

                        The monthly deduction will be deducted from the
                        Subaccounts and Fixed Account in proportion to the value
                        that each Subaccount and Fixed Account bears to the
                        Separate Account Value.

COST OF INSURANCE       We calculate the cost of insurance on each Deduction
                        Day.

                        The maximum cost of insurance charge equals a. times the
                        result of b. minus c. where:

                        a.      is the maximum cost of insurance rate per $1,000
                                for the initial specified amount;

                        b.      is the death benefit; and

                        c.      is the cash value.




                                                                          Page 9

<PAGE>   21


                                                                         Page 10



COST OF INSURANCE       The cost of insurance rate is based on the insured's
                        sex, issue age, coverage year, and rate class. The cost
                        of insurance is also based on whether 90% or 100% of the
                        Guideline Single Premium has been paid at issue.

                        Any change in the cost of insurance rate will be on a
                        uniform basis for all insureds of the same: 1. sex; 2.
                        attained age at start of coverage; 3. coverage year; and
                        4. rate class. However, the cost of insurance rates will
                        not exceed those shown in the Table of Guaranteed
                        Maximum Monthly Cost of Insurance Rates per $1,000
                        multiplied by any rate class percent over 100.

                        These rates are found in the policy specifications.
                        These rates are based on the Commissioners 1980 Standard
                        Ordinary Smoker and Nonsmoker Mortality Tables, Age Last
                        Birthday.

RIDERS                  The monthly charges for any riders are shown in the
                        policy specifications.

MORTALITY AND EXPENSE   These charges are shown in the policy specifications.
RISK CHARGE, ADMIN-
ISTRATION CHARGE, TAX
CHARGE, AND ANNUAL
RECORDS MAINTENANCE
CHARGE

INSUFFICIENT FUND       This policy will enter the insufficient fund value
VALUE STATUS            status as provided in the GRACE PERIOD provision if the
                        Net Surrender Value immediately preceding a deduction
                        is:

                        1.      insufficient to cover the monthly deduction, and

                        2.      no Premium payment or loan payment sufficient to
                                cover at least three monthly deductions is
                                received before the end of the grace period.

                        Any monthly deduction after entering insufficient fund
                        value status will not be considered a reinstatement of
                        this policy.

TRANSFER, WITHDRAWAL
AND LOAN PROVISIONS

TRANSFERS               You may direct all or part of one Subaccount's value to
                        another Subaccount.

                        Transfers will also be subject to the following
                        conditions:

                        1.      The minimum amount which may be transferred is
                                $100 or, if smaller, the remaining value in a
                                Subaccount;

                        2.      No partial transfer will be made if the
                                remaining value of any Subaccount will be less
                                than $500 unless the transfer will eliminate
                                Your interest in such account;

                        3.      We reserve the right to charge $25 for each
                                transfer in excess of 12 in a policy year.

                        Any transfer request must clearly specify:

                        1.      the amount which is to be transferred; and

                        2.      the names of the Subaccounts which are affected.



<PAGE>   22



                        We will only honor a telephone transfer request if a
                        properly executed telephone transfer authorization is on
                        file with Us. Such request for a transfer must comply
                        with the conditions of the authorization.

                        We reserve the right at any time and without notice to
                        any party, to terminate, suspend, or modify these
                        transfer rights.

WITHDRAWALS             You may withdraw all or part of the Cash Value that
                        remains after We subtract any withdrawal charge. We must
                        receive a written request that indicates the amount of
                        the withdrawal from each Subaccount. You must return the
                        policy to Us if You elect a total withdrawal.

                        Withdrawals are subject to these conditions:

                        1.      Each withdrawal must be at least $100 or the
                                value that remains in the Subaccount if smaller;

                        2.      A minimum of $500 must remain in the Subaccount
                                after You make a withdrawal unless the
                                Subaccount is eliminated by such withdrawal;

                        3.      A minimum of $5,000 must remain in the Separate
                                Account after You make a withdrawal.

                        4.      The maximum You may withdraw from any Subaccount
                                is the value of the Subaccount less the amount
                                of any withdrawal charge.

                        5.      Any withdrawal amount You request will be
                                increased by the withdrawal charge.

EFFECT OF A             The Cash Value will be reduced by the amount of the
WITHDRAWAL              withdrawal. The specified amount will be reduced
                        proportional to the reduction in Cash Value due to the
                        partial withdrawal. We will not permit a withdrawal if
                        it will decrease the specified amount to less than the
                        Minimum Specified Amount stated in the Policy
                        Specifications.

WITHDRAWAL CHARGES      Withdrawal charges are shown in the policy
                        specifications.

                        Any amount withdrawn which is not subject to a
                        withdrawal charge will be considered a "free partial
                        withdrawal," as referenced in the policy specifications.

POLICY LOANS            Policy loans may be made any time. We will lend up to a
                        maximum loan amount of 90% of the policy's Cash Value
                        less any applicable withdrawal charges. The amount of
                        any new loan may not exceed the maximum loan amount less
                        Debt on the date the loan is granted. The Preferred Loan
                        portion of a loan will be determined on the date the
                        loan is made, and will not be subsequently redetermined.
                        The minimum amount of a loan is $1,000.

                        On the date the loan is made, an amount equal to the
                        loan will be transferred from the Subaccounts to the
                        Loan Account held in the General Account until the loan
                        is repaid. Unless directed otherwise, the loaned amount
                        will be deducted from the Subaccount in proportion to
                        the values that each account bears to the Separate
                        Account Value. Should the Debt equal or exceed the
                        Surrender Value, this policy will be subject to the
                        GRACE PERIOD provisions.

                        Cash values derived from Premium received by Us in the
                        form of a check or draft will not be available for loans
                        until 30 days after deposit of such check or draft.

POLICY LOAN INTEREST    The loan interest rate will be [5.50%] per year
                        compounded daily. Interest not paid will be charged on a
                        daily basis and will be added to the Debt on this policy
                        and bear interest at the same rate.





                                                                         Page 11

<PAGE>   23


                                                                         Page 12


                        During the existence of a loan, the portion of the Loan
                        Account Value attributable to a Preferred Loan will earn
                        [5.50%] per year. The remainder of the Loan Account
                        Value will earn [3.50%] per year. Interest will be
                        earned on a daily basis and will be added to the Loan
                        Account.

                        If an Internal Revenue Code Section 1035(a) exchange
                        takes place that has an outstanding loan at the time of
                        transfer, the difference between the Cash Value and the
                        total of all Premiums paid under the exchanged policy is
                        considered a Preferred Loan.

POLICY LOAN REPAYMENT   A Debt may be repaid in full or in part at any time
                        while this policy is in force.

