DELAWARE GROUP PREMIUM FUND, 497, 2000-06-08

DELAWARE GROUP PREMIUM FUND
497, 2000-06-08

Previous: CLEMENTE STRATEGIC VALUE FUND INC, SC 13D/A, 2000-06-08

Next: MONY AMERICA VARIABLE ACCOUNT A, 497, 2000-06-08

<PAGE>
DELAWARE(SM)
INVESTMENTS
-----------------------
Philadelphia [ ] London

Delaware Group
Premium Fund

High Yield Series
Service Class

1818 Market Street,
Philadelphia, PA 19103

Prospectus May 1, 2000
(as revised June 5, 2000)

This Prospectus offers the High Yield Series. The Series is in effect a separate
fund issuing its own shares. The shares of the Series are sold only to separate
accounts of life insurance companies (life companies). The separate accounts are
used in conjunction with variable annuity contracts and variable life insurance
policies (variable contracts). The separate accounts invest in shares of the
Series in accordance with allocation instructions received from contract owners.
The investment objective and principal policies of the Series are described in
this Prospectus.

--------------------------------------------------------------------------------
As with all mutual funds, the U.S. Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
Prospectus. Any representation to the contrary is a criminal offense.
--------------------------------------------------------------------------------

Table of contents

...........................................................................
Profile page 1
High Yield Series 1
...........................................................................
How we manage the Series page 2
Our investment strategies 2
The securities we typically invest in 2
The risks of investing in High Yield Series 4
Investment manager 6
Portfolio managers 6
Fund administration (Who's who) 7

...........................................................................
Important information about
the Series page 8
Share classes 8
Purchase and redemption of shares 8
Valuation of shares 8
Dividends, distributions and taxes 9
Euro 9
...........................................................................
Financial highlights page 10

<PAGE>

Profile: High Yield Series (formerly Delchester Series)

What are the Series' goals?

High Yield Series seeks total return and, as a secondary objective, high
current income. Although the Series will strive to achieve its goal, there is
no assurance that it will.

What are the Series' main investment strategies? We invest primarily in
corporate bonds rated BB or lower by S&P or similarly rated by another NRSRO.
These are commonly known as high-yield bonds or junk bonds and involve greater
risks than investment grade bonds. The Series will also invest in unrated bonds
we judge to be of comparable quality. Unrated bonds may be more speculative in
nature than rated bonds. The Series may also invest in U.S. and foreign
government securities and corporate bonds of foreign issuers. In selecting bonds
for the portfolio, we evaluate the income provided by the bond and the bond's
appreciation potential as well as the issuer's ability to make income and
principal payments.

What are the main risks of investing in the Series? Investing in any mutual fund
involves risk, including the risk that you may lose part or all of the money you
invest. The value of your investment in the Series will increase and decrease
according to changes in the value of the securities in the Series' portfolio.
This Series will be affected primarily by declines in bond prices, which can be
caused by adverse changes in interest rates, adverse economic conditions or poor
performance from specific industries or bond issuers. High-yield bonds are rated
below investment grade and are subject to greater risk that the issuer will be
unable to make payments on interest and principal. Bonds of foreign issuers are
also subject to certain risks such as political and economic instability,
currency fluctuations and less stringent regulatory standards. For a more
complete discussion of risk, please turn to "The risks of investing in High
Yield Series."

An investment in the Series is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.

Who should invest in the Series

o Investors with long-term financial goals.

o Investors looking a fixed-income investment that offers a combination of total
return with high current income.

o Investors who want a total return-oriented income investment as a
diversification tool for long-term, equity-oriented portfolios.

Who should not invest in the Series

o Investors with short-term financial goals.

o Investors who are unwilling to own an investment whose value may fluctuate,
sometimes significantly, over the short term.

<PAGE>

How has High Yield Series performed?
--------------------------------------------------------------------------------
This bar chart and table can help you evaluate the risks of investing in High
Yield Series. We show how returns have varied over the past ten calendar years,
as well as average annual returns for one, five and ten years. The Series' past
performance does not necessarily indicate how it will perform in the future. The
returns reflect applicable voluntary expense caps. The returns would be lower
without the voluntary caps. Moreover, the performance presented does not reflect
any separate account fees, which would reduce the returns. On May 1, 2000, the
Series' name was changed from Delchester Series to High Yield Series and the
Series' investment objective changed from high current income to total return
and, as a secondary objective, high current income.

The Service Class shares of the Series are subject to an annual 12b-1 fee of not
more than 0.30% (currently set at 0.15%). Performance shown in the bar chart is
based on the Standard Class shares of the Series, which do not carry a 12b-1 fee
and are offered through a separate prospectus. Performance of Service Class
shares will be lower than the Standard Class and will differ from the Standard
Class to the extent of the 12b-1 fee. As of March 31, 2000, the Class had a
year-to-date return of -5.12%. During the periods illustrated in this bar chart,
the Class' highest quarterly return was 15.95% for the quarter ended March 31,
1991 and its lowest quarterly return was -7.20% for the quarter ended September
30, 1998.

Year-by-year total return

1990 -7.13%
1991 37.54%
1992 13.44%
1993 16.36%
1994 -2.87%
1995 15.50%
1996 12.79%
1997 13.63%
1998 -1.83%
1999 -2.64%

--------------------------------------------------------------------------------
Average annual returns for periods ending 12/31/99

High Yield Salomon Smith
Series Barney Cash Pay
Standard Class High-Yield Index
--------------------------------------------------------------------------------
1 year -2.64% 0.84%
5 years 7.19% 9.49%
10 years 8.77% 10.46%

Performance shown in the average annual return table is based on the Standard
Class shares of the Series, which do not carry a 12b-1 fee and are offered
through a separate prospectus. Performance of Service Class shares will be lower
than the Standard Class and will differ from the Standard Class to the extent of
the 12b-1 fee.

The Series returns are compared to the performance of the Salomon Smith Barney
Cash Pay High-Yield Index. The Salomon Smith Barney Cash Pay High-Yield Index
includes a mix of non-investment grade corporate bonds that pay cash interest,
it excludes both corporate bonds that pay deferred-interest and bankrupt bonds.
You should remember that unlike the Series, the index is unmanaged and doesn't
reflect the actual costs of operating a mutual fund, such as the costs of
buying, selling and holding securities.

<PAGE>

How we manage the Series

High Yield Series

Our investment strategies

We invest primarily in fixed-income securities that we believe will have a
liberal and consistent yield and will tend to reduce the risk of market
fluctuations. We expect to invest the majority of the Series' assets primarily
in high-yield bonds or junk bonds, which involve greater risks than investment
grade bonds. The Series may also invest in unrated bonds that we consider to
have comparable credit characteristics. Unrated bonds may be more speculative in
nature than rated bonds.

Before selecting high-yield corporate bonds, we carefully evaluate each
individual bond including its income potential and the size of the bond
issuance. The size of the issuance helps us evaluate how easily we may be able
to buy and sell the bond.

We also do a thorough credit analysis of the issuer to determine whether that
company has the financial ability to meet the bond's payments.

We maintain a well-diversified portfolio of high-yield bonds that represents
many different sectors and industries. Through diversification we can help to
reduce the impact that any individual bond might have on the portfolio should
the issuer have difficulty making payments.

The Series strives to provide total return, with income as a secondary
objective. Before purchasing a bond, we evaluate both the income level and its
potential for price appreciation. At least 65% of the Series' assets will be
invested in corporate bonds rated at the time of purchase as BB or lower by S&P
or similarly rated by another NRSRO or, if unrated, that we judge to be of
comparable quality. The Series also may invest in bonds of foreign issuers in
pursuit of its objective.

