FIRST INVESTORS MULTISTATE INSURED TAX FREE FUND, 485BPOS, 1997-04-17

FIRST INVESTORS MULTISTATE INSURED TAX FREE FUND
485BPOS, 1997-04-17

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As filed with the Securities and Exchange Commission on April 17, 1997

Registration No. 33-4077
811-4623
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

----------

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Post-Effective Amendment No. 20 X
-
and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940

Amendment No. 20 X
-

----------

FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
(Exact name of Registrant as specified in charter)

Ms. Concetta Durso
Secretary and Vice President
First Investors Multi-State Insured Tax Free Fund
95 Wall Street
New York, New York 10005
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement

It is proposed that this filing will become effective on April 30, 1997 pursuant
to paragraph (b) of Rule 485

Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant has
previously elected to register an indefinite number of shares of beneficial
interest, no par value, under the Securities Act of 1933. Registrant filed a
Rule 24f-2 Notice for its fiscal year ending December 31, 1996 on February 27,
1997.

<PAGE>

FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
CROSS-REFERENCE SHEET

Connecticut Fund Massachusetts Fund
Florida Fund New Jersey Fund
Georgia Fund North Carolina Fund
Maryland Fund Pennsylvania Fund
Virginia Fund

N-1A Item No. Location
- ------------- --------
PART A: PROSPECTUS

1. Cover Page................................... Cover Page
2. Synopsis..................................... Fee Table
3. Condensed Financial Information.............. Financial Highlights
4. General Description of Registrant............ Investment Objectives and
Policies; General Information
5. Management of the Fund....................... Management
5A. Management's Discussion of
Fund Performance............................ Performance Information
6. Capital Stock and Other Securities........... Description of Shares;
Dividends and Other
Distributions; Taxes;
Determination of Net Asset
Value
7. Purchase of Securities Being Offered......... Alternative Purchase Plan;
How to Buy Shares
8. Redemption or Repurchase..................... How to Exchange Shares; How
to Redeem Shares; Telephone
Transactions
9. Pending Legal Proceedings.................... Not Applicable

PART B: STATEMENT OF ADDITIONAL INFORMATION

10. Cover Page................................... Cover Page
11. Table of Contents............................ Table of Contents
12. General Information and History.............. General Information
13. Investment Objectives and Policies........... Investment Policies;
Investment Restrictions;
State Specific Risk Factors;
Insurance
14. Management of the Fund....................... Directors or Trustees and
Officers
15. Control Persons and Principal
Holders of Securities....................... Not applicable
16. Investment Advisory and Other Services....... Management
17. Brokerage Allocation......................... Allocation of Portfolio
Brokerage
18. Capital Stock and Other Securities........... Determination of Net Asset
Value
19. Purchase, Redemption and Pricing
of Securities Being Offered................. Reduced Sales Charges,
Additional Exchange and
Redemption Information and
Other Services; Determination
of Net Asset Value
20. Tax Status................................... Taxes
21. Underwriters................................. Underwriter
22. Performance Data............................. Performance Information
23. Financial Statements......................... Financial Statements; Report
of Independent Accountants

PART C: OTHER INFORMATION

Information required to be included in Part C is set forth under the appropriate
item so numbered, in Part C hereof.

<PAGE>

FIRST INVESTORS NEW YORK INSURED TAX FREE FUND, INC.
FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
CONNECTICUT FUND, FLORIDA FUND, GEORGIA FUND, MARYLAND FUND,
MASSACHUSETTS FUND, NEW JERSEY FUND, NORTH CAROLINA FUND,
PENNSYLVANIA FUND AND VIRGINIA FUND
95 Wall Street, New York, New York 10005/1-800-423-4026

This is a Prospectus for FIRST INVESTORS NEW YORK INSURED TAX FREE
FUND, INC. ("NEW YORK INSURED") and FIRST INVESTORS MULTI-STATE INSURED TAX FREE
FUND (collectively, "Tax Free Funds"), each an open-end diversified management
investment company. NEW YORK INSURED consists of a single investment series and
FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND ("Multi-State Insured")
consists of seventeen separate investment series. This Prospectus relates to NEW
YORK INSURED and the nine series of Multi-State Insured listed above
(singularly, "Fund," and collectively, "Funds"). Each Fund sells two classes of
shares. Investors may select Class A or Class B shares, each with a public
offering price that reflects different sales charges and expense levels. See
"Alternative Purchase Plans."

NEW YORK INSURED. The investment objective of NEW YORK INSURED is to
provide a high level of interest income which is exempt from Federal income tax,
New York State and New York City personal income taxes and is not an item of tax
preference for purposes of the Federal alternative minimum tax ("Tax Preference
Item").

MULTI-STATE INSURED. The investment objective of each Fund of
Multi-State Insured is to achieve a high level of interest income which is
exempt from Federal income tax and, to the extent indicated for a particular
Fund, from state and local income taxes for residents of that state and is not a
Tax Preference Item.

Each Fund invests primarily in tax-exempt obligations issued by or on
behalf of the states or a particular state, its municipal governments and public
authorities, as well as tax-exempt obligations issued by territories or
possessions of the United States, the interest on which is exempt from Federal
income tax, the income or other taxes of a particular state and is not a Tax
Preference Item. There can be no assurance that the objective of any Fund will
be realized.

THE FUNDS' MUNICIPAL BONDS ARE INSURED AS TO TIMELY PAYMENT OF
PRINCIPAL AND INTEREST THROUGH THE ISSUER OR UNDER INSURANCE POLICIES WRITTEN BY
INDEPENDENT INSURANCE COMPANIES. INSURANCE DOES NOT PROTECT AGAINST FLUCTUATIONS
IN THE BONDS' MARKET VALUE OR EACH FUND'S NET ASSET VALUE PER SHARE. FOR MORE
INFORMATION REGARDING THE FUNDS' INSURANCE COVERAGE, SEE "INSURANCE" ON PAGE 18.

This Prospectus sets forth concisely the information about the Funds
that a prospective investor should know before investing and should be retained
for future reference. First Investors Management Company, Inc. ("FIMCO" or
"Adviser") serves as investment adviser to the Funds and First Investors
Corporation ("FIC" or "Underwriter") serves as distributor of the Funds' shares.
A Statement of Additional Information ("SAI"), dated April 30, 1997 (which is
incorporated by reference herein), has been filed with the Securities and
Exchange Commission. The SAI is available at no charge upon request to the Funds
at the address or telephone number indicated above.

An investment in these securities is not a deposit or obligation of, or
guaranteed or endorsed by, any bank and is not federally insured or protected by
the Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other government agency.

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

The date of this Prospectus is April 30, 1997

<PAGE>

FEE TABLE

The following table is intended to assist investors in understanding the
expenses associated with investing in each class of shares of a Fund. Shares of
the Funds issued prior to the January 12, 1995 have been designated as Class A
shares.

SHAREHOLDER TRANSACTION EXPENSES

Class A Class B
Shares Shares
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)................ 6.25% None
Deferred Sales Load
(as a percentage of the lower of original purchase
price or redemption proceeds)...................... None* 4% in the
first year;
declining to
0% after the
sixth year

ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)

<TABLE>

<CAPTION>
MANAGEMENT TOTAL FUND
FEES1 + 12B-1 FEES2 OTHER EXPENSES3 OPERATING EXPENSES4
Class A Class B Class A Class B Class A Class B Class A Class B
Shares Shares Shares Shares Shares Shares Shares Shares
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NEW YORK INSURED 0.70% 0.70% 0.30% 1.00% 0.18% 0.18% 1.18% 1.88%
CONNECTICUT FUND 0.50 0.50 0.20+ 1.00 0.10+ 0.10+ 0.80+ 1.60+
FLORIDA FUND 0.50 0.50 0.20+ 1.00 0.10+ 0.10+ 0.80+ 1.60+
GEORGIA FUND 0.20 0.20 0.20+ 1.00 -0-+ -0-+ 0.40+ 1.20+
MARYLAND FUND 0.30 0.30 0.20+ 1.00 -0-+ -0-+ 0.50+ 1.30+
MASSACHUSETTS FUND 0.50 0.50 0.20+ 1.00 0.10+ 0.10+ 0.80+ 1.60+
NEW JERSEY FUND 0.60 0.60 0.20+ 1.00 0.18 0.18 0.98+ 1.78+
NORTH CAROLINA FUND 0.20 0.20 0.20+ 1.00 -0-+ -0-+ 0.40+ 1.20+
PENNSYLVANIA FUND 0.50 0.50 0.20+ 1.00 0.16 0.16 0.86+ 1.66+
VIRGINIA FUND 0.50 0.50 0.20+ 1.00 0.10+ 0.10+ 0.80+ 1.60+
</TABLE>

- ----------
* A contingent deferred sales charge of 1.00% will be assessed on certain
redemptions of Class A shares that are purchased without a sales
charge. See "How to Buy Shares."
+ Net of waiver and/or reimbursement.
(1) Management Fees have been restated for NEW YORK INSURED to reflect
current fees. For the fiscal year ended December 31, 1996, the Adviser
waived Management Fees as follows: in excess of 0.50% for CONNECTICUT
FUND, FLORIDA FUND, MASSACHUSETTS FUND, PENNSYLVANIA FUND and VIRGINIA
FUND; in excess of 0.20% for GEORGIA FUND and NORTH CAROLINA FUND; in
excess of 0.30% for MARYLAND FUND; and in excess of 0.60% for NEW
JERSEY FUND. Absent the waiver, such fees would have been 0.75% for
each of these Funds. The Adviser will continue to waive such fees for a
minimum period ending December 31, 1997.
(2) The Underwriter has agreed through December 31, 1997 to cap its right
to claim Class A 12b-1 Fees at the annual rates listed above for all
the Funds, other than NEW YORK INSURED. Multi-State Insured's Class A
Distribution Plan provides for 12b-1 Fees in the total amount of up to
0.30% on an annual basis.

2
<PAGE>

(3) For the fiscal year ended December 31, 1996, the Adviser reimbursed all
the Funds, other than NEW YORK INSURED, NEW JERSEY FUND and PENNSYLVANIA
FUND, for certain Other Expenses. Absent such reimbursement, Other
Expenses for each class of shares would have been 0.28% for CONNECTICUT
FUND, 0.21% for FLORIDA FUND, 0.49% for GEORGIA FUND, 0.29% for MARYLAND
FUND, 0.23% for MASSACHUSETTS FUND, 0.36% for NORTH CAROLINA Fund and
0.25% for VIRGINIA FUND. The Adviser will reimburse all Other Expenses for
GEORGIA FUND, MARYLAND FUND and NORTH CAROLINA FUND and Other Expenses in
excess of 0.10% for CONNECTICUT FUND, FLORIDA FUND, MASSACHUSETTS FUND and
VIRGINIA FUND for a minimum period ending December 31, 1997.
(4) If certain fees and expenses had not been waived or reimbursed, Total Fund
Operating Expenses for Class A shares would have been 1.33% for
CONNECTICUT FUND, 1.26% for FLORIDA FUND, 1.54% for GEORGIA FUND, 1.34%
for MARYLAND FUND, 1.28% for MASSACHUSETTS FUND, 1.23% for NEW JERSEY
FUND, 1.41% for NORTH CAROLINA FUND, 1.21% for PENNSYLVANIA FUND, and
1.30% for VIRGINIA FUND; and for Class B shares would have been 2.03% for
CONNECTICUT FUND, 1.96% for FLORIDA FUND, 2.24% for GEORGIA FUND, 2.04%
for MARYLAND FUND, 1.98% for MASSACHUSETTS FUND, 1.93% for NEW JERSEY
FUND, 2.11% for NORTH CAROLINA FUND, 1.91% for PENNSYLVANIA FUND, and
2.00% for VIRGINIA FUND. Each Fund has an expense offset arrangement that
may reduce the Fund's custodian fee based on the amount of cash maintained
by the Fund with its custodian. Any such fee reductions are not reflected
under Total Fund Operating Expenses.

For a more complete description of the various costs and expenses, see
"Investment Objectives and Policies--Insurance," "Alternative Purchase Plans,"
"How to Buy Shares," "How to Redeem Shares," "Management" and "Distribution
Plans." Due to the imposition of Rule 12b-1 fees, it is possible that long-term
shareholders of a Fund may pay more in total sales charges than the economic
equivalent of the maximum front-end sales charge permitted by the rules of the
National Association of Securities Dealers, Inc.

The Example below is based on Class A and Class B expense data for each
Fund's fiscal year ended December 31, 1996, except that certain Operating
Expenses have been restated as noted above.

EXAMPLE

You would pay the following expenses on a $1,000 investment, assuming (1)
5% annual return and (2) redemption at the end of each time period:

ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
NEW YORK INSURED
Class A............... $74 $98 $123 $197
Class B............... 59 89 122 202*

CONNECTICUT FUND
Class A............... 70 86 104 155
Class B............... 56 80 107 169*

FLORIDA FUND
Class A............... 70 86 104 155
Class B............... 56 80 107 169*

3
<PAGE>

ONE YEAR THREE YEARS FIVE YEARS TEN YEARS

GEORGIA FUND
Class A............... 66 75 84 110
Class B............... 52 68 86 123*

MARYLAND FUND
Class A............... 67 78 89 121
Class B............... 53 71 91 135*

MASSACHUSETTS FUND
Class A............... $70 $86 $104 $155
Class B............... 56 80 107 169*

NEW JERSEY FUND
Class A............... 72 92 113 175
Class B............... 58 86 116 188*

NORTH CAROLINA FUND
Class A............... 66 75 84 110
Class B............... 52 68 86 123*

PENNSYLVANIA FUND
Class A............... 71 88 107 162
Class B............... 57 82 110 175*

VIRGINIA FUND
Class A............... 70 86 104 155
Class B............... 56 80 107 169*

You would pay the following expenses on the same $1,000 investment,
assuming (1) 5% annual return and (2) no redemption at the end of each time
period:

ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
NEW YORK INSURED
Class A............... $74 $98 $123 $197
Class B............... 19 59 102 202*

CONNECTICUT FUND
Class A............... 70 86 104 155
Class B............... 16 50 87 169*

FLORIDA FUND
Class A............... 70 86 104 155
Class B............... 16 50 87 169*

4
<PAGE>

GEORGIA FUND
Class A............... 66 75 84 110
Class B............... 12 38 66 123*

MARYLAND FUND
Class A............... 67 78 89 121
Class B............... 13 41 71 135*

MASSACHUSETTS FUND
Class A............... 70 86 104 155
Class B............... 16 50 87 169*

NEW JERSEY FUND
Class A............... $72 $92 $113 $175
Class B............... 18 56 96 188*

NORTH CAROLINA FUND
Class A............... 66 75 84 110
Class B............... 12 38 66 123*

PENNSYLVANIA FUND
Class A............... 71 88 107 162
Class B............... 17 52 90 175*

VIRGINIA FUND
Class A............... 70 86 104 155
Class B............... 16 50 87 169*

* Assumes conversion to Class A shares eight years after purchase.

THE EXPENSES IN THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION BY
THE FUNDS OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES IN FUTURE YEARS MAY BE
GREATER OR LESS THAN THOSE SHOWN.

5
<PAGE>

[This page intentionally left blank]

6
<PAGE>

FINANCIAL HIGHLIGHTS

The table on the following pages sets forth the per share operating
performance data for a share outstanding, total return, ratios to average net
assets and other supplemental data for each period indicated. The table has been
derived from financial statements which have been examined by Tait, Weller &
Baker, independent certified public accountants, whose report thereon appears in
the SAI. This information should be read in conjunction with the Financial
Statements and Notes thereto, which also appear in the SAI, available at no
charge upon request to the Funds.

7
<PAGE>

<TABLE>

<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
-------------------------------------------------------------------------------------------

LESS DISTRIBUTIONS
INCOME FROM INVESTMENT OPERATIONS FROM
--------------------------------- ------------------
NET REALIZED
NET ASSET AND
--------- UNREALIZED
VALUE NET GAIN (LOSS) TOTAL FROM NET NET
BEGINNING INVESTMENT ON INVESTMENT INVESTMENT REALIZED TOTAL
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>

FIRST INVESTORS NEW YORK
INSURED TAX FREE FUND, INC.
CLASS A
1987 . . . . . . . . . $14.25 $.919 $(1.109) $(.190) $.910 $ -- $.910
1988 . . . . . . . . . 13.15 .902 .388 1.290 .930 -- .930
1989 . . . . . . . . . 13.51 .901 .339 1.240 .880 -- .880
1990 . . . . . . . . . 13.87 .889 (.119) .770 .890 -- .890
1991 . . . . . . . . . 13.75 .881 .574 1.455 .875 -- .875
1992 . . . . . . . . . 14.33 .844 .386 1.230 .840 -- .840
1993 . . . . . . . . . 14.72 .809 .608 1.417 .820 .137 .957
1994 . . . . . . . . . 15.18 .758 (1.510) (.752) .768 -- .768
1995 . . . . . . . . . 13.66 .738 1.331 2.069 .740 .059 .799
1996 . . . . . . . . . 14.93 .719 (.298) .421 .720 .091 .811
CLASS B
1/12/95*to 12/31/95 . 13.76 .616 1.232 1.848 .619 .059 .678
1996 . . . . . . . . . 14.93 .617 (.306) .311 .620 .091 .711

FIRST INVESTORS MULTI-STATE
INSURED TAX FREE FUND

CONNECTICUT FUND
CLASS A
10/8/90* to 12/31/90 . $11.17 $.034 $(.014) $ .020 $ -- $ -- $ --
1991 . . . . . . . . . 11.19 .630 .449 1.079 .625 .004 .629
1992 . . . . . . . . . 11.64 .669 .401 1.070 .660 -- .660
1993 . . . . . . . . . 12.05 .615 1.053 1.668 .625 .043 .668
1994 . . . . . . . . . 13.05 .609 (1.480) (.871) .609 -- .609
1995 . . . . . . . . . 11.57 .617 1.333 1.950 .620 -- .620
1996 . . . . . . . . . 12.90 .619 (.202) .417 .617 -- .617
CLASS B
1/12/95* to 12/31/95 . 11.67 .512 1.242 1.754 .524 -- .524
1996 . . . . . . . . . 12.90 .522 (.204) .318 .518 -- .518
</TABLE>

* Commencement of operations of Class A shares or date Class B shares first
offered
** Calculated without sales charges
+ Annualized
++ Net of expenses waived or assumed by the investment adviser and/or the
transfer agent from commencement of operations of each of the Funds of the
First Investors Multi-State Tax Free Fund through December 31, 1996.

8
<PAGE>

<TABLE>

<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
RATIOS / SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------

RATIO TO AVERAGE NET
ASSETS BEFORE
RATIO TO AVERAGE EXPENSES WAIVED OR
NET ASSETS + ASSUMED
---------------- ------------------
NET ASSET NET ASSETS
VALUE END OF NET NET
--------- TOTAL PERIOD INVESTMENT INVESTMENT PORTFOLIO AVERAGE
END RETURN ** (IN EXPENSES INCOME EXPENSES INCOME TURNOVER COMMISSION
OF PERIOD (%) THOUSANDS) (%) (%) (%) (%) RATE (%) RATE++
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>

$13.15 (1.25) $103,892 1.10 6.91 N/A N/A 2
13.51 10.10 121,017 1.26 6.77 N/A N/A 21
13.87 9.43 150,154 1.14 6.57 N/A N/A 13
13.75 5.81 156,022 1.23 6.53 N/A N/A 33
14.33 10.89 162,296 1.24 6.29 N/A N/A 25
14.72 8.84 181,389 1.29 5.84 N/A N/A 46
15.18 9.82 211,967 1.27 5.35 N/A N/A 31
13.66 (5.03) 193,916 1.28 5.30 N/A N/A 55
14.93 15.45 215,259 1.23 5.10 N/A N/A 53
14.54 2.95 203,496 1.23 4.93 N/A N/A 53

14.93 13.66 1,156 2.00+ 4.34+ N/A N/A 53
14.53 2.18 2,242 1.93 4.23 N/A N/A 53

$11.19 7.71+ $ 625 1.75+ 1.46+ .28+ 0
--
11.64 9.92 5,050 .06 5.83 1.60 4.28 35
12.05 9.49 10,828 .33 5.73 1.20 4.86 46
13.05 14.10 17,202 .80 4.83 1.15 4.48 29
11.57 (6.75) 14,848 .87 5.01 1.22 4.66 63
12.90 17.18 16,725 .85 4.98 1.20 4.63 26
12.70 3.37 15,203 .81 4.92 1.23 4.50 15

12.90 15.28 857 1.71+ 4.12+ 2.07+ 3.76+ 26
12.70 2.57 1,505 1.61 4.12 2.02 3.71 15
</TABLE>

9
<PAGE>

<TABLE>

FLORIDA FUND
CLASS A
10/5/90* to 12/31/90 . $11.17 $.018 $ (.058) $(.040) $ -- $ -- $ --
1991 . . . . . . . . . 11.13 .658 .582 1.240 .640 .030 .670
1992 . . . . . . . . . 11.70 .702 .508 1.210 .700 -- .700
1993 . . . . . . . . . 12.21 .664 1.032 1.696 .671 .095 .766
1994 . . . . . . . . . 13.14 .642 (1.346) (.704) .646 -- .646
1995 . . . . . . . . . 11.79 .640 1.527 2.167 .647 -- .647
1996 . . . . . . . . . 13.31 .623 (.198) .425 .625 -- .625
CLASS B
1/12/95*to 12/31/95 . . . 11.87 .529 1.460 1.989 .549 -- .549
1996 . . . . . . . . . . 13.31 .530 (.204) .326 .526 -- .526
. . . . . . . .
GEORGIA FUND
CLASS A
5/1/92* to 12/31/92 . . $11.17 $.267 $.233 $.500 $.250 $ -- $.250
1993 . . . . . . . . . 11.42 .603 1.091 1.694 .619 .005 .624
1994 . . . . . . . . . 12.49 .584 (1.165) (.581) .579 -- .579
1995 . . . . . . . . . 11.33 .653 1.387 2.040 .650 -- .650
1996 . . . . . . . . . 12.72 .639 (.161) .478 .648 -- .648
CLASS B
1/12/95* to 12/31/95 . . 11.42 .529 1.303 1.832 .542 -- .542
1996 . . . . . . . . . 12.71 .563 (.183) .380 .550 -- .550

MARYLAND FUND
CLASS A
10/8/90* to 12/31/90 . . $11.17 $.021 $.189 $.210 $ -- $ -- $ --
1991 . . . . . . . . . 11.38 .628 .287 .915 .615 -- .615
1992 . . . . . . . . . 11.68 .669 .426 1.095 .665 -- .665
1993 . . . . . . . . . 12.11 .653 1.083 1.736 .660 .036 .696
1994 . . . . . . . . . 13.15 .644 (1.373) (.729) .651 -- .651
1995 . . . . . . . . . 11.77 .668 1.348 2.016 .666 -- .666
1996 . . . . . . . . . 13.12 .650 (.235) .415 .655 -- .655
CLASS B
1/12/95*to 12/31/95 . . . 11.85 .561 1.279 1.840 .570 -- .570
1996 . . . . . . . . . . 13.12 .555 (.249) .306 .556 -- .556

</TABLE>

10
<PAGE>

<TABLE>

$11.13 (1.48)+ $ 1,339 -- 1.20+ 1.03+ .17+ 0
11.70 11.45 6,891 .06 6.12 1.12 5.06 70
12.21 10.67 12,678 .29 5.97 1.17 5.10 65
13.14 14.19 21,397 .45 5.20 1.10 4.55 53
11.79 (5.39) 19,765 .62 5.24 1.19 4.67 98
13.31 18.77 22,229 .75 5.05 1.15 4.65 68
13.11 3.34 23,299 .83 4.80 1.16 4.47 55

13.31 17.06 299 1.68+ 4.12+ 2.09+ 3.70+ 68
13.11 2.56 549 1.62 4.01 1.95 3.68 55

$11.42 6.75+ $ 365 -- 4.45+ 3.32+ 1.13+ 53
12.49 15.16 1,469 .13 4.96 1.84 3.24 50
11.33 (4.69) 2,065 .20 4.99 1.93 3.26 78
12.72 18.40 3,047 .20 5.41 1.42 4.20 45
12.55 3.94 3,269 .38 5.17 1.44 4.11 37

12.71 16.34 97 1.00+ 4.61+ 2.22+ 3.40+ 45
12.54 3.13 151 1.19 4.36 2.25 3.30 37

$11.38 8.08+ $ 403 -- 1.69+ 2.88+ (1.19)+ 0
11.68 8.30 1,543 .05 5.74 1.88 3.92 26
12.11 9.64 3,575 .20 5.72 1.38 4.55 38
13.15 14.62 6,643 .45 5.16 1.28 4.33 50
11.77 (5.59) 6,904 .45 5.27 1.34 4.37 44
13.12 17.50 8,666 .48 5.32 1.24 4.55 49
12.88 3.33 10,118 .51 5.10 1.24 4.37 13

13.12 15.82 423 1.38+ 4.42+ 2.19+ 3.61+ 49
12.87 2.45 1,021 1.31 4.30 2.05 3.57 13

</TABLE>

11
<PAGE>

<TABLE>

FIRST INVESTORS MULTI-STATE
INSURED TAX FREE FUND

MASSACHUSETTS FUND
CLASS A
1987 . . . . . . . . . $11.13 $.533 $(1.143) $(.610) $.510 $ -- $.510
1988 . . . . . . . . . 10.01 .753 .547 1.300 .770 -- .770
1989 . . . . . . . . . 10.54 .725 .345 1.070 .730 -- .730
1990 . . . . . . . . . 10.88 .748 (.038) .710 .750 -- .750
1991 . . . . . . . . . 10.84 .732 .468 1.200 .730 -- .730
1992 . . . . . . . . . 11.31 .687 .399 1.086 .676 .010 .686
1993 . . . . . . . . . 11.71 .653 .716 1.369 .660 .139 .799
1994 . . . . . . . . . 12.28 .627 (1.267) (.640) .630 -- .630
1995 . . . . . . . . . 11.01 .612 1.227 1.839 .613 .016 .629
1996 . . . . . . . . . 12.22 .603 (.256) .347 .602 .045 .647
CLASS B
1/12/95*to 12/31/95 . . 11.09 .508 1.155 1.663 .527 .016 .543
1996 . . . . . . . . . . 12.21 .514 (.263) .251 .506 .045 .551

NEW JERSEY FUND
CLASS A
9/13/88* to 12/31/92 . $11.13 $.083 $ .117 $ .200 $ -- $ -- $ --
1989 . . . . . . . . . 11.33 .797 .373 1.170 .770 -- .770
1990 . . . . . . . . . 11.73 .787 .013 .800 .800 -- .800
1991 . . . . . . . . . 11.73 .762 .548 1.310 .750 -- .750
1992 . . . . . . . . . 12.29 .716 .439 1.155 .716 .059 .775
1993 . . . . . . . . . 12.67 .680 .947 1.627 .684 .103 .787
1994 . . . . . . . . . 13.51 .659 (1.448) (.789) .661 -- .661
1995 . . . . . . . . . 12.06 .648 1.291 1.939 .652 .097 .749
1996 . . . . . . . . . 13.25 .636 (.245) .391 .636 .015 .651
CLASS B
1/12/95* to 12/31/95 . 12.14 .526 1.199 1.725 .528 .097 .625
1996 . . . . . . . . . 13.24 .533 (.253) .280 .535 .015 .550

</TABLE>

12
<PAGE>

<TABLE>

$10.01 5.43 $1,595 .05 6.32 1.13 5.24 16
10.54 13.40 2,901 .10 7.33 1.29 6.14 31
10.88 10.43 8,292 .10 6.78 1.03 5.85 11
10.84 6.85 12,760 .06 7.01 .99 6.09 22
11.31 11.45 17,608 .28 6.66 .99 5.94 4
11.71 9.90 20,067 .70 5.99 1.17 5.52 28
12.28 11.93 23,653 .90 5.37 1.15 5.12 32
11.01 (5.30) 20,838 .95 5.45 1.20 5.20 64
12.22 17.07 23,180 .90 5.22 1.15 4.97 40
11.92 2.99 22,543 .86 5.08 1.18 4.76 45

12.21 15.28 314 1.76+ 4.36+ 2.01+ 4.10+ 40
11.91 2.16 519 1.66 4.28 1.98 3.96 45

$11.33 5.96+ $ 2,148 -- 4.95+ .95+ 3.99+ 0
11.73 10.61 17,380 .03 6.82 .92 5.93 10
11.73 7.10 30,686 .10 6.93 .91 6.12 16
12.29 11.52 42,475 .44 6.38 .98 5.84 22
12.67 9.74 54,372 .78 5.76 1.13 5.41 42
13.51 13.09 64,558 .96 5.12 1.11 4.97 44
12.06 (5.91) 55,379 .99 5.21 1.14 5.06 60
13.25 16.41 59,153 .99 5.06 1.14 4.91 30
12.99 3.09 58,823 .98 4.92 1.13 4.77 35

13.24 14.45 957 1.81+ 4.24+ 1.97+ 4.08+ 30
12.97 2.22 1,603 1.78 4.12 1.93 3.97 35

</TABLE>

13
<PAGE>

<TABLE>

FIRST INVESTORS MULTI-STATE
INSURED TAX FREE FUND

NORTH CAROLINA FUND
CLASS A
5/4/92* to 12/31/92 . . $11.17 $.272 $.188 $.460 $.260 $ -- $.260
1993 . . . . . . . . . 11.37 .595 .962 1.557 .604 .043 .647
1994 . . . . . . . . . 12.28 .594 (1.380) (.786) .594 -- .594
1995 . . . . . . . . . 10.90 .608 1.391 1.999 .609 -- .609
1996 . . . . . . . . . 12.29 .590 (.159) .431 .591 -- .591
CLASS B
1/12/95*to 12/31/95 . . . 10.99 .492 1.307 1.799 .499 -- .499
1996 . . . . . . . . . . 12.29 .496 (.161) .335 .495 -- .495

PENNSYLVANIA FUND
CLASS A
4/30/90* to 12/31/90 . . $11.17 $.296 $.214 $.510 $.270 $ -- $.270
1991 . . . . . . . . . 11.41 .714 .429 1.143 .695 .008 .703
1992 . . . . . . . . . 11.85 .699 .427 1.126 .716 -- .716
1993 . . . . . . . . . 12.26 .667 1.048 1.715 .663 .152 .815
1994 . . . . . . . . . 13.16 .627 (1.447) (.820) .630 -- .630
1995 . . . . . . . . . 11.71 .638 1.463 2.101 .635 .036 .671
1996 . . . . . . . . . 13.14 .622 (.197) .425 .627 .028 .655
CLASS B
1/12/95* to 12/31/95 . 11.81 .539 1.376 1.915 .549 .036 .585
1996 . . . . . . . . . 13.14 .529 (.201) .328 .530 .028 .558

VIRGINIA FUND
CLASS A
4/30/90* to 12/31/90 . . $11.17 $.320 $.080 $.400 $.300 $ -- $.300
1991 . . . . . . . . . 11.27 .715 .523 1.238 .690 .018 .708
1992 . . . . . . . . . 11.80 .683 .481 1.164 .702 .032 .734
1993 . . . . . . . . . 12.23 .636 .915 1.551 .639 .082 .721
1994 . . . . . . . . . 13.06 .611 (1.383) (.772) .608 -- .608
1995 . . . . . . . . . 11.68 .625 1.370 1.995 .629 .036 .665
1996 . . . . . . . . . 13.01 .626 (.195) .431 .624 .067 .691
CLASS B
1/12/95*to 12/31/95 . . . 11.76 .510 1.286 1.796 .520 .036 .556
1996 . . . . . . . . . . 13.00 .525 (.194) .331 .524 .067 .591

</TABLE>

14
<PAGE>

<TABLE>

$11.37 6.21+ $1,084 -- 4.53+ 2.20+ 2.33+ 10
12.28 13.98 3,883 .13 4.99 1.28 3.83 32
10.90 (6.45) 3,872 .20 5.22 1.44 3.99 61
12.29 18.72 4,984 .20 5.18 1.36 4.03 76
12.13 3.68 5,822 .38 4.94 1.31 4.02 43

12.29 16.65 75 1.00+ 4.38+ 2.16+ 3.23+ 76
12.13 2.85 134 1.20 4.12 2.12 3.20 43

$11.41 6.88+ $6,252 .05+ 5.39+ 1.05+ 4.39+ 1
11.85 10.24 16,118 .29 6.28 1.03 5.54 26
12.26 9.81 26,036 .56 5.84 1.12 5.28 18
13.16 14.28 35,514 .79 5.17 1.10 4.86 37
11.71 (6.31) 33,542 .88 5.11 1.13 4.86 81
13.14 18.29 39,980 .86 5.07 1.11 4.82 48
12.91 3.39 42,228 .86 4.86 1.11 4.61 42

13.14 16.49 247 1.72+ 4.20+ 1.98 3.94+ 48
12.91 2.61 781 1.66 4.06 1.91 3.81 42

$11.27 5.40+ $3,327 .08+ 5.56+ 1.22+ 4.43+ 0
11.80 11.31 9,756 .13 6.32 1.10 5.36 15
12.23 10.19 16,507 .56 6.75 1.22 5.09 41
13.06 12.94 24,684 .81 4.97 1.16 4.62 39
11.68 (5.97) 22,325 .85 5.01 1.20 4.66 55
13.01 17.42 25,193 .81 5.01 1.16 4.66 34
12.75 3.47 21,047 .79 4.93 1.20 4.52 30

13.00 15.53 991 1.66+ 4.16+ 2.02+ 3.80+ 34
12.74 2.66 1,166 1.59 4.13 2.00 3.72 30

</TABLE>

15
<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

NEW YORK INSURED

The investment objective of NEW YORK INSURED is to provide a high level of
interest income which is exempt from Federal income tax, New York State and New
York City personal income taxes and is not a Tax Preference Item. NEW YORK
INSURED seeks to achieve its objective by investing at least 80% of its total
assets in Municipal Instruments, as defined below, issued by or on behalf of New
York State and its municipal governments and by public authorities in New York
State, as well as by territories and possessions of the United States and the
District of Columbia and their political subdivisions, agencies and
instrumentalities, the interest on which is exempt from Federal income tax, New
York State and New York City personal income taxes and is not a Tax Preference
Item. See "Municipal Instruments."