                        As Debt is paid, the Loan Account Value equal to the
                        amount of repayment which exceeds the difference between
                        interest due and interest earned will be allocated to
                        the Subaccounts according to the then current Premium
                        allocation instructions. Loan repayments will be
                        considered repayment of Preferred Loans last.

EFFECTS OF POLICY       The Debt on this policy, along with the withdrawal
LOANS                   charge will reduce the amount LOANS of Cash Value
                        payable upon surrender. The Debt on this policy will
                        also reduce the amount of Cash Value available for
                        withdrawal. The death benefit payable to the beneficiary
                        upon the death of the Surviving Insured will also be
                        reduced by the amount of Debt.

TRANSFER, WITHDRAWAL    We will redeem the necessary number of accumulation
AND LOAN PROCEDURES     units to achieve the dollar amount requested plus any
                        applicable charges when the withdrawal, transfer or loan
                        is made form a Subaccount. We will reduce the number of
                        accumulation units credited in each Subaccount by the
                        number of accumulation units redeemed. The reduction in
                        the number of accumulation units is determined based on
                        the accumulation unit value at the end of the Valuation
                        Period when We receive the request, provided the request
                        contains all required information. We will pay the
                        amount within seven calendar days after the date We
                        receive the request, except as provided below.

DEFERMENT OF WITH-      If the withdrawal, transfer or loan is to be made from a
                        Subaccount, We may suspend the right of withdrawal or
                        transfer or delay payment more than seven calendar days:

                        1.      during any period when the New York Stock
                                Exchange is closed other than customary weekend
                                and holiday closings;

                        2.      when trading in the markets normally utilized is
                                restricted, or an emergency exists as determined
                                by the Securities and Exchange Commission, so
                                that disposal of investments or determination of
                                the accumulation unit value is not practical; or

                        3.      for such other periods as the Securities and
                                Exchange Commission by order may permit for
                                protection of owners.

SETTLEMENT OPTIONS

                        The Owner, or beneficiary at the death of the Surviving
                        Insured, if no election by the Owner is in effect, may
                        elect to have all of the Net Surrender Value or Death
                        Benefit of this policy paid in a lump sum or have the
                        amount applied to one of the settlement options noted
                        below.

                        The beneficiary may elect to have the death benefit
                        distributed as stated in Option 1 for a period not to
                        exceed the beneficiary's life expectancy; or Options 2,
                        or 3 based upon the life expectancy of the beneficiary
                        as prescribed by federal regulations. The beneficiary
                        must make this choice within sixty days of the time we
                        receive due proof of death. An option can not be changed
                        after the first of such payments is made.

                        Payments must be made to a natural person, referred to
                        below as "payee." If the beneficiary is not a natural
                        person, the beneficiary must elect that the entire death
                        benefit be distributed within five years of your death.
                        Distribution of the death benefit must start within one
                        year after your death. It may start later if prescribed
                        by federal regulations.



<PAGE>   24




                        If the total death benefit proceeds are applied under
                        one of the annuity options, this contract must be
                        surrendered to us.

                        Payments for all options are derived from the applicable
                        tables. Current annuity rates will be used if they
                        produce greater payments than those shown in the policy.
                        The age in the tables is the age of the payee on the
                        last birthday before the first payment is due.

                        The option selected must result in a periodic payment
                        equivalent to at least $20 per month when annuity
                        payments begin. If the annuity option selected or
                        otherwise applied should result in a periodic payment
                        less than the minimum required on the date payments are
                        scheduled to begin, we reserve the right to make a lump
                        sum payment in satisfaction of our obligation to the
                        payee under the policy.

ELECTION OF SETTLEMENT  Election of a settlement option may be made by written
OPTION                  notice to Us.


                        This election may be made:

                        1.      by You during the lifetime of the insured;
                        2.      by the beneficiary if no election made by You is
                                in effect at the time of the death of the
                                insured; or
                        3.      by the beneficiary if You reserve the right to
                                the beneficiary to change an election upon the
                                death of the insured. Such change must be made
                                prior to the first settlement option payment.

                        An election in effect during the lifetime of the insured
                        will be revoked by a subsequent change of beneficiary or
                        an assignment of this policy unless provided otherwise.

OPTION 1

FIXED INSTALLMENT       We will make monthly payments for a fixed number of
ANNUITY                 installments. Payments must be made for at least 5
                        years, but not more than 30 years. Upon the payee's
                        death, if the beneficiary is a natural person, we will
                        automatically continue payments for the remainder of the
                        certain period to the beneficiary. If the beneficiary is
                        either an estate or trust we will pay the discounted
                        value of the remaining payments in the specified period
                        based on the discount rate stated in the supplemental
                        contract.

OPTION 2

LIFE ANNUITY            We will make monthly payments while the payee is alive.

OPTION 3

LIFE ANNUITY WITHINSTAL-We will make monthly payments for a guaranteed period
MENTS GUARANTEED        and thereafter while the payee is alive. The guaranteed
                        period must be selected at the time the settlement
                        option is chosen. The guaranteed periods available are
                        5, 10, 15 and 20 years. If, at the death of the payee,
                        payments have been made for less than five, ten, fifteen
                        or twenty years as elected, and the beneficiary is a
                        natural person, we will automatically continue payments
                        for the remainder of the elected period to the
                        beneficiary. If the beneficiary is either an estate or
                        trust, we will pay the discounted value of the remaining
                        payments in the specified period based on the discount
                        rate stated in the supplemental contract.




                                                                         Page 13

<PAGE>   25


                                                                         Page 14


OPTION 4

JOINT AND SURVIVOR      We will pay the full monthly income while both payees
ANNUITY                 are alive. Upon the death of either payee, we will
                        continue to pay the surviving payee a percentage of the
                        original monthly payment. The percentage payable t the
                        surviving payee must be selected at the time the annuity
                        option is chosen. The percentages available are 50%, 66
                        2/3%, 75% and 100%.

OTHER OPTIONS
                        We may make other settlement options available. Payments
                        are also available on a quarterly, semi-annual or annual
                        basis.

VARIABLE PAYOUT         If a variable payout option is selected, the monthly
OPTIONS                 payment will reflect the investment performance of the
                        Subaccounts in accordance with the allocation of the
                        lump sum distribution allocated to those Subaccounts.

                        Allocations will not be changed thereafter, except as
                        provided in the TRANSFERS DURING THE PAYOUT PERIOD
                        provision.

                        The first monthly payment is based on the guaranteed
                        annuity option shown in the Annuity Option Table.
                        You may elect any option available.

                        The dollar amount of the subsequent payments may
                        increase or decrease depending on the investment
                        experience of each Subaccount. The number of annuity
                        units per payments will remain fixed for each
                        Subaccount.