The Series' investment objective is non-fundamental. This means that the Board
of Trustees may change the objective without obtaining shareholder approval. The
Board changed the Series' investment objective effective May 1, 2000 from "high
current income" to the current investment objective of the Series "total return,
with high current income as a secondary objective." This change in investment
objective will be implemented over the course of the three to six months
following May 15, 2000.

The securities we Fixed-income securities offer the potential for greater
typically invest in income payments than stocks, and also may provide
capital appreciation.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Securities How we use them
------------------------------------------------------------------------------------------------------------------------------------
High Yield Series
<S> <C>
High-yield corporate bonds: Debt obligations issued by a corporation The Series may invest without limit in high-yield
and rated lower than investment grade by an NRSRO such as S&P or corporate bonds. Typically, we invest in bonds rated
Moody's or, if unrated, that we believe are of comparable quality. These BB or B by S&P or, if unrated, are of equivalent
securities are considered to be of poor standing and predominately quality. We will not invest more than 15% of total
speculative. assets in bonds which, at the time of purchase, are
rated CCC or, if unrated, are of equivalent quality.
Also, we will not invest in bonds which, at the time
of purchase, are rated below CCC or, if unrated, are
of equivalent quality.
------------------------------------------------------------------------------------------------------------------------------------
U.S. government securities: Direct U.S. obligations including bills, The Series may invest without limit in U.S.
notes, bonds and other debt securities issued by the U.S. Treasury or government securities. However, they will typically
securities of U.S. government agencies or instrumentalities which are be a small percentage of the portfolio because they
backed by the full faith and credit of the United States. generally do not offer as high a level of current
income as high-yield corporate bonds.
------------------------------------------------------------------------------------------------------------------------------------
Foreign government or corporate securities: Securities issued by The Series may invest up to 15% of its total assets
foreign governments or supranational entities or foreign corporations. in securities of issuers domiciled in foreign
countries including both established countries and
A supranational entity is an entity established or financially supported by those with emerging markets. When investing in these
the national governments of one or more countries. The International foreign securities, the Series may not invest more
Bank for Reconstruction and Development (more commonly known as than two-thirds of that 15% amount (that is, 10% of
the World Bank) is one example of a Supranational entity. total assets) in any combination of non-dollar
denominated securities and emerging market
securities.
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Securities How we use them
------------------------------------------------------------------------------------------------------------------------------------
High Yield Series
<S> <C>
Zero coupon bonds and pay-in-kind bonds: Zero coupon securities are We may invest in zero coupon bonds and
debt obligations which do not entitle the holder to any periodic payments payment-in-kind bonds, though we do not expect this
of interest prior to maturity or a specified date when the securities begin to be a significant component of our strategy. The
paying current interest. Therefore, they are issued and traded at a price market prices of these bonds are generally more
lower than their face amounts or par value. Payment-in-kind bonds pay volatile than the market prices of securities that
interest or dividends in the form of additional bonds or preferred stock. pay interest periodically and are likely to react to
changes in interest rates to a greater degree than
interest-paying bonds having similar maturities and
credit quality. They may have certain tax
consequences which, under certain conditions, could
be adverse to the Series.
------------------------------------------------------------------------------------------------------------------------------------
Repurchase agreements: An agreement between a buyer, such as the Series, and a Typically, we use repurchase agreements as a
seller of securities in which the seller agrees to buy the securities back short-term investment for the Series' cash position.
within a specified time at the same price the buyer paid for them, plus an In order to enter into these repurchase agreements,
amount equal to an agreed upon interest rate. Repurchase agreements are often the Series must have collateral of at least 102% of
viewed as equivalent to cash. the repurchase price. The Series will only enter
into repurchase agreements in which the collateral
is U.S. government securities.
------------------------------------------------------------------------------------------------------------------------------------
Restricted securities: Privately placed securities whose resale is restricted We may invest in privately placed securities,
under securities law. including those that are eligible for resale only
among certain institutional buyers without
registration which are commonly known as Rule 144A
Securities.

Restricted securities that are determined to be
illiquid may not exceed the Series' 15% limit on
illiquid securities, which is described below.
------------------------------------------------------------------------------------------------------------------------------------
Illiquid securities: Securities that do not have a ready market, and cannot be We may invest up to 15% of net assets in illiquid
easily sold within seven days at approximately the price that a series has securities.
valued them.
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The Series may also invest in other income-producing securities including common
stocks and preferred stocks, some of which may have convertible features or
attached warrants. The Series may also enter into options. Please see the
Statement of Additional Information for additional descriptions on these
securities as well as those listed in the table above.

Lending securities The Series may lend up to 25% of its assets to qualified
brokers, dealers and institutional investors for their use in security
transactions. These transactions will generate additional income for the Series.

Purchasing securities on a when-issued or delayed delivery basis Consistent with
its investment objective, the Series may invest in U.S. government securities
and corporate debt obligations on a when-issued or delayed delivery basis; that
is, paying for securities before delivery or taking delivery at a later date.
These transactions involve commitments to buy a new issue with settlement up to
60 days later. During the time between the commitment and settlement, the Series
does not accrue interest, but the market value of the bonds may fluctuate. This
can result in the Series' share value increasing or decreasing. The Series will
designate cash or securities in amounts sufficient to cover its obligations, and
will value the designated assets daily.

Borrowing from banks The Series may borrow money as a temporary measure for
extraordinary purposes or to facilitate redemptions. To the extent that it does
so, the Series may be unable to meet its investment objective. The Series will
not borrow money in excess of one-third of the value of its net assets.

Temporary defensive positions For temporary defensive purposes, High Yield
Series may hold a substantial portion of its assets in cash or cash equivalents.
To the extent it holds cash or cash equivalents, the Series may be unable to
achieve its investment objective.

Portfolio turnover We anticipate that the Series' annual portfolio turnover will
exceed 100%. A turnover rate of 100% would occur if the Series sold and replaced
securities valued at 100% of its net assets within one year. High turnover can
result in increased transaction costs and tax liability.

3
<PAGE>

How we manage the Series (continued)

The risks of investing Investing in any mutual fund involves risk,
in High Yield Series including the risk that you may receive little or no
return on your investment, and the risk that you may
lose part or all of the money you invest. Before you
invest in the Series you should carefully evaluate the
risks. An investment in High Yield Series typically
provides the best results when held for a number of
years. Following are the chief risks you assume when
investing in the Series. Please see the Statement of
Additional Information for further discussion of these
risks and other risks not discussed here.

Market risk is the risk that all or a majority of the securities in a certain We maintain a long-term investment approach and
market--like the stock or bond market--will decline in value because focus on bonds that we believe will continue to pay
of factors such as economic conditions, future expectations or investor interest regardless of interim market fluctuations.
confidence. We do not try to predict overall bond market or
interest rate movements and generally do not trade
for short-term purposes.
------------------------------------------------------------------------------------------------------------------------------------
Industry and security risk is the risk that the value of securities in a We limit the amount of the Series' assets invested
particular industry or the value of an individual stock or bond will in any one industry and in any individual security.
decline because of changing expectations for the performance of that We also follow a rigorous selection process before
industry or for the individual company issuing the stock or bond. choosing securities for the portfolio.
------------------------------------------------------------------------------------------------------------------------------------
Interest rate risk is the risk that securities will decrease in value if The Series is subject to interest rate risk. We
interest rates rise. The risk is greater for bonds with longer maturities than cannot eliminate that risk, but we do strive to
for those with shorter maturities. manage it by monitoring economic conditions.
------------------------------------------------------------------------------------------------------------------------------------
Credit risk is the risk that there is the possibility that a bond's issuer will Our careful, credit-oriented bond selection and our
be unable to make timely payments of interest and principal. commitment to hold a diversified selection of
high-yield bonds are designed to manage this risk.