MULTI-STATE INSURED

The investment objective of each Fund of Multi-State Insured is to achieve
a high level of interest income which is exempt from Federal income tax and, to
the extent indicated for a particular Fund, from state and local income taxes
for residents of that state and is not a Tax Preference Item. Each Fund of
Multi-State Insured seeks to achieve its objective by investing at least 80% of
its total assets in Municipal Instruments, as defined below, issued by or on
behalf of states, territories and possessions of the United States and the
District of Columbia and their political subdivisions, agencies and
instrumentalities, the interest on which is exempt from Federal income tax,
state and local income taxes in the states for whose residents the particular
Fund is established and is not a Tax Preference Item. See "Municipal
Instruments."

GENERAL POLICIES

Each Fund may invest in zero coupon municipal securities. Each Fund may
invest up to 25% of its net assets in securities on a "when-issued" basis, which
involves an arrangement whereby delivery of, and payment for, the instruments
occur up to 45 days after the agreement to purchase the instruments is made by a
Fund. Each Fund also may invest up to 20% of its assets, on a temporary basis,
in high quality fixed income obligations, the interest on which is subject to
Federal and state or local income taxes. Each Fund also may invest up to 10% of
its total assets in municipal obligations on which the rate of interest varies
inversely with interest rates on other municipal obligations or an index
(commonly referred to as inverse floaters) and may acquire detachable call
options relating to municipal bonds. Each Fund may borrow money for temporary or
emergency purposes in amounts not exceeding 5% of its total assets and invest in
repurchase agreements. See "Description of Certain Securities, Other Investment
Policies and Risk Factors," below, and the SAI for more information regarding
these securities.

16
<PAGE>

Factors."
However, in each instance such municipal bonds will be covered by the insurance
feature and thus are considered to be of higher quality than lower rated
municipal bonds without an insurance feature. See "Insurance" for a discussion
of the insurance feature. The Adviser will carefully evaluate on a case-by-case
basis whether to dispose of or retain a municipal bond which has been downgraded
in rating subsequent to its purchase by a Fund. A description of municipal bond
ratings is contained in Appendix A to the SAI.

Each Fund may invest more than 25% of its total assets in a particular
segment of the municipal bond market, such as hospital revenue bonds, housing
agency bonds, industrial development bonds, airport bonds and university
dormitory bonds, during periods when one or more of these segments offer higher
yields and/or profit potential. This possible concentration of the assets of a
Fund may result in the Fund being invested in securities which are related in
such a way that economic, business, political developments, or other changes
which would affect one security would probably likewise affect the other
securities within that particular segment of the bond market. Such concentration
of a Fund's investments could increase market risks, but risk of non-payment of
interest when due, or default on the payment of principal, is covered by the
insurance feature of each Fund.

As used in this Prospectus and in the SAI, "Municipal Instruments" include
the following: (1) municipal bonds; (2) private activity bonds or industrial
development bonds; (3) certificates of participation ("COPs"); (4) municipal
notes; (5) municipal commercial paper; and (6) variable rate demand instruments
("VRDIs").

Each Fund's net asset value fluctuates based mainly upon changes in the
value of its portfolio securities. Each Fund's investment objective and certain
investment policies set forth in the SAI that are designated fundamental
policies may not be changed without shareholder approval. There can be no
assurance that any Fund will achieve its investment objective.

DESCRIPTION OF CERTAIN SECURITIES, OTHER INVESTMENT POLICIES AND RISK FACTORS

GENERAL MARKET RISK

In addition to the risks associated with particular types of
securities, which are discussed below, the Funds are subject to general market
risks. Each Fund invests primarily in Municipal Instruments from a particular
state. The market risks associated with Municipal Instruments include the
possibility that the value of those instruments held by the Funds will fluctuate
with movements in interest rates and changes in the perceived creditworthiness
of the issuers of those instruments. Municipal Instruments are likely to decline
in value in times of rising interest rates and to rise in value in times of
falling interest rates. In general, the longer the maturity of a Municipal
Instrument, the more pronounced is the effect of a change in interest rates on
the value of the instrument. The market risks associated with concentrating
investments in a particular state include a Fund's increased sensitivity to
changes in economic conditions or other circumstances that may weaken the
capacity of the issuer to make principal and interest payments. A Fund's yield
and net asset value per share can be affected by political and economic
developments within a particular state, its public authorities and political
subdivisions. In addition, new federal, state and local laws,

17
<PAGE>

or changes in existing laws, may adversely affect the tax-exempt status of
interest on a Fund's portfolio securities or of the exempt-interest dividends
paid by a Fund, extend the time for payment of principal or interest or
otherwise constrain enforcement of such obligations.

TYPES OF SECURITIES AND THEIR RISKS

DEBT SECURITIES--RISK FACTORS. The market value of debt securities is
influenced significantly by changes in the level of interest rates. Generally,
as interest rates rise, the market value of debt securities decreases.
Conversely, as interest rates fall, the market value of debt securities
increases. Factors which could result in a rise in interest rates, and a
decrease in market value of debt securities, include an increase in inflation or
inflation expectations, an increase in the rate of U.S. economic growth, an
expansion in the Federal budget deficit, or an increase in the price of
commodities such as oil. In addition, the market value of debt securities is
influenced by perceptions of the credit risks associated with such securities.
Credit risk is the risk that adverse changes in economic conditions can affect
an issuer's ability to pay principal and interest. Debt obligations rated lower
than Baa by Moody's or BBB by S&P, commonly referred to as "junk bonds," are
speculative and generally involve a higher risk of loss of principal and income
than higher-rated securities. See Appendix A to the SAI for a description of
municipal bond ratings.

INSURANCE. All municipal bonds in each Fund's portfolio will be insured as
to their scheduled payment of principal and interest at the time of purchase
either (1) under a Mutual Fund Insurance Policy purchased by NEW YORK INSURED
and by Multi-State Insured, on behalf of the Funds, from an independent
insurance company; (2) under an insurance policy obtained subsequent to a
municipal bond's original issue; or (3) under an insurance policy obtained by
the issuer or underwriter of such municipal bond at the time of original
issuance. An insured municipal bond in the portfolio of a Fund typically will be
covered by only one of the three policies. All three types of insurance policies
insure the scheduled payment of all principal and interest on the Funds'
municipal bonds as they fall due. The insurance does not guarantee the market
value or yield of the insured municipal bonds or the net asset value or yield of
the shares of a Fund. Investors should note that while all municipal bonds in
which the Funds will invest will be insured, each Fund may invest up to 35% of
its total assets in portfolio securities not covered by the insurance feature.
Each Tax Free Fund has purchased a Mutual Fund Insurance Policy from AMBAC
Indemnity Corporation ("AMBAC"), a Wisconsin stock insurance company with its
principal executive offices in New York City. Under certain circumstances, each
Tax Free Fund may obtain such insurance from an insurer other than AMBAC,
provided such insurer is rated in the top rating category by S&P, Moody's, Fitch
Investors Service, Inc. or any recognized statistical rating organization.
Because these insurance premiums are paid by each Fund, a Fund's yield is
reduced by this expense. See "Insurance" in the SAI for a detailed discussion of
the insurance feature.

18
<PAGE>

may be limited. The market value of such securities generally is more volatile
than that of a fixed rate obligation and, like most debt obligations, will vary
inversely with changes in interest rates. The interest rates on inverse floaters
may be significantly reduced, even to zero, if interest rates rise. Each Fund
may invest up to 10% of its net assets in inverse floaters.

MUNICIPAL INSTRUMENTS

MUNICIPAL BONDS. Municipal bonds are debt obligations that generally
are issued to obtain funds for various public purposes and have a time to
maturity, at issuance, of more than one year. The two principal classifications
of municipal bonds are "general obligation" and "revenue" bonds. General
obligation bonds are secured by the issuer's pledge of its full faith and credit
for the payment of principal and interest. Revenue bonds generally are payable
only from revenues derived from a particular facility or class of facilities or,
in some cases, from the proceeds of a special tax or other specific revenue
source. There are variations in the security of municipal bonds, both within a
particular classification and between classifications, depending on numerous
factors. The yields on municipal bonds depend on, among other things, general
money market conditions, condition of the municipal bond market, size of a
particular offering, the maturity of the obligation and rating of the issuer.
Generally, the value of municipal bonds varies inversely to changes in interest
rates. See Appendix A to the SAI for a description of municipal bond ratings.

PRIVATE ACTIVITY BONDS OR INDUSTRIAL DEVELOPMENT BONDS. Certain types
of revenue bonds, referred to as private activity bonds ("PABs") or industrial
development bonds ("IDBs"), are issued by or on behalf of public authorities to
obtain funds to provide for various privately operated facilities, such as
airports or mass transportation facilities. Most PABs and IDBs are pure revenue
bonds and are not backed by the taxing power of the issuing agency or authority.
See "Taxes" in the SAI for a discussion of special tax consequences to
"substantial users," or persons related thereto, of facilities financed by PABs
or IDBs.

CERTIFICATES OF PARTICIPATION. COPs provide participation interests
in lease revenues and each certificate represents a proportionate interest in or
right to the lease-purchase payment made under municipal lease obligations or
installment sales contracts. In certain states, COPs constitute a majority of
new municipal financing issues. The possibility that a municipality will not
appropriate funds for lease payments is a risk of investing in COPs, although
this risk is mitigated by the fact that each COP will be covered by the
insurance feature. See "Certificates of Participation" in the SAI for further
information on COPs.

MUNICIPAL NOTES. Municipal notes which a Fund may purchase will be
principally tax anticipation notes, bond anticipation notes, revenue
anticipation notes and project notes. The obligations are sold by an issuer
prior to the occurrence of another revenue producing event to bridge a financial
gap for such issuer. Municipal notes are usually general obligations of the
issuing municipality. Project notes are issued by housing agencies, but are
guaranteed by the U.S. Department of Housing and Urban Development and are
secured by the full faith and credit of the United States. Such municipal notes
must be rated MIG-1 by Moody's or SP-1 by S&P or have insurance through the
issuer or an independent insurance company. A description of municipal note
ratings is contained in Appendix B to the SAI.

19
<PAGE>

VARIABLE RATE DEMAND INSTRUMENTS. VRDIs are Municipal Instruments,
the interest on which is adjusted periodically, and which allow the holder to
demand payment of all unpaid principal plus accrued interest from the issuer. A
VRDI that a Fund may purchase will be selected if it meets criteria established
and designed by that Tax Free Fund's Board of Directors or Trustees (each, a
"Board") to minimize risk to that Fund. In addition, a VRDI must be rated MIG-1
by Moody's or SP-1 by S&P or insured by the issuer or an independent insurance
company. There is a recognized after-market for VRDIs.

VARIABLE RATE AND FLOATING RATE NOTES. Each Fund may invest in
variable rate and floating rate notes, which are derivatives, issued by
municipalities. Variable rate notes include master demand notes which are
obligations permitting the holder to invest fluctuating amounts, which may
change daily without penalty, pursuant to direct arrangements between the Fund,
as lender, and the borrower. The interest rates on these notes fluctuate from
time to time. The issuer of such obligations normally has a corresponding right,
after a given period, to prepay in its discretion the outstanding principal
amount of the obligations plus accrued interest upon a specified number of days'
notice to the holders of such obligations.

The interest rate on a floating rate obligation is based on a known
lending rate, such as a bank's prime rate, and is adjusted automatically each
time such rate is adjusted. The interest rate on a variable rate obligation is
adjusted automatically at specified intervals. Frequently, such obligations are
secured by letters of credit or other credit support arrangements provided by
banks. Because these obligations are direct lending arrangements between the
lender and borrower, it is not contemplated that such instruments generally will
be traded, and there is generally no established secondary market for these
obligations, although they are redeemable at face value. Accordingly, where
these obligations are not secured by letters of credit or other credit support
arrangements, the right of the Fund to redeem is dependent on the ability of the
borrower to pay agencies.

RESTRICTED AND ILLIQUID SECURITIES. Each Fund may invest up to 15% of its
net assets in illiquid securities, including (1) securities that are illiquid
due to the absence of a readily available market or due to legal or contractual
restrictions on resale and (2) repurchase agreements maturing in more than seven
days. However, illiquid securities for purposes of this limitation do not
include securities eligible for resale under Rule 144A under the Securities Act
of 1933, as amended, which each Tax Free Fund's Board or the Adviser has
determined are liquid under Board-approved guidelines. See the SAI for more
information regarding restricted and illiquid securities.

TAXABLE SECURITIES. Each Fund may invest up to 20% of its assets, on a temporary
basis, in high quality fixed income obligations, the interest on which is
subject to Federal and state or local income taxes. A Fund may, for example,
invest the proceeds from the sale of portfolio securities in taxable obligations
pending the investment or reinvestment thereof in Municipal Instruments. A Fund
may invest in highly liquid taxable obligations in order to avoid the necessity
of liquidating portfolio investments to meet redemptions by Fund investors. Each
Fund's temporary investments in taxable securities may consist of: (1)
obligations of the U.S. Government, its agencies or instrumentalities; (2) other
debt securities rated within the highest grade of S&P or Moody's; (3) commercial
paper rated in the highest grade by either of such rating services; and (4)
certificates of

20
<PAGE>

deposit and letters of credit. Certificates of deposit are negotiable
certificates issued against funds deposited in a commercial bank or a savings
and loan association for a definite period of time and earning a specified
return.

STATE SPECIFIC RISK FACTORS

Most of the securities in which each Fund invests are issued within that
Fund's state. Thus, each Fund's yield and share price stability are closely tied
to conditions within that state and to the financial conditions of that state,
its authorities and municipalities. In addition, economic developments within a
single state or region could have a greater impact on a Fund's portfolio than on
an investment portfolio composed of securities of more geographically diverse
issuers. Each Fund seeks to mitigate these potential risks through careful
credit risk analysis and the use of insurance, as previously discussed.
Summaries of certain relevant information regarding each state's economy are set
forth below. For an expanded discussion, see "State Specific Risk Factors" in
the SAI.

RISK FACTORS FOR THE CONNECTICUT FUND. Connecticut's economy is generally
diverse, but concentration in several important sectors, including
manufacturing, finance, insurance and real estate, wholesale and retail trade
and services, may cause the state's economy to be adversely affected by cyclical
changes. The state government derives more than 60% of its revenue from the
collection of taxes, the majority of which is comprised of personal income,
sales and use, corporation and motor fuel taxes. The state finances a wide array
of capital programs and projects through the issuance of general obligation
bonds backed by the general taxing authority of the state and special tax
obligation bonds backed by a dedicated stream of revenue. Fiscal year 1996
showed a General Fund operating surplus of nearly $250 million, reversing last
year's operating deficit. In addition, in fiscal year 1996, the state incurred a
deficit in government operations of $191 million, nearly 70% lower than the
deficit in fiscal year 1995.

RISK FACTORS FOR THE FLORIDA FUND. Florida's economy has diversified and
has shifted emphasis from resource manufacturing to tourism, other services and
trade. Economic developments affecting the service industry, the tourism
industry and high-tech manufacturing could have severe effects on the Florida
economy. Due to the development of amusement and educational theme parks, the
seasonal and cyclical character of Florida's tourist industry has been reduced.
However, a decline in the national economy, competition from other tourist
destinations, crime and international developments all may affect Florida
tourism. While Florida's population growth has traditionally helped its economy
to perform above the national average, the rapid population growth experienced
by the state in the 1980s has slowed down in the 1990s. Due to the large number
of retirees, Florida personal income has generally been insulated from certain
national economic effects. A reduction in the number of retirees moving to
Florida and an increasing native birthrate may increase the susceptibility of
Florida's economy to national economic effects affecting personal income. In
addition, the economic well-being of Florida's retirees could be adversely
affected by federal entitlement cuts. Various limitations on the State of
Florida, its governmental agencies and Florida local governmental agencies,
including constitutional and statutory balanced budget requirements, may inhibit
the ability of the issuers to repay existing municipal indebtedness and issue
additional indebtedness. The value of Florida

21
<PAGE>

municipal instruments may also be affected by general conditions in the money
markets or the municipal bond markets, the levels of Federal income tax rates,
the supply of tax-exempt bonds, the credit quality and rating of the issues and
perceptions with respect to the level of interest rates.

RISK FACTORS FOR THE GEORGIA FUND. The GEORGIA FUND will concentrate its
investments in debt obligations of the state of Georgia and guaranteed revenue
debt of its instrumentalities (the "Georgia Obligations"). The Georgia
Obligations may be adversely affected by economic and political conditions and
developments within the state.

In both economic and demographic arenas, Georgia's growth continues to
exceed that of its neighboring Southeastern states, though Georgia's economy has
slowed from pre-1996 Olympic Games levels. The unemployment rate in Georgia is
currently below the national average.

While Georgia's immediate financial future appears sound, should the
above-mentioned trends slow or reverse themselves, the Georgia economy and state
revenues could be adversely affected. There can be no assurance that the events
discussed above will not negatively affect the market value of the Georgia
Obligations or the ability of either the state or its instrumentalities to pay
interest and repay principal on the Georgia Obligations in a timely manner.

RISK FACTORS FOR THE MARYLAND FUND. Maryland's rate of economic growth has
generally been slower in the 1990s than it had been during the 1980s. State
revenues in recent years have been sufficient to fund the state's expenditures
as well as fund the state's contributions to the Revenue Stabilization Account
of the state's Reserve Fund. The Maryland legislature, however, is considering a
cut in state income taxes which could in turn lower state revenues. Maryland's
constitution requires a balanced budget. While the ratings assigned to Maryland
municipal instruments by nationally recognized statistical ratings organizations
indicate that Maryland and its principal subdivisions and agencies are overall
in satisfactory economic health, there can, of course, be no assurance that this
will continue or that particular bond issues may not be adversely affected by
changes in state or local economic or political conditions. Maryland tax-free
securities include obligations issued by the state of Maryland or its counties,
municipalities, authorities, or other subdivisions. The performance of these
securities is closely tied to economic and political conditions within the
state.

RISK FACTORS FOR THE MASSACHUSETTS FUND. The Commonwealth of Massachusetts
and certain of its cities, towns, counties and other political subdivisions have
at certain times in the past experienced serious financial difficulties which
have adversely affected their credit standing. The recurrence of such financial
difficulties could adversely affect the market values and marketability of, or
result in default in payment on, outstanding obligations issued by the
Commonwealth or its public authorities or municipalities. In Massachusetts, the
tax on personal property and real estate is the principal source of tax revenues
available to cities and towns to meet local costs. "Proposition 2 1/2" an
initiative petition adopted by the voters of the Commonwealth of Massachusetts
in November 1980, limits the power of Massachusetts cities and towns and certain
tax-supported districts and public agencies to raise revenue from property taxes
to support their operations, including the payment of debt service, and could
impair on their obligations. Massachusetts cities and towns also

22
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receive substantial local aid from the Commonwealth. The ability of the
Commonwealth to pay its obligations and to provide local aid will by affected
by, among other things, future social, environmental and economic conditions,
many of which are not within the control of the Commonwealth, as well as by
questions of legislative policy and the financial condition of the Commonwealth.

RISK FACTORS FOR THE NEW JERSEY FUND. New Jersey has a diversified
economic base consisting of, among others, commerce and service industries,
selective commercial agriculture, insurance, tourism, petroleum refining and
manufacturing, although New Jersey's manufacturing industry has shown a downward
trend in the last few years. New Jersey is a major recipient of Federal
assistance. Hence, a decrease in Federal financial assistance may adversely
affect New Jersey's financial condition. As a result of high levels of
unemployment in the 1970s, New Jersey defaulted on employment benefits in 1974
and received advances from the U.S. Department of Labor in order to continue
meeting benefit obligations. In the early 1980s New Jersey's trust fund for
unemployment insurance was bankrupt and until 1984 the trust fund was subject to
a Federal penalty surtax. While New Jersey's economic base has become more
diversified over time and thus its economy appears to be less vulnerable during
recessionary periods, a recurrence of high levels of unemployment could
adversely affect New Jersey's overall economy and its ability to meet its
financial obligations. New Jersey law requires a municipality to maintain a
balanced budget and generally to restrict increases of certain appropriations,
excluding debt service, to the lesser of a certain price index or 5% annually.
Maintaining a balanced budget may adversely affect a municipality's ability to
repay its obligations. The value of New Jersey obligations may also be affected
by general conditions in the money markets or the municipal bond markets, the
levels of Federal and New Jersey income tax rates, the supply of tax-exempt
bonds, the size of the particular offering, the maturity of the obligation, the
credit quality and rating of the issue and perceptions with respect to the level
of interest rates.

RISK FACTORS FOR NEW YORK INSURED. NEW YORK INSURED'S performance is
closely tied to conditions within the State and its public authorities and
municipalities, particularly The City of New York (the "City"). The economic and
financial condition of the State may be affected by various financial, social,
economic and political factors. Those factors can be very complex, can vary from
fiscal year to fiscal year, and are frequently the result of actions taken not
only by the State but also by entities, such as the federal government, that are
outside the State's control. Because of the uncertainty and unpredictability of
changes in these factors, their impact cannot be fully included in the
assumptions used to project the ongoing condition of the State. There can be no
assurance that the State economy will not experience results that are worse than
presently predicted, with corresponding material and adverse effects on the
State's financial projections. To the extent the State experiences economic
difficulties, its ability to assist its public authorities and subdivisions is
impaired. Uncertainties with regard to both the economy and potential decisions
at the federal level add further pressure on future budget balance in the State.
Risks include either a financial market or broader economic "correction."
Potential changes to federal tax law could alter the federal definitions of
income on which many State taxes rely. Significant federal disallowances or
other actions could also affect State finances. An additional risk arises from
the potential impact of certain litigation now pending against the State, which
could produce adverse effects on the State's projections of receipts and
disbursements. Debt service on outstanding obligations of the State's public
authorities is normally paid out of revenues generated by the public
authorities' projects, such as fares, user fees, bridge and tunnel tolls and
rentals

23
<PAGE>

for dormitory rooms and housing. In recent years, however, the State has
provided special financial assistance, in some cases on a recurring basis, to
certain public authorities for operating and other expenses, and for debt
service pursuant to moral obligations indebtedness provisions or otherwise. Some
public authorities also receive moneys from State appropriations to pay for the
operating costs of certain of their programs. For example, the Metropolitan
Transportation Authority receives the bulk of this money in order to carry out
mass transit and commuter services. Failure of the State to appropriate
necessary amounts or to take other action to permit the public authorities to
meet their obligations could result in a default by one or more of the public
authorities. If a default were to occur, it would likely have a significant
adverse effect on the market price of obligations of the State and its public
authorities. The City depends on State aid both to enable the City to balance
its budget and to meet its cash requirements. Although the City has balanced its
budget since 1981, estimates of the City's future revenues and expenditures,
which are based on numerous assumptions, are subject to various uncertainties.
The City may be required to implement additional actions, including increases in
taxes and reductions in essential City services. The City might also seek
additional assistance from the State. The State could be affected by the ability
of the City to market its securities successfully in the public credit markets.
There are also outstanding claims against the City and other localities in the
State. Fiscal difficulties in localities in the State, other than the City,
particularly in the cities of Yonkers and Troy, may also have an impact the
State.

RISK FACTORS FOR THE NORTH CAROLINA FUND. The economic profile of the
State consists of a combination of industry, agriculture and tourism. The labor
force has undergone significant changes during recent years. The State has moved
from a predominantly agricultural economy to a service and goods producing
economy. The majority of non-agricultural employment is spread among
manufacturing, retail trade, services and the government sector. In North
Carolina the issuance of municipal debt is overseen by the North Carolina Local
Government Commission. This Commission handles the approval, sale and delivery
of all local bonds and notes issued in North Carolina and monitors fiscal
accounting standards prescribed by the Local Government Budget and Fiscal
Control Act. No unit of local government can incur bonded indebtedness without
the Commission's prior approval. If approved, the obligations are sold by the
Commission on a sealed bid basis. The Commission then monitors the local unit's
debt service through a system of monthly reports. Over the past twenty years,
North Carolina state debt obligations have maintained ratings of Aaa by Moody's
and AAA by S&P. North Carolina state and municipal securities may be adversely
affected by economic and political conditions and developments within the State
of North Carolina. The North Carolina Constitution requires a balanced budget,
and the State has not realized any revenue shortfalls in recent years. The State
has realized budgetary credit balances in the last several years; however,
during the 1989-90 and 1990-91 fiscal years, the State realized revenue
shortfalls requiring the Governor and General Assembly to mandate significant
spending constraints to fulfill the constitutional requirement of a balanced
budget. Therefore, there is no guarantee that budgetary credit balances will
continue to be realized in future periods.

RISK FACTORS FOR THE PENNSYLVANIA FUND. Pennsylvania's economy is based on
a mixture of manufacturing, mining, trade, medical and health services,
education and financial institutions. Pennsylvania's continued dependence on
manufacturing, mining, steel and coal, however, has made the state vulnerable to
cyclical fluctuations, foreign imports and environmental concerns.
Pennsylvania's population and per capita income have been increasing slightly
over the past five

24
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years, and it's employment and unemployment rates have generally not been
significantly different over the past five years from that of the United States.
Pennsylvania is engaged in certain litigation matters which are described
briefly in the SAI.

RISK FACTORS FOR THE VIRGINIA FUND. Virginia's economy is based primarily
on manufacturing, the government and service sectors, agriculture, mining and
tourism, and unemployment rates are typically below the national average. The
Commonwealth has a long history of fiscal stability, due in large part to a
conservative financial philosophy, broad-based employment opportunities and
diverse sources of revenue. The 1996-98 biennium budget for the Commonwealth
forecasts slow economic growth in the Commonwealth due to the State's economy
continuing to experience the effects of a reduced defense program and downsizing
of the federal government. While Virginia's year-to-year changes in personal
income exceeded those of the United States in the 1980s, the state and nation
have grown at similar rates more recently, with Virginia's real growth rate more
than a percentage point less than the national rate over the last two quarters
of last year. The Constitution of Virginia requires a balanced budget and limits
the ability of the Commonwealth to create debt. General obligation debt may be
incurred to meet certain short-term needs, to finance capital projects and,
under less stringent restriction, to finance revenue-producing capital projects.
Also, "special fund" revenue bonds, to which the constitutional debt
restrictions do not apply and which are not supported by the full faith and
credit of the Commonwealth, may be issued to finance qualifying Commonwealth
revenue projects. General obligations of cities, towns and counties are payable
from the general revenues of the entity, including ad valorem tax revenues on
property within the jurisdiction. Revenue obligations issued by other entities
are payable only from revenues from the particular project or projects involved.
Securities held in the VIRGINIA FUND that are not general obligations of the
Commonwealth may be subject to economic risks or uncertainties peculiar to the
issuers of such securities or the sources from which they are to be paid.

GENERAL. There can be no assurances that future national, regional or
state-wide economic developments will not adversely affect the market value of
Municipal Instruments held by a Fund or the ability of particular obligors to
make timely payments of debt service on (or lease payments relating to) those
obligations. In addition, there can be no assurances that future court decisions
or legislative actions will not affect the ability of the issuer of a Municipal
Instrument to repay its obligations or the tax status of a Fund's distributions
relating to investments in Municipal Instruments.

ALTERNATIVE PURCHASE PLANS

Each Fund has two classes of shares, Class A and Class B, which represent
interests in the same portfolio of securities and have identical voting,
dividend, liquidation and other rights and the same terms and conditions, except
that each class (i) is subject to a different sales charge and bears its
separate distribution and certain other class expenses; (ii) has exclusive
voting rights with respect to matters affecting only that class; and (iii) has
different exchange privileges.

25
<PAGE>

no more than 0.25% may be paid as a service fee and the balance thereof paid as
an asset-based sales charge. The initial sales charge is waived for certain
purchases and a contingent deferred sales charge ("CDSC") may be imposed on such
purchases. See "How to Buy Shares."

CLASS B SHARES. Class B shares are sold without an initial sales charge,
but are generally subject to a CDSC which declines in steps from 4% to 0% during
a six-year period and bear a higher 12b-1 fee than Class A shares. Class B
shares pay a 12b-1 fee at the annual rate of 1.00% of each Fund's average daily
net assets attributable to Class B shares, of which no more than 0.25% may be
paid as a service fee and the balance thereof paid as an asset-based sales
charge. Class B shares automatically convert into Class A shares after eight
years. See "How to Buy Shares."

FACTORS TO CONSIDER IN CHOOSING A CLASS OF SHARES. In deciding which
alternative is most suitable, an investor should consider several factors, as
discussed below. Regardless of whether an investor purchases Class A or Class B
shares, your Representative, as defined under "How to Buy Shares," receives
compensation for selling shares of a Fund, which may differ for each class.

The principal advantages of purchasing Class A shares are the lower
overall expenses, the availability of quantity discounts on volume purchases and
certain account privileges which are not offered to Class B shareholders. If an
investor plans to make a substantial investment, the sales charge on Class A
shares may either be lower due to the reduced sales charges available on volume
purchases of Class A shares or waived for certain eligible purchasers. Because
of the reduced sales charge available on quantity purchases of Class A shares,
it is recommended that investments of $250,000 or more be made in Class A
shares. Investments in excess of $1,000,000 will only be accepted as purchases
of Class A shares. Distributions paid by each Fund with respect to Class A
shares will also generally be greater than those paid with respect to Class B
shares because expenses attributable to Class A shares will generally be lower.

The principal advantage of purchasing Class B shares is that, since no
initial sales charge is paid, all of an investor's money is put to work from the
outset. Furthermore, although any investment in a Fund should only be viewed as
a long-term investment, if a redemption must be made soon after purchase, an
investor will pay a lower sales charge than if Class A shares had been
purchased. Conversely, because Class B shares are subject to a higher
asset-based sales charge, long-term Class B shareholders may pay more in
asset-based sales charges than the economic equivalent of the maximum sales
charge on Class A shares. The automatic conversion of Class B shares into Class
A shares after eight years is designed to reduce the probability of this
occurring.

HOW TO BUY SHARES

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<PAGE>

City time), will be processed and shares will be purchased at the public
offering price determined at the close of regular trading on the NYSE on that
day. Orders received by Representatives before the close of regular trading on
the NYSE and received by FIC at their Woodbridge offices before the close of its
business day, generally 5:00 P.M. (New York City time), will be executed at the
public offering price determined at the close of regular trading on the NYSE on
that day. It is the responsibility of Representatives to promptly transmit
orders they receive to FIC. The "public offering price" is the net asset value
plus the applicable sales charge for Class A shares and the net asset value for
Class B shares. For a discussion of pricing practices when FIC's Woodbridge
offices are unable to open for business due to an emergency, see the SAI. Each
Fund reserves the right to reject any application or order for its shares for
any reason and to suspend the offering of its shares.