                        The number of annuity units for each Subaccount is
                        calculated by dividing a. by b. where:

                        a.      is the portion of the initial monthly payment
                                that can be attributed to that Subaccount; and

                        b.      is the annuity unit value for that Subaccount at
                                the end of the Valuation Period. The Valuation
                                Period includes the date on which the payment is
                                made.

                        Monthly payments, after the first payment, are
                        calculated by summing up, for each Subaccount, the
                        product of a. times b. where:

                        a.      is the number of annuity units per payment in
                                each Subaccount; and

                        b.      is the annuity unit value for that Subaccount at
                                the end of the Valuation Period. The Valuation
                                Period includes the date on which the payment is
                                made.

                        After the first payment, we guarantee that the dollar
                        amount of each payment will not be affected adversely by
                        actual expenses or changes in mortality experience from
                        the expense and mortality assumptions on which we based
                        the first payment.

ANNUITY UNIT VALUE      The value of an annuity unit for each Subaccount at the
                        end of any subsequent Valuation Period is determined by
                        multiplying the result of a. times b. by c.

                        a.      is the annuity unit value for the immediately
                                preceding Valuation Period; and

                        b.      is the net investment factor for the Valuation
                                Period for which the annuity unit value is being
                                calculated; and

                        c.      is the interest factor of .99993235 per calendar
                                day of such subsequent Valuation Period to
                                offset the effect of the assumed rate of 2.50%
                                per year used in the Annuity Option Table.




<PAGE>   26




                        The net investment factor for each Subaccount for any
                        Valuation Period is determined by dividing a. by b.
                        where:

                        a.      is the value of an annuity unit of the
                                applicable Subaccount as of the end of the
                                current Valuation Period plus or minus the per
                                share credit or charge for taxes reserved; and

                        b.      is the value of an annuity unit of the
                                applicable Subaccount as of the end of the
                                immediately preceding Valuation Period, plus or
                                minus the per share credit or charge for taxes
                                reserved.

FIXED PAYOUT OPTION     If a fixed payout option is chosen, your payment will be
                        fixed in amount throughout the payout period. We
                        determine the amount of your fixed annuity payment by
                        multiplying the amount applied to the option by a rate
                        determined by Us which is not less than the rate
                        specified in the Settlement Option Tables below. The
                        amount of the payment will not change throughout the
                        payout period.

TRANSFERS DURING        During the payout period, the payee may choose to
THE PAYOUT PERIOD       change the Subaccounts or the relative weighting of the
                        Subaccounts on which variable payments are based, or the
                        relative proportions of fixed and variable payments.
                        A transfer may be made subject to the following:

                        1.      The payee must send us a written notice in a
                                form satisfactory to us;

                        2.      One transfer is permitted each twelve month
                                period from the date of the first annuity
                                payment. We must receive notice of any such
                                transfer at least thirty days prior to the
                                effective date of the transfer;

                        3.      A payee may not base variable payments on more
                                than three Subaccounts after any transfer;

                        4.      At least $1,000 of annuity unit value or annuity
                                reserve value must be transferred from a
                                Subaccount or from the General Account; and

                        5.      At least $1,000 of annuity unit value or annuity
                                reserve value must remain in the account from
                                which the transfer was made.

                        When a transfer is made between Subaccounts, the number
                        of annuity units per payment attributable to a
                        Subaccount to which a transfer is made is equal to a.
                        multiplied by b. divided by c., where:

                        a.      is the number of annuity units per payment in
                                the Subaccount from which transfer is being
                                made;

                        b.      is the annuity unit value for the Subaccount
                                from which the transfer is being made; and

                        c.      is the annuity unit value for the Subaccount to
                                which transfer is being made.

                        When a transfer is made from the General Account to a
                        Subaccount, the number of annuity units per payment
                        attributable to a Subaccount to which transfer is made
                        is equal to a. divided by b. divided by c., where:

                        a.      is the General Account annuity value being
                                transferred; and

                        b.      is the present value of $1.00 per payment period
                                using the attained age(s) of the payee(s) and
                                any remaining guaranteed payments that may be
                                due at the time of the transfer; and

                        c.      is the annuity unit value for the Subaccount to
                                which the transfer is being made.

                        The General Account annuity value equals the present
                        value of the remaining fixed annuity payments using the
                        same interest and mortality basis used to calculated the
                        fixed annuity payments.




                                                                         Page 15


<PAGE>   27


                                                                         Page 16




                        The amount of money allocated to the General Account in
                        case of a transfer from a Subaccount equals the annuity
                        reserve for the Payee's interest in such Subaccount. The
                        annuity reserve is the product of a. multiplied by b.
                        multiplied by c. where:

                        a.      is the number of annuity un its representing the
                                Payee's interst in such Subaccount per annuity
                                payment;

                        b.      is the annuity unit value for such Subaccount;
                                and

                        c.      is the present value of $1.00 per payment period
                                using the attained age(s) of the Payee(s) and
                                any remaining guaranteed payemtns that may be
                                due at the time of the transfer.

                        Money allocated to the General Account upon such
                        transfer will be applied under the same annuity payout
                        option as originally elected. Guaranteed period payments
                        will be adjusted to reflect the number of guaranteed
                        payments have already been made, no further payments
                        will be guaranteed.

                        All amounts and annuity unit values are determined as of
                        the end of the Valuation Period preceding the effective
                        date of the transfer.

                        We reserve the right at any time and without notice to
                        any party to terminate, suspend or modify these transfer
                        privileges.

SUPPLEMENTARY           A supplementary agreement will be issued to reflect
AGREEMENT               payments that will be made under a settlement option. If
                        payment is made as a death benefit distribution, the
                        effective date will be the date of death. Otherwise, the
                        effective date will be the date chosen by the Owner.

DATE OF FIRST PAYMENT   The effective date under an option will be the date o
                        death. Interest will start to accrue on the effective
                        date. If the normal effective date is the 29th, 30th, or
                        31st of the month, the effective date will be the 28th
                        day of the that month.

EVIDENCE OF AGE, SEX    We may require satisfactory evidence of the age, sex and
AND SURVIVAL            the continued survival of any person on whose life the
                        income is based.

MISSTATEMENT OF AGE     If the age or sex of the payee has been misstated, the
OR SEX                  amount payable under the annuity option selected will be
                        such as the lump sum applied would have purchased at the
                        correct age or sex. Interest not to exceed 6% compounded
                        each year will be charged to any overpayment or credited
                        to any underpayment against future payments We may make
                        under the supplementary agreement for the option
                        selected.

BASIS OF ANNUITY        The guaranteed payments are based on an interest rate of
OPTIONS                 2.50% per year and, where mortality is involved, the
                        "1983 Table a" individual annuity mortality table
                        developed by the Society of Actuaries, projected using
                        Projection Scale G. We may also make available variable
                        annuity payment options based on assumed investment
                        rates other than 2.50%.