Investing in so-called "junk" or "high-yield" bonds entails the risk of We will not purchase more than 15% of total assets
principal loss, which may be greater than the risk involved in investment in bonds which, at the time of purchase, are rated
grade bonds. High-yield bonds are sometimes issued by companies whose CCC by S&P or Caa by Moody's or, if unrated, are of
earnings at the time of issuance are less than the projected debt service on equivalent quality. If a bond held by the Series
the junk bonds. drops below this level or goes into default, the
Series will begin to sell the security in an orderly
manner, striving to minimize any adverse affect on
the Series.
If there were a national credit crisis or an issuer were to become insolvent,
principal values could be adversely affected.
------------------------------------------------------------------------------------------------------------------------------------
Recession risk: Although the market for high-yield bonds existed In striving to manage this risk, we allocate assets
through periods of economic downturns, the high-yield market grew across a wide range of industry sectors. We may
rapidly during the long economic expansion which took place in the emphasize industries that have been less susceptible
United States during the 1980s. During that economic expansion, the use to economic cycles in the past, particularly if we
of high-yield debt securities to finance highly leveraged corporate believe that the economy may be entering into a
acquisitions and restructurings increased dramatically. As a result, the period of slower growth.
high-yield market grew substantially. Some analysts believe a protracted
economic downturn would severely disrupt the market for high-yield
bonds, adversely affect the value of outstanding bonds and adversely affect
the ability of high-yield issuers to repay principal and interest.

It is likely that protracted periods of economic uncertainty would cause
increased volatility in the market prices of high-yield bonds, an increase in
the number of high-yield bond defaults and corresponding volatility in a series'
net asset value. In the past, uncertainty and volatility in the high-yield
market have resulted in volatility in the Series' net asset value.
------------------------------------------------------------------------------------------------------------------------------------
Foreign risk is the risk that foreign securities may be adversely affected We may invest only 15% of total assets in securities
by political instability, changes in currency exchange rates, foreign of issuers domiciled in foreign countries. When
economic conditions or inadequate regulatory and accounting standards. investing in these foreign securities, the Series
These risks are significantly higher for emerging market securities. Non- may not invest more than two-thirds of that 15%
dollar denominated securities also carry the risk of adverse changes in amount (that is, 10% of total assets) in any
foreign currency exchange rates. combination of non-dollar denominated securities and
emerging market securities. We carefully evaluate
the reward and risk associated with each foreign
security that we consider.
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Risks How we strive to manage them
------------------------------------------------------------------------------------------------------------------------------------
High Yield Series
<S> <C>
Liquidity risk is the possibility that securities cannot be readily sold A less liquid secondary market may have an adverse
within seven days at approximately the price that a series values them. effect on the Series' ability to dispose of
particular issues, when necessary, to meet the
There is generally no established retail secondary market for high-yield Series' liquidity needs or in response to a specific
securities. As a result, the secondary market for high-yield securities is economic event, such as the deterioration in the
more limited and less liquid than other secondary securities markets. The creditworthiness of the issuer. In striving to
high-yield secondary market is particularly susceptible to liquidity manage this risk, we evaluate the size of a bond
problems when the institutions, such as mutual funds and certain issuance as a way to anticipate its likely liquidity
financial institutions, which dominate it temporarily stop buying bonds level.
for regulatory, financial or other reasons.
We may invest only 15% of net assets in illiquid
Adverse publicity and investor perceptions may also disrupt the secondary securities.
market for high-yield securities.
------------------------------------------------------------------------------------------------------------------------------------
Valuation risk: A less liquid secondary market as described above can The Series' privately placed high-yield securities
make it more difficult for a series to obtain precise valuations of the high- are particularly susceptible to the liquidity and
yield securities in its portfolio. During periods of reduced liquidity, valuation risks. We will strive to manage this risk
judgment plays a greater role in valuing high-yield securities. by carefully evaluating individual bonds and by
limiting the amount of the portfolio that can be
allocated to privately placed high-yield securities.
------------------------------------------------------------------------------------------------------------------------------------
Redemption risk: If investors redeem more shares of a series than are Volatility in the high-yield market could increase
purchased for an extended period of time, a series may be required to sell redemption risk. We strive to maintain a cash
securities without regard to the investment merits of such actions. This balance sufficient to meet any redemptions. We may
could decrease a series' asset base, potentially resulting in a higher also borrow money, if necessary, to meet
expense ratio. redemptions.
------------------------------------------------------------------------------------------------------------------------------------
Legislative and regulatory risk: The United States Congress has from We monitor the status of regulatory and legislative
time to time taken or considered legislative actions that could adversely proposals to evaluate any possible effects they
affect the high-yield bond market. For example, Congressional legislation might have on the Series' portfolio.
has, with some exceptions, generally prohibited federally insured savings
and loan institutions from investing in high-yield securities. Regulatory
actions have also affected the high-yield market. Similar actions in the
future could reduce liquidity for high-yield issues, reduce the number of
new high-yield securities being issued and could make it more difficult
for a series to attain its investment objective.
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

5
<PAGE>

How we manage the Series (continued)

Investment manager The Series is managed by Delaware Management Company.
Delaware Management Company makes investment decisions
for the Series, manages the Series' business affairs and
provides daily administrative services. For its services
to the Series, the manager was paid 0.63% of average
daily net assets for the last fiscal year.

Portfolio managers Paul A. Matlack and Gerald T. Nichols have primary
responsibility for making day-to-day investment
decisions for High Yield Series.

Paul A. Matlack, Vice President/Senior Portfolio
Manager, is a graduate of the University of Pennsylvania
with an MBA in Finance from George Washington
University. He began his career at Mellon Bank as a
credit specialist, and later served as a corporate loan
officer for Mellon Bank and then Provident National
Bank. He is a CFA charterholder. Mr. Matlack has been a
member of the High Yield Series team since 1990 and has
been co-managing the High Yield Series since January
1993.

Gerald T. Nichols, Vice President/Senior Portfolio
Manager, is a graduate of the University of Kansas,
where he received a BS in Business Administration and an
MS in Finance. Prior to joining Delaware Investments, he
was a high-yield credit analyst at Waddell & Reed, Inc.
and subsequently the investment officer for a private
merchant banking firm. He is a CFA charterholder. Mr.
Nichols has been a member of the High Yield Series team
since 1990 and has been co-managing the High Yield
Series since January 1993.

<PAGE>

Who's who? The following describes the various organizations
involved with managing, administering, and servicing the
Series.

Board of trustees
A mutual fund is governed by a board of trustees which
has oversight responsibility for the management of the
fund's business affairs. Trustees establish procedures
and oversee and review the performance of the investment
manager, the distributor and others that perform
services for the series. At least 40% of the board of
trustees must be independent of the fund's investment
manager and distributor. These independent fund
trustees, in particular, are advocates for shareholder
interests.

Investment manager
Delaware Management Company, One Commerce Square,
Philadelphia, PA 19103

An investment manager is a company responsible for
selecting portfolio investments consistent with
objectives and policies stated in the mutual fund's
prospectus. The investment manager places portfolio
orders with broker/dealers and is responsible for
obtaining the best overall execution of those orders. A
written contract between a mutual fund and its
investment manager specifies the services the manager
performs. Most management contracts provide for the
manager to receive an annual fee based on a percentage
of the fund's average net assets. The manager is subject
to numerous legal restrictions, especially regarding
transactions between itself and the funds it advises.