WHEN YOU OPEN A FUND ACCOUNT, YOU MUST SPECIFY WHICH CLASS OF SHARES YOU
WISH TO PURCHASE. If you do not specify which class of shares you wish to
purchase, your order will be processed according to procedures established by
FIC. For more information, see the SAI.

INITIAL INVESTMENT IN A FUND. You may open a Fund account with as little
as $1,000. This account minimum is waived if you open an account for a
particular class of shares through a full exchange of shares of the same class
of another "Eligible Fund," as defined below. Class A share accounts opened
through an exchange of shares from First Investors Cash Management Fund, Inc. or
First Investors Tax-Exempt Money Market Fund, Inc. (collectively, "Money Market
Funds") may be subject to an initial sales charge. Automatic investment plans
allow you to open an account with as little as $50, provided you invest at least
$600 a year. See "Systematic Investing."

ADDITIONAL PURCHASES. After you make your first investment in a Fund, you
may purchase additional shares of a Fund by mailing a check made payable to FIC,
directly to First Investors Corporation, 581 Main Street, Woodbridge, NJ
07095-1198, Attn: Dept. CP. Include your account number on the face of the
check. There is no minimum on additional purchases of Fund shares.

ELIGIBLE FUNDS. With respect to certain shareholder privileges noted in
this Prospectus and the SAI, each fund in the First Investors family of funds,
except as noted below, is an "Eligible Fund" (collectively, "Eligible Funds").
First Investors Special Bond Fund, Inc., First Investors Life Series Fund and
First Investors U.S. Government Plus Fund are not Eligible Funds. The Money
Market Funds, unless otherwise noted, are not Eligible Funds. The funds of
Executive Investors Trust ("Executive Investors") are Eligible Funds provided
the shares of any such fund either have been (a) acquired through an exchange
from an Eligible Fund which imposes a maximum sales charge of 6.25%, or (b) held
for at least one year from their date of purchase.

SYSTEMATIC INVESTING. Shareholders who have an account with a U.S. bank,
or other financial institution that is an Automated Clearing House member, may
arrange for automatic investments in a Fund on a systematic basis through First
Investors Money Line and through automatic payroll investments. You may also
elect to invest in Class A or Class B shares of a Fund at net asset value all
the cash distributions or Systematic Withdrawal Plan payments from the same
class of shares of an existing account in another Eligible Fund. If you wish to
participate in any of these systematic investment plans, please call Shareholder
Services at 1-800-423-4026 or see the SAI.

FUND/SERV PURCHASES. If there is a Dealer of record on your Fund account,
the Fund is authorized to execute electronic purchase orders received directly
from this Dealer. Electronic

27
<PAGE>

purchase orders may be processed through the services of the National Securities
Clearing Corp. ("NSCC") "Fund/SERV" system. Purchase orders received by a Dealer
before the close of regular trading on the NYSE and received by FIC at its
Woodbridge offices in accordance with NSCC rules and procedures will be executed
at the net asset value, plus any applicable sales charge, determined at the
close of regular trading on the NYSE on that day. It is the responsibility of
the Dealer to transmit purchase orders to FIC promptly and accurately. FIC will
not be liable for any change in the purchase price due to the failure of FIC to
receive such purchase orders. Any such disputes must be settled between you and
the Dealer.

CLASS A SHARES. Class A shares of each Fund are sold at the public
offering price, which will vary with the size of the purchase, as shown in the
following table:

SALES CHARGE AS % OF CONCESSION TO
OFFERING NET AMOUNT DEALERS AS % OF
AMOUNT OF INVESTMENT PRICE INVESTED OFFERING PRICE
- -------------------- --------- ------------ ---------------
Less than $25,000............... 6.25% 6.67% 5.13%
$25,000 but under $50,000....... 5.75 6.10 4.72
$50,000 but under $100,000...... 5.50 5.82 4.51
$100,000 but under $250,000..... 4.50 4.71 3.69
$250,000 but under $500,000..... 3.50 3.63 2.87
$500,000 but under $1,000,000... 2.50 2.56 2.05

There is no sales charge on transactions of $1 million or more.
Additionally, there is no sales charge on purchases that qualify for the
Cumulative Purchase Privilege if they total at least $1 million or on purchases
made pursuant to a Letter of Intent in the minimum amount of $1 million. The
Underwriter will pay from its own resources a sales commission to FIC
Representatives and a concession equal to 0.90% of the amount invested to
Dealers on such purchases. If shares are redeemed within 24 months of purchase a
CDSC of 1.00% will be deducted from the redemption proceeds. The CDSC will be
applied in the same manner as the CDSC on Class B shares. See "Class B Shares."

CUMULATIVE PURCHASE PRIVILEGE AND LETTERS OF INTENT. You may purchase
Class A shares of a Fund at a reduced sales charge through the Cumulative
Purchase Privilege or by executing a Letter of Intent. For more information, see
the SAI, call your Representative or call Shareholder Services at
1-800-423-4026.

WAIVERS OF CLASS A SALES CHARGES. Sales charges on Class A shares do not
apply to: (1) any purchase by an officer, trustee, director or employee (who has
completed the introductory employment period) of the Tax Free Funds, the
Underwriter, the Adviser, or their affiliates, by a Representative, or by the
spouse, or by the children and grandchildren under the age of 21 of any such
person; (2) any purchase by a former officer, trustee, director or employee of
the Tax Free Funds, the Underwriter, the Adviser, or their affiliates, or by a
former FIC Representative; provided they had acted as such for at least five
years and had retired or otherwise terminated the relationship in good standing;
(3) any reinvestment of the loan repayments by a participant in a loan program
of any First Investors sponsored qualified retirement plan; and (4) a purchase
with proceeds from the liquidation of a First Investors Life Variable Annuity
Fund A contract or a First Investors

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<PAGE>

Life Variable Annuity Fund C contract during the one-year period preceding the
maturity date of the contract.

Additionally, policyholders of participating life insurance policies
issued by First Investors Life Insurance Company ("FIL"), an affiliate of the
Adviser and Underwriter, may elect to invest dividends earned on such policies
in Class A shares of a Fund at net asset value, provided the annual dividend is
at least $50 and the policyholder has an existing account with the Fund.

Holders of certain unit trusts ("Unitholders") who have elected to invest
the entire amount of cash distributions from either principal, interest income
or capital gains or any combination thereof ("Unit Distributions") from the
following trusts may invest such Unit Distributions in Class A shares of a Fund
at a reduced sales charge. Unitholders of various series of New York Insured
Municipals-Income Trust sponsored by Van Kampen Merritt Inc. (the "New York
Trust"); Unitholders of various series of the Multistate Tax Exempt Trust
sponsored by Advest Inc.; and Unitholders of various series of the Municipal
Insured National Trust, J.C. Bradford & Co. as agent, may purchase Class A
shares of a Fund with Unit Distributions at an offering price which is the net
asset value per share plus a sales charge of 1.5%. Unitholders of various series
of tax-exempt trusts, other than the New York Trust, sponsored by Van Kampen
Merritt Inc. may purchase Class A shares of a Fund with Unit Distributions at an
offering price which is the net asset value per share plus a sales charge of
1.0%. Each Fund's initial minimum investment requirement is waived for purchases
of Class A shares with Unit Distributions. Shares of a Fund purchased by
Unitholders may be exchanged for Class A shares of any Eligible Fund subject to
the terms and conditions set forth under "How to Exchange Shares."

CLASS B SHARES. The public offering price of Class B shares of each Fund
is the next determined net asset value, with no initial sales charge imposed. A
CDSC, however, is imposed upon most redemptions of Class B shares at the rates
set forth below:

CONTINGENT DEFERRED SALES CHARGE
YEAR SINCE PURCHASE AS A PERCENTAGE OF DOLLARS INVESTED
PAYMENT MADE OR REDEMPTION PROCEEDS

First............................. 4%
Second............................ 4
Third............................. 3
Fourth............................ 3
Fifth............................. 2
Sixth............................. 1
Seventh and thereafter............ 0

The CDSC will not be imposed on (1) the redemption of Class B shares
acquired as dividends or other distributions, or (2) any increase in the net
asset value of redeemed shares above their initial purchase price (in other
words, the CDSC will be imposed on the lower of net asset value or purchase
price). In determining whether a CDSC is payable on any redemption, it will be
assumed that the redemption is made first of any Class B shares acquired as
dividends or distributions, second of Class B shares that have been held for a
sufficient period of time such that the CDSC no longer is applicable to such
shares and finally of Class B shares held longest during the period of time that
a CDSC is applicable to such shares. This will result in you paying the lowest
possible CDSC.

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<PAGE>

As an example, assume an investor purchased 100 shares of Class B shares
at $10 per share for a total cost of $1,000 and in the second year after
purchase, the net asset value per share is $12 and, during such time, the
investor has acquired 10 additional Class B shares as dividends. If at such time
the investor makes his or her first redemption of 50 shares (proceeds of $600),
10 shares will not be subject to a CDSC charge because redemptions are first
made of shares acquired through dividend reinvestment. With respect to the
remaining 40 shares, the charge is applied only to the original cost of $10 per
share and not to the increase in net asset value of $2 per share. Therefore,
$400 of the $600 redemption proceeds will be charged at a rate of 4.00% (the
applicable rate in the second year after purchase).

For purposes of determining the CDSC on Class B shares, all purchases made
during a calendar month will be deemed to have been made on the first business
day of that month at the average cost of all purchases made during that month.
The holding period of Class B shares acquired through an exchange with another
Eligible Fund will be calculated from the first business day of the month that
the Class B shares were initially acquired in the other Eligible Fund. The
amount of any CDSC will be paid to FIC. The CDSC imposed on the purchase of
Class B shares will be waived under certain circumstances. See "Waivers of CDSC
on Class B Shares" in the SAI.

CONVERSION OF CLASS B SHARES. A shareholder's Class B shares will
automatically convert to Class A shares approximately eight years after the date
of purchase, together with a pro rata portion of all Class B shares representing
dividends and other distributions paid in additional Class B shares. The Class B
shares so converted will no longer be subject to the higher expenses borne by
Class B shares. The conversion will be effected at the relative net asset values
per share of the two classes on the first business day of the month following
the month in which the eighth anniversary of the purchase of the Class B shares
occurs. If a shareholder effects one or more exchanges between Class B shares of
the Eligible Funds during the eight-year period, the holding period for the
shares so exchanged will commence upon the date of the purchase of the original
shares. Because the per share net asset value of the Class A shares may be
higher than that of the Class B shares at the time of conversion, a shareholder
may receive fewer Class A shares than the number of Class B shares converted.
See "Determination of Net Asset Value."

GENERAL. The Underwriter may at times agree to reallow to Dealers up to an
additional 0.25% of the dollar amount of shares of the Funds and/or certain
other First Investors Funds sold by such Dealers during a specific period of
time. From time to time, the Underwriter also will pay, through additional
reallowances or other sources, a bonus or other compensation to Dealers that
employ a Dealer Representative who sells a minimum dollar amount of the shares
of the Funds and/or certain other First Investors Funds during a specific period
of time. Such bonus or other compensation may take the form of reimbursement of
certain seminar expenses, co-operative advertising, or payment for travel
expenses, including lodging incurred in connection with trips taken by
qualifying Dealer Representatives to the Underwriter's principal office in New
York City. FIC Representatives generally are more highly compensated for sales
of First Investors mutual funds than for sales of other mutual funds.

30
<PAGE>

HOW TO EXCHANGE SHARES

Should your investment needs change, you may exchange, at net asset value,
shares of a Fund for shares of any Eligible Fund, including the Money Market
Funds. In addition, Class A shares of a Fund may be exchanged at net asset value
for units of any single payment plan ("plan") sponsored by the Underwriter.
SHARES OF A PARTICULAR CLASS MAY BE EXCHANGED ONLY FOR SHARES OF THE SAME CLASS
OF ANOTHER FUND. Exchanges can only be made into accounts registered to
identical owners. If your exchange is into a new account, it must meet the
minimum investment and other requirements of the fund or plan into which the
exchange is being made. Additionally, the fund or plan must be available for
sale in the state where you reside. Before exchanging Fund shares for shares of
another fund or plan, you should read the Prospectus of the fund or plan into
which the exchange is to be made. You may obtain Prospectuses and information
with respect to which funds or plans qualify for the exchange privilege free of
charge by calling Shareholder Services at 1-800-423-4026. Exchange requests
received in "good order," as defined below, by the Transfer Agent before the
close of regular trading on the NYSE will be processed at the net asset value
determined as of the close of regular trading on the NYSE on that day; exchange
requests received after that time will be processed on the following trading
day.

EXCHANGES BY MAIL. To exchange shares by mail, you should mail requests to
Administrative Data Management Corp., 581 Main Street, Woodbridge, NJ
07095-1198. Shares will be exchanged after the request is received in "good
order" by the Transfer Agent. "Good order" means that an exchange request must
include: (1) the names of the funds, account number(s), the dollar amount,
number of shares or percentage of the account you wish to exchange; (2) share
certificates, if issued; (3) the signature of all registered owners exactly as
the account is registered; and (4) signature guarantees, if required (see "How
to Redeem Shares-Signature Guarantees"). If the request is not in good order or
information is missing, the Transfer Agent will seek additional information from
you and process the exchange on the day it receives such information. Certain
account registrations may require additional legal documentation in order to
exchange. To review these requirements, please call Shareholder Services at
1-800-423-4026.

EXCHANGES BY TELEPHONE. See "Telephone Transactions."

ADDITIONAL EXCHANGE INFORMATION. Exchanges should be made for investment
purposes only. A pattern of frequent exchanges may be contrary to the best
interests of a Fund's other shareholders. Accordingly, each Fund has the right,
at its sole discretion, to limit the amount of an exchange, reject any exchange,
or, upon 60 days' notice, materially modify or discontinue the exchange
privilege. Each Fund will consider all relevant factors in determining whether a
particular frequency of exchanges is contrary to the best interests of the Fund
and/or a class of the Fund and its other shareholders. Any such restriction will
be made by a Fund on a prospective basis only, upon notice to the shareholder
not later than ten days following such shareholder's most recent exchange.

HOW TO REDEEM SHARES

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<PAGE>

received in "good order" by the Transfer Agent before the close of regular
trading on the NYSE, will be processed at the net asset value, less any
applicable CDSC, determined as of the close of regular trading on the NYSE on
that day. Payment of redemption proceeds generally will be made within seven
days. If the shares being redeemed were recently purchased by check, payment may
be delayed to verify that the check has been honored, normally not more than
fifteen days. For a discussion of pricing practices when FIC's Woodbridge
offices are unable to open due to an emergency, see the SAI.

REDEMPTIONS BY MAIL. Written redemption requests should be mailed to
Administrative Data Management Corp., 581 Main Street, Woodbridge, NJ
07095-1198. For your redemption request to be in good order, you must include:
(1) the name of the Fund; (2) your account number; (3) the dollar amount, number
of shares or percentage of the account you want redeemed; (4) share
certificates, if issued; (5) the original signatures of all registered owners
exactly as the account is registered; and (6) signature guarantees, if required.
If your redemption request is not in good order or information is missing, the
Transfer Agent will seek additional information and process the redemption on
the day it receives such information. To review these requirements, please call
Shareholder Services at 1-800-423-4026.

SIGNATURE GUARANTEES. In order to protect you, the Funds and their agents,
each Fund reserves the right to require signature guarantees in order to process
certain exchange or redemption requests. See the SAI or call Shareholder
Services at 1-800-423-4026 for instances when signature guarantees are required.

REDEMPTIONS BY TELEPHONE. See "Telephone Transactions."

ELECTRONIC FUND TRANSFER. Shareholders who have established Electronic
Fund Transfer may have redemption proceeds electronically transferred to a
predesignated bank account. Each Fund has the right, at its sole discretion, to
limit or terminate your ability to exercise the electronic fund transfer
privilege at any time. For additional information, see the SAI. Applications to
establish Electronic Fund Transfer are available from your FIC Representative or
by calling Shareholder Services at 1-800-423-4026.

FUND/SERV REDEMPTIONS. If there is a Dealer of record on your Fund
account, the Fund is authorized to execute electronic redemption requests
received directly from this Dealer. Electronic requests may be processed through
the services of the NSCC "Fund/SERV" system. Redemption requests received by a
Dealer before the close of regular trading on the NYSE and received by FIC at
its Woodbridge offices in accordance with NSCC rules and procedures will be
executed at the net asset value, less any applicable sales charge, determined at
the close of regular trading on the NYSE on that day. It is the responsibility
of the Dealer to transmit redemption requests to FIC promptly and accurately.
FIC will not be liable for any change in the redemption price due to the failure
of FIC to receive such redemption requests. Any such disputes must be settled
between you and the Dealer.

SYSTEMATIC WITHDRAWAL PLAN. If you own noncertificated shares, you may set
up a plan for redemptions to be made automatically at regular intervals. See the
SAI for more information on the Systematic Withdrawal Plan or call Shareholder
Services at 1-800-423-4026.

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REINVESTMENT AFTER REDEMPTION. If you redeem Class A or Class B shares in
your Fund account, you can reinvest within six months from the date of
redemption all or any part of the proceeds in shares of the same class of the
same Fund or any other Eligible Fund, including the Money Market Funds, at net
asset value, on the date the Transfer Agent receives your purchase request. For
more information on the reinvestment privilege, please see the SAI or call
Shareholder Services at 1-800-423-4026.

REPURCHASE THROUGH UNDERWRITER. You may redeem Fund shares through a
Dealer. In this event, the Underwriter, acting as agent for each Fund, will
offer to repurchase or accept an offer to sell such shares at a price equal to
the net asset value next determined after the making of such offer, less any
applicable CDSC. The Dealer may charge you an added commission for handling any
redemption transaction.

REDEMPTION OF LOW BALANCE ACCOUNTS. Because each Fund incurs certain fixed
costs in maintaining shareholder accounts, each Fund may redeem without your
consent, on at least 60 days' prior written notice (which may appear on your
account statement), any Fund account of Class A or Class B shares which has a
net asset value of less than $500. To avoid such redemption, you may, during
such 60-day period, purchase additional Fund shares of the same class so as to
increase your account balance to the required minimum. There will be no CDSC
imposed on such redemptions of Class B shares. A Fund will not redeem accounts
that fall below $500 solely as a result of a reduction in net asset value.
Accounts established under a Systematic Investment Plan that have been
discontinued prior to meeting the $1,000 minimum are subject to this policy.

Additional information concerning how to redeem shares of a Fund is
available upon request to your Representative or Shareholder Services at
1-800-423-4026.

TELEPHONE TRANSACTIONS

Unless you specifically decline to have telephone privileges, you, or any
person who we reasonably believe is authorized to act on your behalf, may redeem
or exchange noncertificated shares of a Fund by calling the Special Services
Department at 1-800-342-6221 weekdays (except holidays) between 9:00 A.M. and
5:00 P.M. (New York City time). Certain accounts, however, are required to
complete additional documents in order to activate telephone privileges.
Exchange or redemption requests received before the close of regular trading on
the NYSE will be processed at the net asset value, less any applicable CDSC,
determined as of the close of business on that day. For more information on
telephone privileges, please call Shareholder Services at 1-800-423-4026 or see
the SAI.

TELEPHONE EXCHANGES. Exchange requests may be made by telephone (for
shares held on deposit only). Telephone exchanges to Money Market Funds are not
available if your address of record has changed within 60 days prior to the
exchange request.

<PAGE>

have not been issued in certificate form; (4) each redemption does not
exceed $50,000; and (5) the proceeds of the redemption, together with all
redemptions made from the account during the prior

33
<PAGE>

30-day period, do not exceed $100,000. TELEPHONE REDEMPTION INSTRUCTIONS WILL BE
ACCEPTED FROM ANY ONE OWNER OR AUTHORIZED INDIVIDUAL.

ADDITIONAL INFORMATION. The Tax Free Funds, the Adviser, the Underwriter
and their officers, trustees, directors and employees will not be liable for any
loss, damage, cost or expense arising out of any instruction (or any
interpretation of such instruction) received by telephone or which they
reasonably believe to be authentic. This policy places the entire risk of loss
for unauthorized or fraudulent transactions on the shareholder, except that if
the above-referenced parties do not follow reasonable procedures, some or all of
them may be liable for any such losses. For more information on telephone
transactions see the SAI. The Tax Free Funds have the right, at their sole
discretion, upon 60 days' notice, to materially modify or discontinue the
telephone exchange and redemption privilege. During times of drastic economic or
market changes, telephone exchanges or redemptions may be difficult to
implement. If you experience difficulty in making a telephone exchange or
redemption, your exchange or redemption request may be made by regular or
express mail, and it will be implemented at the next determined net asset value,
less any applicable CDSC, following receipt by the Transfer Agent.

MANAGEMENT

BOARD OF DIRECTORS OR TRUSTEES. Each Tax Free Fund's Board, as part of its
overall management responsibility, oversees various organizations responsible
for the applicable Fund's day-to-day management.

ADVISER. First Investors Management Company, Inc. supervises and manages
each Fund's investments, determines each Fund's portfolio transactions and
supervises all aspects of each Fund's operations. The Adviser is a New York
corporation located at 95 Wall Street, New York, NY 10005. The Adviser presently
acts as investment adviser to 14 mutual funds. First Investors Consolidated
Corporation ("FICC") owns all of the voting common stock of the Adviser and all
of the outstanding stock of FIC and the Transfer Agent. Mr. Glenn O. Head
controls FICC and, therefore, controls the Adviser.

As compensation for its services, the Adviser receives an annual fee from
each of the Funds, which is payable monthly. For the fiscal year ended December
31, 1996, NEW YORK INSURED paid 0.75% of its average daily net assets in
advisory fees. For the fiscal year ended December 31, 1996, the advisory fees
paid by each Fund of Multi-State Insured, as a percentage of such Fund's average
daily net assets, net of waivers, were as follows: CONNECTICUT FUND - 0.47%;
FLORIDA FUND - 0.46%; GEORGIA FUND - 0.15%; MARYLAND FUND - 0.23%; MASSACHUSETTS
FUND - 0.50%; NEW JERSEY FUND - 0.60%; NORTH CAROLINA FUND - 0.15%; PENNSYLVANIA
FUND - 0.50%; and VIRGINIA FUND - 0.47%.

PORTFOLIO MANAGER. Clark D. Wagner has been Portfolio Manager of the Tax
Free Funds since he joined FIMCO in 1991. Mr. Wagner is also Portfolio Manager
for all of the First Investors municipal bond funds. Mr. Wagner is also
Portfolio Manager for Government Fund, Target Maturity 2007 Fund and Target
Maturity 2010 Fund of First Investors Life Series Fund and First Investors

34
<PAGE>

Government Fund, Inc. Mr. Wagner is also responsible for the day-to-day
management of the U.S. Government and mortgage-backed securities portion of
Total Return Fund of First Investors Series Fund. Mr. Wagner has been Chief
Investment Officer of FIMCO since 1992.

BROKERAGE. Each Fund may allocate brokerage commissions, if any, to
broker-dealers in consideration of Fund share distribution, but only when
execution and price are comparable to that offered by other broker-dealers.
Brokerage may be directed to brokers who provide research. See the SAI for more
information on allocation of portfolio brokerage.

UNDERWRITER. Each Tax Free Fund has entered into an Underwriting Agreement
with First Investors Corporation, 95 Wall Street, New York, NY 10005, as
Underwriter. The Underwriter receives all sales charges in connection with the
sale of each Fund's Class A shares and all CDSCs in connection with each Fund's
Class B shares and may receive other payments under a plan of distribution. See
"How to Buy Shares" and "Distribution Plans."

DISTRIBUTION PLANS

Pursuant to separate distribution plans pertaining to each Fund's Class A
and Class B shares ("Class A Plan" or "Class B Plan," and collectively,
"Plans"), each Fund may reimburse or compensate, as applicable, the Underwriter
for certain expenses incurred in the distribution of that Fund's shares
("distribution fees") and the servicing or maintenance of existing Fund
shareholder accounts ("service fees"). Pursuant to the Plans, distribution fees
are paid for activities relating to the distribution of Fund shares, including
costs of printing and dissemination of sales material or literature,
prospectuses and reports used in connection with the sale of Fund shares.
Service fees are paid for the ongoing maintenance and servicing of existing
shareholder accounts, including payments to Representatives who provide
shareholder liaison services to their customers who are holders of that Fund,
provided they meet certain criteria.

Pursuant to each Class A Plan, the applicable Tax Free Fund's Board, in
its sole discretion, may periodically allocate the portion of distribution fees
and services fees that each Fund may spend, provided the aggregate of such fees
paid by that Fund may not exceed an annual rate of 0.30% of the Fund's average
daily net assets attributable to Class A shares in any one fiscal year. Of that
amount, no more than 0.25% of a Fund's average daily net assets attributable to
Class A shares may be paid as service fees. Payments made to the Underwriter
under each Class A Plan may only be made for reimbursement of specific expenses
incurred in connection with distribution and service activities.

Pursuant to each Class B Plan, each Fund is authorized to pay the
Underwriter a distribution fee at the annual rate of 0.75% of that Fund's
average daily net assets attributable to Class B shares and a service fee of
0.25% of the Fund's average daily net assets attributable to Class B shares.
Payments made to the Underwriter under each Class B Plan will represent
compensation for distribution and service activities, not reimbursement for
specific expenses incurred.

Although Class B shares are sold without an initial sales charge, the
Underwriter pays from its own resources a sales commission to FIC
Representatives and a concession equal to 3.5% of the

35
<PAGE>

amount invested to Dealers who sell Class B shares. In addition, the Underwriter
will make quarterly payments of service fees to Representatives commencing after
the thirteenth month following the initial sale of Class B shares. The
Underwriter will make such payments at an annual rate of up to 0.25% of the
average net asset value of Class B shares which are attributable to shareholders
for whom the Representatives are designated as dealer of record.

Each Fund may suspend or modify payments under the Plans at any time, and
payments are subject to the continuation of each Plan, the terms of any dealer
agreements between Dealers and the Underwriter and any applicable limits imposed
by the National Association of Securities Dealers, Inc. Each Fund will not carry
over any fees under the Plans to the next fiscal year. See "Distribution Plans"
in the SAI for a full discussion of the various Plans.

DETERMINATION OF NET ASSET VALUE

The net asset value of each Fund's shares fluctuates and is determined
separately for each class of shares. The net asset value of shares of a given
class of each Fund is determined as of the close of regular trading on the NYSE
(generally 4:00 P.M., New York City time) on each day the NYSE is open for
trading, and at such other times as the applicable Tax Free Fund's Board deems
necessary, by dividing the market value of the securities held by such Fund,
plus any cash and other assets, less all liabilities attributable to that class,
by the number of shares of the applicable class outstanding. If there is no
available market value, securities will be valued at their fair value as
determined in good faith pursuant to procedures adopted by the applicable Tax
Free Fund's Board. Expenses (other than 12b-1 fees and certain other class
expenses) are allocated daily to each class of shares based upon the relative
proportion of net assets of each class. The per share net asset value of the
Class B shares will generally be lower than that of the Class A shares because
of the higher expenses borne by the Class B shares. The NYSE currently observes
the following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

DIVIDENDS AND OTHER DISTRIBUTIONS

Dividends from net investment income are generally declared daily and paid
monthly by each Fund. Unless you direct the Transfer Agent otherwise, dividends
declared on a class of shares of a Fund are paid in additional shares of that
class at the net asset value generally determined as of the close of business on
the first business day of the following month. If you redeem all of your shares
of a Fund at any time during a month, you are paid all dividends declared
through the day prior to the date of the redemption, together with the proceeds
of your redemption, less any applicable CDSC. Net investment income includes
interest, earned discount and other income earned on portfolio securities less
expenses.

Each Fund also distributes with its regular dividend at the end of each
year substantially all of its net capital gain (the excess of net long-term
capital gain over net short-term capital loss) and net short-term capital gain,
if any, after deducting any available capital loss carryovers. Unless you direct
the Transfer Agent otherwise, these distributions are paid in additional shares
of the same class of the distributing Fund at the net asset value generally
determined as of the close of business on the business day immediately following
the record date of the distribution. A Fund may make an

36
<PAGE>

additional distribution in any year if necessary to avoid a Federal excise tax
on certain undistributed ordinary (taxable) income and capital gain.

Dividends and other distributions paid on both classes of a Fund's shares
are calculated at the same time and in the same manner. Dividends on Class B
shares of a Fund are expected to be lower than those for its Class A shares
because of the higher distribution fees borne by the Class B shares. Dividends
on each class also might be affected differently by the allocation of other
class-specific expenses.

In order to be eligible to receive a dividend or other distribution, you
must own Fund shares as of the close of business on the record date of the
distribution. You may elect to receive dividends and/or other distributions in
cash by notifying the Transfer Agent by telephone or in writing prior to the
record date of any such distribution. If you elect this form of payment, the
payment date generally is two weeks following the record date of any such
distribution. Your election remains in effect until you revoke it by notifying
the Transfer Agent.

You may elect to invest the entire amount of any cash distribution on
Class A or Class B shares of a Fund in the same class of shares of any Eligible
Fund, including the Money Market Funds, by notifying the Transfer Agent. See
"Cross-Investment of Cash Distributions" in the SAI.

A dividend or other distribution paid on a class of shares of a Fund will
be paid in additional shares of that class and not in cash if any of the
following events occur: (1) the total amount of the distribution is under $5,
(2) the Fund has received notice of your death on an individual account (until
written alternate payment instructions and other necessary documents are
provided by your legal representative), or (3) a distribution check is returned
to the Transfer Agent, marked as being undeliverable, by the U.S. Postal Service
after two consecutive mailings.

TAXES

FEDERAL INCOME TAXES. Each Fund has qualified and intends to continue to
qualify for treatment as a regulated investment company under the Internal
Revenue Code of 1986, as amended (the "Code"), so that it will be relieved of
Federal income tax on that part of its investment company taxable income
(consisting generally of taxable net investment income and net short-term
capital gain) and net capital gain that is distributed to its shareholders. In
addition, each Fund intends to continue to qualify to pay "exempt-interest
dividends" (as defined below), which requires, among other things, that at the
close of each calendar quarter at least 50% of the value of its total assets
must consist of Municipal Instruments.

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<PAGE>

Fund shares. Distributions of a Fund's realized net capital gain, if any, when
designated as such, are taxable to you as long-term capital gains, whether
received in cash or paid in additional Fund shares, regardless of the length of
time you have owned your shares. If you purchase your shares shortly before the
record date for a taxable dividend or capital gain distribution, you will pay
full price for the shares and receive some portion of the price back as a
taxable distribution. You will receive a statement following the end of each
calendar year describing the tax status of distributions paid by your Fund
during that year.

Interest on indebtedness incurred or continued to purchase or carry shares
of a Fund will not be deductible for Federal income tax purposes to the extent
the Fund's distributions consist of exempt-interest dividends. Each Fund does
not intend to invest in PABs or IDBs the interest on which is treated as a Tax
Preference Item.

Proposals have been and, in the future, may be introduced before Congress
for the purpose of restricting or eliminating the Federal income tax exemption
for interest on Municipal Instruments. If such a proposal were enacted, the
availability of Municipal Instruments for investment by each Fund and the value
of its portfolio securities would be affected. In that event, each Fund would
reevaluate its investment objective and policies.

Each Fund is required to withhold 31% of all taxable dividends, capital
gain distributions and redemption proceeds payable to you (if you are an
individual or certain other non-corporate shareholder) if the Fund is not
furnished with your correct taxpayer identification number, and the same
percentage of dividends and such distributions in certain other circumstances.

Your redemption of Fund shares will result in a taxable gain or loss to
you, depending on whether the redemption proceeds are more or less than your
adjusted basis for the redeemed shares (which normally includes any initial
sales charge paid on Class A shares). An exchange of Fund shares for shares of
any other Eligible Fund generally will have similar tax consequences. However,
special tax rules apply if you (1) dispose of Class A shares through a
redemption or exchange within 90 days of your purchase and (2) subsequently
acquire Class A shares of the same Fund or an Eligible Fund without paying a
sales charge due to the reinvestment privilege or exchange privilege. In these
cases, any gain on your disposition of the original Class A shares will be
increased, or loss decreased, by the amount of the sales charge you paid when
the shares were acquired, and that amount will increase the basis of the
Eligible Fund's shares subsequently acquired. In addition, if you purchase
shares of a Fund within 30 days before or after redeeming other shares of that
Fund (regardless of class) at a loss, all or a portion of the loss will not be
deductible and will increase the basis of the newly purchased shares. No gain or
loss will be recognized to a shareholder as a result of a conversion of Class B
shares into Class A shares.