CREDITORS               The proceeds of this policy and any payment under an
                        annuity option will be exempt from the claim of
                        creditors and from legal process to the extent permitted
                        by law.




<PAGE>   28
                              ANNUITY OPTION TABLE

           AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000 OF VALUE APPLIED

OPTION ONE - FIXED INSTALLMENT ANNUITY

<TABLE>
<CAPTION>

Number                     Number                  Number                   Number
of years       Monthly     of years    Monthly     of years     Monthly     of years    Monthly
selected       Payment     selected    Payment     selected     Payment     selected    Payment
- -----------------------------------------------------------------------------------------------
<C>            <C>         <C>         <C>         <C>          <C>         <C>         <C>
5              17.69       12          8.01        19           5.48        26          4.33
6              14.92       13          7.48        20           5.27        27          4.22
7              12.94       14          7.03        21           5.08        28          4.11
8              11.46       15          6.64        22           4.90        29          4.02
9              10.31       16          6.29        23           4.74        30          3.92
10             9.39        17          5.99        24           4.59
11             8.64        18          5.72        25           4.46
</TABLE>

OPTIONS TWO AND THREE - LIFE ANNUITY WITH INSTALLMENTS GUARANTEED

                           MONTHLY PAYMENTS GUARANTEED
<TABLE>
<CAPTION>
AGE          NONE         60           120           180          240
<C>          <C>          <C>          <C>           <C>          <C>
55           4.02         4.01         3.99          3.94         3.86
56           4.11         4.10         4.07          4.01         3.92
57           4.20         4.19         4.15          4.09         3.99
58           4.29         4.28         4.24          4.17         4.05
59           4.39         4.38         4.33          4.25         4.12
60           4.50         4.48         4.43          4.34         4.19
61           4.61         4.59         4.53          4.43         4.26
62           4.73         4.71         4.64          4.52         4.33
63           4.86         4.84         4.76          4.61         4.40
64           5.00         4.97         4.88          4.71         4.47
65           5.15         5.11         5.01          4.81         4.54
66           5.30         5.26         5.14          4.92         4.61
67           5.47         5.43         5.28          5.02         4.68
68           5.65         5.60         5.43          5.13         4.74
69           5.84         5.78         5.58          5.24         4.80
70           6.05         5.97         5.74          5.35         4.86
71           6.27         6.18         5.90          5.46         4.91
72           6.50         6.40         6.07          5.56         4.96
73           6.76         6.63         6.25          5.67         5.01
74           7.03         6.88         6.43          5.77         5.05
75           7.32         7.14         6.62          5.87         5.09
76           7.64         7.42         6.80          5.96         5.12
77           7.98         7.72         6.99          6.05         5.15
78           8.34         8.03         7.18          6.13         5.17
79           8.73         8.36         7.37          6.20         5.19
80           9.16         8.70         7.56          6.27         5.21
81           9.61         9.06         7.74          6.33         5.23
82           10.10        9.44         7.91          6.38         5.24
83           10.63        9.83         8.08          6.43         5.25
84           11.19        10.23        8.24          6.47         5.25
85           11.80        10.64        8.38          6.50         5.26
</TABLE>

OPTION FOUR - JOINT AND 100% SURVIVOR ANNUITY

<TABLE>
<CAPTION>
Age of                     Age of Secondary Payee
Primary
Payee        55         60         65         70         75         80        85
<C>          <C>        <C>        <C>        <C>        <C>        <C>       <C>
55           3.51       3.64       3.76       3.85       3.92       3.96      3.99
60           3.64       3.84       4.02       4.18       4.29       4.38      4.43
65           3.76       4.02       4.29       4.54       4.75       4.90      5.00
70           3.85       4.18       4.54       4.91       5.25       5.53      5.74
75           3.92       4.29       4.75       5.25       5.77       6.26      6.64
80           3.96       4.38       4.90       5.53       6.26       7.00      7.69
85           3.99       4.43       5.00       5.74       6.64       7.69      8.76
</TABLE>

Rates for ages not shown here will be provided upon request.


<PAGE>   29
                              ANNUITY OPTION TABLE

           AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000 OF VALUE APPLIED

OPTION ONE - FIXED INSTALLMENT ANNUITY
<TABLE>
<CAPTION>
Number                        Number                       Number                          Number
of years       Monthly        of years     Monthly         of years       Monthly          of years        Monthly
selected       Payment        selected     Payment         selected       Payment          selected        Payment
- -------------- ----------- -- ------------ --------------- -------------- -------------- - --------------- ----------------
<C>            <C>            <C>          <C>             <C>            <C>              <C>             <C>
5              17.69          12           8.01            19             5.48             26              4.33
6              14.92          13           7.48            20             5.27             27              4.22
7              12.94          14           7.03            21             5.08             28              4.11
8              11.46          15           6.64            22             4.90             29              4.02
9              10.31          16           6.29            23             4.74             30              3.92
10             9.39           17           5.99            24             4.59
11             8.64           18           5.72            25             4.46
</TABLE>