Delaware Management Company and its predecessors have
been managing the funds in Delaware Investments since
1938. On December 31, 1999, Delaware Management Company
and its affiliates within Delaware Investments,
including Delaware International Advisers Ltd., were
managing in the aggregate more than $47 billion in
assets in the various institutional or separately
managed (approximately $27,783,710,000) and investment
company (approximately $19,579,950,000) accounts.
Delaware Management Company is a series of Delaware
Management Business Trust, which is an indirect, wholly
owned subsidiary of Delaware Management Holdings, Inc.

Portfolio managers
Portfolio managers are employed by the investment
managers or sub-advisers to make investment decisions
for individual portfolios on a day-to-day basis. See
page 6 for information about the portfolio managers of
the Series.

Distributor
Delaware Distributors, L.P., 1818 Market Street,
Philadelphia, PA 19103

Shares of the Series are only sold to separate accounts
of insurance companies used in connection with variable
annuity or variable life products.

Custodian
The Chase Manhattan Bank, 4 Chase Metrotech Center,
Brooklyn, NY 11245

Mutual funds are legally required to protect their
portfolio securities and most funds place them with a
custodian, typically a qualified bank custodian, who
segregates fund securities from other bank assets.

<PAGE>

Important information about the Series

Share classes The Series has two classes of shares, Standard Class and
Service Class. Each class is identical except that
Service Class has a distribution plan or "Rule 12b-1"
plan. The 12b-1 plan allows the Fund to pay distribution
fees of up to 0.30% (currently 0.15%) per year to those
who sell and distribute Service Class shares and provide
services to shareholders and contract owners. Because
these fees are paid out of Service Class' assets on an
ongoing basis, over time these fees will increase the
cost of your investment and may cost you more than
paying other types of sales charges.

Purchase and Shares are sold only to separate accounts of life
redemption of companies at net asset value. (See "Valuation of
shares shares.") Redemptions will be effected by the separate
accounts at the net asset value next determined after
receipt of the order to meet obligations under the
variable contracts. Contract owners do not deal directly
with the Fund with respect to the acquisition or
redemption of Series shares.

Valuation of shares The price you pay for shares will depend on when we
receive your purchase order. If we or an authorized
agent receive your order before the close of regular
trading on the New York Stock Exchange (normally 4:00
p.m. Eastern Time) on a business day, you will pay that
day's closing share price which is based on the Series'
net asset value. If we receive your order after the
close of regular trading, you will pay the next business
day's price. A business day is any day that the New York
Stock Exchange is open for business. We reserve the
right to reject any purchase order.

We determine the Series' net asset value (NAV) per share
at the close of regular trading of the New York Stock
Exchange each business day that the Exchange is open. We
calculate this value by adding the market value of all
the securities and assets in the Series' portfolio,
deducting all liabilities, and dividing the resulting
number by the number of shares outstanding. The result
is the net asset value per share. Foreign securities,
currencies and other assets denominated in foreign
currencies are translated into U.S. dollars at the
exchange rate of these currencies against the U.S.
dollar, as provided by an independent pricing service.
We price securities and other assets for which market
quotations are available at their market value. We price
debt securities on the basis of valuations provided to
us by an independent pricing service that uses methods
approved by the board of trustees. Any investments that
have a maturity of less than 60 days we price at
amortized cost. For all other securities, we use methods
approved by the board of trustees that are designed to
price securities at their fair market value.

From time to time, the Series may also hold securities
that are listed on foreign exchanges. These foreign
exchanges may trade on weekends or days when the Series
does not price its shares. As a result, the NAV of the
Series may change on days when you will not be able to
purchase or redeem shares of the Series.

<PAGE>

Dividends, Dividends and capital gain distributions, if any, are
distributions and distributed annually.
taxes
We automatically reinvest all dividends and any capital
gains.

The Series will not be subject to federal income tax to
the extent its earnings are distributed. The Fund
intends to distribute substantially all of the Series'
net investment income and net capital gains.
Shareholders may be proportionately liable for taxes on
income and gains of the Series but shareholders not
subject to tax on their income will not be required to
pay tax on amounts distributed to them, and the Fund
will inform shareholders of the amount and nature of
income or gains.

Please refer to the prospectus for the variable
insurance contract for additional tax information
relevant to such contracts.

Euro Several European countries began participating in the
European Economic and Monetary Union, which has
established a common currency for participating
countries. This currency is commonly known as the
"Euro." The long-term consequences of the Euro
conversion for foreign exchange rates, interest rates
and the value of European securities in which the Series
may invest are unclear. The consequences may adversely
affect the value and/or increase the volatility of
securities held by the Series.

9
<PAGE>

Financial highlights

<TABLE>
<CAPTION>
High Yield Series(1/2)
(formerly Delchester Series)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
The financial Year Ended 12/31
highlights table 1999 1998 1997 1996 1995
is intended to help you Net asset value, beginning of year $8.460 $9.510 $9.170 $8.940 $8.540
understand the Series' Income (loss) from investment operations
financial performance. Net investment income 0.781 0.906 0.863 0.853 0.872
The total returns in Net realized and unrealized gain (loss)
the table represent the on investments (0.987) (1.048) 0.332 0.230 0.400
rate that an investor -------- -------- ------- ------- -------
would have earned or Total from investment operations (0.206) (0.142) 1.195 1.083 1.272
lost on an investment -------- -------- ------- ------- -------
in the Series (assuming Less dividends and distributions
reinvestment of all Dividends from net investment income (0.784) (0.905) (0.855) (0.853) (0.872)
dividends and Distributions from net realized gain
distributions). All "per on investments (0.050) (0.003) none none none
share" information -------- -------- ------- ------- -------
reflects financial Total dividends and distributions (0.834) (0.908) (0.855) (0.853) (0.872)
results for a single -------- -------- ------- ------- -------
Series share. This Net asset value, end of year $7.420 $8.460 $9.510 $9.170 $8.940
information has been ======== ======== ======= ======= =======
audited by Ernst & Total return(3) (2.64%) (1.83%) 13.63% 12.79% 15.50%
Young LLP, whose Ratios and supplemental data
report, along with the Net assets, end of period (000 omitted) $102,633 $120,708 $98,875 $67,665 $56,605
Series' financial Ratio of expenses to average net assets 0.72% 0.70% 0.70% 0.70% 0.69%
statements, is included Ratio of net investment income
in the Series' annual to average net assets 9.75% 9.85% 9.24% 9.54% 9.87%
report, which is Portfolio turnover 110% 86% 121% 93% 74%
available upon request
by calling
800.523.1918.

</TABLE>

(1) Effective May 1, 2000, the Series' investment objective changed from "high
current income" to "total return and, as a secondary objective, high current
income."
(2) The financial highlights data are derived from data of the Series' Standard
Class shares, which are not subject to 12b-1 plan fees. The Service Class
shares are subject to an annual 12b-1 fee of not more than 0.30% (currently
set at 0.15%). Future data for the Service Class will reflect its 12b-1 plan
fees which will, among other things, lower performance.
(3) Total return does not reflect expenses that apply to Separate Accounts or to
the related insurance policies and inclusion of these charges would reduce
total return figures for all periods shown.