The foregoing is only a summary of some of the important Federal income
tax considerations generally affecting each Fund and its shareholders; see the
SAI for a further discussion. There may be other Federal, state or local tax
considerations applicable to a particular investor; for example, a Fund's
distributions may be wholly or partly taxable under state and/or local laws. You
therefore are urged to consult your own tax adviser.

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<PAGE>

STATE INCOME TAXES.

CONNECTICUT. In the opinion of Kelley Drye & Warren, Connecticut tax
counsel to Multi-State Insured, shareholders who are Connecticut resident
individuals will not be subject to the Connecticut personal income tax on
distributions from the CONNECTICUT FUND to the extent that these distributions
qualify as (i) exempt-interest dividends, as defined in section 852(b)(5) of the
Code, that are attributable to interest on obligations issued by or on behalf of
the State of Connecticut, any political subdivision thereof, or any public
instrumentality, state or local authority, district or similar public entity
created under the laws of the State of Connecticut, or (ii) "exempt dividends"
for Connecticut tax purposes. Distributions to Connecticut shareholders of the
CONNECTICUT FUND that are attributable to sources other than those described
above will generally be includible in the Connecticut income of such
shareholders. See "State Income Taxes" in the SAI for additional Connecticut tax
information.

FLORIDA. In the opinion of Rudnick & Wolfe, Florida tax counsel to
Multi-State Insured, under existing law, shareholders of the FLORIDA FUND will
not be subject to the Florida intangible personal property tax on their
ownership of FLORIDA FUND shares or on distributions of income or gains made by
the FLORIDA FUND to the extent that such distributions are attributable solely
to certain assets exempt from intangible tax taxation under Florida law, as more
fully described in the SAI.

Because Florida does not impose an income tax on individuals, individual
shareholders will not be subject to any Florida income tax on income or gains
distributed by the FLORIDA FUND or on gains resulting from the redemption or
exchange of shares of the FLORIDA FUND. Corporate shareholders may be subject to
the Florida income tax on distributions received from the FLORIDA FUND as more
fully described in the SAI.

For Florida state income tax purposes, the FLORIDA FUND itself will not be
subject to the Florida income tax so long as it has no income subject to Federal
taxation.

Shareholders of the FLORIDA FUND will be subject to Florida estate tax on
their FLORIDA FUND shares only if they are Florida residents, certain natural
persons not domiciled in Florida, or certain natural persons not residents of
the United States.

Interests held by shareholders of the FLORIDA FUND will not be subject to
the Florida ad valorem property tax, the Florida sales and use tax or the
Florida documentary stamp tax.

GEORGIA. In the opinion of Kutak Rock, Georgia tax counsel to Multi-State
Insured, shareholders of the GEORGIA FUND that are individuals, estates, trusts,
and corporations subject to Georgia income tax may exclude from income for
Georgia income tax purposes, distributions from the GEORGIA FUND that are
derived from interest on obligations issued by the State of Georgia or any
political subdivision thereof, exempt from federal taxation under section 103(a)
of the Code. Individuals, estates, trusts and corporations may exclude from
income for Georgia income tax purposes, dividend distributions from the GEORGIA
FUND on obligations of the

39
<PAGE>

United States or of any authority, commission, instrumentality or possession
thereof exempt from state income tax under federal law.

Capital gains recognized as a result of the sale of shares in the GEORGIA
FUND can not be excluded for purposes of calculating the Georgia income tax by
individuals, estates, trusts and corporations.

MARYLAND. In the opinion of Ober, Kaler, Grimes & Shriver, tax counsel to
Multi-State Insured, holders of shares of the MARYLAND FUND who are subject to
Maryland state and local income tax, will not be subject to tax in Maryland on
MARYLAND FUND dividends to the extent that such dividends are attributable to
interest on tax-exempt obligations of the State of Maryland or its political
subdivisions, interest on obligations of the United States or its possessions
and territories or gains realized from the disposition of either of these
categories of obligations (with the express exception of dividends attributable
to gain from the disposition of obligations of a United States territory or
possession which are subject to Maryland state and local income tax). In
addition, dividends attributable to interest on obligations issued by states
other than Maryland and income from repurchase contracts are subject to Maryland
state and local income tax.

MASSACHUSETTS. In the opinion of Palmer & Dodge, Massachusetts tax counsel
to Multi-State Insured, holders of shares of the MASSACHUSETTS FUND who are
subject to Massachusetts personal income tax will not be subject to tax on
distributions from the MASSACHUSETTS FUND to the extent that these distributions
(1) qualify as exempt interest dividends of a regulated investment company
within the meaning of Code section 852(b)(5) that are directly attributable to
interest on obligations issued by the Commonwealth of Massachusetts, its
instrumentalities or its political subdivisions that is exempt from
Massachusetts taxation or (2) qualify as capital gain dividends as defined in
Code section 852(b)(3)(C), that are attributable to gain on obligations issued
by the Commonwealth of Massachusetts, its instrumentalities or political
subdivisions that is exempt from Massachusetts taxation. If a holder of shares
of the MASSACHUSETTS FUND is a corporation subject to the Massachusetts
corporate excise tax, distributions received from the MASSACHUSETTS FUND are
includable in gross income and generally may not be deducted by such a corporate
holder in computing its net income. The shares of the MASSACHUSETTS FUND will be
includable in the gross estate of a deceased individual holder who is a resident
of Massachusetts for purposes of the Massachusetts Estate Tax.

NEW JERSEY. In the opinion of Hawkins, Delafield & Wood, New Jersey tax
counsel to Multi-State Insured, provided that the NEW JERSEY FUND qualifies as a
qualified investment fund under New Jersey law, shareholders of the NEW JERSEY
FUND who are New Jersey resident individuals, estates and trusts will not be
subject to the New Jersey Gross Income Tax on (1) distributions of the interest
and capital gains made by the NEW JERSEY FUND to the extent that such
distributions are with respect to New Jersey state and local bonds and (2) on
gains resulting from the redemption or sale of shares of the NEW JERSEY FUND. A
description of a qualified investment fund and of New Jersey state and local
bonds is contained in the SAI. A corporate shareholder of the NEW JERSEY FUND
subject to the New Jersey Corporation Business Tax or the New Jersey Corporation
Income Tax will be required to include in its corporate tax base (1)
distributions of interest and capital gains made by the NEW JERSEY FUND and (2)
gains resulting from the redemption or sale of shares of the NEW JERSEY FUND.

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NEW YORK. In the opinion of Hawkins, Delafield & Wood, tax counsel to NEW
YORK INSURED, New York resident individual shareholders will not be subject to
the personal income taxes imposed by New York State and by New York City on
distributions from NEW YORK INSURED to the extent that these distributions
qualify as exempt-interest dividends, as defined in section 852(b)(5) of the
Code, and are attributable to interest on obligations issued by or on behalf of
the State of New York or any political subdivision thereof. Information
concerning NEW YORK INSURED income attributable to sources other than from New
York and the tax treatment of interest on indebtedness incurred to purchase or
carry shares of NEW YORK INSURED is provided in the SAI. NEW YORK INSURED
distributions are not excluded from the determination of the franchise and
corporation taxes that are based on entire net income and respectively imposed
by the State and City of New York.

NORTH CAROLINA. This opinion of Wyrick, Robbins, Yates & Ponton L.L.P.,
North Carolina tax counsel to Multi-State Insured, and the information appearing
in the SAI are based on the current administrative position of the North
Carolina Department of Revenue (the "Revenue Department") as found in Chapter
105 of the North Carolina General Statutes, the North Carolina Administrative
Rules, and other rules, bulletins and statements issued by the Revenue
Department.

Individual shareholders of the NORTH CAROLINA FUND who are subject to
North Carolina income taxation will not be subject to such tax on NORTH CAROLINA
FUND dividend distributions to the extent that such distributions qualify as
exempt-interest dividends under the Code and represent (a) interest on direct
obligations of the United States or its possessions, (b) obligations of the
State of North Carolina, its political subdivisions or a commission, an
authority, or another agency of the State of North Carolina or its political
subdivisions, or (c) obligations of nonprofit educational institutions organized
or chartered under the laws of the State of North Carolina. Corporate
shareholders of the NORTH CAROLINA FUND who are subject to North Carolina income
taxation will receive substantially the same treatment as individual taxpayers,
except corporate shareholders must recognize distributions of interest on
obligations of North Carolina nonprofit educational institutions.

The above exemptions from North Carolina income tax do not apply to
capital gain distributions received from the NORTH CAROLINA FUND.

For a more expansive and detailed discussion, please see the SAI.

PENNSYLVANIA. In the opinion of Kirkpatrick & Lockhart LLP, Pennsylvania
tax counsel to Multi-State Insured, individual shareholders of the PENNSYLVANIA
FUND will not be subject to Pennsylvania personal income taxes on distributions
of interest attributable to Exempt Obligations, but will be subject to those
taxes on distributions of gains and most other sources of income from the
PENNSYLVANIA FUND. "Exempt Obligations" generally means obligations issued by
Pennsylvania and its agencies, public authorities, municipalities and other
political subdivisions as well as obligations of the United States. Exempt
interest in Pennsylvania is referred to as excludible exempt-interest dividends
and will be identified by the PENNSYLVANIA FUND.

Shares of the PENNSYLVANIA FUND will be exempt from any Pennsylvania
county personal property tax to the extent that the PENNSYLVANIA FUND'S
portfolio consists of Exempt Obligations on the annual assessment date. This tax
is imposed by most, but not all, counties in Pennsylvania.

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Distributions of interest derived from Exempt Obligations are not subject to the
Philadelphia School District investment net income tax provided that the
PENNSYLVANIA FUND reports to its shareholders the percentage of Exempt
Obligations held by it for the year. The PENNSYLVANIA FUND will report this
percentage to its shareholders. Exempt-interest dividends are not subject to the
Pennsylvania corporate net income tax. Gains on Exempt Obligations are, however,
subject to this tax. Shares of the PENNSYLVANIA FUND are not considered by
Pennsylvania to be exempt when determining Pennsylvania capital stock and
franchise taxes. Please see "Federal Income Taxes" above for a discussion of
"exempt-interest dividends".

VIRGINIA. In the opinion of Sands, Anderson, Marks & Miller, a
Professional Corporation, Virginia tax counsel to Multi-State Insured, interest
on exempt obligations in the VIRGINIA FUND passed through to shareholders in
qualifying distributions will retain its exempt status in the hands of the
shareholders. Accordingly, individual shareholders of the VIRGINIA FUND subject
to Virginia personal income tax will not be required to include in their gross
income, for Virginia personal income tax purposes, distributions made by the
VIRGINIA FUND that are exclusively (1) both tax-exempt for Federal income tax
purposes and derived from interest on obligations of the Commonwealth of
Virginia or any of its political subdivisions, or (2) without regard to any
exemption from Federal income tax, derived from interest in certain obligations
for which a Virginia income tax exemption is independently provided. If a
distribution includes both taxable and tax-exempt interest, the entire
distribution is included in the gross income of the shareholder for Virginia
personal income tax purposes unless the exempt portion is designated with
reasonable certainty. Counsel has been advised that, in the event any such
commingled distributions are made by the VIRGINIA FUND, the VIRGINIA FUND
intends to provide such designation in a manner acceptable to the Virginia
Department of Taxation, to shareholders of the VIRGINIA FUND.

See "State Income Taxes" in the SAI for additional state tax information.
Investors should consult their own tax advisers for appropriate state advice.

PERFORMANCE INFORMATION

For purposes of advertising, each Fund's performance may be calculated for each
class of its shares based on average annual total return and total return. Each
of these figures reflects past performance and does not necessarily indicate
future results. Average annual total return shows the average annual percentage
change in an assumed $1,000 investment. It reflects the hypothetical annually
compounded return that would have produced the same total return if a Fund's
performance had been constant over the entire period. Because average annual
total return tends to smooth out variations in a Fund's return, you should
recognize that it is not the same as actual year-by-year results. Average annual
total return includes the effect of paying the maximum sales charge (in the case
of Class A shares) or the deduction of any applicable CDSC (in the case of Class
B shares) and payment of dividends and other distributions in additional shares.
One, five and ten year periods will be shown unless the class has been in
existence for a shorter period. Total return is computed using the same
calculations as average annual total return. However, the rate expressed is the
percentage change from the initial $1,000 invested to the value of the
investment at the end of the stated period. Total return calculations assume
reinvestment of dividends and other distributions.

42
<PAGE>

Each Fund also may advertise its yield for each class of shares. Yield
reflects investment income net of expenses over a 30-day (or one-month) period
on a Fund share, expressed as an annualized percentage of the maximum offering
price per share for Class A shares and the net asset value per share for Class B
shares at the end of the period. Yield computations differ from other accounting
methods and therefore may differ from dividends actually paid or reported net
income. Each Fund may also advertise its "actual distribution rate" for each
class of shares. This is computed in the same manner as yield except that actual
income dividends declared per share during the period in question are
substituted for net investment income per share. In addition, each Fund
calculates its "actual distribution rate" based upon net asset value for
dissemination to existing shareholders.

Tax-equivalent yields show the taxable yields an investor would have to
earn to equal a Fund's tax-free yields. The tax-equivalent yield is calculated
similarly to the yield, except that the yield is increased using a stated income
tax rate to demonstrate the taxable yield necessary to produce an after-tax
yield equivalent to a Fund's tax-free yield.

Each of the above performance calculations may be based on investment at
reduced sales charge levels or at net asset value. Any quotation of performance
figures not reflecting the maximum sales charge or CDSC will be greater than if
the maximum sales charge or CDSC were used. Each class of shares of a Fund has
different expenses which will affect its performance. Additional performance
information is contained in the Tax Free Funds' Annual Reports which may be
obtained without charge by contacting the applicable Tax Free Fund at
1-800-423-4026.

GENERAL INFORMATION

ORGANIZATION. NEW YORK INSURED was incorporated in the State of Maryland
on July 5, 1983. New York Insured's authorized capital stock consists of one
billion shares of common stock, with a par value of $.01 per share. Multi-State
Insured was organized as a Massachusetts business trust on October 30, 1985. The
seventeen series of Multi-State Insured may be referred to as: First Investors
Arizona Insured Tax Free Fund, First Investors California Insured Tax Free Fund,
First Investors Connecticut Insured Tax Free Fund, First Investors Colorado
Insured Tax Free Fund, First Investors Florida Insured Tax Free Fund, First
Investors Georgia Insured Tax Free Fund, First Investors Maryland Insured Tax
Free Fund, First Investors Massachusetts Insured Tax Free Fund, First Investors
Michigan Insured Tax Free Fund, First Investors Minnesota Insured Tax Free Fund,
First Investors Missouri Insured Tax Free Fund, First Investors New Jersey
Insured Tax Free Fund, First Investors North Carolina Insured Tax Free Fund,
First Investors Ohio Insured Tax Free Fund, First Investors Oregon Insured Tax
Free Fund, First Investors Pennsylvania Insured Tax Free Fund and First
Investors Virginia Insured Tax Free Fund.

Each Tax Free Fund is authorized to issue shares of beneficial interest or
common stock, as applicable, in such separate and distinct series and classes of
shares as the applicable Tax Free Fund's Board shall from time to time
establish. The shares of beneficial interest of Multi-State Insured are
presently divided into seventeen separate and distinct series and the shares of
common stock of NEW YORK INSURED presently comprise one series. Each Tax Free
Fund presently has two

43
<PAGE>

classes, designated Class A shares and Class B shares. Each class of a Fund
represents interests in the same assets of that Fund. The Tax Free Funds do not
hold annual shareholder meetings. If requested to do so by the holders of at
least 10% of a Tax Free Fund's outstanding shares, the applicable Tax Free
Fund's Board will call a special meeting of shareholders for any purpose,
including the removal of Directors or Trustees. Each share of each Fund has
equal voting rights except as noted above.

CUSTODIAN. The Bank of New York, 48 Wall Street, New York, NY 10286, is
custodian of the securities and cash of each Fund.

TRANSFER AGENT. Administrative Data Management Corp., 581 Main Street,
Woodbridge, NJ 07095-1198, an affiliate of FIMCO and FIC, acts as transfer and
dividend disbursing agent for each Fund and as redemption agent for regular
redemptions. The Transfer Agent's telephone number is 1-800-423-4026.

SHARE CERTIFICATES. The Funds do not issue certificates for Class B
shares, The Funds, however, will issue share certificates for Class A shares at
the shareholder's request. Ownership of shares of each Fund is recorded on a
stock register by the Transfer Agent and shareholders have the same rights of
ownership with respect to such shares as if certificates had been issued.

CONFIRMATIONS AND STATEMENTS. You will receive confirmations of purchases
and redemptions of shares of a Fund. Generally, confirmation statements will be
sent to you following a transaction in the account, including payment of a
dividend or capital gain distribution in additional shares or cash. However,
systematic investments made through First Investors Money Line or automatic
payroll deductions will only be confirmed in your monthly or quarterly
statement, showing all transactions occurring during the period.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES. Paul A. D'Oliveira,
2540 Pawtucket Avenue, East Providence, RI 02915 owns 31.2% of the Class B
shares of the MASSACHUSETTS FUND and may, therefore, be deemed to control this
class of that Fund under the 1940 Act. Abraham Jones, 2317 Ellerbe Ln, Raleigh,
NC 27610-3501 owns 39.3% of the Class B shares of the NORTH CAROLINA FUND and
may, therefore, be deemed to control this class of that Fund under the 1940 Act.

SHAREHOLDER INQUIRIES. Shareholder inquiries can be made by calling
Shareholder Services at 1-800-423-4026.

ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS. It is the Tax Free Funds'
practice to mail only one copy of their annual and semi-annual reports to any
address at which more than one shareholder with the same last name has indicated
that mail is to be delivered. Additional copies of the reports will be mailed if
requested in writing or by telephone by any shareholder.

44
<PAGE>

TABLE OF CONTENTS

Fee Table.............................................................. 2
Financial Highlights................................................... 7
Investment Objectives and Policies..................................... 16
Alternative Purchase Plans............................................. 25
How to Buy Shares...................................................... 26
How to Exchange Shares................................................. 31
How to Redeem Shares................................................... 31
Telephone Transactions................................................. 33
Management............................................................. 34
Distribution Plans..................................................... 35
Determination of Net Asset Value....................................... 36
Dividends and Other Distributions...................................... 36
Taxes.................................................................. 37
Performance Information................................................ 42
General Information.................................................... 43

INVESTMENT ADVISER CUSTODIAN
First Investors Management The Bank of New York
Company, Inc. 48 Wall Street
95 Wall Street New York, NY 10286
New York, NY 10005
TRANSFER AGENT
UNDERWRITER Administrative Data
First Investors Corporation Management Corp.
95 Wall Street 581 Main Street
New York, NY 10005 Woodbridge, NJ 07095-1198

LEGAL COUNSEL AUDITORS
Kirkpatrick & Lockhart LLP Tait, Weller & Baker
1800 Massachusetts Avenue, N.W. Two Penn Center Plaza
Washington, D.C. 20036 Philadelphia, PA 19102-1707

This Prospectus is intended to constitute an offer by each Tax Free Fund only of
the securities of which it is the issuer and is not intended to constitute an
offer by any Fund of the securities of any other Fund whose securities are also
offered by this Prospectus. No Fund intends to make any representation as to the
accuracy or completeness of the disclosure in this Prospectus relating to any
other Fund. No dealer, salesman or any other person has been authorized to give
any information or to make any representations other than those contained in
this Prospectus or the Statement of Additional Information, and if given or
made, such information and representation must not be relied upon as having been
authorized by either Tax Free Fund, First Investors Corporation, or any
affiliate thereof. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of the shares offered hereby in any state to
any person to whom it is unlawful to make such offer in such state.

<PAGE>

First Investors
New York Insured
Tax Free Fund, Inc.
- ---------------------------

First Investors
Multi-State
Insured Tax Free Fund
- ---------------------------

Connecticut Fund Massachusetts Fund
Florida Fund New Jersey Fund
Georgia Fund North Carolina Fund
Maryland Fund Pennsylvania Fund
Virginia Fund
- ---------------------------

Prospectus

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

April 30, 1997

First Investors Logo

Logo is described as follows: the arabic numeral one separated into seven
vertical segments followed by the words "First Investors."

Verticle line from top to bottom in center of page about 1/2 inch in thickness

The following language appears to the left of the above language in the printed
piece:

The words "BULK RATE U.S. POSTAGE PAID PERMIT NO. 7379" in a box to the right of
a circle containing the words "MAILED FROM ZIP CODE 11201" appears on the
righthand side.

The following language appears on the lefthand side:

FIRST INVESTORS NEW YORK INSURED TAX FREE FUND, INC.
FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
95 WALL STREET
NEW YORK, NY 10005

First Investors Logo (as described above)
A MEMBER OF THE
FIRST INVESTORS
FINANCIAL NETWORK

FITF001

<PAGE>

FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
CROSS-REFERENCE SHEET

Arizona Fund Minnesota Fund
California Fund Missouri Fund
Colorado Fund Ohio Fund
Michigan Fund Oregon Fund

N-1A Item No. Location
- ------------- --------

PART A: PROSPECTUS

PART B: STATEMENT OF ADDITIONAL INFORMATION

PART C: OTHER INFORMATION

Information required to be included in Part C is set forth under the appropriate
item so numbered, in Part C hereof.

<PAGE>

FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND

ARIZONA FUND, CALIFORNIA FUND, COLORADO FUND, MICHIGAN FUND,
MINNESOTA FUND, MISSOURI FUND, OHIO FUND AND OREGON FUND

95 Wall Street, New York, New York 10005/1-800-423-4026

This is a Prospectus for FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
("Multi-State Insured"), an open-end diversified management investment company
consisting of seventeen separate investment series. This Prospectus relates to
the eight series of Multi-State Insured listed above (singularly, "Fund," and
collectively, "Funds"). Each Fund sells two classes of shares. Investors may
select Class A or Class B shares, each with a public offering price that
reflects different sales charges and expense levels. See "Alternative Purchase
Plans."

The investment objective of each Fund is to achieve a high level of
interest income which is exempt from Federal income tax and, to the extent
indicated for a particular Fund, from state and local income taxes for residents
of that state and is not an item of tax preference for purposes of the Federal
alternative minimum tax ("Tax Preference Item"). Each Fund invests primarily in
tax-exempt obligations issued by or on behalf of the states or a particular
state, its municipal governments and public authorities, as well as tax-exempt
obligations issued by territories or possessions of the United States, the
interest on which is exempt from Federal income tax, the income or other taxes
of a particular state and is not a Tax Preference Item. There can be no
assurance that the objective of any Fund will be realized.

THE FUNDS' MUNICIPAL BONDS ARE INSURED AS TO TIMELY PAYMENT OF PRINCIPAL
AND INTEREST THROUGH THE ISSUER OR UNDER INSURANCE POLICIES WRITTEN BY
INDEPENDENT INSURANCE COMPANIES. INSURANCE DOES NOT PROTECT AGAINST FLUCTUATIONS
IN THE BONDS' MARKET VALUE OR EACH FUND'S NET ASSET VALUE PER SHARE. FOR MORE
INFORMATION REGARDING THE FUNDS' INSURANCE COVERAGE, SEE "INSURANCE" ON PAGE 14.

This Prospectus sets forth concisely the information about the Funds that
a prospective investor should know before investing and should be retained for
future reference. First Investors Management Company, Inc. ("FIMCO" or
"Adviser") serves as investment adviser to the Funds and First Investors
Corporation ("FIC" or "Underwriter") serves as distributor of the Funds' shares.
A Statement of Additional Information ("SAI"), dated April 30, 1997 (which is
incorporated by reference herein), has been filed with the Securities and
Exchange Commission. The SAI is available at no charge upon request to the Funds
at the address or telephone number indicated above.

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

The date of this Prospectus is April 30, 1997

<PAGE>

FEE TABLE

The following table is intended to assist investors in understanding the
expenses associated with investing in each class of shares of a Fund. Shares of
the Funds issued prior to January 12, 1995 have been designated as Class A
shares.

SHAREHOLDER TRANSACTION EXPENSES

Class A Class B
Shares Shares
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)................... 6.25% None
Deferred Sales Load
(as a percentage of the lower of original purchase
price or redemption proceeds)......................... None* 4% in the
first year;
declining to
0% after the
sixth year

ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)

MANAGEMENT TOTAL FUND
FEES1+ 12B-1 FEES2 OTHER EXPENSES3 OPERATING EXPENSES4+
Class A Class B Class A Class B Class A Class B Class A Class B
Shares Shares Shares+ Shares Shares Shares Shares Shares
------ ------ ------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>

ARIZONA FUND 0.30% 0.30% 0.20% 1.00% -0-%+ -0-%+ 0.50 1.30
CALIFORNIA FUND 0.50 0.50 0.20 1.00 0.10+ 0.10+ 0.80 1.60
COLORADO FUND 0.20 0.20 0.20 1.00 -0-+ -0-+ 0.40 1.20
MICHIGAN FUND 0.50 0.50 0.20 1.00 0.18 0.18 0.88 1.68
MINNESOTA FUND 0.30 0.30 0.20 1.00 -0-+ -0-+ 0.50 1.30
MISSOURI FUND 0.20 0.20 0.20 1.00 -0-+ -0-+ 0.40 1.20
OHIO FUND 0.50 0.50 0.20 1.00 0.10+ 0.10+ 0.80 1.60
OREGON FUND 0.30 0.30 0.20 1.00 -0-+ -0-+ 0.50 1.30
</TABLE>

- ------------------------
* A contingent deferred sales charge of 1.00% will be assessed on certain
redemptions of Class A shares that are purchased without a sales charge.
See "How to Buy Shares."
+ Net of waiver and/or reimbursement.
(1) For the fiscal year ended December 31, 1996, the Adviser waived Management
Fees as follows: in excess of 0.50% for CALIFORNIA FUND, MICHIGAN FUND and
OHIO FUND, in excess of 0.30% for ARIZONA FUND, MINNESOTA Fund and OREGON
FUND, and in excess of 0.20% for COLORADO FUND and MISSOURI FUND. Absent the
waiver, such fees would have been 0.75% for each of these Funds. The Adviser
will continue to waive such fees for a minimum period ending December 31,
1997.
(2) The Underwriter has agreed through December 31, 1997 to cap its right to
claim Class A 12b-1 Fees at the annual rates listed above for all the Funds.
Multi-State Insured's Class A Distribution Plan provides for 12b-1 Fees in
the total amount of up to 0.30% on an annual basis.
(3) For the fiscal year ended December 31, 1996, the Adviser reimbursed all the
Funds, other than the MICHIGAN FUND, for certain Other Expenses. Absent such
reimbursement, Other Expenses for each class of shares would have been 0.28%
for ARIZONA FUND, 0.24% for CALIFORNIA FUND, 0.45% for COLORADO FUND, 0.36%
for MINNESOTA FUND, 0.74% for MISSOURI FUND, 0.24% for OHIO FUND and 0.31%
for OREGON FUND. The Adviser will reimburse all Other

2
<PAGE>

Expenses for ARIZONA FUND, COLORADO FUND, MINNESOTA FUND, MISSOURI FUND and
OREGON FUND and Other Expenses in excess of 0.10% for CALIFORNIA FUND and
OHIO FUND for a minimum period ending December 31, 1997.
(4) If certain fees and expenses had not been waived or reimbursed, Total Fund
Operating Expenses for Class A shares would have been 1.33% for ARIZONA
FUND, 1.29% for CALIFORNIA FUND, 1.50% for COLORADO FUND, 1.23% for MICHIGAN
FUND, 1.41% for MINNESOTA FUND, 1.79% for MISSOURI FUND, 1.29% for OHIO
FUND, 1.36% for OREGON FUND; and for Class B shares would have been 2.03%
for ARIZONA FUND, 1.99% for CALIFORNIA FUND, 2.20% for COLORADO FUND, 1.93%
for MICHIGAN FUND, 2.11% for MINNESOTA FUND, 2.49% for MISSOURI FUND, 1.99%
for OHIO FUND, and 2.06% for OREGON FUND. Each Fund has an expense offset
arrangement that may reduce the Fund's custodian fee based on the amount of
cash maintained by the Fund with its custodian. Any such fee reductions are
not reflected under Total Fund Operating Expenses.

The Example below is based on Class A and Class B expense data for each
Fund's fiscal year ended December 31, 1996, except that certain Operating
Expenses have been restated as noted above.

EXAMPLE

You would pay the following expenses on a $1,000 investment, assuming (1)
5% annual return and (2) redemption at the end of each time period:

ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
ARIZONA FUND
Class A................... $67 $78 $89 $121
Class B................... 53 71 91 135*

CALIFORNIA FUND
Class A................... 70 86 104 155
Class B................... 56 80 107 169*

COLORADO FUND
Class A................... 66 75 84 110
Class B................... 52 68 86 123*

MICHIGAN FUND
Class A................... 71 89 108 164
Class B................... 57 83 111 177*

MINNESOTA FUND
Class A................... 67 78 89 121
Class B................... 53 71 91 135*

3
<PAGE>

MISSOURI FUND
Class A................... 66 75 84 110
Class B................... 52 68 86 123*

OHIO FUND
Class A................... $70 $86 $104 $155
Class B................... 56 80 107 169*

OREGON FUND
Class A................... 67 78 89 121
Class B................... 53 71 91 135*

You would pay the following expenses on the same $1,000 investment,
assuming (1) 5% annual return and (2) no redemption at the end of each time
period:

ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
ARIZONA FUND
Class A................... $67 $78 $89 $121
Class B................... 13 41 71 135*

CALIFORNIA FUND
Class A................... 70 86 104 155
Class B................... 16 50 87 169*

COLORADO FUND
Class A................... 66 75 84 110
Class B................... 12 38 66 123*

MICHIGAN FUND
Class A................... 71 89 108 164
Class B................... 17 53 91 177*

MINNESOTA FUND
Class A................... 67 78 89 121
Class B................... 13 41 71 135*

MISSOURI FUND
Class A................... 66 75 84 110
Class B................... 12 38 66 123*

OHIO FUND
Class A................... 70 86 104 155
Class B................... 16 50 87 169*

4
<PAGE>

OREGON FUND
Class A................... 67 78 89 121
Class B................... 13 41 71 135*

* Assumes conversion to Class A shares eight years after purchase.

THE EXPENSES IN THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION BY
THE FUNDS OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES IN FUTURE YEARS MAY BE
GREATER OR LESS THAN THOSE SHOWN.

FINANCIAL HIGHLIGHTS

5
<PAGE>

<TABLE>

ARIZONA FUND
CLASS A
11/1/90* to 12/31/90 . $11.17 $.009 $(.059) $(.050) $ -- $ -- $ --
1991 . . . . . . . . . 11.12 .605 .420 1.025 .605 .020 .625
1992 . . . . . . . . . 11.52 .683 .545 1.228 .668 -- .668
1993 . . . . . . . . . 12.08 .681 1.078 1.759 .672 .047 .719
1994 . . . . . . . . . 13.12 .663 (1.397) (.734) .676 -- .676
1995 . . . . . . . . . 11.71 .665 1.448 2.113 .673 -- .673
1996 . . . . . . . . . 13.15 .664 (.199) .465 .665 -- .665
CLASS B
1/12/95*to 12/31/95 . . . 11.82 .544 1.340 1.884 .554 -- .554
1996 . . . . . . . . . 13.15 .565 (.201) .364 .564 -- .564

CALIFORNIA FUND
CLASS A
2/23/87* to 12/31/87 . $11.13 $.497 $(1.247) $(.750) $.460 $ -- $.460
1988 . . . . . . . . . 9.92 .747 .493 1.240 .780 -- .780
1989 . . . . . . . . . 10.38 .736 .294 1.030 .740 -- .740
1990 . . . . . . . . . 10.67 .747 (.047) .700 .750 -- .750
1991 . . . . . . . . . 10.62 .706 .452 1.158 .708 -- .708
1992 . . . . . . . . . 11.07 .653 .406 1.059 .644 .045 .689
1993 . . . . . . . . . 11.44 .637 .845 1.482 .612 .190 .802
1994 . . . . . . . . . 12.12 .598 (1.328) (.730) .620 -- .620
1995 . . . . . . . . . 10.77 .580 1.335 1.915 .589 .136 .725
1996 . . . . . . . . . 11.96 .576 (.128) .448 .575 .073 .648
CLASS B
1/12/95* to 12/31/95 . 10.87 .472 1.227 1.699 .483 .136 .619
1996 . . . . . . . . . 11.95 .486 (.123) .363 .480 .073 .553

COLORADO FUND
CLASS A
5/4/92* to 12/31/92 . . $11.17 $.308 $.442 $.750 $.290 $ -- $.290
1993 . . . . . . . . . 11.63 .625 .984 1.609 .633 .006 .639
1994 . . . . . . . . . 12.60 .631 (1.351) (.720) .640 -- .640
1995 . . . . . . . . . 11.24 .668 1.340 2.008 .668 -- .668
1996 . . . . . . . . . 12.58 .642 (.089) .553 .643 -- .643
CLASS B
1/12/95*to 12/31/95 . . . 11.35 .564 1.239 1.803 .573 -- .573
1996 . . . . . . . . . 12.58 .547 (.100) .447 .547 -- .547
</TABLE>

* Commencement of operations of Class A shares or date Class B shares were
first offered Calculated without sales charges
** Annualized
+ Net of expenses waived or assumed by the investment adviser and/or the
transfer agent from the ++ commencement of operations through December 31,
1996.