OPTION TWO AND THREE - LIFE ANNUITY WITH INSTALLMENTS GUARANTEED:
<TABLE>
<CAPTION>
Age of            MONTHLY PAYMENTS GUARANTEED                         Age of            MONTHLY PAYMENTS GUARANTEED
Male                                                                  Female
Payee         NONE       60         120        180        240         Payee      NONE       60         120        180         240
<C>           <C>        <C>        <C>        <C>        <C>         <C>        <C>        <C>        <C>        <C>         <C>
55            4.17       4.16       4.13       4.06       3.96        55         3.87       3.86       3.84       3.81        3.75
56            4.27       4.25       4.21       4.14       4.03        56         3.95       3.94       3.92       3.88        3.82
57            4.36       4.35       4.30       4.22       4.09        57         4.03       4.02       4.00       3.95        3.88
58            4.46       4.45       4.40       4.30       4.16        58         4.11       4.11       4.08       4.03        3.95
59            4.57       4.55       4.50       4.39       4.22        59         4.21       4.20       4.17       4.11        4.01
60            4.69       4.67       4.60       4.48       4.29        60         4.30       4.29       4.26       4.19        4.08
61            4.81       4.79       4.71       4.57       4.36        61         4.41       4.40       4.35       4.28        4.15
62            4.94       4.92       4.83       4.66       4.43        62         4.52       4.50       4.46       4.37        4.23
63            5.09       5.05       4.95       4.76       4.49        63         4.64       4.62       4.56       4.46        4.30
64            5.24       5.20       5.08       4.86       4.56        64         4.76       4.74       4.68       4.56        4.37
65            5.40       5.35       5.21       4.96       4.62        65         4.90       4.87       4.80       4.66        4.45
66            5.57       5.52       5.35       5.06       4.69        66         5.04       5.01       4.93       4.77        4.52
67            5.75       5.69       5.49       5.17       4.75        67         5.19       5.16       5.06       4.87        4.59
68            5.95       5.87       5.64       5.27       4.81        68         5.36       5.32       5.20       4.98        4.66
69            6.15       6.07       5.80       5.37       4.86        69         5.53       5.49       5.35       5.10        4.73
70            6.38       6.27       5.96       5.48       4.91        70         5.72       5.68       5.51       5.21        4.80
71            6.61       6.49       6.12       5.58       4.96        71         5.93       5.87       5.67       5.33        4.86
72            6.86       6.72       6.29       5.68       5.00        72         6.15       6.08       5.85       5.44        4.92
73            7.13       6.96       6.47       5.77       5.04        73         6.39       6.31       6.03       5.56        4.97
74            7.42       7.21       6.64       5.86       5.08        74         6.65       6.55       6.21       5.67        5.02
75            7.72       7.48       6.82       5.95       5.11        75         6.93       6.81       6.41       5.78        5.06
76            8.05       7.76       7.00       6.03       5.14        76         7.24       7.08       6.60       5.88        5.10
77            8.40       8.06       7.18       6.11       5.17        77         7.57       7.38       6.80       5.98        5.13
78            8.77       8.37       7.35       6.18       5.19        78         7.92       7.69       7.01       6.07        5.16
79            9.18       8.69       7.53       6.25       5.20        79         8.31       8.02       7.21       6.15        5.18
80            9.60       9.03       7.70       6.31       5.22        80         8.72       8.37       7.41       6.23        5.20
81            10.06      9.38       7.86       6.36       5.23        81         9.17       8.74       7.61       6.30        5.22
82            10.55      9.74       8.02       6.41       5.24        82         9.66       9.13       7.80       6.35        5.23
83            11.07      10.12      8.17       6.45       5.25        83         10.20      9.54       7.98       6.41        5.24
84            11.63      10.50      8.32       6.49       5.26        84         10.77      9.96       8.15       6.45        5.25
85            12.22      10.89      8.45       6.52       5.26        85         11.39      10.40      8.31       6.49        5.26
</TABLE>

OPTION FOUR - JOINT AND 100% SURVIVOR ANNUITY

<TABLE>
<CAPTION>
Age of                                  Age of Female Payee
Male
Payee         55       60       65       70       75      80       85
<C>           <C>      <C>      <C>      <C>      <C>     <C>      <C>
55            3.49     3.66     3.81     3.93     4.02    4.08     4.12
60            3.61     3.83     4.05     4.24     4.40    4.52     4.59
65            3.69     3.97     4.28     4.57     4.84    5.05     5.20
70            3.76     4.09     4.47     4.89     5.31    5.67     5.95
75            3.80     4.17     4.63     5.16     5.75    6.34     6.83
80            3.83     4.23     4.73     5.37     6.14    6.99     7.80
85            3.84     4.26     4.80     5.51     6.44    7.55     8.75
</TABLE>

Rates for ages not shown here will be provided upon request.

<PAGE>   30









































SURVIVORSHIP, MODIFIED SINGLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
PAYABLE ON THE SECOND DEATH

NON-PARTICIPATING

TO THE EXTENT ALLOCATIONS ARE MADE TO THE SUBACCOUNTS, THE CASH VALUE IS BASED
ON THE INVESTMENT EXPERIENCE OF THE SUBACCOUNTS AND MAY INCREASE OR DECREASE
DAILY. THIS AMOUNT IS NOT GUARANTEED. THE AMOUNTS, OR DURATION OF THE DEATH
BENEFIT MAY VARY UNDER THE CONDITIONS DESCRIBED IN THE DEATH BENEFIT AND
TERMINATION PROVISIONS.

This is a legal contract between the owner and Kemper Investors Life Insurance
Company.

READ YOUR POLICY CAREFULLY.

KEMPER INVESTORS LIFE INSURANCE COMPANY
1 Kemper Drive, Long Grove, Illinois  60049-0001

<PAGE>   1


                                                                      EXHIBIT 9

                         ILLUSTRATIONS OF CASH VALUES,
                      SURRENDER VALUES, AND DEATH BENEFITS
                              (Destinations Life)

         The tables in this Illustration have been prepared to help show how
values under Individual and Survivorship Policies change with investment
experience. The tables illustrate how Cash Values, Surrender Values (reflecting
the deduction of Withdrawal Charges, if any) and Death Benefits under a Policy
issued on an Insured or Insureds of a given age would vary over time, if the
hypothetical gross investment rates of return were a uniform, after tax, annual
rate of 0%, 6%, and 12%. If the hypothetical gross investment rate of return
averages 0%, 6%, or 12%, but fluctuates over or under those averages throughout
the years, the Cash Values, Surrender Values and Death Benefits may be
different.

         The amounts shown for the Cash Value, Surrender Value and Death
Benefit as of each Policy Anniversary reflect the fact that the net investment
return on the assets held in the Subaccounts is lower than the gross return.
This is because of a daily charge to the Subaccounts for assuming mortality and
expense risks, which is equivalent to an effective annual charge of 0.90%. In
addition, the net investment returns also reflect the deduction of the
Portfolio investment advisory fees and other Portfolio expenses (0.xx%, the
average of the actual and estimated fees and expenses including any caps or
reimbursements). The tables also reflect applicable charges and deductions
including (a) a monthly Administration Charge of 0.35% annually for the first
ten Policy Years and 0.25% annually thereafter, (b) a monthly Tax Charge of
0.40% annually for the first ten Policy Years and 0.0% thereafter, (c) an
annual Records Maintenance Charge of $30.00 per year, and (d) monthly charges
for insurance protection. However, no Records Maintenance Charge is deducted in
any year in which the Policy Value exceeds $50,000 on the prior Policy
Anniversary. The current cost of insurance charge for Individual Policies,
Standard class (NS) is (a) 0.55% annually of Cash Value for the first ten
Policy Years and 0.25% thereafter or (b) the guaranteed cost of insurance
charge. The current cost of insurance charge for Survivorship Policies,
Standard class (NS) is (a) 0.45% annually of Cash Value for the first ten
Policy Years and 0.20% thereafter or (b) the guaranteed cost of insurance
charge. For each hypothetical gross investment rate of return, tables are
provided reflecting current and guaranteed cost of insurance charges.
Hypothetical gross average investment rates of return of 0%, 6% and 12%
correspond to the following approximate net annual investment rate of return of
- -x.xx%, x.xx% and xx.xx%, respectively. Cost of insurance rates vary by age,
sex and rating class and, therefore, are not reflected in the approximate net
annual investment rate of return above.