<PAGE>

Delaware Group Additional information about the Series' investments is
Premium Fund available in the Series' Annual and Semi-Annual Reports
to shareholders. In the Series' annual reports you will
find a discussion of the market conditions and
investment strategies that significantly affected the
Series' performance during the last fiscal period. You
can find more detailed information about the Series in
the current Statement of Additional Information (SAI),
which we have filed electronically with the Securities
and Exchange Commission (SEC) and which is legally a
part of this Prospectus. You may obtain a free copy of
the Statement of Additional Information by writing to us
at 1818 Market Street, Philadelphia, PA 19103, or call
toll-free 800.523.1918.

You can find reports and other information about the
Series on the EDGAR Database on the SEC web site
(http://www.sec.gov). You can also get copies of this
information, after payment of a duplicating fee, by
e-mailing the SEC at [email protected] or by writing to
the Public Reference Section of the SEC, Washington,
D.C. 20549-0102. Information about the Series, including
its Statement of Additional Information, can be reviewed
and copied at the SEC's Public Reference Room in
Washington, D.C. You can get information on the public
reference room by calling the SEC at 1.202.942.8090.

Investment Company Act File No. 811-5162

DELAWARE(SM)
INVESTMENTS
-----------
Philadelphia [ ] London

<PAGE>

DELAWARE(SM)
INVESTMENTS
-------------------
Philadelphia.London

Delaware Group
Premium Fund

REIT Series
Service Class

1818 Market Street,
Philadelphia, PA 19103
Prospectus May 1, 2000
(as revised June 5, 2000)

This Prospectus offers the REIT Series. The Series is in effect a separate fund
issuing its own shares. The shares of the Series are sold only to separate
accounts of life insurance companies (life companies). The separate accounts are
used in conjunction with variable annuity contracts and variable life insurance
policies (variable contracts). The separate accounts invest in shares of the
Series in accordance with allocation instructions received from contract owners.
The investment objectives and principal policies of the Series are described
below.

As with all mutual funds, the U.S. Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
Prospectus. Any representation to the contrary is a criminal offense.

Table of contents

.................................................................
Profile page 1
REIT Series 1
.................................................................
How we manage the Series page 3
Our investment strategies 3
The securities we typically invest in 3
The risks of investing in REIT Series 5
Investment manager and sub-adviser 6
Portfolio managers 6
Fund administration (Who's who) 7

.................................................................
Important information about
the Series page 8
Share classes 8
Purchase and redemption of shares 8
Valuation of shares 8
Dividends, distributions and taxes 9
Euro 9
.................................................................
Financial highlights page 10

<PAGE>

Profile: REIT Series
--------------------------------------------------------------------------------

What are the Series' goals?
The REIT Series seeks maximum long-term total return, with capital
appreciation as a secondary objective. Although the Series will strive to
achieve its goal, there is no assurance that it will.

What are the Series' main investment strategies? REIT Series invests in
securities of companies that are principally engaged in the real estate
industry. Under normal circumstances, we will invest at least 65% of the Series'
total assets in equity securities of real estate investment trusts (REITs).

In managing the REIT Series portfolio, we strive to include REITs that represent
a variety of different sectors in the real estate industry. As we consider
individual REITs for the portfolio, we carefully evaluate each REIT's management
team. We generally look for those that:

o retain a substantial portion of the properties' cashflow;

o effectively use capital to expand;

o have a strong ability to raise rents; and,

o can create a franchise value for the REIT.

Because we concentrate our investments in the real estate industry, the Series
may be subject to certain risks associated with direct ownership of real estate
and with the real estate industry in general. Its investments may tend to
fluctuate more in value than a portfolio that invests in a broader range of
industries. If the Series holds real estate directly as a result of defaults or
receives rental income from its real estate holdings, its tax status as a
regulated investment company could be jeopardized. The Series is also affected
by interest rate changes, particularly if the real estate investment trusts we
are holding use floating rate debt to finance their ongoing operations.

REIT Series is considered "non-diversified" under federal laws and rules that
regulate mutual funds. That means the Series may allocate more of its net assets
to investments in single securities than a "diversified" fund. Thus, adverse
effects on an investment held by the Series may affect a larger portion of
overall assets and subject the Series to greater risks.

For a more complete discussion of risk, please turn to "The risks of investing
in REIT Series."

An investment in the Series is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.

Who should invest in the Series

o Investors seeking a high level of total return.

o Investors willing to invest in equity securities of companies principally
engaged in the real estate industry.

o Investors looking to diversify their equity holdings by adding exposure to
the real estate markets.

Who should not invest in the Series

o Investors unwilling to accept the risks of investing in the real estate
industry as well as in a non-diversified fund.

o Investors who are unwilling to accept that the value of their investment may
fluctuate, sometimes significantly, over the short term.

<PAGE>

How has REIT Series performed?
--------------------------------------------------------------------------------

This bar chart and table can help you evaluate the risks of investing in REIT
Series. We show returns for the past calendar year, as well as average annual
returns for one year and since inception. The Series' past performance does not
necessarily indicate how it will perform in the future. The returns reflect
applicable voluntary expense caps. The returns would be lower without the
voluntary caps. Moreover, the performance presented does not reflect any
separate account fees, which would reduce the returns.

The Service Class shares of the Series are subject to an annual 12b-1 fee of not
more than 0.30% (currently set at 0.15%). Performance shown in the bar chart is
based on the Standard Class shares of the Series, which do not carry a 12b-1 fee
and are offered through a separate prospectus. Performance of Service Class
shares will be lower than the Standard Class and will differ from the Standard
Class to the extent of the 12b-1 fee. As of March 31, 2000, the Class had a
year-to-date return of 2.85%. During the periods illustrated in this bar chart,
the Class' highest quarterly return was 11.55% for the quarter ended June 30,
1999 and its lowest quarterly return was -7.47% for the quarter ended September
30, 1999.

Year-by-year total return

1999
----
-2.61%

Average annual return for periods ending 12/31/99

--------------------------------------------------------------------------------
REIT Series NAREIT Equity
Standard Class REIT Index
--------------------------------------------------------------------------------
1 year -2.61% -4.62%
Since inception (5/4/98) -7.00% -11.41%
--------------------------------------------------------------------------------

The Series returns are compared to the performance of the NAREIT Equity REIT
Index. The NAREIT Equity REIT Index is a benchmark of real estate investment
trusts that invest in many types of U.S. property. You should remember that
unlike the Series, the index is unmanaged and doesn't reflect the actual costs
of operating a mutual fund, such as the costs of buying, selling and holding
securities.

<PAGE>
How we manage the Series
--------------------------------------------------------------------------------

REIT Series
Our investment strategies

The REIT Series strives to achieve maximum long-term total return. Capital
appreciation is a secondary objective. We invest in securities of companies
principally engaged in the real estate industry. Under normal circumstances, at
least 65% of the Series' total assets will be invested in equity securities of
real estate investment trusts (REITs). The Series may also invest in equity
securities of real estate industry operating companies known as REOCs.

While we do not intend to invest the Series' assets directly in real estate,
under certain circumstances it could own real estate directly as a result of a
default on securities in the portfolio. If the Series has rental income or
income from the direct disposition of real property, the receipt of such income
may adversely affect the Series' ability to retain its tax status as a regulated
investment company.

We do not normally acquire securities for short term purposes; however, we may
take advantage of short-term opportunities that are consistent with the Series'
investment objectives.

REIT Series uses the same investment strategy as Delaware REIT Fund, a separate
fund in the Delaware Investments family, although performance may differ
depending on such factors as the size of the funds and the timing of investments
and redemptions.