6
<PAGE>

<TABLE>

$11.12 (2.68)+ $ 602 -- .59+ 1.47+ (.88) 0
11.52 9.49 2,380 .05 5.75 1.51 4.29 45
12.08 10.98 4,818 .20 5.84 1.32 4.72 58
13.12 14.87 8,247 .20 5.40 1.20 4.41 45
11.71 (5.63) 8,803 .30 5.52 1.24 4.59 63
13.15 18.41 8,834 .50 5.27 1.15 4.62 36
12.95 3.69 8,383 .53 5.17 1.23 4.47 27

13.15 16.20 173 1.30+ 4.62+ 1.95+ 3.95+ 36
12.95 2.89 289 1.33 4.37 2.03 3.67 27

$ 9.92 7.64+ $2,033 .03+ 5.02 .76+ 4.30+ 32
10.38 12.94 2,707 .05 7.42 1.19 6.29 9
10.67 10.21 6,311 .09 7.02 1.19 5.91 16
10.62 6.81 7,873 .08 7.11 1.05 6.14 27
11.07 11.26 12,761 .30 6.49 1.02 5.77 34
11.44 9.84 15,195 .72 5.83 1.25 5.30 52
12.12 13.21 17,625 .89 5.33 1.14 5.08 66
10.77 (6.10) 15,335 .97 5.27 1.22 5.02 83
11.96 18.16 16,547 .90 5.02 1.15 4.77 53
11.76 3.91 15,558 .84 4.93 1.19 4.58 30

11.95 15.91 59 1.74+ 4.31+ 2.00+ 4.04+ 53
11.76 3.16 114 1.63 4.14 1.98 3.79 30

$11.63 10.10+ $1,122 -- 4.95+ 1.90+ 3.06+ 46
12.60 14.14 2,887 .12 5.13 1.42 3.83 27
11.24 (5.77) 3,110 .20 5.41 1.43 4.18 108
12.58 18.25 3,525 .20 5.54 1.32 4.42 45
12.49 4.57 3,466 .38 5.20 1.40 4.17 20

12.58 16.18 131 1.00+ 4.90+ 2.12+ 3.75+ 45
12.48 3.68 241 1.19 4.39 2.21 3.36 20

</TABLE>

7
<PAGE>

<TABLE>

MICHIGAN FUND
CLASS A
1987 . . . . . . . . . $11.13 $.566 $(1.106) $(.540) $.540 -- $.540
1988 . . . . . . . . . 10.05 .773 .557 1.330 .790 -- .790
1989 . . . . . . . . . 10.59 .724 .406 1.130 .730 -- .730
1990 . . . . . . . . . 10.99 .743 (.023) .720 .730 -- .730
1991 . . . . . . . . . 10.98 .729 .476 1.205 .735 .020 .755
1992 . . . . . . . . . 11.43 .681 .494 1.175 .675 -- .675
1993 . . . . . . . . . 11.93 .641 1.053 1.694 .655 .079 .734
1994 . . . . . . . . . 12.89 .612 (1.423) (.811) .609 -- .609
1995 . . . . . . . . . 11.47 .634 1.331 1.965 .635 -- .635
1996 . . . . . . . . . 12.80 .627 (.215) .412 .631 .011 .642
CLASS B
1/12/95*to 12/31/95 . . 11.57 .528 1.241 1.769 .539 -- .539
1996 . . . . . . . . . 12.80 .534 (.229) .305 .534 .011 .545

MINNESOTA FUND
CLASS A
1987 . . . . . . . . . $11.13 $.557 $(1.127) $(.570) $.550 $ -- $.550
1988 . . . . . . . . . 10.01 .748 .332 1.080 .740 -- .740
1989 . . . . . . . . . 10.35 .719 .271 .990 .730 -- .730
1990 . . . . . . . . . 10.61 .722 (.037) .685 .725 -- .725
1991 . . . . . . . . . 10.57 .728 .399 1.127 .720 .007 .727
1992 . . . . . . . . . 10.97 .676 .313 .989 .659 -- .659
1993 . . . . . . . . . 11.30 .625 .622 1.247 .640 .137 .777
1994 . . . . . . . . . 11.77 .592 (1.282) (.690) .600 -- .600
1995 . . . . . . . . . 10.48 .589 1.022 1.611 .591 -- .591
1996 . . . . . . . . . 11.50 .592 (.210) .382 .592 -- .592
CLASS B
1/12/95* to 12/31/95 . 10.55 .515 .950 1.465 .515 -- .515
1996 . . . . . . . . . 11.50 .493 (.205) .288 .498 -- .498

</TABLE>

* Commencement of operations of Class A shares or date Class B shares were
first offered Calculated without sales charges
** Annualized
+ Net of expenses waived or assumed by the investment adviser and/or the
transfer agent from the
++ commencement of operations through December 31, 1996.

8
<PAGE>

<TABLE>

$10.05 6.03 $1,077 .07 6.52 1.18 5.41 7
10.59 13.65 1,845 .12 7.52 1.41 6.23 31
10.99 10.98 6,225 .13 6.76 1.14 5.75 1
10.98 6.83 10,542 .10 6.90 1.06 5.94 11
11.43 11.14 13,630 .31 6.56 1.05 5.82 22
11.93 10.59 20,971 .73 5.86 1.22 5.37 26
12.89 14.49 30,281 .89 5.11 1.14 4.86 25
11.47 (6.36) 30,362 .93 5.11 1.18 4.86 60
12.80 17.47 36,837 .89 5.14 1.14 4.89 45
12.57 3.37 36,928 .88 5.03 1.13 4.78 43

12.80 15.55 388 1.76+ 4.41+ 2.02+ 4.15+ 45
12.56 2.49 724 1.69 4.22 1.94 3.97 43

$10.01 5.04 $ 585 .15 6.06 1.49 4.72 15
10.35 11.14 789 .15 7.38 1.86 5.67 10
10.61 9.85 1,992 .16 6.94 1.42 5.68 16
10.57 6.71 3,365 .15 6.92 1.54 5.53 22
10.97 11.00 4,430 .17 6.83 1.21 5.80 17
11.30 9.29 5,983 .51 6.10 1.38 5.23 33
11.77 11.30 8,118 .65 5.40 1.24 4.80 41
10.48 (5.93) 7,375 .65 5.40 1.29 4.76 34
11.50 15.68 8,162 .65 5.29 1.31 4.63 53
11.29 3.47 8,304 .56 5.27 1.31 4.52 49

11.50 14.13 .1 1.45+ 4.64+ 2.11+ 3.96+ 53
11.29 2.61 41 1.40 4.44 2.14 3.69 49

</TABLE>

9
<PAGE>

<TABLE>

MISSOURI FUND
CLASS A
5/4/92* to 12/31/92 . . $11.17 $.272 $ .363 $.635 $.255 $ -- $.255
1993 . . . . . . . . . 11.55 .620 .988 1.608 .635 .023 .658
1994 . . . . . . . . . 12.50 .617 (1.384) (.767) .613 -- .613
1995 . . . . . . . . . 11.12 .662 1.356 2.018 .668 -- .668
1996 . . . . . . . . . 12.47 .637 (1.80) .457 .637 -- .637
CLASS B
1/12/95*to 12/31/95 . . . 11.22 .548 1.260 1.808 .548 -- .548
1996 . . . . . . . . . . 12.48 .538 (.189) .349 .539 -- .539

OHIO FUND
CLASS A
1987 . . . . . . . . . $11.13 $.576 $(1.166) $(.590) $.550 $ -- $.550
1988 . . . . . . . . . 9.99 .792 .578 1.370 .800 -- .800
1989 . . . . . . . . . 10.56 .732 .408 1.140 .750 -- .750
1990 . . . . . . . . . 10.95 .752 (.012) .740 .760 -- .760
1991 . . . . . . . . . 10.93 .725 .493 1.218 .718 -- .718
1992 . . . . . . . . . 11.43 .676 .432 1.108 .668 -- .668
1993 . . . . . . . . . 11.87 .632 .894 1.526 .632 .104 .736
1994 . . . . . . . . . 12.66 .613 (1.353) (.740) .620 -- .620
1995 . . . . . . . . . 11.30 .615 1.306 1.921 .619 .092 .711
1996 . . . . . . . . . 12.51 .605 (.097) .508 .609 .059 .668
CLASS B
1/12/95* to 12/31/95 . 11.40 .503 1.212 1.715 .513 .092 .605
1996 . . . . . . . . . 12.51 .507 (.095) .412 .513 .059 .572

OREGON FUND
CLASS A
5/4/92* to 12/31/92 . . $11.17 $.260 $ .230 $.490 $.240 $ -- $.240
1993 . . . . . . . . . 11.42 .661 .807 1.468 .598 -- .598
1994 . . . . . . . . . 12.29 .529 (1.339) (.810) .610 -- .610
1995 . . . . . . . . . 10.87 .626 1.289 1.915 .625 -- .625
1996 . . . . . . . . . 12.16 .589 (.161) .428 .588 -- .588
CLASS B
1/12/95*to 12/31/95 . . . 10.97 .541 1.182 1.723 .543 -- .543
1996 . . . . . . . . . . 12.15 .495 (.161) .334 .494 -- .494

</TABLE>

* Commencement of operations of Class A shares or date Class B shares were
first offered Calculated without sales charges
** Annualized
+ Net of expenses waived or assumed by the investment adviser and/or the
transfer agent from the
++ commencement of operations through December 31, 1996.

10
<PAGE>

<TABLE>

$11.55 8.58+ $ 475 -- 4.36+ 4.60+ (.24)+ 28
12.50 14.21 1,540 .13 4.44 1.76 2.81 8
11.12 (6.20) 1,611 .20 5.45 1.57 4.07 98
12.47 18.55 1,890 .20 5.58 1.42 4.36 50
12.29 3.84 1,925 .38 5.24 1.69 3.93 15

12.48 16.41 .1 1.00+ 4.94+ 2.22+ 3.68+ 50
12.29 2.93 36 1.24 4.38 2.55 3.07 15

$9.99 5.15 $ 965 .07 6.71 1.20 5.59 23
10.56 14.15 1,485 .06 7.76 1.50 6.33 23
10.95 11.09 4,058 .07 6.94 1.17 5.84 5
10.93 7.05 6,627 .07 6.99 1.11 5.95 31
11.43 11.51 9,324 .29 6.50 1.05 5.73 34
11.87 9.99 13,869 .62 5.83 1.21 5.23 29
12.66 13.12 20,366 .80 5.09 1.15 4.74 30
11.30 (5.91) 18,169 .85 5.18 1.20 4.83 57
12.51 17.34 19,398 .87 5.07 1.22 4.72 70
12.35 4.23 20,123 .86 4.95 1.19 4.62 33

12.51 15.30 282 1.76+ 4.33+ 2.13+ 3.95+ 70
12.35 3.43 279 1.66 4.15 1.99 3.82 33

$11.42 6.62+ $ 931 -- 4.30+ 2.48+ 1.82+ 12
12.29 13.13 3,747 -- 4.94 1.28 3.66 77
10.87 (6.65) 4,696 .20 5.36 1.39 4.17 135
12.16 17.99 6,840 .20 5.36 1.23 4.33 36
12.00 3.68 9,917 .46 4.97 1.26 4.16 21

12.15 16.00 342 1.00+ 4.72+ 2.03+ 3.65+ 36
11.99 2.87 568 1.26 4.17 2.07 3.36 21

</TABLE>

11
<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

The investment objective of each Fund is to achieve a high level of
interest income which is exempt from Federal income tax and, to the extent
indicated for a particular Fund, from state and local income taxes for residents
of that state and is not a Tax Preference Item. Each Fund seeks to achieve its
objective by investing at least 80% of its total assets in Municipal
Instruments, as defined below, issued by or on behalf of states, territories and
possessions of the United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities, the interest on which is
exempt from Federal income tax, state and local income taxes in the states for
whose residents the particular Fund is established and is not a Tax Preference
Item. See "Municipal Instruments." In the case of the MINNESOTA INSURED TAX FREE
FUND, it is intended that such Fund will comply with the requirement that, in
order for exempt-interest dividends that are derived from interest income from
specified Minnesota sources to be exempt from regular Minnesota personal income
tax, 95% or more of the exempt-interest dividends that are paid to all
shareholders by the Fund must be derived from such specified Minnesota sources.
See "Taxes-Minnesota" for a further discussion of this requirement and of
Minnesota legislation enacted in 1995 that provides for the taxation of interest
income from such specified Minnesota sources, and of exempt-interest dividends
that are derived from such interest income, if certain events occur.

GENERAL POLICIES

Although each Fund generally invests in municipal bonds rated Baa or
higher by Moody's Investors Service, Inc. ("Moody's") or BBB or higher by
Standard & Poor's Ratings Group ("S&P"), each Fund may invest up to 5% of its
net assets in lower rated municipal bonds or in unrated municipal bonds deemed
to be of comparable quality by the Adviser. See "Debt Securities--Risk Factors."
However, in each instance such municipal bonds will be covered by the insurance
feature and thus are considered to be of higher quality than lower rated
municipal bonds without an insurance feature. See "Insurance" for a discussion
of the insurance feature. The Adviser will

12
<PAGE>

carefully evaluate on a case-by-case basis whether to dispose of or retain a
municipal bond which has been downgraded in rating subsequent to its purchase by
a Fund. A description of municipal bond ratings is contained in Appendix A to
the SAI.

DESCRIPTION OF CERTAIN SECURITIES, OTHER INVESTMENT POLICIES AND RISK FACTORS

GENERAL MARKET RISK

TYPES OF SECURITIES AND THEIR RISKS

DEBT SECURITIES--RISK FACTORS. The market value of debt securities is
influenced significantly by changes in the level of interest rates. Generally,
as interest rates rise, the market value of debt

13
<PAGE>

securities decreases. Conversely, as interest rates fall, the market value of
debt securities increases. Factors which could result in a rise in interest
rates, and a decrease in market value of debt securities, include an increase in
inflation or inflation expectations, an increase in the rate of U.S. economic
growth, an expansion in the Federal budget deficit, or an increase in the price
of commodities such as oil. In addition, the market value of debt securities is
influenced by perceptions of the credit risks associated with such securities.
Credit risk is the risk that adverse changes in economic conditions can affect
an issuer's ability to pay principal and interest. Debt obligations rated lower
than Baa by Moody's or BBB by S&P, commonly referred to as "junk bonds," are
speculative and generally involve a higher risk of loss of principal and income
than higher-rated securities. See Appendix A to the SAI for a description of
municipal bond ratings.

INSURANCE. All municipal bonds in each Fund's portfolio will be insured as
to their scheduled payment of principal and interest at the time of purchase
either (1) under a Mutual Fund Insurance Policy purchased by Multi-State
Insured, on behalf of the Funds, from an independent insurance company; (2)
under an insurance policy obtained subsequent to a municipal bond's original
issue; or (3) under an insurance policy obtained by the issuer or underwriter of
such municipal bond at the time of original issuance. An insured municipal bond
in the portfolio of a Fund typically will be covered by only one of the three
policies. All three types of insurance policies insure the scheduled payment of
all principal and interest on the Funds' municipal bonds as they fall due. The
insurance does not guarantee the market value or yield of the insured municipal
bonds or the net asset value or yield of the shares of a Fund. Investors should
note that while all municipal bonds in which the Funds will invest will be
insured, each Fund may invest up to 35% of its total assets in portfolio
securities not covered by the insurance feature. Multi-State Insured has
purchased a Mutual Fund Insurance Policy from AMBAC Indemnity Corporation
("AMBAC"), a Wisconsin stock insurance company with its principal executive
offices in New York City. Under certain circumstances, Multi-State Insured may
obtain such insurance from an insurer other than AMBAC, provided such insurer is
rated in the top rating category by S&P, Moody's, Fitch Investors Service, Inc.
("Fitch") or any recognized statistical rating organization. Because these
insurance premiums are paid by each Fund, a Fund's yield is reduced by this
expense. See "Insurance" in the SAI for a detailed discussion of the insurance
feature.

INVERSE FLOATERS. Each Fund may invest in derivative securities on which
the rate of interest varies inversely with interest rates on similar securities
or the value of an index. For example, an inverse floating rate security may pay
interest at a rate that increases as a specified interest rate index decreases
but decreases as that index increases. The secondary market for inverse floaters
may be limited. The market value of such securities generally is more volatile
than that of a fixed rate obligation and, like most debt obligations, will vary
inversely with changes in interest rates. The interest rates on inverse floaters
may be significantly reduced, even to zero, if interest rates rise. Each Fund
may invest up to 10% of its net assets in inverse floaters.

MUNICIPAL INSTRUMENTS

14
<PAGE>

credit for the payment of principal and interest. Revenue bonds generally are
payable only from revenues derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special tax or other
specific revenue source. There are variations in the security of municipal
bonds, both within a particular classification and between classifications,
depending on numerous factors. The yields on municipal bonds depend on, among
other things, general money market conditions, condition of the municipal bond
market, size of a particular offering, the maturity of the obligation and rating
of the issuer. Generally, the value of municipal bonds varies inversely to
changes in interest rates. See Appendix A to the SAI for a description of
municipal bond ratings.

VARIABLE RATE DEMAND INSTRUMENTS. VRDIs are Municipal Instruments,
the interest on which is adjusted periodically, and which allow the holder to
demand payment of all unpaid principal plus accrued interest from the issuer. A
VRDI that a Fund may purchase will be selected if it meets criteria established
and designed by Multi-State Insured's Board to minimize risk to that Fund. In
addition, a VRDI must be rated MIG-1 by Moody's or SP-1 by S&P or insured by the
issuer or an independent insurance company. There is a recognized after-market
for VRDIs.

15
<PAGE>

which may change daily without penalty, pursuant to direct arrangements between
the Fund, as lender, and the borrower. The interest rates on these notes
fluctuate from time to time. The issuer of such obligations normally has a
corresponding right, after a given period, to prepay in its discretion the
outstanding principal amount of the obligations plus accrued interest upon a
specified number of days' notice to the holders of such obligations.

RESTRICTED AND ILLIQUID SECURITIES. Each Fund may invest up to 15% of its
net assets in illiquid securities, including (1) securities that are illiquid
due to the absence of a readily available market or due to legal or contractual
restrictions on resale and (2) repurchase agreements maturing in more than seven
days. However, illiquid securities for purposes of this limitation do not
include securities eligible for resale under Rule 144A under the Securities Act
of 1933, as amended, which Multi-State Insured's Board of Trustees or the
Adviser has determined are liquid under Board-approved guidelines. See the SAI
for more information regarding restricted and illiquid securities.

TAXABLE SECURITIES. Each Fund may invest up to 20% of its assets, on a
temporary basis, in high quality fixed income obligations, the interest on which
is subject to Federal and state or local income taxes. A Fund may, for example,
invest the proceeds from the sale of portfolio securities in taxable obligations
pending the investment or reinvestment thereof in Municipal Instruments. A Fund
may invest in highly liquid taxable obligations in order to avoid the necessity
of liquidating portfolio investments to meet redemptions by Fund investors. Each
Fund's temporary investments in taxable securities may consist of: (1)
obligations of the U.S. Government, its agencies or instrumentalities; (2) other
debt securities rated within the highest grade of S&P or Moody's; (3) commercial
paper rated in the highest grade by either of such rating services; and (4)
certificates of deposit and letters of credit. Certificates of deposit are
negotiable certificates issued against funds deposited in a commercial bank or a
savings and loan association for a definite period of time and earning a
specified return.

STATE SPECIFIC RISK FACTORS

16
<PAGE>

Each Fund seeks to mitigate these potential risks through careful credit
risk analysis and the use of insurance, as previously discussed. Summaries of
certain relevant information regarding each applicable state's economy are set
forth below. For an expanded discussion, see "State Specific Risk Factors" in
the SAI.

RISK FACTORS FOR THE ARIZONA FUND. Arizona's economy has recovered from
the difficulties caused in the late 1980's by a severe drop in real estate
values and a lack of stability of Arizona-based financial institutions which
caused many such institutions to be placed under control of the Resolution Trust
Corporation. Although, the border counties, and especially the City of Tucson,
have been adversely affected by the devaluation of the peso and the subsequent
instability in the Mexican economy, the Arizona economy has generally performed
above the national average in recent years.

In 1995, taxpayers filed a complaint against a school district in Maricopa
County, Arizona concerning the manner in which constitutional and statutory debt
limits applicable to Arizona school districts are calculated. Specifically,
these citizens argued that the school district's outstanding principal amount of
bonds, together with premium received in connection with the issuance of such
bonds, should be used in such calculations. In 1996, the Superior Court of
Maricopa County entered a judgment in favor of the taxpayers and concluded that
the premium to be treated as debt is determined on the amount that the
underwriter pays to a district for such bonds and not the amount for which the
underwriter resells such bonds. The judgment was not appealed by the effected
district. As a result of the judgment, it is not clear if all or part of any
premium received by a school district is subject to constitutional and statutory
debt limits. The Superior Court's judgment and any proceedings with respect
thereto or proceedings in subsequent cases could have potential adverse
consequences including an adverse impact on the secondary market for debt
securities.

In 1994, the Supreme Court of Arizona ruled that the State of Arizona's
statutory financing scheme for public education was not in compliance with the
Arizona Constitution and directed the Arizona Legislature to revise the
statutory financing scheme for public education to bring it into compliance. The
Supreme Court further ordered that this ruling would have prospective
application only, that the public school system should continue under existing
statutes, and that bonded indebtedness incurred under the existing statutes, as
long as they are in effect, are valid and enforceable. In an effort to respond
to the Supreme Court's decision, the Arizona Legislature established a school
capital equity fund (the "School Fund") with an initial appropriation of $30
million and a subsequent appropriation of $70 million. The School Fund is
available to school districts that meet certain established criteria. On January
15, 1997, the Supreme Court of Arizona ruled that (i) the creation of the School
Fund does not cure the State's statutory finance scheme and (ii) the legislature
must adopt a constitutional funding system by June 30, 1998. If a constitutional
funding system is not adopted by June 30, 1998, the State Superintendent of
Public Instruction and State Board of Education will not be permitted to
distribute funds to the schools of the State. If the State Superintendent of
Public Instruction and State Board of Education do not distribute funds to the
school districts as ordered by the Supreme Court, certain school districts may
experience severe adverse financial consequences that may adversely affect the
market value of bonds and may, if severe enough, cause the bankruptcy or
insolvency of such districts and affect timely payment of certain bonds.

17
<PAGE>

In an attempt to further respond to the Supreme Court's decision, the
Arizona Legislature provided additional funding to the School Fund and
established the "Assistance to Build Classrooms Fund" (the "ABC Fund") to assist
school districts that do not meet a minimum level of capital funding on a per
student basis. The legislation establishing the ABC Fund also provides limits on
a school district's general obligation bonding capacity. In establishing the ABC
Fund, the Arizona Legislature has attempted to reduce the capital funding
disparity between the poor school districts and the wealthy school districts and
thereby comply with the Supreme Court's decision. There can be no assurance that
the ABC Fund brings Arizona's statutory financing scheme for public education
into compliance with the Arizona Constitution.

RISK FACTORS FOR THE CALIFORNIA FUND. California's economy is the largest
among the fifty states. While California's substantial population growth during
the 1980s stimulated local economic growth, it also increased demands on state
services. During the early 1990's, population growth slowed, even while
substantial immigration continued, due to the fact that a significant number of
Californians have left the area. In 1994, California began to emerge from a
severe recession which began in 1990, the worst since the 1930s. In late 1994,
California's unemployment rate began to decline, stabilizing at a rate of 7.6%
in early 1996 from a rate of 10.1% in January, 1994. In February, 1996, the
unemployment rate was 7.6%. In February, 1997, the rate declined to 6.5%, the
lowest jobless rate since October, 1990. Although the state's employment is
growing faster than the nation's, its unemployment rate remains above the
natural rate, in particular in some key urban areas. As a result of the
recession of the early 1990's, California experienced recurring budget deficits.
The foregoing difficulties resulted in deteriorating credit ratings for
California's general obligation bonds in recent years. In 1994, Moody's lowered
the state's general obligations' rating from Aa to A1 where it has remained. In
July, 1996, S&P raised its rating to A-plus from A, as did Fitch. Despite
improvements in the state's economy, these ratings are not expected to improve
materially until the state increases its relatively low reserves.

In December, 1994, the County of Orange, California ("Orange County") and
the Orange County Investment Pools (an instrumentality of Orange County) (the
"Pool") filed for protection under Chapter 9 of the U.S. Bankruptcy Code. Pool
losses are estimated to be $1.64 billion, but the final dollar amount of Pool
losses will not be known until the assets of the Pool are liquidated. The
Federal Bankruptcy Court approved the Pool's motion to liquidate the investments
in the Pool, but there is no guarantee that the liquidation will be completed
within the time frame initially approved, or of the result of such liquidation.
The CALIFORNIA FUND holds securities of certain agencies that invested in the
Pool, including the Orange County Transportation Authority ("OCTA") and the
South Orange County Public Finance Authority ("SOCPA"). At this time, there is
no market in these securities, and if a market develops, there is no guarantee
that the entire amount of the CALIFORNIA FUND'S initial investment in these
securities, or past due interest, if any, will be recovered. It is not possible
at this time to determine whether potential losses exceed those announced or to
determine if the CALIFORNIA FUND holds investments in any jurisdiction that may
suffer financial losses such as Orange County's or may file for bankruptcy. It
also is not currently possible to determine the impact of these fiscal and other
developments on the ability of California issuers to pay interest or repay
principal on their obligations.

18
<PAGE>

RISK FACTORS FOR THE COLORADO FUND. The State of Colorado issues no general
obligation bonds secured by the full faith and credit of the State due to
limitations contained in the State constitution. Several agencies and
instrumentalities of State government, however, are authorized by statute to
issue bonds secured by revenue from specific projects and activities.
Additionally, the State currently is authorized to issue short-term revenue
anticipation notes. The major revenue sources for most of the nearly 2000 local
governments that can issue debt instruments are the ad valorem property tax
levied at the local level and sales and use taxes. In 1995, the last year for
which such information is presently available, the assessed valuation of all
real and personal property subject to taxation in Colorado increased
approximately 8.8% from 1994 levels due to the continued growth in market values
for real property in the State. Sales and use taxes collected at the local level
from January 1, 1996 through December 31, 1996 increased approximately 7.4% over
those collected for the year of 1995.

A 1992 amendment to the State Constitution (the "TABOR Amendment")
restricts growth of State and local government spending to the rate of inflation
plus a growth factor (measured by population, school enrollment or construction,
depending on the governmental entity); and requires voter approval of (a) all
new taxes or tax increases and (b) the issuance of most types of debt. Though
the TABOR Amendment is not expected to have an immediate effect on the credit
quality of State and local governments, it will likely reduce the financial
flexibility of all levels of government in Colorado over time. In particular,
local governments dependent on taxes on residential property are being squeezed
between the TABOR Amendment requirements of voter approval for increased mill
levies and an earlier State Constitutional amendment (the "Gallagher Amendment")
which has had the effect of lowering the assessment rate on residential property
from 21% to 10.36% over the past 10 years. Younger or rapidly growing
municipalities with large infrastructure requirements may have particular
difficulty finding the revenues needed to finance their growth.

RISK FACTORS FOR THE MICHIGAN FUND. The principal sectors of Michigan's
economy are manufacturing of durable goods (including automobiles and components
and office equipment), tourism and agriculture. The durable goods manufacturing
sector in Michigan and in other states tends to be more vulnerable to economic
downturns and the component industries have been characterized as having excess
capacity, resulting in plant closings and permanent reductions in the workforce,
many of which have occurred in Michigan. Although the Michigan unemployment rate
has recently been lower than the national unemployment rate, over the last ten
years the Michigan unemployment rate has been typically much higher than the
national average. The market value and marketability of bonds issued by the
State and local units of government may be affected adversely by the same
factors that affect Michigan's economy generally. The ability of the State and
its local units of government to pay the principal of and the interest on their
bonds may be affected by such factors, by the possibility of an unfavorable
resolution of lawsuits against the State in the areas of corrections, highway
maintenance, social services, court funding, tax collection, and budgetary
reductions to school districts, and by certain constitutional, statutory and
charter limitations.

19
<PAGE>

RISK FACTORS FOR THE MINNESOTA FUND. Minnesota's emergence as a regional
center is evidenced by employment growth in the trade, finance, insurance and
service industries. Medical equipment, business services, printing and
publishing and agriculture continue to be important components of Minnesota's
economy. The iron ore industry has declined economically because of overcapacity
and exhaustion of the high-grade resource in Minnesota. Minnesota's economy has
become less dependent on the resource-based industries, and more dependent on
other forms of manufacturing. Economic difficulties and the resultant impact on
state and local government finances may adversely affect the market value of
obligations in the portfolio of the MINNESOTA FUND or the ability of respective
obligors to make timely payment of the principal and interest on such
obligations.

RISK FACTORS FOR THE MISSOURI FUND. Missouri operates from a General
Revenue Fund which includes funds received from tax revenues and federal grants.
The Missouri Constitution imposes a limit on the amount of taxes that may be
imposed by the General Assembly during any fiscal year. No assurances can be
given that the amount of revenue derived from taxes will remain at its current
level or that the amount of federal grants previously provided to the state will
continue. Missouri is barred by its constitution from issuing debt instruments
to fund government operations. The state is, however, authorized to issue
general obligation or revenue bonds to finance or refinance the cost of capital
projects upon approval by the voters. Repayments of general obligation bonds are
made from the General Revenue Fund. Therefore, if the state is unable to
increase its tax revenues, the state's ability to make payments on the existing
general obligation bonds may be adversely affected. Repayments of revenue bonds
are generally limited to the revenues from particular projects. The state may,
however, enact a tax specifically to repay the state's revenue bonds. No
assurances can be given that the state will receive sufficient revenues from the
projects or from taxes to make the required payments on such bonds. The
information contained herein is not intended to be a complete discussion of all
relevant risk factors for the MISSOURI FUND, and there may be other factors not
discussed herein that may adversely affect the repayment and value, of debt
obligations of the State of Missouri and its local governmental entities.

RISK FACTORS FOR THE OHIO FUND. The OHIO FUND is susceptible to general or
particular political, economic or regulatory factors that may affect issuers of
Ohio obligations. Generally, the creditworthiness of Ohio obligations of local
issuers is unrelated to that of obligations of the State itself, and the State
has no responsibility to make payments on those local obligations. While
diversifying more into the service and other non-manufacturing areas, the Ohio
economy continues to rely in part on durable goods manufacturing largely
concentrated in motor vehicles and equipment, steel, rubber products and
household appliances. As a result, general economic activity, as in many other
industrially-developed states, tends to be more cyclical than in some other
states and in the nation as a whole. Agriculture is an important segment of the
economy. In prior years, the state's overall unemployment rate was commonly
somewhat higher than the national figure. However, for the last six years the
state rates were below the national rates. The unemployment rate and its effects
vary among geographic areas of the state.

RISK FACTORS FOR THE OREGON FUND. Oregon's economy historically has relied
heavily on the timber industry which is particularly vulnerable to recessionary
cycles and to pressures from environmental groups. The federal government is
developing and implementing a plan to restore native salmon runs in the Pacific
Northwest which will involve restrictions on the use of dams to

20
<PAGE>

generate electricity on some of Oregon's major rivers; it is uncertain how the
salmon recovery plan may impact the economy through utility rate increases. In
1990, Oregon voters approved Measure 5, a property tax limitation measure that
puts a cap on local ad valorem property taxes, and in 1996 voters approved
Measure 47, which reduces most property taxes by ten percent and limits future
increases. Because of the State's need to replace lost tax revenues, Measures 5
and 47 could adversely affect the State's credit rating, causing the State to
pay a higher interest rate on the money it borrows. There is a relatively
inactive trading market for municipal instruments of Oregon issuers in other
than general obligations of the State; if the Oregon Fund were forced to sell a
large volume of these instruments for any reason, the value of the OREGON FUND'S
portfolio may be adversely affected.