         The values shown are for Policies issued to preferred nonsmoker
Insureds. Values for Policies issued on a basis involving a higher mortality
risk would result in lower Cash Values, Surrender Values and Death Benefits
than those illustrated. Females generally have a more favorable rate structure
than males.

         The tables also reflect the fact that no charges for Federal, state or
other income taxes are currently made against the Separate Account. If such a
charge is made in the future, it will take a higher gross rate of return than
illustrated to produce the net after-tax returns shown in the tables.

         Upon request, KILICO will furnish an illustration based on the
proposed Insured's age, sex and premium payment requested.

                                       1

<PAGE>   2


                                   INDIVIDUAL
        MODIFIED SINGLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
       MALE STANDARD NON-SMOKER [$10,000] INITIAL PREMIUM ISSUE AGE [40]
                        $XXXXX INITIAL SPECIFIED AMOUNT:

                       VALUES--CURRENT COST OF INSURANCE



<TABLE>
<CAPTION>
                                 0% Hypothetical                     6% Hypothetical                     12% Hypothetical
                             Gross Investment Return             Gross Investment Return             Gross Investment Return
                           -----------------------------      ------------------------------      ------------------------------
              Premium
             Paid Plus
  Policy    Interest at    Cash      Surrender    Death       Cash      Surrender     Death       Cash      Surrender     Death
   Year         5%         Value       Value     Benefit      Value       Value      Benefit      Value       Value      Benefit
- ----------  -----------    -----     ---------   -------      -----     ---------    -------      -----     ---------    -------

<S>          <C>
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
35
40
45
</TABLE>


ASSUMPTIONS:

                                       2

<PAGE>   3


         (1) NO ADDITIONAL PREMIUMS PAID AND NO POLICY LOANS HAVE BEEN MADE.

         (2) VALUES REFLECT CURRENT COST OF INSURANCE CHARGES.

         (3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS
         INVESTMENT RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN THE
         PROSPECTUS APPENDIX.

         (4) DEATH BENEFIT REFLECTS CURRENT INTERNAL REVENUE CODE REQUIREMENTS.

         (5) ZERO VALUES INDICATE POLICY LAPSE IN ABSENCE OF AN ADDITIONAL
         PREMIUM PAYMENT.

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 RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN
OWNER AND ACTUAL EXPENSES. THE DEATH BENEFIT, CASH VALUE AND SURRENDER VALUE
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN
AVERAGED 0%, 6% AND 12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR
BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE
MADE BY KEMPER INVESTORS LIFE INSURANCE COMPANY THAT THESE HYPOTHETICAL RATES
OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF
TIME.

                                       3

<PAGE>   4


                                   INDIVIDUAL
        MODIFIED SINGLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
       MALE STANDARD NON-SMOKER [$10,000] INITIAL PREMIUM ISSUE AGE [40]
                        $XXXXX INITIAL SPECIFIED AMOUNT:

                      VALUES--GUARANTEED COST OF INSURANCE



<TABLE>
<CAPTION>
                                 0% Hypothetical                     6% Hypothetical                     12% Hypothetical
                             Gross Investment Return             Gross Investment Return             Gross Investment Return
                           -----------------------------      ------------------------------      ------------------------------
              Premium
             Paid Plus
  Policy    Interest at    Cash      Surrender    Death       Cash      Surrender     Death       Cash      Surrender     Death
   Year         5%         Value       Value     Benefit      Value       Value      Benefit      Value       Value      Benefit
- ----------  -----------    -----     ---------   -------      -----     ---------    -------      -----     ---------    -------

<S>          <C>
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
35
40
45
</TABLE>


ASSUMPTIONS:

                                       4

<PAGE>   5


         (1) NO ADDITIONAL PREMIUMS PAID AND NO POLICY LOANS HAVE BEEN MADE.

         (2) VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES.

         (3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS
         INVESTMENT RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN THE
         PROSPECTUS APPENDIX.

         (4) DEATH BENEFIT REFLECTS CURRENT INTERNAL REVENUE CODE REQUIREMENTS.

         (5) ZERO VALUES INDICATE POLICY LAPSE IN ABSENCE OF AN ADDITIONAL
         PREMIUM PAYMENT.

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 RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN
OWNER AND ACTUAL EXPENSES. THE DEATH BENEFIT, CASH VALUE AND SURRENDER VALUE
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN
AVERAGED 0%, 6% AND 12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR
BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE
MADE BY KEMPER INVESTORS LIFE INSURANCE COMPANY THAT THESE HYPOTHETICAL RATES
OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF
TIME.

                                       5

<PAGE>   6


                                  SURVIVORSHIP
        MODIFIED SINGLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
                    MALE STANDARD NON-SMOKER ISSUE AGE [45]
                   FEMALE STANDARD NON-SMOKER ISSUE AGE [40]
                           [$10,000] INITIAL PREMIUM
                        $XXXXX INITIAL SPECIFIED AMOUNT:

                       VALUES--CURRENT COST OF INSURANCE



<TABLE>
<CAPTION>
                                 0% Hypothetical                     6% Hypothetical                     12% Hypothetical
                             Gross Investment Return             Gross Investment Return             Gross Investment Return
                           -----------------------------      ------------------------------      ------------------------------
              Premium
             Paid Plus
  Policy    Interest at    Cash      Surrender    Death       Cash      Surrender     Death       Cash      Surrender     Death
   Year         5%         Value       Value     Benefit      Value       Value      Benefit      Value       Value      Benefit
- ----------  -----------    -----     ---------   -------      -----     ---------    -------      -----     ---------    -------

<S>          <C>
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
35
40
45
</TABLE>

                                       6

<PAGE>   7


ASSUMPTIONS:

         (1) NO ADDITIONAL PREMIUMS PAID AND NO POLICY LOANS HAVE BEEN MADE.

         (2) VALUES REFLECT CURRENT COST OF INSURANCE CHARGES.

         (3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS
         INVESTMENT RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN THE
         PROSPECTUS APPENDIX.

         (4) DEATH BENEFIT REFLECTS CURRENT INTERNAL REVENUE CODE REQUIREMENTS.

         (5) ZERO VALUES INDICATE POLICY LAPSE IN ABSENCE OF AN ADDITIONAL
         PREMIUM PAYMENT.

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 RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN
OWNER AND ACTUAL EXPENSES. THE DEATH BENEFIT, CASH VALUE AND SURRENDER VALUE
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN
AVERAGED 0%, 6% AND 12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR
BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE
MADE BY KEMPER INVESTORS LIFE INSURANCE COMPANY THAT THESE HYPOTHETICAL RATES
OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF
TIME.