The Series' investment objective is non-fundamental. This means that the Board
of Trustees may change the objective without obtaining shareholder approval. If
the objective were changed, we would notify shareholders before the change in
the objective became effective.

The securities we Stocks offer investors the potential for capital
typically invest in appreciation, and may pay dividends as well.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
Securities How we use them
-------------------------------------------------------------------------------------------------------------------------
REIT Series
-------------------------------------------------------------------------------------------------------------------------
<S> <C>
Real estate investment trusts: A company, usually traded We may invest without limit in shares of REITs.
publicly, that manages a portfolio of real estate to earn
profits for shareholders.

-------------------------------------------------------------------------------------------------------------------------
REITs are generally classified as equity REITs, mortgage We may invest in equity securities of REOCs that meet the
REITs or a combination of equity and mortgage REITs. Equity criteria described to the left.
REITs invest the majority of their assets directly in real
property, derive income primarily from the collection of
rents and can realize capital gains by selling properties
that have appreciated in value. Mortgage REITs invest the
majority of their assets in real estate mortgages and derive
income from the collection of interest payments. By
investing in REITs indirectly through the Series, a
shareholder bears a proportionate share of the expenses of a
fund and indirectly shares similar expenses of the REITs.

-------------------------------------------------------------------------------------------------------------------------
Real estate industry operating companies: We consider a REOC
to be a company that derives at least 50% of its gross
revenues or net profits from:
o ownership, development, construction, financing, management
or sale of commercial, industrial or residential
real estate; or
o products or services related to the real estate industry,
such as building supplies or mortgage servicing.

-------------------------------------------------------------------------------------------------------------------------
Foreign securities and American Depositary Receipts: The Series' investments may from time to time include
Securities of foreign entities issued directly or, in the sponsored or unsponsored American Depositary Receipts that
case of American Depositary Receipts, through a U.S. bank. are actively traded in the United States. We may invest up
ADRs represent the bank's holdings of a stated number of to 10% of the Series' assets in foreign securities (not
shares of a foreign corporation. An ADR entitles the holder including ADRs).
to all dividends and capital gains earned by the underlying
foreign shares. ADRs are bought and sold the same as U.S.
securities.

-------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

How we manage the Series (continued)

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
Securities How we use them
-------------------------------------------------------------------------------------------------------------------------
REIT Series
-------------------------------------------------------------------------------------------------------------------------
<S> <C>
Options and futures: Options represent a right to buy or If we have stocks that appreciated in price, we may want to
sell a security or group of securities at an agreed upon protect those gains when we anticipate adverse conditions.
price at a future date. The purchaser of an option may or We might use options or futures to neutralize the effect of
may not choose to go through with the transaction. any price declines, without selling the security. We might
also use options or future to gain exposure to a particular
Writing a covered call option on a security obligates the market segment without purchasing individual securities in
owner of the security to sell it at an agreed upon price on that segment. We might use this approach if we had excess
an agreed upon date (usually no more than nine months in the cash that we wanted to invest quickly.
future.) The owner of the security receives a premium
payment from the purchaser of the call, but if the security We might use covered call options if we believe that doing
appreciates to a price greater than the agreed upon selling so would help the Series to meet its investment objective.
price, the series would lose out on those gains.
Use of these strategies can increase the operating costs of
Futures contracts are agreements for the purchase or sale of the Series and can lead to loss of principal.
securities at a specified price, on a specified date. Unlike
an option, a futures contract must be executed unless it is
sold before the settlement date.

Options and futures are generally considered to be
derivative securities.

-------------------------------------------------------------------------------------------------------------------------
Repurchase agreements: An agreement between a buyer, such as Typically, we use repurchase agreements as a short-term
the Series, and a seller of securities in which the seller investment for our cash position. In order to enter into
agrees to buy the securities back within a specified time at repurchase agreements, the Series must have collateral of at
the same price the buyer paid for them, plus an amount equal least 102% of the repurchase price. Except when we believe a
to an agreed upon interest rate. Repurchase agreements are temporary defensive approach is appropriate, the Series will
often viewed as equivalent to cash. not hold more than 5% of its total assets in cash or other
short-term investments. All short-term investments will be
rated AAA by S&P or Aaa by Moody's or if unrated, be of
comparable quality, based on our evaluation.The Series will
only enter into repurchase agreements in which the
collateral is U.S. government securities.

-------------------------------------------------------------------------------------------------------------------------
Restricted securities: Privately placed securities whose We may invest in privately placed securities, including
resale is restricted under securities law. those that are eligible for resale only among certain
institutional buyers without registration which are commonly
known as Rule 144A Securities. Restricted securities that
are determined to be illiquid may not exceed the Series' 15%
limit on illiquid securities, which is described below.

-------------------------------------------------------------------------------------------------------------------------
Illiquid securities: Securities that do not have a ready We may invest up to 15% of net assets in illiquid
market, and cannot be easily sold within seven days at securities, including repurchase agreements with maturities
approximately the price that the Series has valued them. of over seven days.

-------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

The REIT Series may also invest in other securities including convertible
securities including enhanced convertible securities as well as, rights and
warrants to purchase common stock, preferred stocks, mortgage-backed securities,
U.S. government securities and zero coupon bonds. Please see the Statement of
Additional Information for additional descriptions on these securities as well
as those listed in the table above.

Lending securities The Series may lend up to 25% of its assets to qualified
dealers and institutional investors for their use in security transactions.
These transactions will generate additional income for the Series.

Borrowing from banks The Series may borrow money as a temporary measure for
extraordinary purposes or to facilitate redemptions. Borrowing money could
result in the Series being unable to meet its investment objective. The Series
will not borrow money in excess of one-third of the value of its net assets.

Temporary defensive positions For temporary defensive purposes, REIT Series may
hold a substantial portion of its assets in cash or cash equivalents. To the
extent it holds cash or cash equivalents, the Series may be unable to achieve
its investment objective.

Portfolio turnover We anticipate that the Series' annual portfolio turnover will
be less than 100%. A turnover rate of 100% would occur if the Series' sold and
replaced securities valued at 100% of its net assets within one year.

4
<PAGE>
The risks of investing Investing in any mutual fund involves risk,
in REIT Series including the risk that you may receive little or
no return on your investment, and the risk that
you may lose part or all of the money you invest.
Before you invest in the Series you should
carefully evaluate the risks. An investment in the
Series typically provides the best results when
held for a number of years. Following are the
chief risks you assume when investing in REIT
Series. Please see the Statement of Additional
Information for further discussion of these risks
and other risks not discussed here.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
Risks How we strive to manage them
-------------------------------------------------------------------------------------------------------------------------
REIT Series
-------------------------------------------------------------------------------------------------------------------------
<S> <C>
Market risk is the risk that all or a majority of the We maintain a long-term investment approach and focus on
securities in a certain market--like the stock or bond securities we believe can appreciate over an extended time
market--will decline in value because of factors such as frame regardless of interim market fluctuations. We do not
economic conditions, future expectations or investor try to predict overall market movements and generally do not
confidence. trade for short-term purposes.
-------------------------------------------------------------------------------------------------------------------------