ALTERNATIVE PURCHASE PLANS

CLASS A SHARES. Class A shares are sold with an initial sales charge of up
to 6.25% of the offering price with discounts available for volume purchases.
Class A shares pay a 12b-1 fee at the annual rate of 0.30% of each Fund's
average daily net assets attributable to Class A shares, of which no more than
0.25% may be paid as a service fee and the balance thereof paid as an
asset-based sales charge. The initial sales charge is waived for certain
purchases and a contingent deferred sales charge ("CDSC") may be imposed on such
purchases. See "How to Buy Shares."

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<PAGE>

The principal advantage of purchasing Class B shares is that, since no
initial sales charge is paid, all of an investor's money is put to work from the
outset. Furthermore, although any investment in a Fund should only be viewed as
a long-term investment, if a redemption must be made soon after purchase, an
investor will pay a lower sales charge than if Class A shares had been
purchased. Conversely, because Class B shares are subject to higher asset-based
sales charges, long-term Class B shareholders may pay more in asset-based sales
charges than the economic equivalent of the maximum sales charge on Class A
shares. The automatic conversion of Class B shares into Class A shares after
eight years is designed to reduce the probability of this occurring.

HOW TO BUY SHARES

You may buy shares of a Fund through a First Investors registered
representative ("FIC Representative") or through a registered representative
("Dealer Representative") of an unaffiliated broker-dealer ("Dealer") which is
authorized to sell shares of a Fund. Your FIC Representative or Dealer
Representative (each, a "Representative") may help you complete and submit an
application to open an account with a Fund. Certain accounts may require
additional documentation. Applications accompanied by checks drawn on U.S. banks
made payable to "FIC" and received in FIC's Woodbridge offices by the close of
regular trading on the NYSE, generally 4:00 P.M. (New York City time), will be
processed and shares will be purchased at the public offering price determined
at the close of regular trading on the NYSE on that day. Orders received by
Representatives before the close of regular trading on the NYSE and received by
FIC at their Woodbridge offices before the close of its business day, generally
5:00 P.M. (New York City time), will be executed at the public offering price
determined at the close of regular trading on the NYSE on that day. It is the
responsibility of Representatives to promptly transmit orders they receive to
FIC. The "public offering price" is the net asset value plus the applicable
sales charge for Class A shares and the net asset value for Class B shares. For
a discussion of pricing practices when FIC's Woodbridge offices are unable to
open for business due to an emergency, see the SAI. Each Fund reserves the right
to reject any application or order for its shares for any reason and to suspend
the offering of its shares.

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FUND/SERV PURCHASES. If there is a Dealer of record on your Fund account,
the Fund is authorized to execute electronic purchase orders received directly
from this Dealer. Electronic purchase orders may be processed through the
services of the National Securities Clearing Corp. ("NSCC") "Fund/SERV" system.
Purchase orders received by a Dealer before the close of regular trading on the
NYSE and received by FIC at its Woodbridge offices in accordance with NSCC rules
and procedures will be executed at the net asset value, plus any applicable
sales charge, determined at the close of regular trading on the NYSE on that
day. It is the responsibility of the Dealer to transmit purchase orders to FIC
promptly and accurately. FIC will not be liable for any change in the purchase
price due to the failure of FIC to receive such purchase orders. Any such
disputes must be settled between you and the Dealer.

CLASS A SHARES. Class A shares of each Fund are sold at the public
offering price, which will vary with the size of the purchase, as shown in the
following table:

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SALES CHARGE AS % OF CONCESSION TO
OFFERING NET AMOUNT DEALERS AS % OF
AMOUNT OF INVESTMENT PRICE INVESTED OFFERING PRICE
- -------------------- --------- -------------- ---------------
Less than $25,000................ 6.25% 6.67% 5.13%
$25,000 but under $50,000........ 5.75 6.10 4.72
$50,000 but under $100,000....... 5.50 5.82 4.51
$100,000 but under $250,000...... 4.50 4.71 3.69
$250,000 but under $500,000...... 3.50 3.63 2.87
$500,000 but under $1,000,000.... 2.50 2.56 2.05

CUMULATIVE PURCHASE PRIVILEGE AND LETTER OF INTENT. You may purchase Class
A shares of a Fund at a reduced sales charge through the Cumulative Purchase
Privilege or by executing a Letter of Intent. For more information, see the SAI,
call your Representative or call Shareholder Services at 1-800-423-4026.

WAIVERS OF CLASS A SALES CHARGES. Sales charges on Class A shares do not
apply to: (1) any purchase by an officer, director, trustee or employee (who has
completed the introductory employment period) of the Multi-State Insured, the
Underwriter, the Adviser, or their affiliates, by a Representative, or by the
spouse, or by the children and grandchildren under the age of 21 of any such
person; (2) any purchase by a former officer, director, trustee or employee of
Multi-State Insured, the Underwriter, the Adviser, or their affiliates, or by a
former FIC Representative; provided they had acted as such for at least five
years and had retired or otherwise terminated the relationship in good standing;
(3) any reinvestment of the loan repayments by a participant in a loan program
of any First Investors sponsored qualified retirement plan; and (4) a purchase
with proceeds from the liquidation of a First Investors Life Variable Annuity
Fund A contract or a First Investors Life Variable Annuity Fund C contract
during the one-year period preceding the maturity date of the contract.

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<PAGE>

Unitholders of various series of the Multistate Tax Exempt Trust sponsored by
Advest Inc.; and Unitholders of various series of the Municipal Insured National
Trust, J.C. Bradford & Co. as agent, may purchase Class A shares of a Fund with
Unit Distributions at an offering price which is the net asset value per share
plus a sales charge of 1.5%. Unitholders of various series of tax-exempt trusts,
other than the New York Trust, sponsored by Van Kampen Merritt Inc. may purchase
Class A shares of a Fund with Unit Distributions at an offering price which is
the net asset value per share plus a sales charge of 1.0%. Each Fund's initial
minimum investment requirement is waived for purchases of Class A shares with
Unit Distributions. Shares of a Fund purchased by Unitholders may be exchanged
for Class A shares of any Eligible Fund subject to the terms and conditions set
forth under "How to Exchange Shares."

CONTINGENT DEFERRED SALES CHARGE
YEAR SINCE PURCHASE AS A PERCENTAGE OF DOLLARS INVESTED
PAYMENT MADE OR REDEMPTION PROCEEDS

First.............................. 4%
Second............................. 4
Third.............................. 3
Fourth............................. 3
Fifth.............................. 2
Sixth.............................. 1
Seventh and thereafter............. 0

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HOW TO EXCHANGE SHARES

26
<PAGE>

by calling Shareholder Services at 1-800-423-4026. Exchange requests received in
"good order," as defined below, by the Transfer Agent before the close of
regular trading on the NYSE will be processed at the net asset value determined
as of the close of regular trading on the NYSE on that day; exchange requests
received after that time will be processed on the following trading day.

EXCHANGES BY TELEPHONE. See "Telephone Transactions."

HOW TO REDEEM SHARES

You may redeem your Fund shares at the next determined net asset value,
less any applicable CDSC, on any day the NYSE is open, directly through the
Transfer Agent. Your Representative may help you with this transaction. Shares
may be redeemed by mail or telephone. Certain account registrations may require
additional legal documentation in order to redeem. Redemption requests received
in "good order" by the Transfer Agent before the close of regular trading on the
NYSE, will be processed at the net asset value, less any applicable CDSC,
determined as of the close of regular trading on the NYSE on that day. Payment
of redemption proceeds generally will be made within seven days. If the shares
being redeemed were recently purchased by check, payment may be delayed to
verify that the check has been honored, normally not more than fifteen days. For
a discussion of pricing practices when FIC's Woodbridge offices are unable to
open due to an emergency, see the SAI.

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<PAGE>

(3) the dollar amount, number of shares or percentage of the account you want
redeemed; (4) share certificates, if issued; (5) the original signatures of all
registered owners exactly as the account is registered; and (6) signature
guarantees, if required. If your redemption request is not in good order or
information is missing, the Transfer Agent will seek additional information and
process the redemption on the day it receives such information. To review these
requirements, please call Shareholder Services at 1-800-423-4026.

REDEMPTIONS BY TELEPHONE. See "Telephone Transactions."

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<PAGE>

of such offer, less any applicable CDSC. The Dealer may charge you an added
commission for handling any redemption transaction.

Additional information concerning how to redeem shares of a Fund is
available upon request to your Representative or Shareholder Services at
1-800-423-4026.

TELEPHONE TRANSACTIONS

TELEPHONE REDEMPTIONS. The telephone redemption privilege may be used
provided: (1) the redemption proceeds are being mailed to the address of record
or to a predesignated bank account; (2) your address of record has not changed
within the past 60 days; (3) the shares to be redeemed have not been issued in
certificate form; (4) each redemption does not exceed $50,000; and (5) the
proceeds of the redemption, together with all redemptions made from the account
during the prior 30-day period, do not exceed $100,000. TELEPHONE REDEMPTION
INSTRUCTIONS WILL BE ACCEPTED FROM ANY ONE OWNER OR AUTHORIZED INDIVIDUAL.

ADDITIONAL INFORMATION. Multi-State Insured, the Adviser, the Underwriter
and their officers, trustees, directors and employees will not be liable for any
loss, damage, cost or expense arising out of any instruction (or any
interpretation of such instruction) received by telephone or which they
reasonably believe to be authentic. This policy places the entire risk of loss
for unauthorized or fraudulent transactions on the shareholder, except that if
the above-referenced parties do not follow reasonable procedures, some or all of
them may be liable for any such losses.

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<PAGE>

For more information on telephone transactions see the SAI. The Funds have the
right, at their sole discretion, upon 60 days' notice, to materially modify or
discontinue the telephone exchange and redemption privilege. During times of
drastic economic or market changes, telephone exchanges or redemptions may be
difficult to implement. If you experience difficulty in making a telephone
exchange or redemption, your exchange or redemption request may be made by
regular or express mail, and it will be implemented at the next determined net
asset value, less any applicable CDSC, following receipt by the Transfer Agent.

MANAGEMENT

BOARD OF TRUSTEES. Multi-State Insured's Board of Trustees, as part of its
overall management responsibility, oversees various organizations responsible
for each Fund's day-to-day management.

As compensation for its services, the Adviser receives an annual fee from
each of the Funds, which is payable monthly. For the fiscal year ended December
31, 1996, the advisory fees paid by each Fund, as a percentage of such Fund's
average daily net assets, net of waivers, were as follows: ARIZONA FUND - 0.30%;
CALIFORNIA FUND - 0.50%; COLORADO FUND - 0.15%; MICHIGAN FUND - 0.50%; MINNESOTA
FUND - 0.29% MISSOURI FUND - 0.15%; OHIO FUND - 0.48% and OREGON FUND - 0.24%.

PORTFOLIO MANAGER. Clark D. Wagner has been Portfolio Manager of
Multi-State Insured since he joined FIMCO in 1991. Mr. Wagner is also Portfolio
Manager for all of the First Investors municipal bond funds. Mr. Wagner is also
Portfolio Manager for Government Fund, Target Maturity 2007 Fund and Target
Maturity 2010 Fund of First Investors Life Series Fund and First Investors
Government Fund, Inc. Mr. Wagner is also responsible for the day-to-day
management of the U.S. Government and mortgage-backed securities portion of
Total Return Fund of First Investors Series Fund. Mr. Wagner has been Chief
Investment Officer of FIMCO since 1992.

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<PAGE>

UNDERWRITER. Multi-State Insured has entered into an Underwriting
Agreement with First Investors Corporation, 95 Wall Street, New York, NY 10005,
as Underwriter. The Underwriter receives all sales charges in connection with
the sale of each Fund's Class A shares and all CDSCs in connection with each
Fund's Class B shares and may receive other payments under a plan of
distribution. See "How to Buy Shares" and "Distribution Plans."

DISTRIBUTION PLANS

Pursuant to each Class A Plan, Multi-State Insured's Board of Trustees, in
its sole discretion, may periodically allocate the portion of distribution fees
and services fees that each Fund may spend, provided the aggregate of such fees
paid by that Fund may not exceed an annual rate of 0.30% of the Fund's average
daily net assets attributable to Class A shares in any one fiscal year. Of that
amount, no more than 0.25% of a Fund's average daily net assets attributable to
Class A shares may be paid as service fees. Payments made to the Underwriter
under each Class A Plan may only be made for reimbursement of specific expenses
incurred in connection with distribution and service activities.

Although Class B shares are sold without an initial sales charge, the
Underwriter pays from its own resources a sales commission to FIC
Representatives and a concession equal to 3.5% of the amount invested to Dealers
who sell Class B shares. In addition, the Underwriter will make quarterly
payments of service fees to Representatives commencing after the thirteenth
month following the initial sale of Class B shares. The Underwriter will make
such payments at an annual rate of up to 0.25% of the average net asset value of
Class B shares which are attributable to shareholders for whom the
Representatives are designated as dealer of record.

Each Fund may suspend or modify payments under the Plans at any time, and
payments are subject to the continuation of each Plan, the terms of any dealer
agreements between Dealers and

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<PAGE>

the Underwriter and any applicable limits imposed by the National Association of
Securities Dealers, Inc. Each Fund will not carry over any fees under the Plans
to the next fiscal year. See "Distribution Plans" in the SAI for a full
discussion of the various Plans.

DETERMINATION OF NET ASSET VALUE

The net asset value of each Fund's shares fluctuates and is determined
separately for each class of shares. The net asset value of shares of a given
class of each Fund is determined as of the close of regular trading on the NYSE
(generally 4:00 P.M., New York City time) on each day the NYSE is open for
trading, and at such other times as the Board of Trustees deems necessary, by
dividing the market value of the securities held by such Fund, plus any cash and
other assets, less all liabilities attributable to that class, by the number of
shares of the applicable class outstanding. If there is no available market
value, securities will be valued at their fair value as determined in good faith
pursuant to procedures adopted by the Board of Trustees. Expenses (other than
12b-1 fees and certain other class expenses) are allocated daily to each class
of shares based upon the relative proportion of net assets of each class. The
per share net asset value of the Class B shares will generally be lower than
that of the Class A shares because of the higher expenses borne by the Class B
shares. The NYSE currently observes the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.

DIVIDENDS AND OTHER DISTRIBUTIONS

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<PAGE>

A dividend or other distribution paid on a class of shares of a Fund will
be paid in additional shares of that class and not in cash if any of the
following events occurs: (1) the total amount of the distribution is under $5,
(2) the Fund has received notice of your death on an individual account (until
written alternate payment instructions and other necessary documents are
provided by your legal representative), or (3) a distribution check is returned
to the Transfer Agent, marked as being undeliverable, by the U.S. Postal Service
after two consecutive mailings.

TAXES

FEDERAL INCOME TAX. Each Fund has qualified and intends to continue to
qualify for treatment as a regulated investment company under the Internal
Revenue Code of 1986, as amended (the "Code"), so that it will be relieved of
Federal income tax on that part of its investment company taxable income
(consisting generally of taxable net investment income and net short-term
capital gain) and net capital gain that is distributed to its shareholders. In
addition, each Fund intends to continue to qualify to pay "exempt-interest
dividends" (as defined below), which requires, among other things, that at the
close of each calendar quarter at least 50% of the value of its total assets
must consist of Municipal Instruments.

Distributions by a Fund of the excess of interest income from Municipal
Instruments over certain amounts disallowed as deductions, which are designated
by the Fund as "exempt-interest dividends," generally may be excluded by you
from gross income. Distributions by a Fund of interest income from taxable
obligations and net short-term capital gain, if any, are taxable to you as
ordinary income to the extent of the Fund's earnings and profits, whether
received in cash or paid in additional Fund shares. Distributions of a Fund's
realized net capital gain, if any, when designated as such, are taxable to you
as long-term capital gains, whether received in cash or paid in additional Fund
shares, regardless of the length of time you have owned your shares. If you
purchase your shares shortly before the record date for a taxable dividend or
capital gain distribution, you will pay full price for the shares and receive
some portion of the price back as a taxable distribution. You will receive a
statement following the end of each calendar year describing the tax status of
distributions paid by your Fund during that year.

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<PAGE>

No gain or loss will be recognized to a shareholder as a result of a
conversion of Class B shares into Class A shares.

STATE INCOME TAXES.

ARIZONA. In the opinion of O'Connor, Cavanagh, Anderson, Westover,
Killingsworth & Beshears, P.A., Arizona tax counsel to Multi-State Insured,
distributions from the ARIZONA FUND that are received by investors that are
individuals, corporations, trusts, and estates who are subject to Arizona income
tax will not be subject to tax in Arizona to the extent that those distributions
are attributable to interest on tax-exempt obligations of the State of Arizona
or interest on obligations of the United States, Puerto Rico, the Virgin Islands
or Guam. Other distributions from the ARIZONA FUND, including those related to
short-term and long-term capital gains, generally will be taxable under Arizona
law when received by Arizona taxpayers.

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<PAGE>

CALIFORNIA. In the opinion of Parker, Milliken, Clark, O'Hara & Samuelian,
a professional corporation, California tax counsel to Multi-State Insured,
distributions made to individuals, estates or trusts by the CALIFORNIA FUND,
which are treated as exempt-interest dividends under the Code and are
attributable to California tax-exempt interest, less allocable nondeductible
expenses, are not includable in gross income for California personal income tax
purposes, provided that the CALIFORNIA FUND qualifies as a regulated investment
company under the Code, properly designates such exempt-interest dividends under
California law and satisfies the requirement of California law that at least 50%
of its assets at the close of each quarter of its taxable year be invested in
qualified tax-exempt obligations. The designation requirement is met by the
CALIFORNIA FUND by notifying shareholders within 60 days after the close of a
taxable year to the extent that dividends are exempt-interest dividends. It is
important that California shareholders retain this designation each year in
order to establish that exempt-interest dividends are tax-exempt under
California law. Qualified tax-exempt obligations under California law generally
include obligations issued by California or a local government within California
as well as direct U.S. Government obligations. Direct U.S. Government
obligations do not include securities guaranteed by U.S. Government agencies,
such as the Federal National Mortgage Association, the Government National
Mortgage Association or similar agencies, or repurchase agreements involving
federal securities. A portion of any discount attributable to a stripped
tax-exempt bond or a stripped coupon may be treated as taxable when distributed
to shareholders. Distributions of the CALIFORNIA FUND that are derived from
sources other than those described above, including interest on certain
non-California obligations such as repurchase agreements and municipal
instruments of other states, will not be treated as tax-exempt for California
personal income tax purposes and are also includable in income subject to the
California alternative minimum tax.

Distributions treated as capital gains dividends under the Code will
currently be taxed as ordinary income for California personal income tax
purposes.

Corporations subject to the California franchise tax or California
corporate income tax are required to include in their gross income and in income
subject to the corporate alternative minimum tax all distributions received from
the CALIFORNIA FUND, including exempt-interest dividends.

California law generally follows Federal law on matters such as denial or
limitation of deductions for short-term losses where exempt-interest dividends
have recently been received, wash sales, limitations on tax basis for certain
sales charges and the nondeductibility of interest on indebtedness incurred by
shareholders to purchase or carry shares of tax-exempt instruments, such as the
CALIFORNIA FUND.

It is the intent of Multi-State Insured, as represented to and relied upon
by California tax counsel in rendering their opinion, that except when
acceptable investment s are unavailable for the CALIFORNIA FUND, the CALIFORNIA
FUND will maintain at least 80% of the value of its net assets in debt
obligations of the State of California, its localities and political
subdivisions, which are exempt from regular Federal income tax and California
personal income tax.

The foregoing description relates to certain aspects of the California tax
treatment of an investment in shares of the CALIFORNIA FUND. For purposes of the
foregoing opinion, California

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<PAGE>

tax counsel has assumed, as to the CALIFORNIA FUND, the Federal tax treatment as
set forth elsewhere in this Prospectus. Investors may be subject to other state
tax limitations depending upon their particular situations and should consult
their own tax advisers for appropriate tax advice.

COLORADO. In the opinion of Kutak Rock, Colorado tax counsel to
Multi-State Insured, shareholders of the COLORADO FUND that are corporations,
individuals, estates or trusts subject to the Colorado personal income tax will
not be required to include in their gross income for Colorado income tax
purposes, distributions made by the COLORADO FUND that are derived from interest
on obligations issued by the State of Colorado, or any political subdivision
thereof on or after May 1, 1980 which obligations are exempt from Federal
taxation under section 103(a) of the Code. Similarly, corporations, individuals,
estates and trusts may exclude from the calculation of Colorado income tax
dividend distributions from the COLORADO FUND to the extent attributable to
interest on obligations of the United States or its possessions. Colorado
statutes provide that corporations, individuals, estates and trusts will not be
entitled to exclude from income any dividend distributions from the COLORADO
FUND which are attributable to interest exempt from federal income tax under
Section 103(a) of the Code and attributable to obligations issued by any other
state or a political subdivision thereof. As a general matter, neither capital
gains recognized as a result of the sale of shares in the COLORADO FUND nor
capital gain dividends received from the COLORADO FUND can be excluded for
purposes of calculating the Colorado income tax by individuals, estates, trusts
or corporations. In addition, interest on indebtedness incurred or continued by
individuals, estates, trusts, or corporations to purchase or carry shares of the
COLORADO FUND will not be deductible for Colorado income tax purposes to the
extent that the COLORADO FUND distributions consist of exempt-interest dividends
during the applicable taxable year of such shareholder. Colorado has no
municipal income taxes.

MICHIGAN. In the opinion of Dickinson, Wright, Moon, Van Dusen & Freeman,
Michigan tax counsel to Multi-State Insured, holders of the MICHIGAN FUND will
not be subject to the Michigan income tax or single business tax on MICHIGAN
FUND dividends to the extent that such distributions qualify as exempt-interest
dividends which are attributable to interest on tax-exempt obligations of the
State of Michigan, its political or governmental subdivisions, or its
governmental agencies or instrumentalities (as well as certain other Federally
tax exempt obligations, such as certain obligations of Puerto Rico). To the
extent that distributions on the MICHIGAN FUND are attributable to sources other
than those described above, such distributions, including, but not limited to,
long or short-term capital gains, will not be exempt from Michigan income tax or
single business tax. Holders of the MICHIGAN FUND will be exempt from the
Michigan intangibles tax to the extent that the investment portfolio consists of
the aforementioned obligations or certain U.S. obligations. To the extent that
distributions on the MICHIGAN FUND are not subject to Michigan income tax, they
are not subject to the uniform city income tax imposed by certain Michigan
cities.

MINNESOTA. In the opinion of Faegre & Benson, Minnesota tax counsel to
Multi-State Insured, provided that the MINNESOTA FUND qualifies as a RIC under
the Code, and subject to the discussion in the paragraph below, shareholders of
the MINNESOTA FUND who are individuals, estates, or trusts and who are subject
to the regular Minnesota personal income tax will not be subject to such tax on
MINNESOTA FUND dividends to the extent that such distributions qualify as
exempt-interest dividends of a RIC under section 852(b)(5) of the Code which are
derived from interest income on tax-exempt obligations of the State of
Minnesota, or its

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<PAGE>

political or governmental subdivisions, municipalities, governmental agencies or
instrumentalities ("Minnesota Sources"). The foregoing will apply, however, only
if the portion of the exempt-interest dividends from such Minnesota Sources that
is paid to all shareholders represents 95% or more of the exempt-interest
dividends that are paid by the MINNESOTA FUND. If the 95% test is not met, all
exempt-interest dividends that are paid by the MINNESOTA FUND will be subject to
the regular Minnesota personal income tax. Even if the 95% test is met, to the
extent that exempt-interest dividends that are paid by the MINNESOTA FUND are
not derived from the Minnesota Sources, such dividends will be subject to the
regular Minnesota personal income tax. Other distributions of the MINNESOTA
FUND, including distributions from net short-term and long-term capital gains,
are generally not exempt from the regular Minnesota personal income tax.

Pursuant to Minnesota legislation enacted in 1995, exempt-interest
dividends that are derived from interest income on obligations of the Minnesota
Sources described above may become subject to tax in the case of individuals,
estates, and trusts if the exemption of such income were judicially determined
to discriminate against interstate commerce. See "Risk Factors for the Minnesota
Fund" in the SAI for further discussion of this legislation.

Subject to certain limitations that are set forth in the Minnesota Rules,
MINNESOTA FUND dividends, if any, that are derived from interest on certain
United States obligations are not subject to the regular Minnesota personal
income tax or the Minnesota alternative minimum tax, in the case of shareholders
of the MINNESOTA FUND who are individuals, estates or trusts.

MISSOURI. In the opinion of Shook, Hardy & Bacon L.L.P., Missouri tax
counsel to Multi-State Insured, if a dividend paid by the MISSOURI FUND
qualifies as an exempt-interest dividend under the Code (or, in the case of a
dividend paid by the MISSOURI FUND that is attributable to net interest earned
by the MISSOURI FUND on obligations of the United States, if the MISSOURI FUND
properly designates such dividend as a "state income tax exempt-interest
dividend" under Missouri law), the portion of such dividend that is attributable
to interest received by the MISSOURI FUND on obligations of (1) Missouri or its
political subdivisions ("Missouri Obligations"), (2) territories or possessions
of the United States (to the extent Federal law exempts interest on such
obligations from state taxation), or (3) the United States, will not be subject
to the Missouri income tax when received by a shareholder of the MISSOURI FUND,
provided the MISSOURI FUND meets certain recordkeeping requirements specified
under Missouri law. All other dividends paid by the MISSOURI FUND to its
shareholders, and all gains realized by such shareholders on the redemption or
sale of shares of the MISSOURI FUND, will be subject to the Missouri income tax,
to the extent a shareholder is subject to the Missouri income tax and, under
applicable law, is required to include capital gain, dividend and interest in
his or her Missouri taxable income. Dividends received from the MISSOURI FUND by
(1) an individual shareholder of the MISSOURI FUND who is not engaged in a trade
or business, or (2) any other shareholder of the MISSOURI FUND who holds shares
of the MISSOURI FUND for investment purposes and not as part of its ordinary
trade or business, will not be subject to the city earnings and profits tax of
St. Louis or Kansas City, Missouri.

OHIO. In the opinion of Squire, Sanders & Dempsey, Ohio tax counsel to
Multi-State Insured, provided that the OHIO FUND continues to qualify as a
registered investment company for Federal income tax purposes and that at all
times at least 50 percent of the value of the total

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<PAGE>

assets of the OHIO FUND consists of obligations issued by or on behalf of the
State of Ohio, political subdivisions thereof or agencies or instrumentalities
of the State or its political subdivisions ("Ohio Obligations") or similar
obligations of other states or their subdivisions, shareholders of the OHIO FUND
who are otherwise subject to the Ohio personal income tax, or municipal or
school district income taxes in Ohio will not be subject to such taxes on
distributions with respect to shares of the OHIO FUND to the extent that such
distributions are properly attributable to (1) interest on and profits made on
the sale, exchange or other disposition of Ohio Obligations or (2) interest on
obligations of the United States or its territories or possessions or of any
authority, commission or instrumentality of the United States that is exempt
from state income taxes under the laws of the United States (e.g., obligations
issued by the Governments of Puerto Rico, the Virgin Islands and Guam and their
authorities and municipalities). Except as provided above, distributions with
respect to shares of the OHIO FUND will not be exempt from the Ohio personal
income tax or municipal or school district income taxes in Ohio.

OREGON. In the opinion of Weiss, Jensen, Ellis & Howard, Oregon tax
counsel to Multi-State Insured, shareholders of the OREGON FUND who are subject
to the Oregon personal income tax will not be required to include in their
Oregon personal income distributions from the OREGON FUND to the extent that (1)
such distributions qualify as exempt-interest dividends of a RIC under section
852(b)(5) of the Code that are attributable to interest from tax-exempt
obligations of the State of Oregon or its political subdivisions or authorities;
(2) such distributions are attributable to interest from obligations issued by
the territories of Guam, Puerto Rico, Samoa, Virgin Islands, or their
authorities, or the Commonwealth of Puerto Rico or its authority; or (3) such
distributions are attributable to interest from obligations issued by the U.S.
Government, its agencies and instrumentalities and are exempted from state
income tax under the laws of the United States. To the extent that distributions
from the OREGON FUND are attributable to sources other than those described in
the preceding sentence, such distributions will not be exempt from the Oregon
personal income tax. Also, distributions that qualify as capital gain dividends
under section 852(b)(3)(C) of the Code and that are includable in Federal gross
income will be includable as capital gains in Oregon income of a shareholder.

See "State Income Taxes" in the SAI for further state tax information.
Investors should consult their own tax advisers for appropriate state advice.

PERFORMANCE INFORMATION

For purposes of advertising, each Fund's performance may be calculated for
each class of its shares based on average annual total return and total return.
Each of these figures reflects past performance and does not necessarily
indicate future results. Average annual total return shows the average annual
percentage change in an assumed $1,000 investment. It reflects the hypothetical
annually compounded return that would have produced the same total return if a
Fund's performance had been constant over the entire period. Because average
annual total return tends to smooth out variations in a Fund's return, you
should recognize that it is not the same as actual year-by-year results. Average
annual total return includes the effect of paying the maximum sales charge (in
the case of Class A shares) or the deduction of any applicable CDSC (in the case
of Class B shares) and payment of dividends and other distributions in
additional shares. One, five and ten year periods will be shown unless the class
has been in existence for a shorter period. Total return is computed using the
same calculations as average annual total return.

38
<PAGE>

However, the rate expressed is the percentage change from the initial $1,000
invested to the value of the investment at the end of the stated period. Total
return calculations assume reinvestment of dividends and other distributions.

Each of the above performance calculations may be based on investment at
reduced sales charge levels or at net asset value. Any quotation of performance
figures not reflecting the maximum sales charge or CDSC will be greater than if
the maximum sales charge or CDSC were used. Each class of shares of a Fund has
different expenses which will affect its performance. Additional performance
information is contained in the Funds' Annual Report which may be obtained
without charge by contacting the Funds at 1-800-423-4026.

GENERAL INFORMATION

ORGANIZATION. Multi-State Insured was organized as a Massachusetts
business trust on October 30, 1985. The seventeen series of Multi-State Insured
may be referred to as: First Investors Arizona Insured Tax Free Fund, First
Investors California Insured Tax Free Fund, First Investors Connecticut Insured
Tax Free Fund, First Investors Colorado Insured Tax Free Fund, First Investors
Florida Insured Tax Free Fund, First Investors Georgia Insured Tax Free Fund,
First Investors Maryland Insured Tax Free Fund, First Investors Massachusetts
Insured Tax Free Fund, First Investors Michigan Insured Tax Free Fund, First
Investors Minnesota Insured Tax Free Fund, First Investors Missouri Insured Tax
Free Fund, First Investors New Jersey Insured Tax Free Fund, First Investors
North Carolina Insured Tax Free Fund, First Investors Ohio Insured Tax Free
Fund, First Investors Oregon Insured Tax Free Fund, First Investors Pennsylvania
Insured Tax Free Fund and First Investors Virginia Insured Tax Free Fund.

Multi-State Insured is authorized to issue shares of beneficial interest
in such separate and distinct series and classes of shares as Multi-State
Insured's Board of Trustees shall from time to time establish. The shares of
beneficial interest of Multi-State Insured are presently divided into seventeen
separate and distinct series. Multi-State Insured presently has two classes,
designated Class A shares and Class B shares. Each class of a Fund represents
interests in the

39
<PAGE>

same assets of that Fund. Multi-State Insured does not hold annual shareholder
meetings. If requested to do so by the holders of at least 10% of Multi-State
Insured's outstanding shares, Multi-State Insured's Board of Trustees will call
a special meeting of shareholders for any purpose, including the removal of
Trustees. Each share of each Fund has equal voting rights except as noted.