                                       7

<PAGE>   8


                                  SURVIVORSHIP
        MODIFIED SINGLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
                    MALE STANDARD NON-SMOKER ISSUE AGE [45]
                   FEMALE STANDARD NON-SMOKER ISSUE AGE [40]
                           [$10,000] INITIAL PREMIUM
                        $XXXXX INITIAL SPECIFIED AMOUNT:

                      VALUES--GUARANTEED COST OF INSURANCE



<TABLE>
<CAPTION>
                                 0% Hypothetical                     6% Hypothetical                     12% Hypothetical
                             Gross Investment Return             Gross Investment Return             Gross Investment Return
                           -----------------------------      ------------------------------      ------------------------------
              Premium
             Paid Plus
  Policy    Interest at    Cash      Surrender    Death       Cash      Surrender     Death       Cash      Surrender     Death
   Year         5%         Value       Value     Benefit      Value       Value      Benefit      Value       Value      Benefit
- ----------  -----------    -----     ---------   -------      -----     ---------    -------      -----     ---------    -------

<S>          <C>
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
35
40
45
</TABLE>

                                       8

<PAGE>   9


ASSUMPTIONS:

         (1) NO ADDITIONAL PREMIUMS PAID AND NO POLICY LOANS HAVE BEEN MADE.

         (2) VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES.

         (3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS
         INVESTMENT RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN THE
         PROSPECTUS APPENDIX.

         (4) DEATH BENEFIT REFLECTS CURRENT INTERNAL REVENUE CODE REQUIREMENTS.

         (5) ZERO VALUES INDICATE POLICY LAPSE IN ABSENCE OF AN ADDITIONAL
         PREMIUM PAYMENT.

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 RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN
OWNER AND ACTUAL EXPENSES. THE DEATH BENEFIT, CASH VALUE AND SURRENDER VALUE
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN
AVERAGED 0%, 6% AND 12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR
BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE
MADE BY KEMPER INVESTORS LIFE INSURANCE COMPANY THAT THESE HYPOTHETICAL RATES
OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF
TIME.

                                       9

<PAGE>   10


                         ILLUSTRATIONS OF CASH VALUES,
                      SURRENDER VALUES, AND DEATH BENEFITS
                            (Destination Life Plus)

         The tables in this Illustration have been prepared to help show how
values under Individual and Survivorship Policies change with investment
experience. The tables illustrate how Cash Values, Surrender Values (reflecting
the deduction of Withdrawal Charges, if any) and Death Benefits under a Policy
issued on an Insured or Insureds of a given age would vary over time, if the
hypothetical gross investment rates of return were a uniform, after tax, annual
rate of 0%, 6%, and 12%. If the hypothetical gross investment rate of return
averages 0%, 6%, or 12%, but fluctuates over or under those averages throughout
the years, the Cash Values, Surrender Values and Death Benefits may be
different.

         The amounts shown for the Cash Value, Surrender Value and Death
Benefit as of each Policy Anniversary reflect the fact that the net investment
return on the assets held in the Subaccounts is lower than the gross return.
This is because of a daily charge to the Subaccounts for assuming mortality and
expense risks, which is equivalent to an effective annual charge of 0.90%. In
addition, the net investment returns also reflect the deduction of the
Portfolio investment advisory fees and other Portfolio expenses (0.xx%, the
average of the actual and estimated fees and expenses including any caps or
reimbursements). The tables also reflect applicable charges and deductions
including (a) a monthly Administration Charge of 0.35% annually for the first
ten Policy Years and 0.25% annually thereafter, (b) a monthly Tax Charge of
0.40% annually for the first ten Policy Years and 0.0% thereafter, (c) an
annual Records Maintenance Charge of $30.00 per year, and (d) monthly charges
for insurance protection. However, no Records Maintenance Charge is deducted in
any year in which the Policy Value exceeds $50,000 on the prior Policy
Anniversary. The current cost of insurance charge for Individual Policies,
Standard class (NS) is (a) 0.25% annually of Cash Value for the first ten
Policy Years and 0.10% thereafter or (b) the guaranteed cost of insurance
charge. The current cost of insurance charge for Survivorship Policies,
Standard class (NS) is (a) 0.20% annually of Cash Value for the first ten
Policy Years and 0.10% thereafter or (b) the guaranteed cost of insurance
charge. For each hypothetical gross investment rate of return, tables are
provided reflecting current and guaranteed cost of insurance charges.
Hypothetical gross average investment rates of return of 0%, 6% and 12%
correspond to the following approximate net annual investment rate of return of
- -x.xx%, x.xx% and xx.xx%, respectively. Cost of insurance rates vary by age,
sex and rating class and, therefore, are not reflected in the approximate net
annual investment rate of return above.

         The values shown are for Policies issued to preferred nonsmoker
Insureds. Values for Policies issued on a basis involving a higher mortality
risk would result in lower Cash Values, Surrender Values and Death Benefits
than those illustrated. Females generally have a more favorable rate structure
than males.

         The tables also reflect the fact that no charges for Federal, state or
other income taxes are currently made against the Separate Account. If such a
charge is made in the future, it will take a higher gross rate of return than
illustrated to produce the net after-tax returns shown in the tables.

         Upon request, KILICO will furnish an illustration based on the
proposed Insured's age, sex and Premium payment requested.

                                      10

<PAGE>   11


                                   INDIVIDUAL
        MODIFIED SINGLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
       MALE STANDARD NON-SMOKER $[300,000] INITIAL PREMIUM ISSUE AGE [40]
                        $XXXXX INITIAL SPECIFIED AMOUNT:

                       VALUES--CURRENT COST OF INSURANCE



<TABLE>
<CAPTION>
                                 0% Hypothetical                     6% Hypothetical                     12% Hypothetical
                             Gross Investment Return             Gross Investment Return             Gross Investment Return
                           -----------------------------      ------------------------------      ------------------------------
              Premium
             Paid Plus
  Policy    Interest at    Cash      Surrender    Death       Cash      Surrender     Death       Cash      Surrender     Death
   Year         5%         Value       Value     Benefit      Value       Value      Benefit      Value       Value      Benefit
- ----------  -----------    -----     ---------   -------      -----     ---------    -------      -----     ---------    -------

<S>          <C>
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
35
40
45
</TABLE>


ASSUMPTIONS:

                                      11

<PAGE>   12


         (1) NO ADDITIONAL PREMIUMS PAID AND NO POLICY LOANS HAVE BEEN MADE.

         (2) VALUES REFLECT CURRENT COST OF INSURANCE CHARGES.

         (3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS
         INVESTMENT RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN THE
         PROSPECTUS APPENDIX.