Industry and security risk is the risk that the value of In REIT Series we hold a number of different individual
securities in a particular industry or the value of an securities, seeking to manage security risk. However, we do
individual stock or bond will decline because of changing concentrate in the real estate industry. As a consequence,
expectations for the performance of that industry or for the the share price of the Series may fluctuate in response to
individual company issuing the stock or bond. factors affecting that industry, and may fluctuate more
widely than a portfolio that invests in a broader range of
industries. The Series may be more susceptible to any single
economic, political or regulatory occurrence affecting the
real estate industry.
-------------------------------------------------------------------------------------------------------------------------
Interest rate risk is the risk that securities will decrease REIT Series is subject to interest rate risk. If the Series
in value if interest rates rise and conversely rise in value invests in real estate investment trusts that hold fixed
when interest rates fall. rate obligations, we would expect the value of those trusts
to decrease if interest rates rise and increase if interest
rates decline. However, lower interest rates also tend to
increase the chances that a bond will be refinanced, which
can hurt the returns of REITs that hold fixed rate
obligations. We strive to manage this risk by monitoring
interest rates and evaluating their potential impact on
securities already in the portfolio or those we are
considering for purchase.
-------------------------------------------------------------------------------------------------------------------------
Real estate industry risks include among others: Since the Series invests principally in REITs, it is subject
o possible declines in the value of real estate; to the risks associated with the real estate industry. We
o risks related to economic conditions; will strive to manage these risks through careful selection
o possible shortage of mortgage funds; of individual REIT securities; however, investors should
o overbuilding and extended vacancies; carefully consider these risks before investing in the
o increased competition; Series.
o changes in property taxes, operating expenses or zoning laws;
o costs of environmental clean-up, or damages from natural
disasters;
o limitations or fluctuations in rent payments;
o cashflow fluctuations; and
o defaults by borrowers.
REITs are also subject to the risk of failing to qualify for
tax-free pass-through of income under the Internal Revenue
Code and/or failing to qualify for an exemption from
registration as an investment company under the Investment
Company Act of 1940.
-------------------------------------------------------------------------------------------------------------------------
Non-diversified funds risk: Non-diversified investment REIT Series is a non-diversified fund and subject to this
companies have the flexibility to invest as much as 50% of risk. Nevertheless, we typically hold securities from a
their assets in as few as two issuers with no single issuer variety of different issuers, representing different sectors
accounting for more than 25% of the portfolio. The remaining of the real estate industry. We also perform extensive
50% of the portfolio must be diversified so that no more analysis on all securities. We are particularly diligent in
than 5% of a series' assets is invested in the securities of reviewing securities that represent a larger percentage of
a single issuer. Because a non-diversified fund may invest portfolio assets.
its assets in fewer issuers, the value of series shares may
increase or decrease more rapidly than if the series were
fully diversified.
-------------------------------------------------------------------------------------------------------------------------
Foreign risk is the risk that foreign securities may be We may invest up to 10% of the REIT Series' total assets in
adversely affected by political instability (including foreign securities; however we typically invest only a small
governmental seizures or nationalization of assets), changes portion of assets in foreign securities, so this is not
in currency exchange rates, foreign economic conditions or expected to be a major risk to the Series.
inadequate regulatory and accounting standards. Foreign
markets may also be less efficient, less liquid, have
greater price volatility, less regulation and higher
transaction costs than U.S. markets.
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

5
<PAGE>

How we manage the Series (continued)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
Risks How we strive to manage them
-------------------------------------------------------------------------------------------------------------------------
REIT Series
-------------------------------------------------------------------------------------------------------------------------
<S> <C>

Liquidity risk is the possibility that securities cannot be We limit exposure to illiquid securities.
readily sold within seven days at approximately the price
that a series has valued them.

-------------------------------------------------------------------------------------------------------------------------
Futures and options risk is the possibility that a series REIT Series may use futures contracts and options on futures
may experience a loss if it employs an options or futures contracts, as well as options on securities for hedging
strategy related to a security or a market index and that purposes. We limit the amount of the Series' assets that may
security or index moves in the opposite direction from what be committed to these strategies.
the manager anticipated. Futures and options also involve
additional expenses, which could reduce any benefit or
increase any loss the series gains from using the strategy.

Options and futures contracts on foreign currencies, and
forward contracts, entail particular risks related to
conditions affecting the underlying currency.

-------------------------------------------------------------------------------------------------------------------------
</TABLE>

Investment manager The Series is managed by Delaware Management Company.
and sub-adviser Delaware Management Company makes investment decisions for
the Series, manages the Series' business affairs and
provides daily administrative services. Lincoln Investment
Management, Inc. (Lincoln) is the Series' sub-adviser. As
sub-adviser, Lincoln provides Delaware with investment
recommendations, asset allocation advice, research, economic
analysis and other investment services regarding the types
of securities in which we invest. For its services to the
Series, the manager and sub-adviser were paid an aggregate
fee of 0.64% of average daily net assets for the last fiscal
year, reflecting a waiver of fees by the manager.

Lincoln is a wholly owned subsidiary of Lincoln National
Corporation and was incorporated in 1930. Lincoln's primary
activity is institutional fixed-income investment management
and consulting. These activities include fixed-income
portfolios, private placements, real estate debt and equity,
and asset/liability management. Lincoln provides investment
management services to Lincoln National Corporation, its
principal subsidiaries and affiliated registered investment
companies, and acts as investment adviser to other
unaffiliated clients.

Portfolio managers Thomas J. Trotman and Damon J. Andres have primary
responsibility for making day-to-day investment decisions
for the REIT Series. Mr. Trotman and Mr. Andres have been on
the Series' investment team since 1998.

Thomas J. Trotman, Vice President/Portfolio Manager, earned
a bachelor's degree in Accounting from Muhlenberg College
and an MBA from Widener University. Prior to joining
Delaware Investments in 1995, he was Vice President and
Director of Investment Research at Independence Capital
Management. Before that, he held credit-related positions at
Marine Midland Bank, U.S. Steel Corporation, and Amerada
Hess. Mr. Trotman is a CFA charterholder.

Damon J. Andres, Vice President/Portfolio Manager, earned a
BS in Business Administration with an emphasis in Finance
and Accounting from the University of Richmond. Prior to
joining Delaware Investments in 1994, he provided investment
consulting services as a Consulting Associate with Cambridge
Associates, Inc. in Arlington, Virginia.

6
<PAGE>

Who's who? The following describes the various organizations involved
with managing, administering, and servicing the Series.

Board of trustees

A mutual fund is governed by a board of trustees which has
oversight responsibility for the management of the fund's
business affairs. Trustees establish procedures and oversee
and review the performance of the investment manager, the
distributor and others that perform services for the series.
At least 40% of the board of trustees must be independent of
the fund's investment manager and distributor. These
independent fund trustees, in particular, are advocates for
shareholder interests.

Investment manager

Delaware Management Company, One Commerce Square,
Philadelphia, PA 19103

An investment manager is a company responsible for selecting
portfolio investments consistent with objectives and
policies stated in the mutual fund's prospectus. The
investment manager places portfolio orders with
broker/dealers and is responsible for obtaining the best
overall execution of those orders. A written contract
between a mutual fund and its investment manager specifies
the services the manager performs. Most management contracts
provide for the manager to receive an annual fee based on a
percentage of the fund's average net assets. The manager is
subject to numerous legal restrictions, especially regarding
transactions between itself and the funds it advises.

Delaware Management Company and its predecessors have been
managing the funds in Delaware Investments since 1938. On
December 31, 1999, Delaware Management Company and its
affiliates within Delaware Investments, including Delaware
International Advisers Ltd., were managing in the aggregate
more than $47 billion in assets in the various institutional
or separately managed (approximately $27,783,710,000) and
investment company (approximately $19,579,950,000) accounts.
Delaware Management Company is a series of Delaware
Management Business Trust, which is an indirect, wholly
owned subsidiary of Delaware Management Holdings, Inc.

Sub-adviser

Lincoln Investment Management, Inc., 200 E. Berry Street,
Fort Wayne, Indiana 46802

A sub-adviser is a company generally responsible for the
management of the fund's assets and is selected and
supervised by the investment manager.

Portfolio managers

Portfolio managers are employed by the investment managers
or sub-advisers to make investment decisions for individual
portfolios on a day-to-day basis. See page 6 for information
about the portfolio managers of the Series.

Distributor

Delaware Distributors, L.P., 1818 Market Street,
Philadelphia, PA 19103

Shares of the Series are only sold to separate accounts of
insurance companies used in connection with variable annuity
or variable life products.

Custodian

The Chase Manhattan Bank, 4 Chase Metrotech Center,
Brooklyn, NY 11245

Mutual funds are legally required to protect their portfolio
securities and most funds place them with a custodian,
typically a qualified bank custodian, who segregates fund
securities from other bank assets.

<PAGE>
Important information about the Series
--------------------------------------------------------------------------------
Share classes The Series has two classes of shares, Standard Class and
Service Class. Each class is identical except that Service
Class has a distribution plan or "Rule 12b-1" plan. The
12b-1 plan allows the Fund to pay distribution fees of up
to 0.30% (currently 0.15%) per year to those who sell and
distribute Service Class shares and provide services to
shareholders and contract owners. Because these fees are
paid out of Service Class' assets on an ongoing basis,
over time these fees will increase the cost of your
investment and may cost you more than paying other types
of sales charges.

Purchase and Shares are sold only to separate accounts of life
redemption of companies at net asset value. (See "Valuation of shares.")
shares Redemptions will be effected by the separate accounts at
the net asset value next determined after receipt of the
order to meet obligations under the variable contracts.
Contract owners do not deal directly with the Fund with
respect to the acquisition or redemption of Series shares.

Valuation of shares The price you pay for shares will depend on when we
receive your purchase order. If we or an authorized agent
receive your order before the close of regular trading on
the New York Stock Exchange (normally 4:00 p.m. Eastern
Time) on a business day, you will pay that day's closing
share price which is based on the Series' net asset value.
If we receive your order after the close of regular
trading, you will pay the next business day's price. A
business day is any day that the New York Stock Exchange
is open for business. We reserve the right to reject any
purchase order.

We determine the Series' net asset value (NAV) per share
at the close of regular trading of the New York Stock
Exchange each business day that the Exchange is open. We
calculate this value by adding the market value of all the
securities and assets in the Series' portfolio, deducting
all liabilities, and dividing the resulting number by the
number of shares outstanding. The result is the net asset
value per share. Foreign securities, currencies and other
assets denominated in foreign currencies are translated
into U.S. dollars at the exchange rate of these currencies
against the U.S. dollar, as provided by an independent
pricing service. We price securities and other assets for
which market quotations are available at their market
value. We price debt securities on the basis of valuations
provided to us by an independent pricing service that uses
methods approved by the board of trustees. Any investments
that have a maturity of less than 60 days we price at
amortized cost. For all other securities, we use methods
approved by the board of trustees that are designed to
price securities at their fair market value.

<PAGE>
Dividends, Dividends and capital gain distributions, if any, are
distributions and distributed annually.
taxes
We automatically reinvest all dividends and any capital
gains.

The Series will not be subject to federal income tax to
the extent its earnings are distributed. The Fund intends
to distribute substantially all of the Series' net
investment income and net capital gains. Shareholders may
be proportionately liable for taxes on income and gains of
the Series but shareholders not subject to tax on their
income will not be required to pay tax on amounts
distributed to them, and the Fund will inform shareholders
of the amount and nature of income or gains.

Please refer to the prospectus for the variable insurance
contract for additional tax information relevant to such
contracts.

Euro Several European countries began participating in the
European Economic and Monetary Union, which has
established a common currency for participating countries.
This currency is commonly known as the "Euro." The
long-term consequences of the Euro conversion for foreign
exchange rates, interest rates and the value of European
securities in which the Series may invest are unclear. The
consequences may adversely affect the value and/or
increase the volatility of securities held by the Series.

<PAGE>

Financial highlights
<TABLE>
<CAPTION>

REIT Series(1)
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The financial Period 5/4/98(2)
highlights table is Year Ended through
intended to help you 12/31/99 12/31/99
understand the ----------------------------------------------------------------------------------------
Series' financial Net asset value, beginning of period $9.100 $10.000
performance. The Income (loss) from investment operations
total returns in the Net investment income 0.334 0.217
table represent the Net realized and unrealized loss on investments (0.574) (1.117)
rate that an ------ -------
investor would have Total from investment operations (0.240) (0.900)
earned or lost on an ------ -------
investment in the Less dividends:
Series (assuming Dividends from net investment income (0.190) none
reinvestment of all ------ -------
dividends and Total dividends (0.190) none
distributions). All ------ -------
"per share" Net asset value, end of period $8.670 $ 9.100
information reflects ====== =======
financial results Total return(3) (2.61%) (9.00%)
for a single Series Ratios and supplemental data
share. This Net assets, end of period (000 omitted) $11,624 $5,562
information has been Ratio of expenses to average net assets 0.85% 0.85%
audited by Ernst & Ratio of expenses to average net assets prior
Young LLP, whose to expense limitation and expenses paid indirectly 0.96% 1.02%
report, along with Ratio of net investment income to average net assets 5.65% 6.42%
the Series' Ratio of net investment income to average net assets prior
financial to expense limitation and expenses paid indirectly 5.54% 6.25%
statements, is Portfolio turnover 33% 39%
included in the
Series' annual
report, which is
available upon
request by calling
800.523.1918.
(1) The financial highlights data are derived from data of the Series' Standard
Class shares, which are not subject to 12b-1 plan fees. The Service Class
shares are subject to an annual 12b-1 fee of not more than 0.30% (currently
set at 0.15%). Future data for the Service Class will reflect its 12b-1
plan fees which will, among other things, lower performance.
(2) Date of commencement of operations; ratios have been annualized but total
return has not been annualized.
(3) Total return does not reflect expenses that apply to Separate Accounts or
to the related insurance policies and inclusion of these charges would
reduce total return figures for all periods shown. Total return reflects
expense limitations in effect for the Series.

</TABLE>

10
<PAGE>
Delaware Group
Premium Fund

Additional information about the Series' investments is
available in the Series' Annual and Semi-Annual Reports to
shareholders. In the Series' annual reports you will find
a discussion of the market conditions and investment
strategies that significantly affected the Series'
performance during the last fiscal period. You can find
more detailed information about the Series in the current
Statement of Additional Information (SAI), which we have
filed electronically with the Securities and Exchange
Commission (SEC) and which is legally a part of this
Prospectus. You may obtain a free copy of the Statement of
Additional Information by writing to us at 1818 Market
Street, Philadelphia, PA 19103, or call toll-free
800.523.1918.

You can find reports and other information about the
Series on the EDGAR Database on the SEC web site
(http://www.sec.gov). You can also get copies of this
information, after payment of a duplicating fee, by
e-mailing the SEC at [email protected] or by writing to
the Public Reference Section of the SEC, Washington, D.C.
20549-0102. Information about the Series, including its
Statement of Additional Information, can be reviewed and
copied at the SEC's Public Reference Room in Washington,
D.C. You can get information on the public reference room
by calling the SEC at 1.202.942.8090.

Investment Company Act File No. 811-5162

DELAWARE(SM)
INVESTMENTS
=====================
Philadelphia o London