CUSTODIAN. The Bank of New York, 48 Wall Street, New York, NY 10286, is
custodian of the securities and cash of each Fund.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES. Maureen Neumayer,
P.O. Box 19056, San Diego, CA 92159-0056 owns 33.2% of the Class B shares of the
CALIFORNIA FUND and may, therefore, be deemed to control this class of that Fund
under the 1940 Act. Elden E. Coombs, 9577 S Deer Creek Canyon Rd., Littleton, CO
80127 owns 44.0% of the Class B shares of the COLORADO FUND and may, therefore,
be deemed to control this class of that Fund under the 1940 Act. Lillian Thill,
26962 Franklin Terrace Apartments, Southfield, MI 48034 owns 27.2% of the Class
B shares of the MICHIGAN FUND and may, therefore, be deemed to control this
class of that Fund under the 1940 Act. Myrtle Eveland, 316 Polk Street #2, Anoka
MN 55303 owns 99.6% of the Class B shares of the MINNESOTA FUND and may,
therefore, be deemed to control this class of that Fund under the 1940 Act. Ray
A. Powell and Lulu M. Powell, 3315 Gillham Rd., Kansas City, MO. 64109 and
Raymond Lankford, 15 Terryhill Lane, St. Louis, MO 63131 own 29.7% and 69.8%,
respectively, of the Class B shares of the MISSOURI FUND and, may, therefore, be
deemed to control this class of that Fund under the 1940 Act. Irene M. Knight,
1586 J. First St. NE, Massioon, OH 44646 owns 32.5% of the Class B shares of the
OHIO FUND and may, therefore, be deemed to control this class of that Fund under
the 1940 Act.

SHAREHOLDER INQUIRIES. Shareholder inquiries can be made by calling
Shareholder Services at 1-800-423-4026.

40
<PAGE>

ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS. It is Multi-State
Insured's practice to mail only one copy of its annual and semi-annual reports
to any address at which more than one shareholder with the same last name has
indicated that mail is to be delivered. Additional copies of the reports will be
mailed if requested in writing or by telephone by any shareholder.

41
<PAGE>

TABLE OF CONTENTS

Fee Table................................................................. 2
Financial Highlights...................................................... 5
Investment Objectives and Policies........................................ 12
Alternative Purchase Plans................................................ 21
How to Buy Shares......................................................... 22
How to Exchange Shares.................................................... 26
How to Redeem Shares...................................................... 27
Telephone Transactions.................................................... 29
Management................................................................ 30
Distribution Plans........................................................ 31
Determination of Net Asset Value.......................................... 32
Dividends and Other Distributions......................................... 32
Taxes..................................................................... 33
Performance Information................................................... 38
General Information....................................................... 39

LEGAL COUNSEL AUDITORS
Kirkpatrick & Lockhart LLP Tait, Weller & Baker
1800 Massachusetts Avenue, N.W. Two Penn Center Plaza
Washington, D.C. 20036 Philadelphia, PA 19102-1707

This Prospectus is intended to constitute an offer by Multi-State Insured only
of the securities of which it is the issuer and is not intended to constitute an
offer by any Fund of the securities of any other Fund whose securities are also
offered by this Prospectus. No Fund intends to make any representation as to the
accuracy or completeness of the disclosure in this Prospectus relating to any
other Fund. No dealer, salesman or any other person has been authorized to give
any information or to make any representations other than those contained in
this Prospectus or the Statement of Additional Information, and if given or
made, such information and representation must not be relied upon as having been
authorized by either Multi-State Insured, First Investors Corporation, or any
affiliate thereof. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of the shares offered hereby in any state to
any person to whom it is unlawful to make such offer in such state.

<PAGE>

First Investors
Multi-State
Insured Tax Free Fund
- ---------------------------

Arizona Fund Minnesota Fund
California Fund Missouri Fund
Colorado Fund Ohio Fund
Michigan Fund Oregon Fund
- ---------------------------

Prospectus

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

April 30, 1997

First Investors Logo

Logo is described as follows: the arabic numeral one separated into seven
vertical segments followed by the words "First Investors."

Verticle line from top to bottom in center of page about 1/2 inch in thickness

The following language appears to the left of the above language in the printed
piece:

The words "BULK RATE U.S. POSTAGE PAID PERMIT NO. 7379" in a box to the right of
a circle containing the words "MAILED FROM ZIP CODE 11201" appears on the
righthand side.

The following language appears on the lefthand side:

FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
95 WALL STREET
NEW YORK, NY 10005

First Investors Logo (as described above)
A MEMBER OF THE
FIRST INVESTORS
FINANCIAL NETWORK

FITF002

<PAGE>

PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements:

Financial Statements are set forth in Part B, Statement of Additional
Information.

(b) Exhibits:

(1)/2/ Amended and Restated Declaration of Trust

(2)/2/ By-laws

(3) Not Applicable

(4) Shareholders' rights are contained in (a) Articles III,
VIII, X, XI and XII of Registrant's Amended and Restated
Declaration of Trust dated October 30, 1985, as amended
September 22, 1994, previously filed as Exhibit 99.B1 to
Registrant's Registration Statement and (b) Articles III
and V of Registrant's By-laws, previously filed as
Exhibit 99.B2 to Registrant's Registration Statement.

(5)/2/ Investment Advisory Agreement between Registrant and First
Investors Management Company, Inc.

(6)/2/ Underwriting Agreement between Registrant and First
Investors Corporation.

(7) Not Applicable

(8)a./2/ Custodian Agreement between Registrant and Irving Trust
Company

b./2/ Supplement to Custodian Agreement

(9)/2/ Administration Agreement between Registrant, First
Investors Management Company, Inc., First Investors
Corporation and Administrative Data Management Corp.

(10)/1/ Opinion of Counsel

(11)a. Consent of independent accountants
b./2/ Powers of Attorney
c. Consent of Arizona tax counsel
d. Consent of California tax counsel
e. Consent of Colorado and Georgia tax counsel
f. Consent of Connecticut tax counsel
g. Consent of Florida tax counsel
h. Opinion and Consent of Maryland tax counsel
i. Consent of Massachusetts tax counsel
j. Consent of Michigan tax counsel
k. Consent of Minnesota tax counsel
l. Consent of Missouri tax counsel
m. Consent of New Jersey tax counsel
n. Consent of North Carolina tax counsel
o. Consent of Ohio tax counsel
p. Consent of Oregon tax counsel
q. Consent of Pennsylvania tax counsel
r. Consent of Virginia tax counsel

<PAGE>

(12) Not applicable

(13)/3/ Undertakings of the Co-Underwriters

(14) Not Applicable

(15)a./2/ Amended and Restated Class A Distribution Plan

b./2/ Class B Distribution Plan

(16) Performance Calculations

(17) Financial Data Schedules (filed as Exhibit 27 for
electronic filing purposes)

(18)/2/ 18f-3 Plan

- ----------
/1/ Incorporated by reference from Registrant's Rule 24f-2 Notice for its
fiscal year ending December 31, 1996 filed on February 27, 1997.
/2/ Incorporated by reference from Post-Effective Amendment No. 19 to
Registrant's Registration Statement (File No. 33-4077) filed on April
25, 1996.
/3/ Previously filed with the Commission.

Item 25. Persons Controlled by or under common control with Registrant

There are no persons controlled by or under common control with
the Registrant.

Item 26. Number of Holders of Securities

Number of Record
Holders as of
Title of Class February 3, 1997
-------------- ----------------

Class A Class B
Arizona Fund 361 14
California Fund 438 8
Colorado Fund 245 13
Connecticut Fund 672 62
Florida Fund 695 38
Georgia Fund 144 16
Maryland Fund 436 31
Massachusetts Fund 892 33
Michigan Fund 1,199 32
Minnesota Fund 349 3
Missouri Fund 125 3
North Carolina Fund 251 16
Ohio Fund 839 24
New Jersey Fund 1,695 44
Oregon Fund 573 24
Pennsylvania Fund 1,233 44
Virginia Fund 890 46

Item 27. Indemnification

Article XI, Section 1 of Registrant's Declaration of Trust
provides as follows:

Section 1.

Provided they have exercised reasonable care and have acted under the
reasonable belief that their actions are in the best interest of

<PAGE>

the Trust, the Trustees shall not be responsible for or liable in any event for
neglect or wrongdoing of them or any officer, agent, employee or investment
adviser of the Trust, but nothing contained herein shall protect any Trustee
against any liability to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.

Article XI, Section 2 of Registrant's Declaration of Trust provides as
follows:

Section 2.

(a) Subject to the exceptions and limitations contained in Section
(b) below:

(i) every person who is, or has been, a Trustee or officer of the Trust (a
"Covered Person") shall be indemnified by the Trust to the fullest extent
permitted by law against liability and against expenses reasonably incurred or
paid by him in connection with any claim, action, suit or proceeding which he
becomes involved as a party or otherwise by virtue of his being or having been a
Trustee or officer and against amounts paid or incurred by him in the settlement
thereof;

(ii) the words "claim," "action," "suit," or "proceeding" shall apply to
all claims, actions, suits or proceedings (civil, criminal or other, including
appeals), actual or threatened, and the words "liability" and "expenses" shall
include, without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.

(b) No indemnification shall be provided hereunder to a Covered
Person:

(i) Who shall have been adjudicated by a court or body before which the
proceeding was brought (A) to be liable to the Trust or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office or (B) not to have acted in
good faith in the reasonable belief that his action was in the best interest of
the Trust; or

(ii) in the event of a settlement, unless there has been a determination
that such Trustee or officer did not engage in willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office,

(A) by the court or other body approving the settlement; or
(B) by at least a majority or those Trustees who are
neither interested persons of the Trust nor are
parties to the matter based upon a review of readily
available facts (as opposed to a full trial-type
inquiry); or
(C) by written opinion of independent legal counsel based
upon a review of readily available facts (as opposed
to a full trial-type inquiry); provided, however,
that any Shareholder may, by appropriate legal
proceedings, challenge any such determination by the
Trustees, or by independent counsel.

(c) The rights of indemnification herein provided may be insured against
by policies maintained by the Trust, shall be severable, shall not be exclusive
of or affect any other rights to which any Covered Person may now or hereafter
be entitled, shall continue as to a person who has ceased to be such Trustee or
officer and shall inure to the benefit of the heirs, executors and
administrators of such a person. Nothing contained herein shall affect any
rights to indemnification to which Trust personnel, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under the
law.

<PAGE>

(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character described in
paragraph (a) of this Section 2 may be paid by the Trust from time to time prior
to final disposition thereof upon receipt of an undertaking by or on behalf of
such Covered Person that such amount will be paid over by him to the Trust if it
is ultimately determined that he is not entitled to indemnification under this
Section 2; provided, however, that either (a) such Covered Person shall have
provided appropriate security for such undertaking, (b) the Trust is insured
against losses arising out of any such advance payments or (c) either a majority
of the Trustees who are neither interested persons of the Trust nor are parties
to the matter, or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed to a full
trial-type inquiry), that there is a reason to believe that such Covered Person
will be found entitled to indemnification under this Section 2.

The general effect of this Indemnification will be to indemnify
the officers and Trustees of the Registrant from costs and expenses arising from
any action, suit or proceeding to which they may be made a party by reason of
their being or having been a Trustee or officer of the Registrant, except where
such action is determined to have arisen out of the willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the Trustee's or officer's office.

The Registrant's Investment Advisory Agreement provides as follows:

The Manager shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Company or any Series in connection with the
matters to which this Agreement relate except a loss resulting from the willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement. Any person, even though also an officer, partner, employee, or agent
of the Manager, who may be or become an officer, Board member, employee or agent
of the Company shall be deemed, when rendering services to the Company or acting
in any business of the Company, to be rendering such services to or acting
solely for the Company and not as an officer, partner, employee, or agent or one
under the control or direction of the Manager even though paid by it.

The Registrant's Underwriting Agreement provides as follows:

The Underwriter agrees to use its best efforts in effecting the sale and
public distribution of the shares of the Fund through dealers and to perform its
duties in redeeming and repurchasing the shares of the Fund, but nothing
contained in this Agreement shall make the Underwriter or any of its officers
and directors or shareholders liable for any loss sustained by the Fund or any
of its officers, trustees, or shareholders, or by any other person on account of
any act done or omitted to be done by the Underwriter under this Agreement
provided that nothing herein contained shall protect the Underwriter against any
liability to the Fund or to any of its shareholders to which the Underwriter
would otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of its duties as Underwriter or by reason of its
reckless disregard of its obligations or duties as Underwriter under this
Agreement. Nothing in this Agreement shall protect the Underwriter from any
liabilities which they may have under the Securities Act of 1933 or the
Investment Company Act of 1940.

<PAGE>

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable. See Item 32 herein.

Item 28. Business and Other Connections of Investment Adviser

First Investors Management Company, Inc., the Registrant's Investment
Adviser, also serves as Investment Adviser to:

First Investors Cash Management Fund, Inc.
First Investors Series Fund
First Investors Series Fund II, Inc.
First Investors Fund For Income, Inc.
First Investors Government Fund, Inc.
First Investors High Yield Fund, Inc.
First Investors Insured Tax Exempt Fund, Inc.
First Investors Global Fund, Inc.
First Investors Life Series Fund
First Investors New York Insured Tax Free Fund, Inc.
First Investors Special Bond Fund, Inc.
First Investors Tax-Exempt Money Market Fund, Inc.
First Investors U.S. Government Plus Fund

Affiliations of the officers and directors of the Investment Adviser are
set forth in Part B, Statement of Additional Information, under "Directors or
Trustees and Officers."

Item 29. Principal Underwriters

(a) First Investors Corporation, Underwriter of the Registrant, is
also underwriter for:

First Investors Cash Management Fund, Inc.
First Investors Series Fund
First Investors Series Fund II, Inc.
First Investors Fund For Income, Inc.
First Investors Government Fund, Inc.
First Investors High Yield Fund, Inc.
First Investors Insured Tax Exempt Fund, Inc.
First Investors Global Fund, Inc.
First Investors New York Insured Tax Free Fund, Inc.
First Investors Tax-Exempt Money Market Fund, Inc.
First Investors U.S. Government Plus Fund

(b) The following persons are the officers and directors of the
Underwriter:

<PAGE>

Position and Position and
Name and Principal Office with First Office with
Business Address Investors Corporation Registrant
- ------------------ --------------------- ------------

Glenn O. Head Chairman President
95 Wall Street and Director and Trustee
New York, NY 10005

Marvin M. Hecker President None
95 Wall Street
New York, NY 10005

John T. Sullivan Director Chairman of the
95 Wall Street Board of Trustees
New York, NY 10005

Roger L. Grayson Director Trustee
95 Wall Street
New York, NY 10005

Joseph I. Benedek Treasurer Treasurer
581 Main Street
Woodbridge, NJ 07095

Robert Murphy Comptroller None
581 Main Street
Woodbridge, NJ 07095

Lawrence A. Fauci Senior Vice President None
95 Wall Street and Director
New York, NY 10005

Kathryn S. Head Vice President, Trustee
581 Main Street Chief Financial
Woodbridge, NJ 07095 Officer and Director

Louis Rinaldi Senior Vice None
581 Main Street President
Woodbridge, NJ 07095

Frederick Miller Vice President None
581 Main Street
Woodbridge, NJ 07095

Howard M. Factor Vice President None
95 Wall Street
New York, NY 10005

Larry R. Lavoie Secretary and None
95 Wall Street General Counsel
New York, NY 10005

Matthew Smith Vice President None
581 Main Street
Woodbridge, NJ 07095

Jeremiah J. Lyons Director None
56 Weston Avenue
Chatham, NJ 07928

Anne Condon Vice President None
581 Main Street
Woodbridge, NJ 07095

Jane W. Kruzan Director None
232 Adair Street
Decatur, GA 30030

<PAGE>

Item 30. Location of Accounts and Records

Physical possession of the books, accounts and records of the
Registrant are held by First Investors Management Company, Inc. and its
affiliated companies, First Investors Corporation and Administrative Data
Management Corp., at their corporate headquarters, 95 Wall Street, New York, NY
10005 and administrative offices, 581 Main Street, Woodbridge, NJ 07095, except
for those maintained by the Registrant's Custodian, The Bank of New York, 48
Wall Street, New York, NY 10286.

Item 31. Management Services

Inapplicable

Item 32. Undertakings

The Registrant undertakes to carry out all indemnification
provisions of its Declaration of Trust, Advisory Agreement and Underwriting
Agreement in accordance with Investment Company Act Release No. 11330 (September
4, 1980) and successor releases.

Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the provisions under Item 27 herein, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

The Registrant hereby undertakes to furnish a copy of its latest
annual report to shareholders, upon request and without charge, to each person
to whom a prospectus is delivered.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant represents that this Amendment
meets all the requirements for effectiveness pursuant to Rule 485(b) under the
Securities Act of 1933, and has duly caused this Post-Effective Amendment to
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on the
16th day of April, 1997.

FIRST INVESTORS MULTI-STATE
INSURED TAX FREE FUND
(Registrant)

By: /s/ Glenn O. Head
----------------
Glenn O. Head
President and Trustee

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to this Registration Statement
has been signed below by the following persons in the capacities and on the
dates indicated.

/s/Glenn O. Head Principal Executive April 16, 1997
- ------------------------- Officer and Trustee
Glenn O. Head

/s/Joseph I. Benedek Principal Financial April 16, 1997
- ------------------------- and Accounting Officer
Joseph I. Benedek

* Trustee April 16, 1997
- -------------------------
Kathryn S. Head

* Trustee April 16, 1997
- -------------------------
Roger L. Grayson

* Trustee April 16, 1997
- -------------------------
Herbert Rubinstein

* Trustee April 16, 1997
- -------------------------
Nancy Schaenen

* Trustee April 9, 1997
- -------------------------
James M. Srygley

* Trustee April 9, 1997
- -------------------------
John T. Sullivan

* Trustee April 9, 1997
- -------------------------
Rex R. Reed

* Trustee April 16, 1997
- -------------------------
Robert F. Wentworth

*By: /s/Larry R. Lavoie
------------------
Larry R. Lavoie
Attorney-in-fact

<PAGE>

INDEX TO EXHIBITS

Exhibit
Number Description

99.B11.1 Consent of accountants
99.B11.2 Power of Attorney
99.B11.3 Consent of Arizona tax counsel
99.B11.4 Consent of California tax counsel
99.B11.5 Consent of Colorado tax counsel
99.B11.6 Consent of Connecticut tax counsel
99.B11.7 Consent of Florida tax counsel
99.B11.8 Consent of Georgia tax counsel
99.B11.9 Opinion and Consent of Maryland tax counsel
99.B11.10 Consent of Massachusetts tax counsel
99.B11.11 Consent of Michigan tax counsel
99.B11.12 Consent of Minnesota tax counsel
99.B11.13 Consent of Missouri tax counsel
99.B11.14 Consent of New Jersey tax counsel
99.B11.15 Consent of North Carolina tax counsel
99.B11.16 Consent of Ohio tax counsel
99.B11.17 Consent of Oregon tax counsel
99.B11.18 Consent of Pennsylvania tax counsel
99.B11.19 Consent of Virginia tax counsel
99.B16 Performance Calculations
27.011 FDS-Massachusetts Fund Class A
27.012 FDS-Massachusetts Fund Class B
27.021 FDS-Michigan Fund Class A
27.022 FDS-Michigan Fund Class B
27.031 FDS-Minnesota Fund Class A
27.032 FDS-Minnesota Fund Class B
27.041 FDS-Ohio Fund Class A
27.042 FDS-Ohio Fund Class B
27.051 FDS-California Fund Class A
27.052 FDS-California Fund Class B
27.061 FDS-New Jersey Fund Class A
27.062 FDS-New Jersey Fund Class B
27.071 FDS-Pennsylvania Fund Class A
27.072 FDS-Pennsylvania Fund Class B
27.081 FDS-Virginia Fund Class A
27.082 FDS-Virginia Fund Class B
27.091 FDS-Arizona Fund Class A
27.092 FDS-Arizonia Fund Class B
27.101 FDS-Connecticut Fund Class A
27.102 FDS-Connecticut Fund Class B
27.111 FDS-Florida Fund Class A
27.112 FDS-Florida Fund Class B
27.121 FDS-Maryland Fund Class A
27.122 FDS-Maryland Fund Class B
27.131 FDS-Colorado Fund Class A
27.132 FDS-Colorado Fund Class B
27.141 FDS-Georgia Fund Class A
27.142 FDS-Georgia Fund Class B
27.151 FDS-Missouri Fund Class A
27.152 FDS-Missouri Series Class B
27.161 FDS-North Carolina Fund Class A
27.162 FDS-North Carolina Fund Class B
27.171 FDS-Oregon Fund Class A
27.172 FDS-Oregon Fund Class B

Consent of Independent Certified Public Accountants

First Investors Multi-State Insured Tax Free Fund
95 Wall Street
New York, New York 10005

We consent to the use in Post-Effective Amendment No. 20 to the
Registration Statement on Form N-1A (File No. 33-4077) of our report dated
January 31, 1997 relating to the December 31, 1996 financial statements of First
Investors Multi-State Insured Tax Free Fund, which are included in said
Registration Statement.

/s/ Tait, Weller & Baker

TAIT, WELLER & BAKER

Philadelphia, Pennsylvania
April 16, 1997

First Investors Multi-State Insured Tax Free Fund

Power of Attorney

KNOW ALL MEN BY THESE PRESENTS that the undersigned officer and/or
trustee of First Investors Multi-State Insured Tax Free Fund hereby appoints
Larry R. Lavoie or Glenn O. Head, and each of them, his true and lawful attorney
to execute in his name, place and stead and on his behalf a Registration
Statement on Form N-1A for the registration pursuant to the Securities Act of
1933 and the Investment Company Act of 1940 of shares of beneficial interest of
said Massachusetts business trust, and any and all amendments to said
Registration Statement (including post-effective amendments), and all
instruments necessary or incidental in connection therewith and to file the same
with the Securities and Exchange Commission. Said attorney shall have full power
and authority to do and perform in the name and on behalf of the undersigned
every act whatsoever requisite or desirable to be done in the premises, as fully
and to all intents and purposes as the undersigned might or could do, the
undersigned hereby ratifying and approving all such acts of said attorney.

IN WITNESS WHEREOF, the undersigned has executed this instrument this
3rd day of April, 1997.

/s/ Nancy Schaenen

Nancy Schaenen

O'CONNOR CAVANAGH
The Law Offices of
O'Connor, Cavanagh, Anderson, Killingsworth & Beshears
A Professional Association
One East Camelback Road, Suite 1100
Phoenix, Arizona 85012

April 10, 1997

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005-4297

Re: First Investors Multi-State Insured Tax Free Fund

Gentlemen:

We hereby consent to the use of our name and the reference to our firm
in Post-Effective Amendment No. 20 to the Registration Statement on Form N-1A of
First Investors Multi-State Insured Tax Free Fund and the related Prospectus.

Very truly yours,

/s/O'Connor, Cavanagh, Anderson,
Killingsworth & Beshears
A Professional Association

PARKER, MILLIKEN, CLARK, O'HARA & SAMUELIAN
A Professional Corporation
ATTORNEYS AT LAW
333 South Hope Street, 27th Floor
Los Angeles, California 90071-1488

April 9, 1997

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005-4297

Re: First Investors Multi-State Insured Tax Free Fund

Gentlemen:

Very truly yours,

PARKER, MILLIKEN, CLARK,
O'HARA & SAMUELIAN

By: /s/William W. Reid
William W. Reid

KUTAK ROCK
A Partnership
Including Professional Corporations
Suite 2900
717 Seventeenth Street
Denver, Colorado 80202-3329

April 7, 1997

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005

Re: First Investors Multi-State Insured Tax Free Fund

Gentlemen:

Very truly yours,

/s/Kutak Rock

KELLEY DRYE & WARREN LLP
Two Stamford Plaza
281 Tresser Boulevard
Stamford, Connecticut 06901-3229

April 7, 1997

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005

Re: First Investors Multi-State Insured Tax Free Fund

Gentlemen:

Very truly yours,

KELLEY DRYE & WARREN

By: /s/Richard Chargar

Law Offices
RUDNICK & WOLFE
A Partnership Including Professional Corporations
101 East Kennedy Blvd.
Suite 2000
Tampa, Florida 33602-5133

DAVID A. BEYER

April 8, 1997

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005-4297

Re: First Investors Multi-State Insured Tax Free Fund

Gentlemen:

Sincerely yours,

RUDNICK & WOLFE

/s/David A. Beyer
David A. Beyer

KUTAK ROCK
A Partnership
Including Professional Corporations
Suite 2100
225 Peachtree Street, N.E.
Atlanta, Georgia 30303-1731

April 11, 1997

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005-4297

Re: First Investors Multi-State Insured Tax Free Fund

Gentlemen:

Very truly yours,

/s/Michael K. Wolensky
Michael K. Wolensky
on behalf of KUTAK ROCK

OBER | KALER
A Professional Corporation

Ober, Kaler, Grimes & Shriver
Attorneys at Law

120 East Baltimore Street
Baltimore, Maryland 21202-1643
410-585-1120

April 1, 1997

First Investors Multi-State Insured Tax Free Fund
95 Wall Street
New York, New York 10005

Re: FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND

Gentlemen:

We have acted as special Maryland counsel for First Investors
Multi-State Insured Tax Free Fund (the "Fund"). The Fund is an open-end
diversified management investment company, commonly called a mutual fund. As
described in the prospectus of the Fund (the "Prospectus"), the Fund offers
seventeen (17) separate series of shares, one of which is the First Investors
Multi-State Insured Tax Free Fund - Maryland Fund (the "Maryland Fund").

You have advised us that the Maryland Fund intends to qualify as a
"regulated investment company" under Part I of Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). We express no opinion as to
whether the Maryland Fund qualifies as a regulated investment company under Part
I of Subchapter M of the Code, and we have not been furnished with any IRS
ruling letter or opinion of counsel as to the status of the Maryland Fund as a
regulated investment company. If in any year the Maryland Fund fails to qualify
as a regulated investment company, it would incur Maryland corporate income tax
on its taxable income for that year and distributions generally would be taxable
as ordinary income to the shareholders.

In rendering our opinion, we have assumed that the Maryland Fund
qualifies as a regulated company under Part I of Subchapter M of the Code and
that dividends paid by the Maryland Fund and designated as exempt-interest
dividends as required by Section 852(b)(5) of the Code will qualify as interest
excludable from a shareholder's gross income for federal income tax purposes
under Section 103 of the Code. In addition, we have assumed that the obligations
that are acquired by the Maryland Series have been or

<PAGE>

will be issued in strict compliance with all requirements of Maryland law and,
where applicable, Federal law.

Section 10-203 of the Tax-General Article of the Annotated Code of
Maryland (the "Tax-General Article") establishes the rule that an individual's
Maryland adjusted gross income is the "individual's federal adjusted gross
income" as determined under the Code, with certain adjustments. For this
purpose, the term, "individual" is defined to include fiduciaries. Section
10-101 of the Tax-General Article. Sections 10-301 and 10-304 of the Tax-General
Article provide that a corporation's Maryland taxable income is its federal
taxable income for the taxable year with certain adjustments. Thus,
exempt-interest dividends paid by the Maryland Fund and excludable from federal
adjusted gross income under Sections 852 and 103(a) of the Code, are exempt from
Maryland state and local income taxes, absent an adjustment provision to the
contrary.

Exempt-interest dividends paid by the Maryland Fund and attributable to
Maryland obligations are not an addition to federal adjusted gross income and
are, therefore, exempt from Maryland income taxation. See Maryland Income Tax
Division, Administrative Release No. 5 (January 1, 1989, as revised May 1,
1991); see also, Opinion of the Attorney General, Opinion No. 83-050, 68 Op.
Atty. Gen. 410 (1983) (income derived from interest on Maryland obligations
owned by a mutual fund receives "pass-through" treatment and, as a result, is
exempt from Maryland income taxation when received by a shareholder of the
mutual fund). However, Section 10-204(b) of the Tax-General Article provides
that, in computing Maryland net income, there is added to Federal adjusted gross
income "interest or dividends, less related expenses, attributable to an
obligations or security of: (1) another state; or (2) a political subdivision or
authority of another state." The same addition applies to corporations. Section
10-305(d)(1) of the Tax-General Article. Accordingly, exempt-interest dividends
paid by the Maryland Fund to its shareholders which are attributable to interest
on obligations of states other than Maryland are subject to Maryland income
taxation, whereas exempt-interest dividends paid by the Maryland Fund to its
shareholders which are attributable to interest on Maryland obligations are
exempt from Maryland income taxation.

If included in federal adjusted gross income, interest or dividends
attributable to an obligation of the United States or an obligation of an
authority, commission, instrumentality, possession or territory of the United
States ("United States Obligation") is subtracted from federal adjusted gross
income of a Maryland resident in determining Maryland adjusted gross income.
Section 10-207(c) of the Tax-General Article. The same subtraction applies to
corporations. Section 10-307(f) of the

<PAGE>

Tax-General Article. This subtraction is expressly made applicable to a
distribution or dividend attributable to interest from a United States
Obligation by a mutual fund to an individual or a corporation. Sections
10-207(c-1) and 10-307(g)(4) of the Tax-General Article. Thus, distributions or
dividends from the Maryland Fund attributable to interest or dividends derived
from an obligation of the United States or an obligation of an authority,
commission, instrumentality, possession or territory of the United States will
be exempt from Maryland state and local income taxes.

Section 10-207(j) of the Tax-General Article provides a subtraction to
compute Maryland adjusted gross income for "profit realized from the sale or
exchange of a bond issued by the State or a political subdivision of the State."
The same subtraction applies to corporations. Section 10-307(g)(1) of the
Tax-General Article. This subtraction applies to a distribution or dividend by a
mutual fund attributable to profit realized from the sale or exchange of a bond
issued by Maryland or a political subdivision of Maryland. Maryland Income Tax
Division, Administrative Release No. 5. Thus, the portion of the Maryland Fund's
dividends or distributions that represent gain from the sale of an obligation or
a political subdivision of Maryland will be subtracted from federal taxable
income to determine a shareholder's Maryland taxable income.

In Doneski v. Comptroller, 605 A.2d 649 (Md. Ct. Spec. App. 1992), the
Maryland Court of Special Appeals held that the State of Maryland's taxation of
gains realized from the sale of United States government obligations was
impermissible. Thus, in general, such gain must be subtracted from federal
taxable income to determine Maryland taxable income. It follows, therefore, that
the portion of a mutual fund's dividends or distributions paid to its'
shareholders which represents gain from the sale or exchange of an United States
government obligation should be subtracted from federal taxable income in
determining a shareholder's Maryland taxable income.

The Maryland Court of Appeals has held that a repurchase agreement is
in substance a loan from a mutual fund, secured by a pledge of tax-free
government obligations. Comptroller v. First United Bank & Trust Co., 578 A.2d
192 (Md. Ct. App. 1990). The income realized on a repurchase agreement is
therefore not earned on tax-free government obligations, and will be subject to
Maryland income tax.

Gain realized by a shareholder from the sale or other disposition of
his shares of the Maryland Fund is taxable for federal income tax purposes.
Maryland provides no subtraction for such gains. Therefore, the gain realized
upon the sale or

<PAGE>

other disposition of shares of the Maryland Fund is taxable for Maryland income
tax purposes.

Under Section 265(a)(2) and (4) of the Code, interest on indebtedness
incurred or continued to purchase or carry obligations distributing tax-exempt
interest or shares of a "regulated investment company" paying exempt-interest
dividends is not deductible for Federal income tax purposes. Maryland law does
not provide a subtraction for interest on such indebtedness.

Maryland presently imposes income tax on individuals with respect to
items of tax preference with reference to such items as defined in the Code.
Section 10-222 of the Tax-General Article. For taxable years beginning after
December 31, 1986, interest paid on certain private activity bonds constitutes a
tax preference pursuant to Section 57(a)(5) of the Code. Accordingly, if the
Maryland Fund held such bonds, 50% of the interest would be taxable by Maryland
under the provisions of Section 10-205(f) of the Tax-General Article (to the
extent such interest and other specified items exceed a threshold amount, and
thus constitute a tax preference).

Based upon the foregoing, we are of the opinion that:

1. Holders of the Maryland Fund who are subject to Maryland state and
local income tax will not be subject to tax in Maryland on Maryland Fund
dividends to the extent that such dividends qualify as exempt-interest dividends
of a regulated investment company under Section 852(b)(5) of the Code and which
are attributable to (i) interest on tax-exempt obligations of the State of
Maryland or its political subdivisions or authorities, (ii) interest on
obligations of the United States or an authority, commission, instrumentality,
possession or territory of the United States, or (iii) gain realized by the
Maryland Fund from the sale or exchange of obligations issued by Maryland, a
political subdivision of Maryland, or the United States or an authority,
commission, or instrumentality of the United States.

2. To the extent that distributions of the Maryland Fund are
attributable to sources other than those described above, such as (i) interest
on obligations issued by states other than Maryland or (ii) income from
repurchase contracts, such distributions will not be exempt from Maryland state
and local income taxes. In addition, gain realized by a shareholder upon a
redemption or exchange of Maryland Fund shares will be subject to Maryland
taxation.

3. In the event the Maryland Fund fails to qualify as a "regulated
investment company" as defined in the Code, the Maryland Fund would be subject
to Maryland corporate income tax

<PAGE>

and distributions would generally be taxable as ordinary income to the
shareholders.

4. Maryland presently includes in net taxable income items of tax
preferences as defined in that Code. Interest paid on certain private activity
bonds constitutes a tax preference. Accordingly, subject to a threshold amount,
50% of any distributions of the Maryland Fund attributable to such private
activity bonds will not be exempt from Maryland state and local income taxes.

5. Interest on indebtedness incurred (directly or indirectly) by a
shareholder of the Maryland Fund to purchase or carry shares of the Maryland
Fund will not be deductible for Maryland state and local income tax purposes to
the extent such interest is allocable to exempt-interest dividends.

This letter is not be construed as a prediction of a favorable outcome
with respect to any issue for which no favorable prediction is made herein, or
as a guaranty of any tax result, or as offering any assurance or guaranty that a
Maryland state taxing authority might not differ with our conclusions, or raise
other questions or issues upon audit, or that such action may not be judicially
sustained.

We have not examined any of the assets to be deposited in and held by
the Maryland fund, and express no opinion as to whether the interest on any such
assets would in fact be tax exempt if directly received by a shareholder; nor
have we made any review of the proceedings relating to the issuance of Maryland
or non-Maryland obligations.

We hereby consent to the filing of this opinion as an exhibit to, and
further consent to the use of our name and reference of our firm in
Post-Effective Amendment No. 20 to the Registration Statement on Form N-1A of
First Investors Multi-State Insured Tax Free Fund and the Prospectus. In giving
such consent, we do not thereby admit that we are within the category of persons
whose consent is required by Section 7 of the Securities Act of 1933, as
amended, and the rules and regulations thereunder.

Very truly yours,

OBER, KALER, GRIMES & SHRIVER,
A Professional Corporation

By: /s/Bruce H. Jurist

Bruce H. Jurist

PALMER & DODGE
One Beacon Street
Boston, Massachusetts 02108-3190

April 8, 1997

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005

Re: First Investors Multi-State Insured Tax Free Fund

Gentlemen:

Very truly yours,

/s/Palmer & Dodge

DICKINSON, WRIGHT, MOON, VAN DUSEN & FREEMAN
COUNSELLORS AT LAW
500 Woodward Avenue, Suite 4000
Detroit, Michigan 48226-3425

April 17, 1997

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005

Re: FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND

Gentlemen:

Very truly yours,

DICKINSON, WRIGHT, MOON,
VAN DUSEN & FREEMAN

/s/Thomas D. Hammerschmidt

Thomas D. Hammerschmidt, Jr.

FAEGRE & BENSON LLP
2200 Norwest Center, 90 South Seventh Street
Monneapolis, Minnesota 55402-3901

April 7, 1997

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005

Re: First Investors Multi-State
Insured Tax Free Fund

Gentlemen:

We hereby consent to the reference to us under the heading "Minnesota"
that deals with Minnesota taxes in the Prospectus to be filed as part of
Post-Effective Amendment No. 20 to the Registration Statement of First Investors
Multi-State Insured Tax Free Fund. In giving such consent, we do not thereby
admit that we are in the category of persons whose consent is required under
section 7 of the Securities Act of 1933, as amended.

Very truly yours,

/s/Faegre & Benson LLP
Faegre & Benson LLP

SHOOK, HARDY & BACON L.L.P.
One Kansas City Place
1200 Main Street
Kansas City, Missouri 64105-2118

April 9, 1997

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005

Re: First Investors Multi-State Insured Tax Free Fund

Gentlemen:

By this consent, we confirm that the provisions of our opinion letter
dated April 8, 1993, dealing with assumptions and limitations remain in full
force and effect.

Very truly yours,

/s/Shook, Hardy & Bacon L.L.P.

SHOOK, HARDY & BACON L.L.P.

HAWKINS, DELAFIELD & WOOD
One Gateway Center
Newark, New Jersey 07102-5311

April 3, 1997

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005

Re: First Investors Multi-State Insured
Tax Free Fund (New Jersey Series)

Gentlemen:

Very truly yours,

/s/Hawkins, Delafield & Wood

Hawkins, Delafield & Wood

WYRICK ROBBINS YATES & PONTON L.L.P.
ATTORNEYS AT LAW
4101 Lake Boone Trail, Suite 300
Raleigh, North Carolina 27607-7506

April 8, 1997

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005

Re: First Investors Multi-State Insured Tax Free Fund

Gentlemen:

Very truly yours,

/s/Wyrick Robbins Yates & Ponton L.L.P.

Hawkins, Delafield & Wood

SQUIRE, SANDERS & DEMPSEY
L.L.P.
4900 Key Tower
127 Public Square
Cleveland, Ohio 44114-1304

April 17, 1997

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005-4297

Re: First Investors Multi-State Insured Tax Free Fund

Gentlemen:

Very truly yours,

/s/Squire, Sanders & Dempsey L.L.P.

WEISS, JENSEN, ELLIS & HOWARD
2300 U.S. Bancorp
111 SW Fifth Avenue
Portland, Oregon 97204

April 4, 1997

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005-4297

Re: First Investors Multi-State Insured
Tax Free Fund: Oregon Series
Our File No. 009107.0001

Gentlemen:

Very truly yours,

/s/Weiss, Jensen, Ellis & Howard, P.C.

WEISS, JENSEN, ELLIS & HOWARD, P.C.

KIRKPATRICK & LOCKHART LLP
1500 Oliver Building
Pittsburgh, Pennsylvania 15222-2312

April 7, 1997

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005

Re: First Investors Multi-State Insured Tax Free Fund

Gentlemen:

Very truly yours,

/s/Kirkpatrick & Lockhart LLP

Kirkpatrick & Lockhart LLP

SANDS ANDERSON MARKS & MILLER
A Professional Corporation
1206 Norwood Street
P.O. Box 1052
Radford, Virginia 24141-0052

April 8, 1997

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005

Re: First Investors Multi-State Insured Tax Free Fund

Gentlemen:

Very truly yours,

SANDS, ANDERSON, MARKS & MILLER,
a Professional Corporation

By: /s/Daniel M. Siegel
Vice President

Distribution yields for First Investor's Funds are calculated using the
following formula:

Yield = (a/b)

Where:

a = dividends declared during the last 12 months.

b = Net asset value per share on the last day of the period.

The following is a list of the information used to calculate the distribution
yield for First Investors Multi-State Insured Tax Free Fund (Class A shares) as
of December 31, 1996.

Distribution
a b Yield
- - -----

Arizona Fund $.665 $12.95 5.14%
California Fund $.575 $11.76 4.89%
Colorado Fund $.643 $12.49 5.15%
Connecticut Fund $.617 $12.70 4.86%
Florida Fund $.625 $13.11 4.77%
Georgia Fund $.648 $12.55 5.16%
Maryland Fund $.655 $12.88 5.09%
Massachusetts Fund $.602 $11.92 5.05%
Michigan Fund $.631 $12.57 5.02%
Minnesota Fund $.592 $11.29 5.24%
Missouri Fund $.637 $12.29 5.18%
New Jersey Fund $.636 $12.99 4.90%
North Carolina Fund $.591 $12.13 4.87%
Ohio Fund $.609 $12.35 4.93%
Oregon Fund $.588 $12.00 4.90%
Pennsylvania Fund $.627 $12.91 4.86%
Virginia Fund $.624 $12.75 4.89%

<PAGE>

Distribution yields for First Investor's Funds are calculated using the
following formula:

Yield = (a/b)

Where:

a = dividends declared during the last 12 months.

b = Net asset value per share on the last day of the period.

The following is a list of the information used to calculate the distribution
yield for First Investors Multi-State Insured Tax Free Fund (Class B shares) as
of December 31, 1996.

Distribution
a b Yield
- - -----

Arizona Fund $.564 $12.95 4.36%
California Fund $.480 $11.76 4.08%
Colorado Fund $.547 $12.48 4.38%
Connecticut Fund $.518 $12.70 4.08%
Florida Fund $.526 $13.11 4.01%
Georgia Fund $.550 $12.54 4.39%
Maryland Fund $.556 $12.87 4.32%
Massachusetts Fund $.506 $11.91 4.25%
Michigan Fund $.534 $12.56 4.25%
Minnesota Fund $.498 $11.29 4.41%
Missouri Fund $.539 $12.29 4.39%
New Jersey Fund $.535 $12.97 4.12%
North Carolina Fund $.495 $12.13 4.08%
Ohio Fund $.513 $12.35 4.15%
Oregon Fund $.494 $11.99 4.12%
Pennsylvania Fund $.530 $12.91 4.11%
Virginia Fund $.524 $12.74 4.11%

<PAGE>

Yields for First Investor's Funds are calculated using the following formula:

2(((((a-b) + ((cd)-e))+1)-)-1)

Where:

a = dividends and interest earned during the 30 day period.

b = expenses accrued for the period (net of reimbursements).

c = the average daily number of shares outstanding during the period
that were entitled to receive dividends.

d = the maximum offering price per share on the last day of the
period.

e = undeclared earned income.

The following is a list of the information used to calculate the SEC Yield for
First Investors Insured Multi-State Fund, Inc. (Class B shares) as of December
31, 1996.

*Tax
Equivalent
a b c d e Yield Yield
- - - - - ----- -----
Arizona Fund $1,292 $302 22,239 $12.95 $.00 4.16% 6.12%
California Fund $470 $137 8,963 $11.75 $.00 3.82% 5.96%
Colorado Fund $1,024 $228 19,187 $12.48 $.00 4.02% 5.88%
Connecticut Fund $6,575 $1,897 115,667 $12.70 $.00 3.85% 5.60%
Florida Fund $2,413 $700 41,372 $13.11 $.00 3.82% 5.31%
Georgia Fund $673 $146 11,996 $12.54 $.00 4.25% 6.28%
Maryland Fund $4,581 $1,072 79,370 $12.88 $.00 4.16% 6.08%
Massachusetts Fund $2,187 $646 41,644 $11.91 $.00 3.76% 5.93%
Michigan Fund $3,164 $954 56,775 $12.56 $.00 3.75% 5.45%
Minnesota Fund $183 $43 3,585 $11.29 $.00 4.22% 6.41%
Missouri Fund $163 $35 2,931 $12.29 $.00 4.32% 6.38%
New Jersey Fund $6,615 $2,062 113,559 $12.99 $.00 3.74% 5.56%
North Carolina Fund $593 $129 10,995 $12.13 $.00 4.21% 6.34%
Ohio Fund $1,281 $360 22,453 $12.35 $.00 4.02% 6.04%
Oregon Fund $2,417 $573 45,572 $11.99 $.00 4.08% 6.23%
Pennsylvania Fund $3,388 $996 58,970 $12.91 $.00 3.80% 5.43%
Virginia Fund $5,103 $1,494 90,493 $12.74 $.00 3.79% 5.59%

*Tax Equivalent Yields were computed assuming a federal tax rate of 28% as well
as the maximum rate for the appropriate state. The formula and maximum state
rates are listed below.

Tax Equivalent Yield = Yield / ((1 - Federal Rate - Maximum State Rate) +
(Federal Rate * Maximum State Rate ))

Maximum Rate
Tax Rate
------------
Arizona Fund 5.60%
California Fund 11.00%
Colorado Fund 5.00%
Connecticut Fund 4.50%
Florida Fund .00%
Georgia Fund 6.00%
Maryland Fund 5.00%
Massachusetts Fund 12.00%
Michigan Fund 4.40%
Minnesota Fund 8.50%
Missouri Fund 6.00%
New Jersey Fund 6.58%
North Carolina Fund 7.75%
Ohio Fund 7.50%
Oregon Fund 9.00%
Pennsylvania Fund 2.80%
Virginia Fund 5.75%

<PAGE>

Yields for First Investor's Funds are calculated using the following formula:

2(((((a-b) + ((cd)-e))+1)-)-1)

Where:

a = dividends and interest earned during the 30 day period.

b = expenses accrued for the period (net of reimbursements).

c = the average daily number of shares outstanding during the period
that were entitled to receive dividends.

d = the maximum offering price per share on the last day of the
period.

e = undeclared earned income.

The following is a list of the information used to calculate the SEC Yield for
First Investors Insured Multi-State Fund, Inc. (Class A shares) as of December
31, 1996.

<TABLE>
<CAPTION>
*Tax
Equivalent
a b c d e Yield Yield
- - - - - ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Arizona Fund $37,609 $3,383 647,656 $13.81 $.00 4.64% 6.83%
California Fund $69,627 $10,145 1,328,724 $12.54 $.00 4.32% 6.74%
Colorado Fund $14,737 $1,111 275,883 $13.32 $.00 4.49% 6.56%
Connecticut Fund $67,766 $9,774 1,191,809 $13.55 $.00 4.35% 6.33%
Florida Fund $103,128 $14,967 1,768,028 $13.98 $.00 4.32% 6.00%
Georgia Fund $14,691 $1,062 261,505 $13.39 $.00 4.72% 6.97%
Maryland Fund $44,484 $4,002 770,253 $13.74 $.00 4.63% 6.77%
Massachusetts Fund $98,988 $14,562 1,884,241 $12.71 $.00 4.27% 6.74%
Michigan Fund $163,370 $25,399 2,931,991 $13.41 $.00 4.25% 6.17%
Minnesota Fund $37,269 $3,318 728,084 $12.04 $.00 4.69% 7.12%
Missouri Fund $8,706 $620 156,241 $13.11 $.00 4.78% 7.06%
New Jersey Fund $263,702 $44,282 4,521,892 $13.86 $.00 4.24% 6.30%
North Carolina Fund $25,590 $1,855 474,306 $12.94 $.00 4.69% 7.06%
Ohio Fund $91,893 $12,901 1,610,185 $13.17 $.00 4.51% 6.77%
Oregon Fund $41,838 $3,808 788,170 $12.80 $.00 4.57% 6.97%
Pennsylvania Fund $185,873 $27,673 3,234,302 $13.77 $.00 4.30% 6.14%
Virginia Fund $92,498 $13,544 1,639,078 $13.60 $.00 4.29% 6.32%
</TABLE>

*Tax Equivalent Yields were computed assuming a federal tax rate of 28% as well
as the maximum rate for the appropriate state. The formula and maximum state
rates are listed below.

Tax Equivalent Yield = Yield / ((1 - Federal Rate - Maximum State Rate) +
(Federal Rate * Maximum State Rate ))

SEC Standardized Total Returns - Class A Shares

Average Annual Total Return and Total Return for First Investors Funds are
calculated using the following standardized formula:

Average Annual
Total Return = ((ERV / P) ) - 1

Total Return = ((ERV - P) / P)

Where: ERV = Ending redeemable value of a hypothetical $1,000
investment made at the beginning of 1, 5, or 10 year
periods (or fractional period there of.)

P = a hypothetical initial investment of $1,000

N = number of years

The following table lists the information used to calculate the standardized
average annual total return and total return for First Investors Insured
Multi-State Fund Inc. (Class A shares) as of December 31, 1996.

AVE. ANNUAL TOTAL
ERV P N TOTAL RETURN RETURN
--- - - ------------ ------
Arizona Fund
------------
1 year: $971.90 $1,000.00 1.00 (2.81%) (2.81%)
5 years: $1,382.20 $1,000.00 5.00 6.69% 38.22%
Life of Fund: $1,510.00 $1,000.00 6.17 6.91% 51.00%

California Fund
---------------
1 year: $974.00 $1,000.00 1.00 (2.60%) (2.60%)
5 years: $1,344.10 $1,000.00 5.00 6.09% 34.41%
Life of Fund: $1,858.20 $1,000.00 9.86 6.48% 85.82%

Colorado Fund
-------------
1 year: $980.30 $1,000.00 1.00 (1.97%) (1.97%)
Life of Fund: $1,332.20 $1,000.00 4.67 6.33% 33.22%

Connecticut Fund
- ----------------
1 year: $969.20 $1,000.00 1.00 (3.08%) (3.08%)
5 years: $1,322.40 $1,000.00 5.00 5.75% 32.24%
Life of Fund: $1,457.30 $1,000.00 6.23 6.23% 45.73%

Florida Fund
------------
1 year: $968.60 $1,000.00 1.00 (3.14%) (3.14%)
5 years: $1,372.20 $1,000.00 5.00 6.53% 37.22%
Life of Fund: $1,528.20 $1,000.00 6.24 7.03% 52.82%

Georgia Fund
------------
1 year: $974.30 $1,000.00 1.00 (2.57%) (2.57%)
Life of Fund: $1,324.20 $1,000.00 4.67 6.20% 32.42%

Maryland Fund
-------------
1 year: $969.00 $1,000.00 1.00 (3.10%) (3.10%)
5 years: $1,350.30 $1,000.00 5.00 6.19% 35.03%
Life of Fund: $1,490.60 $1,000.00 6.23 6.61% 49.06%

<PAGE>

Massachusetts Fund
------------------
1 year: $965.90 $1,000.00 1.00 (3.41%) (3.41%)
5 years: $1,317.40 $1,000.00 5.00 5.67% 31.74%
10 years: $1,857.20 $1,000.00 10.00 6.40% 85.72%

Michigan Fund
-------------
1 year: $969.30 $1,000.00 1.00 (3.07%) (3.07%)
5 years: $1,347.90 $1,000.00 5.00 6.15% 34.79%
10 years: $1,929.50 $1,000.00 10.00 6.81% 92.95%

Minnesota Fund
--------------
1 year: $969.70 $1,000.00 1.00 (3.03%) (3.03%)
5 years: $1,284.10 $1,000.00 5.00 5.13% 28.41%
10 years: $1,763.50 $1,000.00 10.00 5.85% 76.35%

Missouri Fund
-------------
1 year: $973.50 $1,000.00 1.00 (2.65%) (2.65%)
Life of Fund: $1,307.70 $1,000.00 4.67 5.91% 30.77%

New Jersey Fund
---------------
1 year: $966.70 $1,000.00 1.00 (3.33%) (3.33%)
5 years: $1,313.20 $1,000.00 5.00 5.60% 31.32%
Life of Fund: $1,766.00 $1,000.00 8.30 7.09% 76.60%

North Carolina Fund
- -------------------
1 year: $971.90 $1,000.00 1.00 (2.81%) (2.81%)
Life of Fund: $1,282.10 $1,000.00 4.67 5.46% 28.21%

Ohio Fund
---------
1 year: $977.50 $1,000.00 1.00 (2.25%) (2.25%)
5 years: $1,342.60 $1,000.00 5.00 6.07% 34.26%
10 years: $1,927.60 $1,000.00 10.00 6.80% 92.76%

Oregon Fund
-----------
1 year: $972.00 $1,000.00 1.00 (2.80%) (2.80%)
Life of Fund: $1,265.30 $1,000.00 4.67 5.17% 26.53%

Pennsylvania Fund
- -----------------
1 year: $969.00 $1,000.00 1.00 (3.10%) (3.10%)
5 years: $1,346.80 $1,000.00 5.00 6.14% 34.68%
Life of Fund: $1,556.40 $1,000.00 6.67 6.85% 55.64%

Virginia Fund
-------------
1 year: $969.80 $1,000.00 1.00 (3.02%) (3.02%)
5 years: $1,330.40 $1,000.00 5.00 5.88% 33.04%
Life of Fund: $1,538.40 $1,000.00 6.67 6.66% 53.84%

<PAGE>

NAV Only Total Returns - Class A Shares

Average Annual Total Return and Total Return for First Investors Funds are
calculated using the following standardized formula:

Average Annual
Total Return = ((ERV / P) ) - 1

Total Return = ((ERV - P) / P)

Where: ERV = Ending redeemable value of a hypothetical $1,000
investment made at the beginning of 1, 5, or 10 year
periods (or fractional period there of.)

P = a hypothetical initial investment of $1,000

N = number of years

The following table lists the information used to calculate the average annual
total return and total return for First Investors Insured Multi-State Fund Inc.
(Class A shares) as of December 31, 1996.

AVE. ANNUAL TOTAL
ERV P N TOTAL RETURN RETURN
--- - - ------------ ------
Arizona Fund
------------
1 year: $1,036.90 $1,000.00 1.00 3.69% 3.69%
5 years: $1,474.40 $1,000.00 5.00 8.08% 47.44%
Life of Fund: $1,610.10 $1,000.00 6.17 8.03% 61.01%

California Fund
---------------
1 year: $1,039.10 $1,000.00 1.00 3.91% 3.91%
5 years: $1,434.00 $1,000.00 5.00 7.47% 43.40%
Life of Fund: $1,981.80 $1,000.00 9.86 7.18% 98.18%

Colorado Fund
-------------
1 year: $1,045.70 $1,000.00 1.00 4.57% 4.57%
Life of Fund: $1,420.40 $1,000.00 4.67 7.80% 42.04%

Connecticut Fund
- ----------------
1 year: $1,033.70 $1,000.00 1.00 3.37% 3.37%
5 years: $1,411.10 $1,000.00 5.00 7.13% 41.11%
Life of Fund: $1,553.90 $1,000.00 6.23 7.32% 55.39%

Florida Fund
------------
1 year: $1,033.40 $1,000.00 1.00 3.34% 3.34%
5 years: $1,463.60 $1,000.00 5.00 7.92% 46.36%
Life of Fund: $1,629.50 $1,000.00 6.24 8.13% 62.95%

Georgia Fund
------------
1 year: $1,039.40 $1,000.00 1.00 3.94% 3.94%
Life of Fund: $1,411.90 $1,000.00 4.67 7.66% 41.19%

Maryland Fund
-------------
1 year: $1,033.30 $1,000.00 1.00 3.33% 3.33%
5 years: $1,440.50 $1,000.00 5.00 7.57% 44.05%
Life of Fund: $1,589.30 $1,000.00 6.23 7.71% 58.93%

<PAGE>

Massachusetts Fund
------------------
1 year: $1,029.90 $1,000.00 1.00 2.99% 2.99%
5 years: $1,404.70 $1,000.00 5.00 7.03% 40.47%
10 years: $1,980.70 $1,000.00 10.00 7.09% 98.07%

Michigan Fund
-------------
1 year: $1,033.70 $1,000.00 1.00 3.37% 3.37%
5 years: $1,437.30 $1,000.00 5.00 7.52% 43.73%
10 years: $2,057.60 $1,000.00 10.00 7.50% 105.76%

Minnesota Fund
--------------
1 year: $1,034.70 $1,000.00 1.00 3.47% 3.47%
5 years: $1,369.50 $1,000.00 5.00 6.49% 36.95%
10 years: $1,880.70 $1,000.00 10.00 6.53% 88.07%

Missouri Fund
-------------
1 year: $1,038.40 $1,000.00 1.00 3.84% 3.84%
Life of Fund: $1,394.50 $1,000.00 4.67 7.38% 39.45%

New Jersey Fund
---------------
1 year: $1,030.90 $1,000.00 1.00 3.09% 3.09%
5 years: $1,400.70 $1,000.00 5.00 6.97% 40.07%
Life of Fund: $1,883.50 $1,000.00 8.30 7.93% 88.35%

North Carolina Fund
- -------------------
1 year: $1,036.80 $1,000.00 1.00 3.68% 3.68%
Life of Fund: $1,367.00 $1,000.00 4.67 6.92% 36.70%

Ohio Fund
---------
1 year: $1,042.30 $1,000.00 1.00 4.23% 4.23%
5 years: $1,431.80 $1,000.00 5.00 7.44% 43.18%
10 years: $2,055.90 $1,000.00 10.00 7.49% 105.59%

Oregon Fund
-----------
1 year: $1,036.80 $1,000.00 1.00 3.68% 3.68%
Life of Fund: $1,349.00 $1,000.00 4.67 6.62% 34.90%

Pennsylvania Fund
- -----------------
1 year: $1,033.90 $1,000.00 1.00 3.39% 3.39%
5 years: $1,436.60 $1,000.00 5.00 7.51% 43.66%
Life of Fund: $1,659.50 $1,000.00 6.67 7.88% 65.95%

Virginia Fund
-------------
1 year: $1,034.70 $1,000.00 1.00 3.47% 3.47%
5 years: $1,419.40 $1,000.00 5.00 7.26% 41.94%
Life of Fund: $1,640.50 $1,000.00 6.67 7.70% 64.05%

<PAGE>

SEC Standardized Total Returns - Class B Shares

Average Annual Total Return and Total Return for First Investors Funds are
calculated using the following standardized formula:

Average Annual
Total Return = ((ERV / P) ) - 1

Total Return = ((ERV - P) / P)

Where: ERV = Ending redeemable value of a hypothetical $1,000
investment made at the beginning of 1, 5, or 10 year
periods (or fractional period there of.)

P = a hypothetical initial investment of $1,000

N = number of years

AVE. ANNUAL TOTAL
ERV P N TOTAL RETURN RETURN
--- - - ------------ ------
Arizona Fund
------------
1 year: $987.60 $1,000.00 1.00 (1.24%) (1.24%)
Life of Fund: $1,148.00 $1,000.00 1.97 7.26% 14.80%

California Fund
---------------
1 year: $990.20 $1,000.00 1.00 (.98%) (.98%)
Life of Fund: $1,148.20 $1,000.00 1.97 7.27% 14.82%

Colorado Fund
-------------
1 year: $995.70 $1,000.00 1.00 (.43%) (.43%)
Life of Fund: $1,156.70 $1,000.00 1.97 7.67% 15.67%

Connecticut Fund
----------------
1 year: $984.50 $1,000.00 1.00 (1.55%) (1.55%)
Life of Fund: $1,134.80 $1,000.00 1.97 6.63% 13.48%

Florida Fund
------------
1 year: $984.90 $1,000.00 1.00 (1.51%) (1.51%)
Life of Fund: $1,153.00 $1,000.00 1.97 7.49% 15.30%

Georgia Fund
------------
1 year: $990.00 $1,000.00 1.00 (1.00%) (1.00%)
Life of Fund: $1,151.30 $1,000.00 1.97 7.42% 15.13%

Maryland Fund
-------------
1 year: $983.00 $1,000.00 1.00 (1.67%) (1.67%)
Life of Fund: $1,139.40 $1,000.00 1.97 6.85% 13.94%

<PAGE>

Massachusetts Fund
------------------
1 year: $980.70 $1,000.00 1.00 (1.93%) (1.93%)
Life of Fund: $1,130.90 $1,000.00 1.97 6.44% 13.09%

Michigan Fund
-------------
1 year: $984.20 $1,000.00 1.00 (1.58%) (1.58%)
Life of Fund: $1,137.10 $1,000.00 1.97 6.74% 13.71%

Minnesota Fund
--------------
1 year: $985.00 $1,000.00 1.00 (1.50%) (1.50%)
Life of Fund: $1,124.20 $1,000.00 1.97 6.12% 12.42%

Missouri Fund
-------------
1 year: $988.10 $1,000.00 1.00 (1.19%) (1.19%)
Life of Fund: $1,149.90 $1,000.00 1.97 7.35% 14.99%

New Jersey Fund
---------------
1 year: $981.40 $1,000.00 1.00 (1.86%) (1.86%)
Life of Fund: $1,122.70 $1,000.00 1.97 6.05% 12.27%

North Carolina Fund
- -------------------
1 year: $987.50 $1,000.00 1.00 (1.25%) (1.25%)
Life of Fund: $1,151.60 $1,000.00 1.97 7.43% 15.16%

Ohio Fund
---------
1 year: $993.00 $1,000.00 1.00 (.70%) (.70%)
Life of Fund: $1,144.40 $1,000.00 1.97 7.08% 14.44%

Oregon Fund
-----------
1 year: $987.20 $1,000.00 1.00 (1.28%) (1.28%)
Life of Fund: $1,145.20 $1,000.00 1.97 7.13% 14.52%

Pennsylvania Fund
- -----------------
1 year: $984.90 $1,000.00 1.00 (1.51%) (1.51%)
Life of Fund: $1,147.70 $1,000.00 1.97 7.24% 14.77%

Virginia Fund
-------------
1 year: $985.70 $1,000.00 1.00 (1.43%) (1.43%)
Life of Fund: $1,138.60 $1,000.00 1.97 6.81% 13.86%

<PAGE>

NAV Only Total Returns - Class B Shares

Average Annual Total Return and Total Return for First Investors Funds are
calculated using the following standardized formula:

Average Annual
Total Return = ((ERV / P) ) - 1

Total Return = ((ERV - P) / P)

Where:

ERV = Ending redeemable value of a hypothetical $1,000
investment made at the beginning of 1, 5, or 10 year
periods (or fractional period there of.)

P = a hypothetical initial investment of $1,000

N = number of years

The following table lists the information used to calculate the average annual
total return and total return for First Investors Insured Multi-State Fund Inc.
(Class B shares) as of December 31, 1996.

AVE. ANNUAL TOTAL
ERV P N TOTAL RETURN RETURN
--- - - ------------ ------
Arizona Fund
------------
1 year: $1,028.90 $1,000.00 1.00 2.89% 2.89%
Life of Fund: $1,195.60 $1,000.00 1.97 9.49% 19.56%

California Fund
- ---------------
1 year: $1,031.60 $1,000.00 1.00 3.16% 3.16%
Life of Fund: $1,195.70 $1,000.00 1.97 9.50% 19.57%

Colorado Fund
-------------
1 year: $1,036.80 $1,000.00 1.00 3.68% 3.68%
Life of Fund: $1,204.60 $1,000.00 1.97 9.91% 20.46%

Connecticut Fund
- ----------------
1 year: $1,025.70 $1,000.00 1.00 2.57% 2.57%
Life of Fund: $1,182.40 $1,000.00 1.97 8.88% 18.24%

Florida Fund
------------
1 year: $1,025.60 $1,000.00 1.00 2.56% 2.56%
Life of Fund: $1,200.60 $1,000.00 1.97 9.72% 20.06%

Georgia Fund
------------
1 year: $1,031.30 $1,000.00 1.00 3.13% 3.13%
Life of Fund: $1,199.70 $1,000.00 1.97 9.69% 19.97%

Maryland Fund
-------------
1 year: $1,024.50 $1,000.00 1.00 2.45% 2.45%
Life of Fund: $1,186.60 $1,000.00 1.97 9.07% 18.66%

<PAGE>

Massachusetts Fund
------------------
1 year: $1,021.60 $1,000.00 1.00 2.16% 2.16%
Life of Fund: $1,177.80 $1,000.00 1.97 8.66% 17.78%

Michigan Fund
-------------
1 year: $1,024.90 $1,000.00 1.00 2.49% 2.49%
Life of Fund: $1,184.30 $1,000.00 1.97 8.97% 18.43%

Minnesota Fund
--------------
1 year: $1,026.10 $1,000.00 1.00 2.61% 2.61%
Life of Fund: $1,171.10 $1,000.00 1.97 8.35% 17.11%

Missouri Fund
-------------
1 year: $1,029.20 $1,000.00 1.00 2.92% 2.92%
Life of Fund: $1,198.20 $1,000.00 1.97 9.61% 19.82%

New Jersey Fund
---------------
1 year: $1,022.20 $1,000.00 1.00 2.22% 2.22%
Life of Fund: $1,169.80 $1,000.00 1.97 8.29% 16.98%

North Carolina Fund
- -------------------
1 year: $1,028.50 $1,000.00 1.00 2.85% 2.85%
Life of Fund: $1,199.80 $1,000.00 1.97 9.69% 19.98%

Ohio Fund
---------
1 year: $1,034.30 $1,000.00 1.00 3.43% 3.43%
Life of Fund: $1,192.50 $1,000.00 1.97 9.35% 19.25%

Oregon Fund
-----------
1 year: $1,028.70 $1,000.00 1.00 2.87% 2.87%
Life of Fund: $1,193.30 $1,000.00 1.97 9.38% 19.33%

Pennsylvania Fund:
1 year: $1,026.10 $1,000.00 1.00 2.61% 2.61%
Life of Fund: $1,195.30 $1,000.00 1.97 9.48% 19.53%

Virginia Fund
-------------
1 year: $1,026.60 $1,000.00 1.00 2.66% 2.66%
Life of Fund: $1,186.10 $1,000.00 1.97 9.05% 18.61%

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