         (4) DEATH BENEFIT REFLECTS CURRENT INTERNAL REVENUE CODE REQUIREMENTS.

         (5) ZERO VALUES INDICATE POLICY LAPSE IN ABSENCE OF AN ADDITIONAL
         PREMIUM PAYMENT.

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 RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN
OWNER AND ACTUAL EXPENSES. THE DEATH BENEFIT, CASH VALUE AND SURRENDER VALUE
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN
AVERAGED 0%, 6% AND 12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR
BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE
MADE BY KEMPER INVESTORS LIFE INSURANCE COMPANY THAT THESE HYPOTHETICAL RATES
OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF
TIME.

                                      12

<PAGE>   13


                                   INDIVIDUAL
        MODIFIED SINGLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
       MALE STANDARD NON-SMOKER [$300,000] INITIAL PREMIUM ISSUE AGE [40]
                        $XXXXX INITIAL SPECIFIED AMOUNT:

                      VALUES--GUARANTEED COST OF INSURANCE



<TABLE>
<CAPTION>
                                 0% Hypothetical                     6% Hypothetical                     12% Hypothetical
                             Gross Investment Return             Gross Investment Return             Gross Investment Return
                           -----------------------------      ------------------------------      ------------------------------
              Premium
             Paid Plus
  Policy    Interest at    Cash      Surrender    Death       Cash      Surrender     Death       Cash      Surrender     Death
   Year         5%         Value       Value     Benefit      Value       Value      Benefit      Value       Value      Benefit
- ----------  -----------    -----     ---------   -------      -----     ---------    -------      -----     ---------    -------

<S>          <C>
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
35
40
45
</TABLE>


ASSUMPTIONS:

                                      13

<PAGE>   14


         (1) NO ADDITIONAL PREMIUMS PAID AND NO POLICY LOANS HAVE BEEN MADE.

         (2) VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES.

         (3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS
         INVESTMENT RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN THE
         PROSPECTUS APPENDIX.

         (4) DEATH BENEFIT REFLECTS CURRENT INTERNAL REVENUE CODE REQUIREMENTS.

         (5) ZERO VALUES INDICATE POLICY LAPSE IN ABSENCE OF AN ADDITIONAL
         PREMIUM PAYMENT.

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 RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN
OWNER AND ACTUAL EXPENSES. THE DEATH BENEFIT, CASH VALUE AND SURRENDER VALUE
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN
AVERAGED 0%, 6% AND 12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR
BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE
MADE BY KEMPER INVESTORS LIFE INSURANCE COMPANY THAT THESE HYPOTHETICAL RATES
OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF
TIME.

                                      14

<PAGE>   15


                                  SURVIVORSHIP
        MODIFIED SINGLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
                    MALE STANDARD NON-SMOKER ISSUE AGE [45]
                   FEMALE STANDARD NON-SMOKER ISSUE AGE [40]
                           [$300,000] INITIAL PREMIUM
                        $XXXXX INITIAL SPECIFIED AMOUNT:

                       VALUES--CURRENT COST OF INSURANCE



<TABLE>
<CAPTION>
                                 0% Hypothetical                     6% Hypothetical                     12% Hypothetical
                             Gross Investment Return             Gross Investment Return             Gross Investment Return
                           -----------------------------      ------------------------------      ------------------------------
              Premium
             Paid Plus
  Policy    Interest at    Cash      Surrender    Death       Cash      Surrender     Death       Cash      Surrender     Death
   Year         5%         Value       Value     Benefit      Value       Value      Benefit      Value       Value      Benefit
- ----------  -----------    -----     ---------   -------      -----     ---------    -------      -----     ---------    -------

<S>          <C>
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
35
40
45
</TABLE>

                                      15

<PAGE>   16


ASSUMPTIONS:

         (1) NO ADDITIONAL PREMIUMS PAID AND NO POLICY LOANS HAVE BEEN MADE.

         (2) VALUES REFLECT CURRENT COST OF INSURANCE CHARGES.

         (3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS
         INVESTMENT RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN THE
         PROSPECTUS APPENDIX.

         (4) DEATH BENEFIT REFLECTS CURRENT INTERNAL REVENUE CODE REQUIREMENTS.

         (5) ZERO VALUES INDICATE POLICY LAPSE IN ABSENCE OF AN ADDITIONAL
         PREMIUM PAYMENT.

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 RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN
OWNER AND ACTUAL EXPENSES. THE DEATH BENEFIT, CASH VALUE AND SURRENDER VALUE
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN
AVERAGED 0%, 6% AND 12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR
BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE
MADE BY KEMPER INVESTORS LIFE INSURANCE COMPANY THAT THESE HYPOTHETICAL RATES
OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF
TIME.

                                      16

<PAGE>   17


                                  SURVIVORSHIP
        MODIFIED SINGLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
                    MALE STANDARD NON-SMOKER ISSUE AGE [45]
                   FEMALE STANDARD NON-SMOKER ISSUE AGE [40]
                           [$300,000] INITIAL PREMIUM
                        $XXXXX INITIAL SPECIFIED AMOUNT:

                      VALUES--GUARANTEED COST OF INSURANCE



<TABLE>
<CAPTION>
                                 0% Hypothetical                     6% Hypothetical                     12% Hypothetical
                             Gross Investment Return             Gross Investment Return             Gross Investment Return
                           -----------------------------      ------------------------------      ------------------------------
              Premium
             Paid Plus
  Policy    Interest at    Cash      Surrender    Death       Cash      Surrender     Death       Cash      Surrender     Death
   Year         5%         Value       Value     Benefit      Value       Value      Benefit      Value       Value      Benefit
- ----------  -----------    -----     ---------   -------      -----     ---------    -------      -----     ---------    -------

<S>          <C>
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
35
40
45
</TABLE>

                                      17

<PAGE>   18


ASSUMPTIONS:

         (1) NO ADDITIONAL PREMIUMS PAID AND NO POLICY LOANS HAVE BEEN MADE.

         (2) VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES.

         (3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS
         INVESTMENT RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN THE
         PROSPECTUS APPENDIX.

         (4) DEATH BENEFIT REFLECTS CURRENT INTERNAL REVENUE CODE REQUIREMENTS.

         (5) ZERO VALUES INDICATE POLICY LAPSE IN ABSENCE OF AN ADDITIONAL
         PREMIUM PAYMENT.

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 RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN
OWNER AND ACTUAL EXPENSES. THE DEATH BENEFIT, CASH VALUE AND SURRENDER VALUE
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN
AVERAGED 0%, 6% AND 12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR
BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE
MADE BY KEMPER INVESTORS LIFE INSURANCE COMPANY THAT THESE HYPOTHETICAL RATES
OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF
TIME.

                                      18


© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission