AMERICAN CENTURY VARIABLE PORTFOLIOS INC, 485BPOS, 1999-04-15

AMERICAN CENTURY VARIABLE PORTFOLIOS INC
485BPOS, 1999-04-15

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

File No. 33-14567

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 26 [X]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

File No. 811-5188

Amendment No. 26 [X]

(Check appropriate box or boxes.)

AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
_________________________________________________________________
(Exact Name of Registrant as Specified in Charter)

4500 Main Street, Kansas City, MO 64111
_________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (816) 531-5575

William M. Lyons, 4500 Main Street, Kansas City, MO 64111
_________________________________________________________________
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: May 1, 1999

It is proposed that this filing will become effective (check
appropriate box)

[ ] immediately upon filing pursuant to paragraph (b)
[X] on May 1, 1999 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485.

If appropriate, check the following box:

[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
[front cover]

AMERICAN CENTURY

Prospectus

VP Value Fund

[american century logo (reg.sm)]
American
Century

[left margin]

MAY 1, 1999

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANYONE WHO
TELLS YOU OTHERWISE IS COMMITTING A CRIME.

Distributed by Funds Distributor, Inc.

[inside front cover - blank]

TABLE OF CONTENTS

An Overview of the Fund ................................................... 3
Fund Performance History .................................................. 4
Information about the Fund ................................................ 5
Management ................................................................ 7
Share Price, Distributions and Taxes ...................................... 9
Financial Highlights ...................................................... 10

[left margin]

Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in GREEN ITALICS, look for its definition
in the left margin.

[graphic of hand with index finger pointing] This symbol highlights special
information and helpful tips.

American Century Investments

[page 2 - blank]

2 American Century Investments 1-800-345-3533

AN OVERVIEW OF THE FUND

WHAT IS THE FUND'S INVESTMENT GOAL?

The fund seeks long-term capital growth. Income is a secondary objective.

WHAT ARE THE FUND'S PRIMARY INVESTMENT STRATEGIES AND PRINCIPAL RISKS?

In selecting stocks for VP Value, the fund managers look for stocks of medium to
large companies that they believe are undervalued at the time of purchase. A
more detailed description of the fund's value investment strategy begins on page
5.

The fund's principal risks include

* Market Risk--The value of a fund's shares will go up and down based on the
performance of the companies whose securities it owns and other factors
affecting the securities market generally.

* Interest Rate Risk--When interest rates change, the value of the fund's
fixed-income securities will be affected.

* Principal Loss--As with all mutual funds, if you sell your shares when their
value is less than the price you paid, you will lose money.

WHO may WANT TO INVEST IN THE FUND?

The fund may be a good investment if you are

* seeking long-term capital growth from your investment

* seeking an equity fund that utilizes a value style of investing

* comfortable with the risks associated with the fund's investment strategy

WHO may not WANT TO INVEST IN THE FUND?

The fund may not be a good investment if you are

* investing for a short period of time

* uncomfortable with volatility in the value of your investment

[left margin]

[graphic of hand with index finger pointing] An investment in the fund is not a
bank deposit, and it is not insured or guaranteed by the Federal Deposit
Insurance Corporation (FDIC) or any other government agency.

www.americancentury.com American Century Investments 3

FUND PERFORMANCE HISTORY

VP VALUE FUND

Annual Total Returns

The following bar chart shows the performance of the fund's shares for each full
calendar year in the life of the fund. It indicates the volatility of the fund's
historical returns from year to year.

[bar chart - data below]

VP Value
1998 4.81%
1997 26.08%

The highest and lowest quarterly returns for the period reflected in the bar
chart are:

Highest Lowest
- --------------------------------------------------------------------------------
VP Value 13.07% (2Q 1997) -10.88% (3Q 1998)

Average Annual Returns

The following table shows the average annual returns of the fund's shares for
the periods indicated during the life of the fund. The benchmarks are unmanaged
indices that have no operating costs and are included in the table for
performance comparison. The S&P 500 is viewed as a broad measure of U.S. Stock
performance, while the S&P 500/BARRA Value Index is an index consisting of S&P
500 stocks that have lower price/book ratios and, in general, share other
characteristics associated with value stocks.

For the calendar year ended December 31, 1998 1 year Life of Fund(1)
- --------------------------------------------------------------------------------
VP Value 4.81% 15.94%
S&P 500/BARRA Value Index 14.68% 21.80%
S&P 500 Index 28.68% 29.01%

(1) The inception date for VP Value is May 1, 1996.

[left margin]

[graphic of hand with index finger pointing] The performance information on this
page is designed to help you see how fund returns can vary. Keep in mind that
past performance does not predict how the fund will perform in the future.

[graphic of hand with index finger pointing] For current performance
information, please call us at 1-800-345-3533 or visit American Century's Web
site at www.americancentury.com.

4 American Century Investments 1-800-345-3533

INFORMATION ABOUT THE FUND

VP VALUE FUND

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

The fund seeks long-term capital growth by investing primarily in common stocks.
Income is a secondary objective.

HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVE?

The fund managers look for stocks of medium to large companies that they believe
are undervalued at the time of purchase. The managers use a value investment
strategy that looks for companies that are temporarily out of favor in the
market. The managers attempt to purchase the stock of these undervalued
companies and hold them until they have returned to favor in the market and
their stock prices have gone up. Companies may be undervalued due to market
declines, poor economic conditions, actual or anticipated bad news regarding the
issuer or its industry, or because they have been overlooked by the market. To
identify these companies, the fund managers look for companies with earnings,
cash flows and/or assets that may not be reflected accurately in the companies'
stock prices, or companies whose dividend payments appear high when compared to
the stock prices.

The fund managers do not attempt to time the market. Instead, under normal
market conditions, they intend to keep at least 80% of the fund's assets
invested in stocks regardless of the movement of stock prices generally. When
the managers believe that it is prudent, the fund may invest a portion of its
assets in convertible securities, foreign securities, short-term instruments,
bonds, notes and debt securities of companies, debt obligations of governments
and their agencies, NON-LEVERAGED stock index futures contracts and other
similar securities. Stock index futures contracts, a type of derivative
security, can help the fund's cash assets remain liquid while performing more
like stocks. The fund has a policy governing stock index futures and similar
derivative securities to help manage the risks of these types of investments.
For example, the managers cannot leverage the fund's assets by investing in a
derivative security. A complete description of the derivatives policy is
included in the Statement of Additional Information.

In the event of exceptional market or economic conditions, or if the fund is
unable to find securities meeting its criteria of selection, the fund may, as a
temporary defensive measure, invest all or a substantial portion of its assets
in cash or high-quality, short-term debt securities. To the extent the fund
assumes a defensive position, it will not be pursuing its objective of capital
growth.

Additional information about VP Value's investments is available in its annual
and semiannual reports. In these reports you will find a discussion of the
market conditions and investment strategies that significantly affected the
fund's performance during the most recent fiscal period. You may get these
reports at no cost by calling the insurance company from which you purchased the
shares or by calling us.

[left margin]

NON-LEVERAGED means that the fund may not invest in futures contracts where it
would be possible to lose more than the fund invested.

[graphic of hand with index finger pointing] Fixed-income securities are rated
by nationally recognized securities ratings organizations (SROs), such as
Moody's and Standard & Poor's. Each SRO has its own system for classifying
securities, but each tries to indicate a company's ability to make timely
payments of interest and principal. A detailed description of SROs, their
ratings system and what we do if a security isn't rated is included in the
Statement of Additional Information.

www.americancentury.com American Century Investments 5

WHAT ARE THE PRIMARY RISKS OF INVESTING IN THE FUND?

The value of VP Value's shares depends on the value of the stocks and other
securities it owns. The value of the individual securities the fund owns will go
up and down depending on the performance of the companies that issued them,
general market and economic conditions, and investor confidence.

As with all funds, at any given time the value of your shares of VP Value may be
worth more or less than the price you paid. If you sell your shares when the
value is less than the price you paid, you will lose money.

If the market does not consider the individual stocks purchased by VP Value to
be undervalued, the value of the fund's shares may not rise as high as other
funds and may in fact decline, even if stock prices are generally increasing.

Market performance tends to be cyclical and, in the various cycles, certain
investment styles may fall in and out of favor. If the market is not favoring
the fund's style, the fund's gains may not be as big as, or its losses may be
bigger than, other equity funds using different investment styles.

Foreign securities can have certain unique risks, including fluctuations in
currency exchange rates, unstable political and economic structures, reduced
availability of public information and lack of uniform financial reporting and
regulatory practices similar to those that apply to U.S. issuers. These factors
make investing in foreign securities generally riskier than investing in U.S.
stocks. To the extent the fund invests in foreign securities, the overall risk
of the fund could be affected.

The fund is offered only to insurance companies for the purpose of offering the
fund as an investment option under variable annuity or variable life insurance
contracts. Although the fund does not foresee any disadvantages to contract
owners due to the fact that it offers its shares as an investment medium for
both variable annuity and variable life products, the interests of various
contract owners participating in the fund might, at some time, be in conflict
due to future differences in tax treatment of variable products or other
considerations. Consequently, the fund's Board of Directors will monitor events
in order to identify any material irreconcilable conflicts that may possibly
arise and to determine what action, if any, should be taken in response to such
conflicts. If a conflict were to occur, an insurance company separate account
might be required to withdraw its investments in the fund, and the fund might be
forced to sell securities at disadvantageous prices to redeem such investments.

6 American Century Investments 1-800-345-3533

MANAGEMENT

WHO MANAGES THE FUND?

The Board of Directors, investment advisor and fund management team play key
roles in the management of the fund.

THE BOARD OF DIRECTORS

The Board of Directors oversees the management of the fund and meets at least
quarterly to review reports about fund operations. Although the Board of
Directors does not manage the fund, it has hired an investment advisor to do so.
More than two-thirds of the directors are independent of the fund's advisor;
that is, they are not employed by and have no financial interest in the advisor.

THE INVESTMENT ADVISOR

The fund's investment advisor is American Century Investment Management, Inc.
The advisor has been managing mutual funds since 1958. American Century is
headquartered at 4500 Main Street, Kansas City, Missouri 64111.

The advisor is responsible for managing the investment portfolio of the fund and
directing the purchase and sale of its investment securities. The advisor also
arranges for transfer agency, custody and all other services necessary for the
fund to operate.

For the services it provided to the fund during the most recent fiscal year, the
advisor received a unified management fee of 1.00% of the average net assets of
the fund. In November 1998, the fund's shareholders approved a new management
agreement with lower fees. Under the new agreement, the advisor will receive a
unified management fee of 1.00% of the first $500 million of the average net
assets of the fund, 0.95% of the next $500 million and 0.90% thereafter. The
amount of the management fee is calculated daily and paid monthly.

Out of that fee, the advisor paid all expenses of managing and operating the
fund except brokerage expenses, taxes, interest, fees and expenses of the
independent directors (including legal counsel fees), and extraordinary
expenses.

THE FUND MANAGEMENT TEAM

The advisor uses a team of portfolio managers, assistant portfolio managers and
analysts to manage the fund. The team meets regularly to review portfolio
holdings and to discuss purchase and sale activity. Team members buy and sell
securities for a fund as they see fit, guided by the fund's investment
objectives and strategies.

The portfolio managers on the investment team are identified below:

PHILLIP N. DAVIDSON

Mr. Davidson, Vice President and Portfolio Manager, has been a member of the
team that manages VP Value since May 1996. He joined American Century in
September 1993. He has a bachelor's degree in finance and an MBA from Illinois
State University.

SCOTT A. MOORE

Mr. Moore, Portfolio Manager, has been a member of the team that manages VP
Value since October 1996 and Portfolio Manager since February 1999. He joined
American Century in August 1993 as an Investment Analyst. He has a bachelor's
degree in finance from Southern Illinois University and an MBA in finance from
the University of Missouri-Columbia. He is a Chartered Financial Analyst.

[left margin]

[graphic of hand with index finger pointing] CODE OF ETHICS

American Century has a Code of Ethics designed to ensure that the interests of
fund shareholders come before the interests of the people who manage the fund.
Among other provisions, the Code of Ethics prohibits portfolio managers and
other investment personnel from buying securities in an initial public offering
or from profiting from the purchase and sale of the same security within 60
calendar days. In addition, the Code of Ethics requires portfolio managers and
other employees with access to information about the purchase or sale of
securities by the fund to obtain approval before executing permitted personal
trades.

www.americancentury.com American Century Investments 7

FUND PERFORMANCE

VP Value has the same management team and investment policies as another fund in
the American Century family of funds. The fees and expenses of the funds are
expected to be similar, and they will be managed with substantially the same
investment objective and strategies. Notwithstanding these general similarities,
this fund and the retail fund are separate mutual funds that will have different
investment performance. Differences in cash flows into the two funds, the size
of their portfolios, specific investments held by the two funds, as well as the
additional expenses of the insurance product, will cause performance to differ

Please consult the separate account prospectus for a description of the
insurance product through which the fund is offered and its associated fees.

FUNDAMENTAL INVESTMENT POLICIES

Fundamental investment policies contained in the Statement of Additional
Information and the investment objectives of the fund may not be changed without
a shareholder vote. The Board of Directors may change any other policies and
investment strategies.

YEAR 2000 ISSUES

Many of the world's computer systems currently cannot properly recognize or
process date-sensitive information relating to the Year 2000 and beyond. Because
this may impact the computer systems of various American Century-affiliated and
external service providers for the fund, American Century formally initiated a
Year 2000 readiness project in July 1997. It involves a team of information
technology professionals assisted by outside consultants and guided by a
senior-level steering committee. The team's goal is to assess the impact of the
Year 2000 on American Century's systems, renovate or replace noncompliant
critical systems and test those systems. In addition, the team has been working
to gather information about the Year 2000 efforts of the fund's other major
service providers.

Although American Century believes its critical systems will function properly
in the Year 2000, this is not guaranteed. If the efforts of American Century or
its external service providers are not successful, the fund's business,
particularly the provision of shareholder services, may be hampered.

In addition, the issuers of securities the fund owns could have Year 2000
computer problems. Foreign issuers, especially those in emerging markets, may be
more susceptible to such problems than U.S. issuers. These problems could
negatively affect the value of issuers' securities, which, in turn, could impact
the fund's performance. The advisor has established a process to gather publicly
available information about the Year 2000 readiness of these issuers. However,
this process may not uncover all relevant information, and the information
gathered may not be complete and accurate. Moreover, an issuer's Year 2000
readiness is only one of many factors the fund managers may consider when making
investment decisions, and other factors may receive greater weight.

8 American Century Investments 1-800-345-3533

SHARE PRICE, DISTRIBUTIONS AND TAXES

PURCHASE AND REDEMPTION OF SHARES

For instructions on how to purchase and redeem shares, read the prospectus of
your insurance company separate account. Your order will be priced at the net
asset value next determined after your request is received in the form required
by the insurance company separate account. There are no sales commissions or
redemption charges. However, certain sales or deferred sales charges and other
charges may apply to the variable annuity or life insurance contracts. Those
charges are disclosed in the separate account prospectus.

ABUSIVE TRADING PRACTICES

We do not permit market-timing or other abusive trading practices in our funds.

Excessive, short-term (market-timing) or other abusive trading practices may
disrupt portfolio management strategies and harm fund performance. To minimize
harm to the fund and its shareholders, we reserve the right to reject any
purchase order (including exchanges) from any investor we believe has a history
of abusive trading or whose trading, in our judgment, has been or may be
disruptive to a fund. In making this judgment, we may consider trading done in
multiple accounts under common ownership or control. We also reserve the right
to delay delivery of redemption proceeds up to seven days.

SHARE PRICE

American Century determines the NET ASSET VALUE (NAV) of the fund as of the
close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern
time) on each day the Exchange is open. On days when the Exchange is not open
(including certain U.S. holidays), we do not calculate the NAV. The NAV of the
fund share is the current value of the fund's assets, minus any liabilities,
divided by the number of fund shares outstanding.

If current market prices of securities owned by a fund are not readily
available, the advisor may determine their fair value in accordance with
procedures adopted by the fund's Board of Directors. Trading of securities in
foreign markets may not take place on every day the Exchange is open. Also,
trading in some foreign markets may take place on weekends or holidays when the
fund's NAV is not calculated. So, the value of the fund's portfolio may be
affected on days when you can't purchase or redeem its shares.

We will price your purchase, exchange or redemption at the NAV next determined
after the insurance company separate account receives your transaction request
in good order.

DISTRIBUTIONS

Federal tax laws require the fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means that the fund will not be subject to state or
federal income tax on amounts distributed. The distributions generally consist
of dividends and interest received by the fund, as well as CAPITAL GAINS
realized on the sale of investment securities. VP Value generally pays
distributions from net income and capital gains, if any, once a year in
December. The fund may make more frequent distributions, if necessary, to comply
with Internal Revenue Code provisions.

You will participate in fund distributions, when they are declared, starting on
the day after your purchase is effective. For example, if you purchase shares on
a day that a distribution is declared, you will not receive that distribution.
If you redeem shares, you will receive any distribution declared on the day you
redeem. If you redeem all shares, we will include any distributions received
with your redemption proceeds. All distributions from the fund will be invested
in additional shares.

TAXES

Consult the prospectus of your insurance company separate account for a
discussion of the tax status of your variable contract.

[left margin]

The NET ASSET VALUE of the fund is the price of its shares.

CAPITAL GAINS are increases in the values of capital assets, such as stock, from
the time the assets are purchased. Tax becomes due on capital gains once an
asset is sold.

www.americancentury.com American Century Investments 9

FINANCIAL HIGHLIGHTS

UNDERSTANDING THE FINANCIAL HIGHLIGHTS

The table on the next page itemizes what contributed to the changes in share
price during the period. It also shows the changes in share price for this
period in comparison to changes over the last three fiscal periods.

On a per-share basis, the table includes as appropriate

* share price at the beginning of the period

* investment income and capital gains or losses

* distributions of income and capital gains paid to shareholders

* share price at the end of the period

The table also includes some key statistics for the period as appropriate

* Total Return--the overall percentage of return of the fund, assuming the
reinvestment of all distributions

* Expense Ratio--operating expenses as a percentage of average net assets

* Net Income Ratio--net investment income as a percentage of average net asset

* Portfolio Turnover--the percentage of the fund's buying and selling activity

The Financial Highlights have been audited by Deloitte & Touche LLP, independent
auditors. Their Independent Auditors' Report is included in the fund's annual
report for the year ended December 31, 1998, which is incorporated by reference
into the Statement of Additional Information, and is available upon request.

10 American Century Investments 1-800-345-3533

<TABLE>
<CAPTION>
VP VALUE FUND

For a Share Outstanding Throughout the Years Ended December 31 (except as noted

PER-SHARE DATA
1998 1997 1996(1)

<S> <C> <C> <C>
Net Asset Value, Beginning of Period ......$ 6.93 $ 5.58 $ 5.00
----------- ----------- -----------
Income From Investment Operations
Net Investment Income ................... 0.08(2) 0.07 0.05
Net Realized and Unrealized Gain
on Investment Transactions ............ 0.27 1.37 0.56
----------- ----------- -----------
Total From Investment Operations ........ 0.35 1.44 0.61
----------- ----------- -----------
Distributions
From Net Investment Income .............. (0.04) (0.04) (0.03)
From Net Realized Gains on
Investment Transactions .............. (0.51) (0.05) --
Total Distributions ..................... (0.55) (0.09) (0.03)
----------- ----------- -----------
Net Asset Value, End of Period ............$ 6.73 $ 6.93 $ 5.58
----------- ----------- -----------
Total Return(3) ......................... 4.81% 26.08% 12.28%

RATIOS/SUPPLEMENTAL DATA
1998 1997 1996(1)

Ratio of Operating Expenses
to Average Net Assets .................. 1.00% 1.00% 1.00%(4)
Ratio of Net Investment Income
to Average Net Assets .................. 1.21% 1.60% 1.98%(4)
Portfolio Turnover Rate ................... 158% 138% 49%
Net Assets, End of Period (in thousands) ..$ 316,624 $ 188,015 $ 23,894

- ----------
(1) May 1, 1996 (inception) through December 31, 1996.

(2) Computed using average shares outstanding throughout the period.

(3) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(4) Annualized.
</TABLE>

www.americancentury.com American Century Investments 11

NOTES

12 American Century Investments 1-800-345-3533

NOTES

www.americancentury.com American Century Investments 13

MORE INFORMATION ABOUT THE FUND IS CONTAINED IN THESE DOCUMENTS

ANNUAL AND SEMIANNUAL REPORTS

These reports contain more information about the fund's investments and the
market conditions and investment strategies that significantly affected the
fund's performance during the most recent fiscal period.

STATEMENT OF ADDITIONAL INFORMATION (SAI)

The SAI contains a more detailed, legal description of the fund's operations,
investment restrictions, policies and practices. The SAI is incorporated by
reference into this Prospectus. This means that it is legally part of this
Prospectus, even if you don't request a copy.

You many obtain a copy of the SAI or annual and semiannual reports at no charge
by contacting American Century at the telephone number or address below.

You also can get information about the fund (including the SAI) from the
Securities and Exchange Commission (SEC).

* In person SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location
and hours.

* On the Internet www.sec.gov

* By mail SEC Public Reference Section
Washington, D.C. 20549-6009
(The SEC will charge a fee for copying
the documents.)
- --------------------------------------------------------------------------------

AMERICAN CENTURY INVESTMENTS
P.O. Box 419385
Kansas City, Missouri 64141-6385

INVESTMENT PROFESSIONAL SERVICE REPRESENTATIVE
1-800-345-3533 or 816-531-5575

WWW.AMERICANCENTURY.COM

FAX: 816-340-4360

TELECOMMUNICATIONS DEVICE FOR THE DEAF
1-800-634-4113 or 816-444-3485

BUSINESS, NOT-FOR-PROFIT AND
EMPLOYER-SPONSORED RETIREMENT PLANS
1-800-345-3533

Investment Company Act File No. 811-5188

[american century logo (reg.sm)]
American
Century

9905
SH-PRS-15708
<PAGE>
[front cover]

AMERICAN CENTURY

Prospectus

VP International Fund

[american century logo (reg.sm)]
American
Century

[left margin]

MAY 1, 1999

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANYONE
WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.

Distributed by Funds Distributor, Inc.

[inside front cover - blank]

TABLE OF CONTENTS

[left margin]

Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in GREEN ITALICS, look for its definition
in the left margin.

[graphic of hand with index finger pointing] This symbol highlights special
information and helpful tips.

American Century Investments

[page 2 - blank]

2 American Century Investments 1-800-345-3533

AN OVERVIEW OF THE FUND

WHAT IS THE FUND'S INVESTMENT GOAL?

The fund seeks capital growth.

WHAT ARE THE FUND'S PRIMARY INVESTMENT STRATEGIES AND PRINCIPAL RISKS?

The fund managers look for stocks of growing foreign companies. The basis of the
strategy used by the fund managers is that, over the long term, stocks of
companies with earnings and revenue growth have a greater-than-average chance to
increase in value over time. A more detailed description of American Century's
growth investment style and the fund's investment strategies and risks begins on
page 5.

The fund's principal risks include

* Market Risk--The value of a fund's shares will go up and down based on the
performance of the companies whose securities it owns and other factors
affecting the securities market generally.

* Price Volatility--The value of the fund's shares may fluctuate significantly
in the short term.

* Principal Loss--As with all mutual funds, if you sell your shares when their
value is less than the price you paid, you will lose money.

* Foreign Risk--The fund invests primarily in foreign securities, which are
generally riskier than U.S. stocks.

WHO may WANT TO INVEST IN THE FUND?

The fund may be a good investment if you are

* seeking long-term capital growth from your investment

* seeking diversification of your investment portfolio through investment in
foreign securities

* comfortable with the risks associated with investing in U.S. and foreign
growth securities

* comfortable with the fund's short-term price volatility

WHO may not WANT TO INVEST IN THE FUND?

The fund may not be a good investment if you are

* investing for a short period of time

* uncomfortable with the risks associated with foreign investing

* uncomfortable with volatility in the value of your investment

[left margin]

www.americancentury.com American Century Investments 3

FUND PERFORMANCE HISTORY

VP INTERNATIONAL FUND

Annual Total Returns

The following bar chart shows the performance of the fund's shares for each full
calendar year in the life of the fund. It indicates the volatility of the fund's
historical returns from year to year.

[bar chart - data below]

VP International
1998 18.76%
1997 18.63%
1996 14.41%
1995 12.21%

The highest and lowest quarterly returns for the period reflected in the bar
chart are:

Highest Lowest
- --------------------------------------------------------------------------------
VP International 17.82% (1Q 1998) -18.28% (3Q 1998)

Average Annual Returns

The following table shows the average annual returns of the fund's shares for
the periods indicated during the life of the fund. The benchmarks are unmanaged
indices that have no operating costs and are included in the table for
performance comparison. The S&P 500 is viewed as a broad measure of U.S. stock
performance, while the Morgan Stanley Capital International EAFE Index is a
widely followed group of stocks from 20 countries.

For the calendar year ended December 31, 1998 1 year Life of Fund(1)
- --------------------------------------------------------------------------------
VP International 18.76% 12.30%
S&P 500 Index 28.68% 26.65%
Morgan Stanley Capital International EAFE Index 20.00% 8.11%

(1) The inception date for VP International is May 1, 1994.

[left margin]

[graphic of hand with index finger pointing] For current performance
information, please call us at 1-800-345-3533 or visit American Century's Web
site at www.americancentury.com.

4 American Century Investments 1-800-345-3533

INFORMATION ABOUT THE FUND

VP INTERNATIONAL FUND

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

The fund seeks capital growth.

HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVE?

The fund managers use a growth investment strategy developed by American Century
to invest in stocks of companies that they believe will increase in value over
time. This strategy looks for companies with earnings and revenue growth.
Ideally, the fund managers look for companies whose earnings and revenues are
not only growing, but growing at a successively faster, or accelerating, pace.
This strategy is based on the premise that, over the long term, the stocks of
companies with earnings and revenue growth have a greater-than-average chance to
increase in value.

The managers use a bottom-up approach to select stocks to buy for the fund. That
means they first look for strong, growing companies to invest in, rather than
allocating investments by country or region or simply buying any company in a
growing industry or sector. The fund managers track financial information for
thousands of companies to identify trends in the companies' earnings and
revenues. This information is used to help the fund managers select or decide to
continue to hold the stocks of companies they believe will be able to sustain
their growth and to sell stocks of companies whose growth begins to slow down.

In addition to locating strong companies with earnings and revenue growth, the
fund managers believe that it is important to diversify the fund's holdings
across different countries and geographical regions to attempt to manage the
risks of an international portfolio. For this reason, the fund managers also
consider the prospects for relative economic growth among countries or regions,
economic and political conditions, expected inflation rates, currency exchange
fluctuations, and tax considerations when making investments.

The fund managers do not attempt to time the market. Instead, under normal
market conditions, they intend to keep the fund essentially fully invested in
stocks regardless of the movement of stock prices generally. When the managers
believe that it is prudent, the fund may invest a portion of its assets in
convertible securities, short-term instruments, NON-LEVERAGED stock index
futures contracts and other similar securities. Stock index futures contracts, a
type of derivative security, can help the fund's cash assets remain liquid while
performing more like stocks. The fund has a policy governing stock index futures
and similar derivative securities to help manage the risk of these types of
investments. For example, the managers cannot leverage the fund's assets by
investing in a derivative security. A more complete description of the
derivatives policy is included in the Statement of Additional Information.

Additional information about VP International's investments is available in its
annual and semiannual reports. In these reports you will find a discussion of
the market conditions and investment strategies that significantly affected the
fund's performance during the most recent fiscal period. You may get these
reports at no cost by calling the insurance company from which you purchased the
shares or by calling us.

[left margin]

[graphic of hand with index finger pointing] Accelerating growth is shown, for
example, by growth that is faster this quarter than last or faster this year
than the year before.

NON-LEVERAGED means that the fund may not invest in futures contracts where it
would be possible to lose more than the fund invested.

www.americancentury.com American Century Investments 5

WHAT KINDS OF SECURITIES DOES THE FUND BUY?

The fund generally will purchase equity securities of foreign companies. At
least 65% of the fund's assets will be invested at all times in equity
securities of issuers from at least three countries outside the United States.
The fund can purchase other types of securities as well, such as domestic and
foreign preferred stocks, convertible securities, equity-equivalent securities,
notes, bonds and other debt securities.

In the event of exceptional market or economic conditions, the fund may, as a
temporary defensive measure, invest all or a substantial portion of its assets
in cash or high-quality, short-term debt securities. To the extent the fund
assumes a defensive position, it will not be pursuing its objective of capital
growth.

The fund considers foreign companies to include companies (i) domiciled outside
the United States, (ii) deriving at least half of their revenue from sales or
production outside the United States, or (iii) for which the principal trading
market of their securities is outside the United States. The fund does not have
limits on the countries in which it can invest, and the fund managers expect to
invest in companies in both developed countries and emerging markets. The fund
considers developed countries to include Australia, Austria, Belgium, Canada,
Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New
Zealand, Norway, Portugal, Spain, Sweden, Switzerland, the United Kingdom and
the United States. Emerging market countries are considered to be those
countries not listed as developed countries above.

WHAT ARE THE PRIMARY RISKS OF INVESTING IN THE FUND?

The value of VP International's shares depends on the value of the stocks and
other securities it owns. The value of the individual securities the fund owns
will go up and down depending on the performance of the companies that issued
them, general market and economic conditions, and investor confidence.

As with all funds, at any given time the value of your shares of VP
International may be worth more or less than the price you paid. If you sell
your shares when the value is less than the price you paid, you will lose money

Investing in foreign securities has certain unique risks that make it generally
riskier than investing in U.S. stocks. These risks include exposure to political
and economic events in world markets; limited availability of public
information; less developed trading markets; and lack of uniform financial
reporting and regulatory practices similar to those that apply in the United
States. In addition, foreign securities are subject to currency risk, meaning
that because the fund's investments are generally held in foreign currencies,
the fund could experience gains or losses based solely upon a change in the
exchange rate between foreign currencies and the U.S. dollar.

6 American Century Investments 1-800-345-3533

MANAGEMENT

WHO MANAGES THE FUND?

The Board of Directors, investment advisor and fund management team play key
roles in the management of the fund.

THE BOARD OF DIRECTORS

THE INVESTMENT ADVISOR

For the services it provided to the fund during the most recent fiscal year, the
advisor received a unified management fee of 1.47% of the average net assets of
the fund. In November 1998, the fund's shareholders approved a new management
agreement with lower fees. Under the new agreement, the advisor will receive a
unified management fee of 1.50% of the first $250 million of the average net
assets of the fund, 1.20% of the next $250 million and 1.10% thereafter. The
amount of the management fee is calculated daily and paid monthly.

THE FUND MANAGEMENT TEAM

The portfolio managers on the investment team are identified below:

HENRIK STRABO

Mr. Strabo, Senior Vice President and Chief Investment Officer--International
Equities, has been a member of the team that manages VP International since the
fund's inception on May 1, 1994. He joined American Century in 1993 as an
Investment Analyst and was promoted to Portfolio Manager in April 1994. He has a
bachelor's degree in business from the University of Washington.

MARK S. KOPINSKI

Mr. Kopinski, Senior Vice President and Portfolio Manager, has been a member of
the team that manages VP International since rejoining American Century in April
1997. Before rejoining American Century, he served as Vice President and
Portfolio Manager at Federated Investors, Inc. from June 1995 to March 1997.
Prior to 1995, he served as Vice President and Portfolio Manager of American
Century. He has a bachelor's degree in business administration from Monmouth
College and an MA in Asian studies from the University of Illinois.

[left margin]

[graphic of hand with index finger pointing] CODE OF ETHICS

www.americancentury.com American Century Investments 7

FUND PERFORMANCE

VP International has the same management team and investment policies as another
fund in the American Century family of funds. The fees and expenses of the funds
are expected to be similar, and they will be managed with substantially the same
investment objective and strategies. Notwithstanding these general similarities,
this fund and the retail fund are separate mutual funds that will have different
investment performance. Differences in cash flows into the two funds, the size
of their portfolios, specific investments held by the two funds, as well as the
additional expenses of the insurance product, will cause performance to differ.

Please consult the separate account prospectus for a description of the
insurance product through which the fund is offered and its associated fees.

FUNDAMENTAL INVESTMENT POLICIES

Fundamental investment policies contained in the Statement of Additional
Information and the investment objective of the fund may not be changed without
a shareholder vote. The Board of Directors may change any other policies and
investment strategies.

YEAR 2000 ISSUES

8 American Century Investments 1-800-345-3533

SHARE PRICE, DISTRIBUTIONS AND TAXES

PURCHASE AND REDEMPTION OF SHARES

ABUSIVE TRADING PRACTICES

We do not permit market-timing or other abusive trading practices in our funds.

SHARE PRICE

American Century determines the NET ASSET VALUE (NAV) of the fund as of the
close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern
time) on each day the Exchange is open. On days when the Exchange is not open
(including certain U.S. holidays), we do not calculate the NAV. The NAV of a
fund share is the current value of the fund's assets, minus any liabilities,
divided by the number of fund shares outstanding.

We will price your purchase, exchange or redemption at the NAV next determined
after the insurance company separate account receives your transaction request
in good order.

DISTRIBUTIONS

Federal tax laws require the fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means that the fund will not be subject to state or
federal income tax on amounts distributed. The distributions generally consist
of dividends and interest received by the fund, as well as CAPITAL GAINS
realized on the sale of investment securities. VP International generally pays
distributions from net income and capital gains, if any, once a year in
December. The fund may make more frequent distributions, if necessary, to comply
with Internal Revenue Code provisions.

TAXES

Consult the prospectus of your insurance company separate account for a
discussion of the tax status of your variable contract.

[left margin]

The NET ASSET VALUE of the fund is the price of its shares.

CAPITAL GAINS are increases in the values of capital assets, such as stock, from
the time the assets are purchased. Tax becomes due on capital gains once an
asset is sold.

www.americancentury.com American Century Investments 9

FINANCIAL HIGHLIGHTS

UNDERSTANDING THE FINANCIAL HIGHLIGHTS

On a per-share basis, the table includes as appropriate

* share price at the beginning of the period

* investment income and capital gains or losses

* distributions of income and capital gains paid to shareholders

* share price at the end of the period

The table also includes some key statistics for the period as appropriate

* Total Return--the overall percentage of return of the fund, assuming the
reinvestment of all distributions

* Expense Ratio--operating expenses as a percentage of average net assets

* Net Income Ratio--net investment income as a percentage of average net asset

* Portfolio Turnover--the percentage of the fund's buying and selling activity

10 American Century Investments 1-800-345-3533

<TABLE>
<CAPTION>
VP INTERNATIONAL FUND

For a Share Outstanding Throughout the Years Ended December 31 (except as noted

PER-SHARE DATA
1998 1997 1996 1995 1994(1)

<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ......$ 6.84 $ 5.96 $ 5.33 $ 4.75 $ 5.00
----------- ----------- ----------- ----------- -----------
Income From Investment Operations
Net Investment Income (Loss) ............ 0.02 (0.02) 0.02(2) 0.03(2) --
Net Realized and Unrealized
Gain (Loss) on
Investment Transactions .............. 1.24 1.11 0.74 0.55 (0.25)
----------- ----------- ----------- ----------- -----------
Total From Investment Operations ........ 1.26 1.09 0.76 0.58 (0.25)
----------- ----------- ----------- ----------- -----------
Distributions
From Net Investment Income .............. (0.04) (0.06) (0.03) -- --
In Excess of Net Investment Income ...... -- (0.01) (0.07) -- --
From Net Realized Gains
on Investment Transactions ........... (0.36) (0.14) (0.03) -- --
In Excess of Net Realized Gains ......... (0.08) -- -- -- --
----------- ----------- ----------- ----------- -----------
Total Distributions ..................... (0.48) (0.21) (0.13) -- --
----------- ----------- ----------- ----------- -----------
Net Asset Value, End of Period ............$ 7.62 $ 6.84 $ 5.96 $ 5.33 $ 4.75
----------- ----------- ----------- ----------- -----------
Total Return(3) ......................... 18.76% 18.63% 14.41% 12.21% (5.00)%

RATIOS/SUPPLEMENTAL DATA
1998 1997 1996 1995 1994(1)

Ratio of Operating Expenses
to Average Net Assets .................. 1.47%(4) 1.50% 1.50% 1.50% 1.50%(5)
Ratio of Net Investment Income
(Loss) to Average Net Assets ........... 0.25%(4) (0.08)% 0.31% 0.70% (0.11)%(5)
Portfolio Turnover Rate ................... 181% 173% 154% 214% 157%
Net Assets, End of Period (in thousands) ..$ 418,962 $ 216,523 $ 101,335 $ 51,609 $ 17,993

(1) May 1, 1994 (inception) through December 31, 1994.

(2) Computed using average shares outstanding throughout the period.

(3) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(4) The fund's advisor voluntarily waived a portion of its management fee from
October 1, 1998 through November 16, 1998. In absence of the waiver, the
annualized ratio of operating expenses to average net assets and annualized
ratio of net investment income to average net assets would have been 1.48%
and 0.24% for the year ended December 31, 1998.

(5) Annualized.
</TABLE>

www.americancentury.com American Century Investments 11

NOTES

12 American Century Investments 1-800-345-3533

NOTES

www.americancentury.com American Century Investments 13

MORE INFORMATION ABOUT THE FUND IS CONTAINED IN THESE DOCUMENTS

ANNUAL AND SEMIANNUAL REPORTS

STATEMENT OF ADDITIONAL INFORMATION (SAI)

You many obtain a copy of the SAI or annual and semiannual reports at no charge
by contacting American Century at the telephone number or address below.

You also can get information about the fund (including the SAI) from the
Securities and Exchange Commission (SEC).

* In person SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location
and hours.

* On the Internet www.sec.gov

AMERICAN CENTURY INVESTMENTS
P.O. Box 419385
Kansas City, Missouri 64141-6385

INVESTMENT PROFESSIONAL SERVICE REPRESENTATIVE
1-800-345-3533 or 816-531-5575

WWW.AMERICANCENTURY.COM

FAX: 816-340-4360

TELECOMMUNICATIONS DEVICE FOR THE DEAF
1-800-634-4113 or 816-444-3485

BUSINESS, NOT-FOR-PROFIT AND
EMPLOYER-SPONSORED RETIREMENT PLANS
1-800-345-3533

Investment Company Act File No. 811-5188

[american century logo (reg.sm)]
American
Century

9905
SH-PRS-15707
<PAGE>
(front cover)

AMERICAN CENTURY

Prospectus

VP Income & Growth Fund

[american century logo (reg.sm)]
American
Century

MAY 1, 1999

(left hand margin)

The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this Prospectus is accurate or complete. Anyone who
tells you otherwise is committing a crime.

Distributed by
Funds Distributor, Inc.

(blank page)

Table of Contents

Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in green italics, look for its definition
in the left margin.

(graphic of hand with index finger pointing) This symbol highlights special
information and helpful tips.

American Century Investments

(blank page)

2 American Century Investments 1-800-345-3533

An Overview of the Fund

What is the fund's investment goal?

The fund seeks dividend growth, current income and capital appreciation by
investing in common stocks.

What are the fund's primary investment strategies and principal risks?

In selecting stocks for VP Income & Growth, the fund managers select primarily
from the largest 1,500 publicly traded U.S. companies. The managers use
quantitative, computer- driven models to construct the portfolios of stocks. A
more detailed description of the fund's investment strategies begins on page 5.

The fund's principal risks include

* Market Risk--The value of a fund's shares will go up and down based on the
performance of the companies whose securities it owns and other factors
affecting the securities market generally.

* Price Volatility--The value of the fund's shares may fluctuate significantly
in the short term.

* Principal Loss--As with all mutual funds, if you sell your shares when their
value is less than the price you paid, you will lose money.

Who may want to invest in the fund?

The fund may be a good investment if you are

* seeking long-term capital growth from your investment

* comfortable with the fund's short-term price volatility

* comfortable with the risks associated with the fund's investment strategy

Who may not want to invest in the fund?

The fund may not be a good investment if you are

* investing for a short period of time

* uncomfortable with volatility in the value of your investment

(left margin)

(graphic of hand with index finger pointing)
An investment in the fund is not a bank deposit, and it is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.

www.americancentury.com American Century Investments 3

Fund Performance History

VP Income & Growth Fund

Annual Total Returns

The following bar chart shows the performance of the fund's shares for each full
calendar year in the life of the fund. It indicates the volatility of the fund's
historical returns from year to year.

(bar chart data below)

VP Income and Growth fund
1998 26.87%

The highest and lowest quarterly returns for the period reflected in the bar
chart are:

Highest Lowest
- ------------------------------------------------------------------------------
VP Income & Growth 21.69% (1Q 1998) -11.25% (3Q 1998)

Average Annual Returns

The following table shows the average annual returns of the fund's shares for
the periods indicated during the life of the fund. The benchmark is an unmanaged
index that has no operating costs and is included in the table for performance
comparison.

For the calendar year
ended December 31, 1998 1 year Life of Fund (1)
- -------------------------------------------------------------------------------
VP Income & Growth 26.87% 30.68%
S&P 500 Index 28.68% 32.30%

(1) The inception date for VP Income & Growth is October 30, 1997.

(left margin)

(graphic of hand with index finger pointing)
The performance information on this page is designed to help you see how fund
returns can vary. Keep in mind that past performance does not predict how the
fund will perform in the future.

(graphic of hand with index finger pointing)
For current performance information, please call us at 1-800-345-3533 or visit
American Century's Web site at www.americancentury.com.

4 American Century Investments 1-800-345-3533

Information about the Fund

VP Income & Growth Fund

What is the fund's investment objective?

The fund seeks dividend growth, current income and capital appreciation by
investing in common stocks.

How does the fund pursue its investment objective?

The fund's investment strategy utilizes quantitative management techniques in a
two-step process that draws heavily on computer technology. In the first step,
the fund managers rank stocks, primarily the 1,500 largest publicly traded
companies in the United States (measured by the value of their stock) from most
attractive to least attractive. This is determined by using a computer model
that combines measures of a stock's value, as well as measures of its growth
potential. To measure value, the managers use ratios of stock price to book
value and stock price to cash flow, among others. To measure growth, the
managers use, among others, the rate of growth of a company's earnings and
changes in its earnings estimates.

In the second step, the managers use a technique called portfolio optimization.
In portfolio optimization, the managers use a computer to build a portfolio of
stocks from the ranking described earlier that they believe will provide the
optimal balance between risk and expected return. The goal is to create a fund
that provides better returns than the S&P 500 without taking on significant
additional risk. The managers also attempt to create a dividend yield for the
fund that will be greater than that of the S&P 500.

The fund managers do not attempt to time the market. Instead, under normal
market conditions, they intend to keep the fund essentially fully invested in
stocks regardless of the movement of stock prices generally. When the managers
believe that it is prudent, the fund may invest a portion of its assets in
convertible securities, foreign securities, short-term instruments,
non-leveraged stock index futures contracts and other similar securities. Stock
index futures contracts, a type of derivative security, can help the fund's cash
assets remain liquid while performing more like stocks. The fund has a policy
governing stock index futures and similar derivative securities to help manage
the risk of these types of investments. For example, the managers cannot
leverage the fund's assets by investing in a derivative security. A complete
description of the derivatives policy is included in the Statement of Additional
Information.

Additional information about VP Income & Growth's investments is available in
its annual and semiannual reports. In these reports you will find a discussion
of the market conditions and investment strategies that significantly affected
the fund's performance during the most recent fiscal period. You may get these
reports at no cost by calling the insurance company from which you purchased the
shares or by calling us.

(left hand margin)

Non-leveraged means that the fund may not invest in futures contracts where it
would be possible to lose more than the fund invested.

www.americancentury.com American Century Investments 5

What are the primary risks of investing in the fund?

The value of VP Income & Growth's shares depends on the value of the stock and
other securities it owns. The value of the individual securities VP Income &
Growth owns will go up and down depending on the performance of the companies
that issued them, general market and economic conditions, and investor
confidence.

As with all funds, at any given time the value of your shares of VP Income &
Growth may be worth more or less than the price you paid. If you sell your
shares when the value is less than the price you paid, you will lose money.

6 American Century Investments 1-800-345-3533

Management

Who manages the fund?

The Board of Directors, investment advisor and fund management team play key
roles in the management of the fund.

The Board of Directors

The Investment Advisor

For the services it provided to the fund during the most recent fiscal year, the
advisor received a unified management fee of 0.70% of the average net assets of
the fund. The amount of the management fee is calculated daily and paid monthly

The Fund Management Team

The portfolio managers on the investment team are identified below:

John Schniedwind
Mr. Schniedwind, Senior Vice President and Group Leader--Quantitative Equity,
has been a member of the team since the fund's inception. He joined American
Century in 1982 and also supervises other portfolio management teams. He has a
bachelor of science from Purdue University and an MBA in finance from the
University of California. He is a Chartered Financial Analyst.

Kurt Borgwardt
Mr. Borgwardt, Vice President, Portfolio Manager and Director of Quantitative
Equity Research, joined American Century in 1990, and has managed the
quantitative equity research effort since then. He has been a member of the team
since the fund's inception. He has a bachelor of arts from Stanford University
and an MBA with a specialization in finance from the University of Chicago.
He is a Chartered Financial Analyst.

(left margin)

(graphic of hand with index finger pointing
Code of Ethics

www.americancentury.com American Century Investments 7

Fund Performance

VP Income & Growth has the same management team and investment policies as
another fund in the American Century family of funds. The fees and expenses of
the funds are expected to be similar, and they will be managed with
substantially the same investment objective and strategies. Notwithstanding
these general similarities, this fund and the retail fund are separate mutual
funds that will have different investment performance. Differences in cash flows
into the two funds, the size of their portfolios, specific investments held by
the two funds, as well as the additional expenses of the insurance product, will
cause performance to differ.

Please consult the separate account prospectus for a description of the
insurance product through which the fund is offered and its associated fees.

Fundamental Investment Policies

Year 2000 Issues

8 American Century Investments 1-800-345-3533

Share Price, Distributions and Taxes

Purchase and Redemption of Shares

Abusive Trading Practices

We do not permit market-timing or other abusive trading practices in our funds.

Share Price

American Century determines the net asset value (NAV) of the fund as of the
close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern
time) on each day the Exchange is open. On days when the Exchange is not open
(including certain U.S. holidays), we do not calculate the NAV. The NAV of a
fund share is the current value of the fund's assets, minus any liabilities,
divided by the number of fund shares outstanding.

We will price your purchase, exchange or redemption at the NAV next determined
after the insurance company separate account receives your transaction request
in good order.

Distributions

Federal tax laws require the fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means that the fund will not be subject to state or
federal income tax on amounts distributed. The distributions generally consist
of dividends and interest received by the fund, as well as capital gains
realized on the sale of investment securities. VP Income & Growth generally pays
distributions from net income and capital gains, if any, once a year in
December. The fund may make more frequent distributions, if necessary, to comply
with Internal Revenue Code provisions.

Taxes

Consult the prospectus of your insurance company separate account for a
discussion of the tax status of your variable contract.

(left margin)

The net asset value of the fund is the price of its shares.

Capital gains are increases in the values of capital assets, such as stock, from
the time the assets are purchased. Tax becomes due on capital gains once an
asset is sold.

www.americancentury.com American Century Investments 9

Financial Highlights

Understanding the Financial Highlights

On a per-share basis, the table includes as appropriate

* share price at the beginning of the period

* investment income and capital gains or losses

* distributions of income and capital gains paid to shareholders

* share price at the end of the period

The table also includes some key statistics for the period as appropriate

* Total Return--the overall percentage of return of the fund, assuming the
reinvestment of all distributions

* Expense Ratio--operating expenses as a percentage of average net assets

* Net Income Ratio--net investment income as a percentage of average net assets

* Portfolio Turnover--the percentage of the fund's buying and selling activity

10 American Century Investments 1-800-345-3533

VP Income & Growth Fund

For a Share Outstanding Throughout the Years Ended December 31 (except as noted

Per-Share Data
1998 1997(1)

Net Asset Value, Beginning of Period ....... $ 5.39 $ 5.00
----------- -----------
Income From Investment Operations
Net Investment Income .................... 0.03 0.02
Net Realized and Unrealized Gain
on Investment Transactions ............... 1.41 0.37
----------- -----------
Total From Investment Operations ......... 1.44 0.39
----------- -----------
Distributions
From Net Investment Income ............... (0.04) --
From Net Realized Gains
on Investment Transactions ............... (0.01) --
----------- -----------
Total Distributions ...................... (0.05) --
----------- -----------
Net Asset Value, End of Period ............. $ 6.78 $ 5.39
----------- -----------
Total Return(2) .......................... 26.87% 7.80%
Ratios/Supplemental Data
1998 1997

Ratio of Operating Expenses
to Average Net Assets ...................... 0.70% 0.70%(3)
Ratio of Net Investment Income
to Average Net Assets ...................... 1.43% 1.94%(3)
Portfolio Turnover Rate .................... 55% 10%
Net Assets, End of Period (in thousands) ... $ 109,626 $ 1,230

(1) October 30, 1997 (inception) through December 31, 1997.

(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.

(3) Annualized.

www.americancentury.com American Century Investments 11

Notes

12 American Century Investments 1-800-345-3533

Notes

www.americancentury.com American Century Investments 13

More information about the fund is contained in these documents

Annual and Semiannual Reports

Statement of Additional Information (SAI)

You may obtain a copy of the SAI or annual and semiannual reports at no charge
by contacting American Century at the telephone number of address below.

You also can get information about the fund (including the SAI) from the
Securities and Exchange Commission (SEC).

* In person SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location
and hours.

* On the Internet www.sec.gov

* By mail SEC Public Reference Section
Washington, D.C. 20549-6009
(The SEC will charge a fee for copying the documents.)

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

American Century Investments
P.O. Box 419385
Kansas City, Missouri 64141-6385

Investment Professional Service Representative
1-800-345-3533 or 816-531-5575

www.americancentury.com

Fax: 816-340-4360

Telecommunications Device for the Deaf
1-800-634-4113 or 816-444-3485

Business, Not-For-Profit and Employer-Sponsored
Retirement Plans
1-800-345-3533

Investment Company Act File No. 811-5188

[american century logo (reg.sm)]
American
Century

9905
SH-PRS-15706
<PAGE>
AMERICAN CENTURY

Prospectus

VP Balanced Fund

[american century logo (reg.sm)]
American
Century

[left margin]

MAY 1, 1999

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANYONE
WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.

Distributed by Funds Distributor, Inc.

[end left margin]

TABLE OF CONTENTS

An Overview of the Fund ................................................... 3
Fund Performance History .................................................. 4
Information about the Fund ................................................ 5
Management ................................................................ 7
Share Price, Distributions and Taxes ...................................... 10
Financial Highlights ...................................................... 11

[left margin callouts]

Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in GREEN ITALICS, look for its definition
in the left margin.

+ This symbol highlights special information and helpful tips.

[end left margin callouts]

American Century Investments

2 American Century Investments 1-800-345-3533

AN OVERVIEW OF THE FUND

WHAT IS THE FUND'S INVESTMENT GOAL?

The fund seeks long-term capital growth and current income by investing
approximately 60% of its assets in equity securities and the remainder in bonds
and other fixed-income securities.

WHAT ARE THE FUND'S PRIMARY INVESTMENT STRATEGIES AND PRINCIPAL RISKS?

In selecting stocks for the equity portion of VP Balanced, the fund managers
select primarily from the largest 1,500 publicly traded U.S. companies. The
fixed-income portion of the fund is invested in a diversified portfolio of
high-grade securities. A more detailed description of the fund's investment
strategies begins on page 5.

The fund's principal risks include

* Market Risk--The value of a fund's shares will go up and down based on the
performance of the companies whose securities it owns and other factors
affecting the securities market generally.

* Interest Rate Risk--When interest rates change, the value of the fund's
fixed-income securities will be affected.

* Principal Loss--As with all mutual funds, if you sell your shares when their
value is less than the price you paid, you will lose money.

WHO MAY WANT TO INVEST IN THE FUND?

The fund may be a good investment if you are

* seeking a fund that combines the potential for long-term capital growth with
income

* seeking the convenience of a fund that invests in both equity and
fixed-income securities

* comfortable with the risks associated with the fund's investment strategy

WHO MAY NOT WANT TO INVEST IN THE FUND?

The fund may not be a good investment if you are

* investing for a short period of time

* uncomfortable with volatility in the value of your investment

[left margin callout]

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

[end left margin callout]

www.americancentury.com American Century Investments 3

FUND PERFORMANCE HISTORY

VP BALANCED FUND

Annual Total Returns

The following bar chart shows the performance of the fund's shares for each full
calendar year in the life of the fund. It indicates the volatility of the fund's
historical returns from year to year.

[bar chart data]

1998 1997 1996 1995 1994 1993 1992
15.77% 15.81% 12.21% 21.12% 0.61% 7.69% -6.04%

The highest and lowest quarterly returns for the period reflected in the bar
chart are:

Highest Lowest
- --------------------------------------------------------------------------------
VP Balanced 12.16% (2Q 1997) -7.28% (3Q 1998)

Average Annual Returns

The following table shows the average annual returns of the fund's shares for
the periods indicated during the life of the fund. The benchmarks are unmanaged
indices that have no operating costs and are included in the table for
performance comparison. The fund's benchmark was changed to the Lehman Aggregate
Bond Index beginning January 1, 1999. The fund's advisor believes this index
better represents the broad U.S. taxable bond market. The Lehman Aggregate Bond
Index includes mortgage-backed securities, while the fund's previous index did
not.

For the calendar year ended December 31, 1998 1 year 5 years Life of Fund(1)
- --------------------------------------------------------------------------------
VP Balanced 15.77% 12.89% 11.65%
S&P 500 Index 28.68% 24.05% 19.45%
Lehman Intermediate Government/Corporate Index 8.44% 6.60% 7.77%
Blended Index(2) 20.54% 17.07% 14.89%
Lehman Aggregate Bond Index 8.69% 7.27% 8.50%
Blended Index(3) 20.71% 17.36% 15.20%

(1) The inception date for VP Balanced is May 1, 1991.

(2) The Blended Index is a combination of two widely known indices in proportion
to the approximate asset mix of the fund. Accordingly, 60% of the Blended
Index consists of the performance of the S&P 500, which represents the
equity portion of the fund, and 40% of the Blended Index consists of the
Lehman Intermediate Government/Corporate Index, which represents the
fixed-income portion.

(3) The Blended Index is a combination of two widely known indices in proportion
to the approximate asset mix of the fund. Accordingly, 60% of the Blended
Index consists of the performance of the S&P 500, which represents the
equity portion of the fund, and 40% of the Blended Index consists of the
Lehman Aggregate Bond Index, which represents the fixed-income portion.

[left margin callouts]

+ The performance information on this page is designed to help you see how fund
returns can vary. Keep in mind that past performance does not predict how the
fund will perform in the future.

+ For current performance information, please call us at 1-800-345-3533 or visit
American Century's Web site at www.americancentury.com.

[end left margin callouts]

4 American Century Investments 1-800-345-3533

INFORMATION ABOUT THE FUND

VP BALANCED FUND

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

The fund seeks long-term capital growth and current income by investing
approximately 60% of its assets in equity securities and the remainder in bonds
and other fixed-income securities.

HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVE?

With the equity portion of the VP Balanced portfolio, the fund managers utilize
quantitative management techniques in a two-step process that draws heavily on
computer technology. In the first step, the fund managers rank stocks, primarily
the 1,500 largest publicly traded companies in the United States (measured by
the value of their stock) from most attractive to least attractive. This is
determined by using a computer model that combines measures of a stock's value,
as well as measures of its growth potential. To measure value, the managers use
ratios of stock price-to-book value and stock price-to-cash flow, among others.
To measure growth, the managers use, among others, the rate of growth of a
company's earnings and changes in its earnings estimates.

In the second step, the managers use a technique called portfolio optimization.
In portfolio optimization, the managers use a computer to build a portfolio of
stocks from the ranking described earlier that they believe will provide the
optimal balance between risk and expected return. The goal is to create an
equity portfolio that provides better returns than the S&P 500 without taking on
significant additional risk.

The fixed-income portion of the fund's portfolio is invested primarily in a
diversified portfolio of high-grade government, corporate, asset-backed and
similar securities payable in U.S. currency, with a minimum of 25% of the fund's
assets in fixed-income SENIOR SECURITIES. At least 80% of the fixed-income
assets will be invested in securities that, at the time of purchase, are rated
within the three highest categories by a nationally recognized statistical
rating organization. Up to 20% of the fixed-income portion may be invested in
the fourth category-rated securities, and up to 15% may be invested in the fifth
category. Under normal market conditions the WEIGHTED AVERAGE MATURITY for the
fixed-income portfolio will be in the three- to 10-year range.

The fund managers do not attempt to time the market. Instead, under normal
market conditions, they intend to keep the equity portion of the fund
essentially fully invested in stocks regardless of the movement of stock prices
generally. When the managers believe that it is prudent, the fund may invest a
portion of its assets in convertible securities, foreign securities, short-term
securities, NON-LEVERAGED stock index futures contracts and other similar
securities. Stock index futures contracts, a type of derivative security, can
help the fund's cash assets remain liquid while performing more like stocks. The
fund has a policy governing stock index futures and similar derivative
securities to help manage the risk of these types of investments. For example,
the managers cannot leverage the fund's assets by investing in a derivative
security. A complete description of the derivatives policy is included in the
Statement of Additional Information.

Additional information about VP Balanced's investments is available in its
annual and semiannual reports. In these reports you will find a discussion of
the market conditions and investment strategies that significantly affected the
fund's performance during the most recent fiscal period. You may get these
reports at no cost by calling the insurance company from which you purchased the
shares or by calling us.

[left margin callouts]

SENIOR SECURITIES is a term that refers to the bonds of a company that are first
in line for payment if it has difficulties meeting its payment obligations. As
long as a series of a company's bonds is not subordinated to another series of
the company's bonds, it is considered "senior" debt.

WEIGHTED AVERAGE MATURITY is a tool that the advisor uses to approximate the
remaining maturity of a fund's investment portfolio. Generally, the longer a
fund's weighted average maturity, the more sensitive it is to changes in
interest rates.

NON-LEVERAGED means that the fund may not invest in futures contracts where it
would be possible to lose more than the fund invested.

+ Fixed-income securities are rated by nationally recognized securities ratings
organizations (SROs), such as Moody's and Standard & Poor's. Each SRO has its
own system for classifying securities, but each tries to indicate a company's
ability to make timely payments of interest and principal. A detailed
description of SROs, their ratings system and what we do if a security isn't
rated is included in the Statement of Additional Information.

[end left margin callouts]

www.americancentury.com American Century Investments 5

WHAT ARE THE PRIMARY RISKS OF INVESTING IN THE FUND?

The value of VP Balanced's shares depends on the value of the stocks, bonds and
other securities it owns. The value of the individual equity securities VP
Balanced owns will go up and down depending on the performance of the companies
that issued them, general market and economic conditions, and investor
confidence. The value of the fund's fixed-income securities will be affected
primarily by rising or falling interest rates and the continued ability of the
issuers of these securities to make payments of interest and principal as they
become due.

Generally, when interest rates rise, the value of the fund's fixed-income
securities will decline. The opposite is true when interest rates decline. The
interest rate risk for VP Balanced is higher than for funds that have a shorter
weighted average maturity, such as money market and short-term bond funds.

The lowest-rated bonds in which the fund may invest, BBB- and BB-rated bonds,
contain some speculative characteristics. Having these bonds in the fund's
portfolio means the fund's value may go down more, if interest rates or other
economic conditions change, than if the fund contained only higher-rated bonds.

As with all funds, at any given time the value of your shares of VP Balanced may
be worth more or less than the price you paid. If you sell your shares when the
value is less than the price you paid, you will lose money.

6 American Century Investments 1-800-345-3533

MANAGEMENT

WHO MANAGES THE FUND?

The Board of Directors, investment advisor and fund management team play key
roles in the management of the fund.

THE BOARD OF DIRECTORS

THE INVESTMENT ADVISOR

For the services it provided to the fund during the most recent fiscal year, the
advisor received a unified management fee of 0.97% of the average net assets of
the fund. In November 1998, the fund's shareholders approved a new management
agreement with lower fees. Under the new agreement, the advisor will receive a
unified management fee of 0.90% of the first $250 million of the average net
assets of the fund, 0.85% of the next $250 million and 0.80% thereafter. The
amount of the management fee is calculated daily and paid monthly.

www.americancentury.com American Century Investments 7

THE FUND MANAGEMENT TEAM

The portfolio managers on the investment team are identified below:

JOHN SCHNIEDWIND

Mr. Schniedwind, Senior Vice President and Group Leader-Quantitative Equity, has
been a member of the team that manages the equity portion of VP Balanced since
November 1998. He joined American Century in 1982 and also supervises other
portfolio management teams. He has a bachelor of science from Purdue University
and an MBA in finance from the University of California. He is a Chartered
Financial Analyst.

JEFFREY R. TYLER

Mr. Tyler, Senior Vice President and Portfolio Manager, has been a member of the
team that manages the equity portion of VP Balanced since November 1998. He
joined American Century as a Portfolio Manager in January 1988. He has a
bachelor's degree in business economics from the University of California and an
MBA in finance and economics from Northwestern University. He is a Chartered
Financial Analyst.

JEFFREY L. HOUSTON

Mr. Houston, Vice President and Portfolio Manager, has been a member of the team
that manages the fixed-income portion of VP Balanced since June 1995. He joined
American Century as an Investment Analyst in November 1990 and was promoted to
Portfolio Manager in 1994. He has a bachelor of arts from the University of
Delaware and an MPA from Syracuse University. He is a Chartered Financial
Analyst.

JOHN F. WALSH

Mr. Walsh, Portfolio Manager, has been a member of the team that manages the
fixed-income portion of VP Balanced since January 1999. He joined American
Century in February 1996 as an Investment Analyst. Prior to joining American
Century, he served as an Assistant Vice President and Analyst at First
Interstate Bank, Los Angeles, California, from July 1993 to January 1996. He has
a bachelor's degree in marketing from Loyola Marymount University and an MBA in
finance from Creighton University.

[left margin callout]

+ CODE OF ETHICS

[end left margin callout]

8 American Century Investments 1-800-345-3533

FUND PERFORMANCE

VP Balanced has the same management team and investment policies as another fund
in the American Century family of funds. The fees and expenses of the funds are
expected to be similar, and they will be managed with substantially the same
investment objective and strategies. Notwithstanding these general similarities,
this fund and the retail fund are separate mutual funds that will have different
investment performance. Differences in cash flows into the two funds, the size
of their portfolios, specific investments held by the two funds, as well as the
additional expenses of the insurance product, will cause performance to differ.

Please consult the separate account prospectus for a description of the
insurance product through which the fund is offered and its associated fees.

FUNDAMENTAL INVESTMENT POLICIES

YEAR 2000 ISSUES

www.americancentury.com American Century Investments 9

SHARE PRICE, DISTRIBUTIONS AND TAXES

PURCHASE AND REDEMPTION OF SHARES

ABUSIVE TRADING PRACTICES

We do not permit market-timing or other abusive trading practices in our funds.

SHARE PRICE

American Century determines the NET ASSET VALUE (NAV) of the fund as of the
close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern
time) on each day the Exchange is open. On days when the Exchange is not open
(including certain U.S. holidays), we do not calculate the NAV. The NAV of a
fund share is the current value of the fund's assets, minus any liabilities,
divided by the number of fund shares outstanding.

We will price your purchase, exchange or redemption at the NAV next determined
after the insurance company separate account receives your transaction request
in good order.

DISTRIBUTIONS

Federal tax laws require the fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means that the fund will not be subject to state or
federal income tax on amounts distributed. The distributions generally consist
of dividends and interest received by the fund, as well as CAPITAL GAINS
realized on the sale of investment securities. VP Balanced generally pays
distributions from net income and capital gains, if any, once a year in
December. The fund may make more frequent distributions, if necessary, to comply
with Internal Revenue Code provisions.

TAXES

Consult the prospectus of your insurance company separate account for a
discussion of the tax status of your variable contract.

[left margin callouts]

The NET ASSET VALUE of the fund is the price of its shares.

CAPITAL GAINS are increases in the values of capital assets, such as stock, from
the time the assets are purchased. Tax becomes due on capital gains once an
asset is sold.

[end left margin callouts]

10 American Century Investments 1-800-345-3533

FINANCIAL HIGHLIGHTS

UNDERSTANDING THE FINANCIAL HIGHLIGHTS

On a per-share basis, the table includes as appropriate

* share price at the beginning of the period

* investment income and capital gains or losses

* distributions of income and capital gains paid to shareholders

* share price at the end of the period

The table also includes some key statistics for the period as appropriate

* Total Return--the overall percentage of return of the fund, assuming the
reinvestment of all distributions

* Expense Ratio--operating expenses as a percentage of average net assets

* Net Income Ratio--net investment income as a percentage of average net asset

* Portfolio Turnover--the percentage of the fund's buying and selling activity

www.americancentury.com American Century Investments 11

<TABLE>
<CAPTION>
VP BALANCED FUND

For a Share Outstanding Throughout the Years Ended December 31

PER-SHARE DATA

1998 1997 1996 1995 1994

<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ....................$ 8.24 $ 7.54 $ 7.04 $ 5.96 $ 6.07

Income From Investment Operations

Net Investment Income ................................. 0.16 0.19 0.18 0.17 0.15

Net Realized and Unrealized Gain (Loss)
on Investment Transactions ............................ 1.04 0.94 0.65 1.08 (0.11)

Total From Investment Operations ...................... 1.20 1.13 0.83 1.25 0.04

Distributions

From Net Investment Income ............................ (0.15) (0.09) (0.13) (0.17) (0.15)

From Net Realized Gains on Investment Transactions .... (0.95) (0.34) (0.20) -- --

Total Distributions ................................... (1.10) (0.43) (0.33) (0.17) (0.15)

Net Asset Value, End of Year ..........................$ 8.34 $ 8.24 $ 7.54 $ 7.04 $ 5.96

Total Return(1) ....................................... 15.77% 15.81% 12.21% 21.12% 0.61%

RATIOS/SUPPLEMENTAL DATA

1998 1997 1996 1995 1994

Ratio of Operating Expenses to Average Net Assets ..... 0.97%(2) 1.00% 0.99% 0.97% 1.00%

Ratio of Net Investment Income to Average Net Assets .. 2.16%(2) 2.19% 2.43% 2.69% 2.49%

Portfolio Turnover Rate ............................... 158% 125% 130% 87% 63%

Net Assets, End of Year (in thousands) ................$ 280,437 $ 219,087 $ 215,393 $ 153,823 $ 105,100

(1) Total return assumes reinvestment of dividends and capital gains
distributions, if any.

(2) The fund's advisor voluntarily waived a portion of its management fee from
October 1, 1998 through November 16, 1998. In absence of the waiver, the
annualized ratio of operating expenses to average net assets and annualized
ratio of net investment income to average net assets would have been 0.99%
and 2.15%, respectively, for the year ended December 31, 1998.
</TABLE>

12 American Century Investments 1-800-345-3533

NOTES

www.americancentury.com American Century Investments 13

MORE INFORMATION ABOUT THE FUND IS CONTAINED IN THESE DOCUMENTS

ANNUAL AND SEMIANNUAL REPORTS

STATEMENT OF ADDITIONAL INFORMATION (SAI)

You may obtain a copy of the SAI or annual and semiannual reports at no charge
by contacting American Century at the telephone number or address below.

You also can get information about the fund (including the SAI) from the
Securities and Exchange Commission (SEC).

* In person SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location and hours.

* On the Internet www.sec.gov

* By mail SEC Public Reference Section
Washington, D.C. 20549-6009
(The SEC will charge a fee for copying the
documents.)

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

AMERICAN CENTURY INVESTMENTS
P.O. Box 419385
Kansas City, Missouri 64141-6385

INVESTMENT PROFESSIONAL SERVICE REPRESENTATIVE
1-800-345-3533 or 816-531-5575

WWW.AMERICANCENTURY.COM

FAX: 816-340-4360

TELECOMMUNICATIONS DEVICE FOR THE DEAF
1-800-634-4113 or 816-444-3485

BUSINESS, NOT-FOR-PROFIT AND
EMPLOYER-SPONSORED RETIREMENT PLANS
1-800-345-3533

Investment Company Act File No. 811-5188

[american century logo (reg.sm)]
American
Century

9905
SH-PRS-15704
<PAGE>
AMERICAN CENTURY

Prospectus

VP Advantage Fund

[american century logo (reg.sm)]
American
Century

[left margin]

MAY 1, 1999

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANYONE
WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.

Distributed by Funds Distributor, Inc.

[end left margin]

TABLE OF CONTENTS

An Overview of the Fund ................................................... 3
Fund Performance History .................................................. 4
Information about the Fund ................................................ 5
Management ................................................................ 7
Share Price, Distributions and Taxes ...................................... 10
Financial Highlights ...................................................... 11

[left margin callouts]

Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in GREEN ITALICS, look for its definition
in the left margin.

+ This symbol highlights special information and helpful tips.

[end left margin callouts]

American Century Investments

2 American Century Investments 1-800-345-3533

AN OVERVIEW OF THE FUND

WHAT IS THE FUND'S INVESTMENT GOAL?

The fund seeks long-term capital growth and current income by investing
approximately 40% of its assets in equity securities, 40% in fixed-income
securities and the remaining 20% in cash and cash equivalents.

WHAT ARE THE FUND'S PRIMARY INVESTMENT STRATEGIES AND PRINCIPAL RISKS?

In selecting stocks for the equity portion of VP Advantage, the fund managers
look for common stocks of growing companies. The basis of the equity strategy is
that, over the long term, stocks of companies with earnings and revenue growth
have a greater-than-average chance to increase in value over time. The
fixed-income and cash portions of the fund are invested in fixed-income
securities of the U.S. government and its agencies and instrumentalities. A more
detailed description of the fund's investment strategies begins on page 5.

The fund's principal risks include

* Market Risk--The value of a fund's shares will go up and down based on the
performance of the companies whose securities it owns and other factors
affecting the securities market generally.

* Interest Rate Risk--When interest rates change, the value of the fund's
fixed-income securities will be affected.

* Principal Loss--As with all mutual funds, if you sell your shares when their
value is less than the price you paid, you will lose money.

WHO MAY WANT TO INVEST IN THE FUND?

The fund may be a good investment if you are

* seeking a fund that combines the potential for long-term capital growth with
income

* seeking the convenience of a fund that invests in both equity and
fixed-income securities

* comfortable with the risks associated with the fund's investment strategy

WHO MAY NOT WANT TO INVEST IN THE FUND?

The fund may not be a good investment if you are

* investing for a short period of time

* uncomfortable with volatility in the value of your investment

[left margin callout]

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

[end left margin callout]

www.americancentury.com American Century Investments 3

FUND PERFORMANCE HISTORY

VP ADVANTAGE FUND

Annual Total Returns

The following bar chart shows the performance of the fund's shares for each full
calendar year in the life of the fund. It indicates the volatility of the fund's
historical returns from year to year.

[bar chart data]

1998 1997 1996 1995 1994 1993 1992
17.19% 12.83% 9.25% 16.75% 1.03% 6.84% -3.76%

The highest and lowest quarterly returns for the period reflected in the bar
chart are:

Highest Lowest
- --------------------------------------------------------------------------------
VP Advantage 9.98% (4Q 1998) -5.07% (1Q 1992)

Average Annual Returns

For the calendar year ended December 31, 1998 1 year 5 years Life of Fund(1)
- --------------------------------------------------------------------------------
VP Advantage 17.19% 11.25% 9.75%
Lehman Intermediate Government Bond Index 8.49% 6.45% 7.57%
S&P 500 Index 28.68% 24.05% 9.74%
90-Day Treasury Bill Index 4.88% 5.02% 4.54%
Blended Index(2) 15.80% 13.21% 11.82%

(1) The inception date for VP Advantage is August 1, 1991.

(2) The Blended Index is a combination of three widely known indices in
proportion to the approximate asset mix of the fund. Accordingly, 40% of the
Blended Index consists of the performance of the Lehman Intermediate
Government Bond Index, another 40% of the Blended Index consists of the S&P
500 Index, and the remaining 20% consists of the 90-Day Treasury Bill Index.

[left margin callouts]

+ The performance information on this page is designed to help you see how fund
returns can vary. Keep in mind that past performance does not predict how the
fund will perform in the future.

+ For current performance information, please call us at 1-800-345-3533 or visit
American Century's Web site at www.americancentury.com.

[end left margin callouts]

4 American Century Investments 1-800-345-3533

INFORMATION ABOUT THE FUND

VP ADVANTAGE FUND

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVE?

For the equity portion of the fund, the fund managers use a growth investment
strategy developed by American Century to invest in stocks of companies that
they believe will increase in value over time. This strategy looks for companies
with earnings and revenues that are not only growing, but growing at a
successively faster, or accelerating, pace. This strategy is based on the
premise that, over the long term, the stocks of companies with accelerating
earnings and revenues have a greater-than-average chance to increase in value.

The managers use a bottom-up approach to select stocks to buy for the fund. That
means they first look for strong, growing companies to invest in, rather than
simply buying any company in a growing industry or sector. Using American
Century's extensive computer database, the managers track financial information
for thousands of companies to identify trends in the companies' earnings and
revenues. This information is used to help the fund managers select or decide to
continue to hold the stocks of companies they believe will be able to sustain
accelerating growth, and to sell stocks of companies whose growth begins to slow
down.

Although most of the equity portion of the fund will be invested in U.S.
companies, there is no limit on the amount of assets the fund can invest in
foreign companies. Most of the fund's foreign investments are in companies
located and doing business in developed countries. Investments in foreign
securities present some unique risks that are more fully described in the fund's
Statement of Additional Information.

The fixed-income and cash portions of the fund will be invested only in
obligations of the U.S. government and its agencies and instrumentalities. The
fixed-income securities in which the fund may invest include (1) direct
obligations of the United States, such as Treasury bonds, notes and bonds, and
(2) obligations (including mortgage-backed and other asset-backed securities)
issued or guaranteed by agencies and instrumentalities of the U.S. government
that are established under an act of Congress. Under normal market conditions,
the fixed-income portion is expected to have a WEIGHTED AVERAGE MATURITY of
three to 10 years, and the cash portion is expected to have a weighted average
maturity of six months or less. Securities will be chosen based on their income
level and price stability.

The fund managers do not attempt to time the market. Instead, under normal
market conditions, they intend to keep the fund essentially fully invested in
stocks regardless of the movement of stock prices generally. When the managers
believe that it is prudent, the fund may invest a portion of its assets in
convertible securities, foreign securities, short-term securities, NON-LEVERAGED
stock index futures contracts and other similar securities. Stock index futures
contracts, a type of derivative security, can help the fund's cash assets remain
liquid while performing more like stocks. The fund has a policy governing stock
index futures and similar derivative securities to help manage the risk of these
types of investments. For example, the managers cannot leverage the fund's
assets by investing in a derivative security. A complete description of the
derivatives policy is included in the Statement of Additional Information.

In the event of exceptional market or economic conditions, or if the fund is
unable to find securities meeting its criteria of selection, the fund may, as a
temporary defensive measure, invest all or a substantial portion of its assets
in cash or cash equivalents. To the extent the fund assumes a defensive
position, it will not be pursuing its objective of capital growth.

[left margin callouts]

+ Accelerating growth is shown, for example, by growth that is faster this
quarter than last or faster this year than the year before.

NON-LEVERAGED means that the fund may not invest in futures contracts where it
would be possible to lose more than the fund invested.

[end left margin callouts]

www.americancentury.com American Century Investments 5

Additional information about VP Advantage's investments is available in its
annual and semiannual reports. In these reports you will find a discussion of
the market conditions and investment strategies that significantly affected the
fund's performance during the most recent fiscal period. You may get these
reports at no cost by calling the insurance company from which you purchased the
shares or by calling us.

WHAT ARE THE PRIMARY RISKS OF INVESTING IN THE FUND?

The value of VP Advantage's shares depends on the value of the stocks, bonds and
other securities it owns. The value of the individual equity securities VP
Advantage owns will go up and down depending on the performance of the companies
that issued them, general market and economic conditions, and investor
confidence. The value of the fund's fixed-income securities will be affected
primarily by rising or falling interest rates and the continued ability of the
issuers of these securities to make payments of interest and principal as they
become due.

Generally, when interest rates rise, the value of the fund's fixed-income
securities will decline. The opposite is true when interest rates decline. The
interest rate risk for VP Advantage is higher than for funds that have a shorter
weighted average maturity, such as money market and short-term bond funds.

As with all funds, at any given time the value of your shares of VP Advantage
may be worth more or less than the price you paid. If you sell your shares when
the value is less than the price you paid, you will lose money.

The fund managers may buy a large amount of a company's stock quickly for the
equity portion of the fund, and often will dispose of it quickly if the
company's earnings or revenues decline. While the managers believe this strategy
provides substantial appreciation potential over the long term, in the short
term it can create a significant amount of share price volatility.

Market performance tends to be cyclical, and in the various cycles, certain
investment styles may fall in and out of favor. If the market is not favoring
the fund's style, the fund's gains may not be as big as, or their losses may be
bigger than, other equity funds using different investment styles.

6 American Century Investments 1-800-345-3533

MANAGEMENT

WHO MANAGES THE FUND?

The Board of Directors, investment advisor and fund management team play key
roles in the management of the fund.

THE BOARD OF DIRECTORS

THE INVESTMENT ADVISOR

For the services it provided to the fund during the most recent fiscal year, the
advisor received a unified management fee of 1.00% of the average net assets of
the fund. The amount of the management fee is calculated daily and paid monthly.

www.americancentury.com American Century Investments 7

THE FUND MANAGEMENT TEAM

The portfolio managers on the investment team are identified below:

JAMES E. STOWERS III

Mr. Stowers, Chief Executive Officer and Portfolio Manager, joined American
Century as a Portfolio Manager in 1981. He has been a member of the team that
manages the equity portion of VP Advantage since the fund's inception. He has a
bachelor's degree in finance from Arizona State University.

JEFFREY L. HOUSTON

Mr. Houston, Vice President and Portfolio Manager, has been a member of the team
that manages the fixed-income portion of VP Advantage since June 1995. He joined
American Century as an Investment Analyst in November 1990 and was promoted to
Portfolio Manager in 1994. He has a bachelor of arts from the University of
Delaware and an MPA from Syracuse University. He is a Chartered Financial
Analyst.

JOHN R. SYKORA

Mr. Sykora, Vice President and Portfolio Manager, has been a member of the team
that manages the equity portion of VP Advantage since November 1997. He joined
American Century in May 1994 as an Investment Analyst. Before joining American
Century, he served as a Financial Analyst for Business Men's Assurance Company
of America, Kansas City, Missouri, from August 1993 to April 1994. He has a
bachelor's degree in accounting and finance and an MBA in finance from Michigan
State University. He is a Chartered Financial Analyst.

BRUCE A. WIMBERLY

Mr. Wimberly, Vice President and Portfolio Manager, has been a member of the
team that manages the equity portion of VP Advantage since July 1996. He joined
American Century in September 1994 as an Investment Analyst. Before joining
American Century, he attended the Kellogg Graduate School of Management,
Northwestern University, from August 1992 to August 1994, where he obtained his
MBA. He also has a bachelor of arts from Middlebury College.

JOHN F. WALSH

Mr. Walsh, Portfolio Manager, has been a member of the team that manages the
fixed-income portion of VP Advantage since January 1999. He joined American
Century in February 1996 as an Investment Analyst. Prior to joining American
Century, he served as an Assistant Vice President and Analyst at First
Interstate Bank, Los Angeles, California, from July 1993 to January 1996. He has
a bachelor's degree in marketing from Loyola Marymount University and an MBA in
finance from Creighton University.

[left margin callout]

+ CODE OF ETHICS

[end left margin callout]

8 American Century Investments 1-800-345-3533

FUNDAMENTAL INVESTMENT POLICIES

YEAR 2000 ISSUES

www.americancentury.com American Century Investments 9

SHARE PRICE, DISTRIBUTIONS AND TAXES

PURCHASE AND REDEMPTION OF SHARES

ABUSIVE TRADING PRACTICES

We do not permit market-timing or other abusive trading practices in our funds.

SHARE PRICE

American Century determines the NET ASSET VALUE (NAV) of the fund as of the
close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern
time) on each day the Exchange is open. On days when the Exchange is not open
(including certain U.S. holidays), we do not calculate the NAV. The NAV of a
fund share is the current value of the fund's assets, minus any liabilities,
divided by the number of fund shares outstanding.

We will price your purchase, exchange or redemption at the NAV next determined
after the insurance company separate account receives your transaction request
in good order.

DISTRIBUTIONS

Federal tax laws require the fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means that the fund will not be subject to state or
federal income tax on amounts distributed. The distributions generally consist
of dividends and interest received by the fund, as well as CAPITAL GAINS
realized on the sale of investment securities. VP Advantage generally pays
distributions from net income and capital gains, if any, once a year in
December. The fund may make more frequent distributions, if necessary, to comply
with Internal Revenue Code provisions.

TAXES

Consult the prospectus of your insurance company separate account for a
discussion of the tax status of your variable contract.

[left margin callouts]

The NET ASSET VALUE of the fund is the price of its shares.

CAPITAL GAINS are increases in the values of capital assets, such as stock, from
the time the assets are purchased. Tax becomes due on capital gains once an
asset is sold.

[end left margin callouts]

10 American Century Investments 1-800-345-3533

FINANCIAL HIGHLIGHTS

UNDERSTANDING THE FINANCIAL HIGHLIGHTS

On a per-share basis, the table includes as appropriate

* share price at the beginning of the period

* investment income and capital gains or losses

* distributions of income and capital gains paid to shareholders

* share price at the end of the period

The table also includes some key statistics for the period as appropriate

* Total Return--the overall percentage of return of the fund, assuming the
reinvestment of all distributions

* Expense Ratio--operating expenses as a percentage of average net assets

* Net Income Ratio--net investment income as a percentage of average net asset

* Portfolio Turnover--the percentage of the fund's buying and selling activity

www.americancentury.com American Century Investments 11

<TABLE>
<CAPTION>
VP ADVANTAGE FUND

For a Share Outstanding Throughout the Years Ended December 31

PER-SHARE DATA

1998 1997 1996 1995 1994

<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ....................$ 6.60 $ 6.29 $ 6.19 $ 5.48 $ 5.57

Income From Investment Operations

Net Investment Income ............................... 0.19 0.19 0.20 0.20 0.15

Net Realized and Unrealized Gain (Loss)
on Investment Transactions .......................... 0.86 0.56 0.34 0.71 (0.09)

Total From Investment Operations .................... 1.05 0.75 0.54 0.91 0.06

Distributions

From Net Investment Income .......................... (0.15) (0.10) (0.15) (0.20) (0.15)

From Net Realized Gains on Investment Transactions .. (0.56) (0.34) (0.29) -- --

Total Distributions ................................. (0.71) (0.44) (0.44) (0.20) (0.15)

Net Asset Value, End of Year ..........................$ 6.94 $ 6.60 $ 6.29 $ 6.19 $ 5.48

Total Return(1) ..................................... 17.19% 12.83% 9.25% 16.75% 1.03%

RATIOS/SUPPLEMENTAL DATA

1998 1997 1996 1995 1994

Ratio of Operating Expenses to Average Net Assets ..... 1.00% 0.99% 0.98% 0.95% 1.00%

Ratio of Net Investment Income to Average Net Assets .. 2.74% 2.85% 3.10% 3.32% 2.65%

Portfolio Turnover Rate ............................... 82% 69% 80% 99% 57%

Net Assets, End of Year (in thousands) ................$ 26,308 $ 25,244 $ 25,230 $ 24,037 $ 22,413
</TABLE>

(1) Total return assumes reinvestment of dividends and capital gains
distributions, if any.

12 American Century Investments 1-800-345-3533

NOTES

www.americancentury.com American Century Investments 13

MORE INFORMATION ABOUT THE FUND IS CONTAINED IN THESE DOCUMENTS

ANNUAL AND SEMIANNUAL REPORTS

STATEMENT OF ADDITIONAL INFORMATION (SAI)

You may obtain a copy of the SAI or annual and semiannual reports at no charge
by contacting American Century at the telephone number or address below.

You also can get information about the fund (including the SAI) from the
Securities and Exchange Commission (SEC).

* In person SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location and hours.

* On the Internet www.sec.gov

* By mail SEC Public Reference Section
Washington, D.C. 20549-6009
(The SEC will charge a fee for copying the
documents.)

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

AMERICAN CENTURY INVESTMENTS
P.O. Box 419385
Kansas City, Missouri 64141-6385

INVESTMENT PROFESSIONAL SERVICE REPRESENTATIVE
1-800-345-3533 or 816-531-5575

WWW.AMERICANCENTURY.COM

FAX: 816-340-4360

TELECOMMUNICATIONS DEVICE FOR THE DEAF
1-800-634-4113 or 816-444-3485

BUSINESS, NOT-FOR-PROFIT AND
EMPLOYER-SPONSORED RETIREMENT PLANS
1-800-345-3533

Investment Company Act File No. 811-5188

[american century logo(reg.sm)]
American
Century

9905
SH-PRS-15703
<PAGE>
AMERICAN CENTURY

Prospectus

VP Capital Appreciation Fund

[american century logo (reg.sm)]
American
Century

[left margin]

MAY 1, 1999

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR
COMPLETE. ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.

Distributed by Funds Distributor, Inc.

[blank page]

TABLE OF CONTENTS

[left margin]

Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in GREEN ITALICS, look for its definition
in the left margin.

[graphic of hand with pointing index finger] This symbol highlights special
information and helpful tips.

American Century Investments

[blank page]

2 American Century Investments 1-800-345-3533

AN OVERVIEW OF THE FUND

WHAT IS THE FUND'S INVESTMENT GOAL?

The fund seeks capital growth.

WHAT ARE THE FUND'S PRIMARY INVESTMENT STRATEGIES AND PRINCIPAL RISKS?

The fund managers look for common stocks of growing companies. The basis of the
strategy used by the fund is that, over the long term, stocks of companies with
earnings and revenue growth have a greater-than-average chance to increase in
value over time. A more detailed description of American Century's "growth"
investment style begins on page 5.

The fund's principal risks include

* Market Risk--The value of a fund's shares will go up and down based on the
performance of the companies whose securities it owns and other factors
affecting the securities market generally.

* Price Volatility--The value of the fund's shares may fluctuate significantly
in the short term.

* Principal Loss--As with all mutual funds, if you sell your shares when their
value is less than the price you paid, you will lose money.

WHO MAY WANT TO INVEST IN THE FUND?

The fund may be a good investment if you are

* seeking long-term capital growth from your investment

* comfortable with the fund's short-term price volatility

* comfortable with the risks associated with the fund's investment strategy

WHO MAY NOT WANT TO INVEST IN THE FUND?

The fund may not be a good investment if you are

* investing for a short period of time

* uncomfortable with volatility in the value of your investment

[left margin]

[graphic of hand with pointing index finger] An investment in the fund is not a
bank deposit, and it is not insured or guaranteed by the Federal Deposit
Insurance Corporation (FDIC) or any other government agency.

www.americancentury.com American Century Investments 3

FUND PERFORMANCE HISTORY

VP CAPITAL APPRECIATION FUND

Annual Total Returns

The following bar chart shows the performance of the fund's shares for each of
the last 10 calendar years. It indicates the volatility of the fund's historical
returns from year to year.

[bar chart]
<TABLE>
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
- -----------------------------------------------------------------------------------------------
VP Capital
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Appreciation -2.16% -3.26% -4.32% 31.10% -1.17% 10.31% -1.34% 41.88% -1.25% 28.72%
</TABLE>

The highest and lowest quarterly returns for the period reflected in the bar
chart are:

Highest Lowest
- --------------------------------------------------------------------------------
VP Capital Appreciation 22.23% (1Q 1991) -19.03% (3Q 1998)

Average Annual Returns

The following table shows the average annual returns of the fund's shares for
the periods indicated during the last 10 calendar years. The benchmarks are
unmanaged indices that have no operating costs and are included in the table for
performance comparison. The S&P 500 is viewed as a broad measure of U.S. stock
performance, while the S&P MidCap 400 is considered to represent the
performances of mid-capitalization stocks generally and the S&P MidCap 400/BARRA
Growth Index represents the half of the S&P 400 with higher price/book ratios.

For the calendar year Life of
ended December 31, 1998 1 year 5 years 10 years Fund(1)
- --------------------------------------------------------------------------------

VP Capital Appreciation -2.16% 3.25% 8.70% 8.25%

S&P MidCap 400 Index 19.11% 18.84% 19.29% 20.08%

S&P 500 Index 28.68% 24.05% 19.17% 19.04%

S&P MidCap 400/BARRA
Growth Index 34.86% 19.77% N/A N/A

(1) The inception date for VP Capital Appreciation is November 20, 1987.

[left margin]

[graphic of hand with pointing index finger] The performance information on this
page is designed to help you see how fund returns can vary. Keep in mind that
past performance does not predict how the fund will perform in the future.

[graphic of hand with pointing index finger] For current performance
information, please call us at 1-800-345-3533 or visit American Century's Web
site at www.americancentury.com.

4 American Century Investments 1-800-345-3533

INFORMATION ABOUT THE FUND

VP CAPITAL APPRECIATION FUND

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

The fund seeks capital growth.

HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVE?

The fund managers use a growth investment strategy developed by American Century
to invest in stocks of companies that they believe will increase in value over
time. This strategy looks for companies with earnings and revenues that are not
only growing, but growing at a successively faster, or accelerating, pace. This
strategy is based on the premise that, over the long term, the stocks of
companies with accelerating earnings and revenues have a greater-than-average
chance to increase in value.

Although most of the fund's assets will be invested in U.S. companies, there is
no limit on the amount of assets the fund can invest in foreign companies. Most
of the fund's foreign investments are in companies located and doing business in
developed countries. Investments in foreign securities present some unique risks
that are more fully described in the fund's Statement of Additional Information.

The fund managers do not attempt to time the market. Instead, under normal
market conditions, they intend to keep the fund essentially fully invested in
stocks regardless of the movement of stock prices generally. When the managers
believe that it is prudent, the fund may invest a portion of its assets in
convertible securities, foreign securities, short-term instruments,
NON-LEVERAGED stock index futures contracts and other similar securities. Stock
index futures contracts, a type of derivative security, can help the fund's cash
assets remain liquid while performing more like stocks. The fund has a policy
governing stock index futures and similar derivative securities to help manage
the risk of these types of investments. For example, the managers cannot
leverage the fund's assets by investing in a derivative security. A complete
description of the derivatives policy is included in the Statement of Additional
Information.

Additional information about VP Capital Appreciation's investments is available
in its annual and semiannual reports. In these reports you will find a
discussion of the market conditions and investment strategies that significantly
affected the fund's performance during the most recent fiscal period. You may
get these reports at no cost by calling the insurance company through which you
purchased the shares or by calling us.

WHAT KINDS OF SECURITIES DOES THE FUND BUY?

The fund will usually purchase common stocks of U.S. and foreign companies, but
it can purchase other types of securities as well, such as domestic and foreign
preferred stocks, convertible securities, equity-equivalent securities, notes,
bonds and other debt securities. The fund limits its purchase of debt securities
to investment-grade obligations.

[left margin]

[graphic of hand with pointing index finger] Accelerating growth is shown, for
example, by growth that is faster this quarter than last or faster this year
than the year before.

NON-LEVERAGED means that the fund may not invest in futures contracts where it
would be possible to lose more than the fund invested.

www.americancentury.com American Century Investments 5

WHAT ARE THE PRIMARY RISKS OF INVESTING IN THE FUND?

The value of VP Capital Appreciation's shares depends on the value of the stocks
and other securities it owns. The value of the individual securities VP Capital
Appreciation owns will go up and down depending on the performance of the
companies that issued them, general market and economic conditions, and investor
confidence.

The fund managers may buy a large amount of a company's stock quickly, and often
will dispose of it quickly if the company's earnings or revenues decline. While
the managers believe this strategy provides substantial appreciation potential
over the long term, in the short term it can create a significant amount of
share price volatility. This volatility can be greater than that of the average
stock fund.

As with all funds, at any given time the value of your shares of VP Capital
Appreciation may be worth more or less than the price you paid. If you sell your
shares when the value is less than the price you paid, you will lose money.

Market performance tends to be cyclical, and in the various cycles, certain
investment styles may fall in and out of favor. If the market is not favoring
the fund's style, the fund's gains may not be as big as, or its losses may be
bigger than, other equity funds using different investment styles.

6 American Century Investments 1-800-345-3533

MANAGEMENT

WHO MANAGES THE FUND?

The Board of Directors, investment advisor and fund management team play key
roles in the management of the fund.

THE BOARD OF DIRECTORS

THE INVESTMENT ADVISOR

THE FUND MANAGEMENT TEAM

The portfolio managers on the investment team are identified below:

HAROLD S. BRADLEY

Mr. Bradley, Senior Vice President and Portfolio Manager, has been a member of
the team that manages VP Capital Appreciation since March 1998. He joined
American Century in 1988 and for 10 years managed the global equity, futures and
foreign exchange trading activities for American Century. He has a bachelor of
arts from Marquette University.

LINDA K. PETERSON

Ms. Peterson, Portfolio Manager, has been a member of the team that manages VP
Capital Appreciation since March 1998. She joined American Century in 1986. She
served as an Investment Analyst for American Century's growth-oriented equity
funds from April 1994 until February 1998. She has a bachelor's degree in
finance from the University of Northern Iowa and an MBA from the University of
Missouri-Kansas City. She is a Chartered Financial Analyst.

[left margin]

[graphic of hand with pointing index finger] Code of Ethics
American Century has a Code of Ethics designed to ensure that the interests of
fund shareholders come before the interests of the people who manage the fund.
Among other provisions, the Code of Ethics prohibits portfolio managers and
other investment personnel from buying securities in an initial public offering
or from profiting from the purchase and sale of the same security within 60
calendar days. In addition, the Code of Ethics requires portfolio managers and
other employees with access to information about the purchase or sale of
securities by the fund to obtain approval before executing permitted personal
trades.

www.americancentury.com American Century Investments 7

FUNDAMENTAL INVESTMENT POLICIES

YEAR 2000 ISSUES

8 American Century Investments 1-800-345-3533

SHARE PRICE, DISTRIBUTIONS AND TAXES

PURCHASE AND REDEMPTION OF SHARES

ABUSIVE TRADING PRACTICES

We do not permit market-timing or other abusive trading practices in our funds.

SHARE PRICE

American Century determines the NET ASSET VALUE (NAV) of the fund as of the
close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern
time) on each day the Exchange is open. On days when the Exchange is not open
(including certain U.S. holidays), we do not calculate the NAV. The NAV of a
fund share is the current value of the fund's assets, minus any liabilities,
divided by the number of fund shares outstanding.

We will price your purchase, exchange or redemption at the NAV next determined
after the insurance company separate account receives your transaction request
in good order.

DISTRIBUTIONS

Federal tax laws require the fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means that the fund will not be subject to state or
federal income tax on amounts distributed. The distributions generally consist
of dividends and interest received by the fund, as well as CAPITAL GAINS
realized on the sale of investment securities. VP Capital Appreciation generally
pays distributions from net income and capital gains, if any, once a year in
December. The fund may make more frequent distributions, if necessary, to comply
with Internal Revenue Code provisions.

TAXES

Consult the prospectus of your insurance company separate account for a
discussion of the tax status of your variable contract.

[left margin]

The NET ASSET VALUE of the fund is the price of its shares.

CAPITAL GAINS are increases in the values of capital assets, such as stock, from
the time the assets are purchased. Tax becomes due on capital gains once an
asset is sold.

www.americancentury.com American Century Investments 9

FINANCIAL HIGHLIGHTS

UNDERSTANDING THE FINANCIAL HIGHLIGHTS

On a per-share basis, the table includes as appropriate

* share price at the beginning of the period

* investment income and capital gains or losses

* distributions of income and capital gains paid to shareholders

* share price at the end of the period

The table also includes some key statistics for the period as appropriate

* Total Return--the overall percentage of return of the fund, assuming the
reinvestment of all distributions

* Expense Ratio--operating expenses as a percentage of average net assets

* Net Income Ratio--net investment income as a percentage of average net asset

* Portfolio Turnover--the percentage of the fund's buying and selling activity

10 American Century Investments 1-800-345-3533

<TABLE>
<CAPTION>
VP CAPITAL APPRECIATION FUND

For a Share Outstanding Throughout the Years Ended December 31

PER-SHARE DATA
1998 1997 1996 1995 1994

Net Asset Value,
<S> <C> <C> <C> <C> <C>
Beginning of Year ................. $ 9.68 $ 10.24 $ 12.06 $ 9.21 $ 9.32
------------- ------------- ------------- ------------- -------------
Income From
Investment Operations

Net Investment Income (Loss) .... (0.01) (0.05)(1) (0.06)(1) (0.02) 0.01

Net Realized and
Unrealized Gain (Loss)
on Investment Transactions ...... (0.17) (0.30) (0.40) 2.88 (0.12)
------------- ------------- ------------- ------------- -------------
Total From
Investment Operations ........... (0.18) (0.35) (0.46) 2.86 (0.11)
------------- ------------- ------------- ------------- -------------
Distributions

From Net Investment Income ...... -- -- -- (0.01) --

From Net Realized
Gains on Investment
Transactions .................... (0.48) (0.21) (1.36) -- --
------------- ------------- ------------- ------------- -------------
Total Distributions ............. (0.48) (0.21) (1.36) (0.01) --
------------- ------------- ------------- ------------- -------------
Net Asset Value,
End of Year ....................... $ 9.02 $ 9.68 $ 10.24 $ 12.06 $ 9.21
============= ============= ============= ============= =============
Total Return(2) ................. (2.16)% (3.26)% (4.32)% 31.10% (1.17)%

RATIOS/SUPPLEMENTAL DATA
1998 1997 1996 1995 1994

Ratio of Operating Expenses
to Average Net Assets ............. 1.00% 1.00% 1.00% 0.99% 1.00%

Ratio of Net Investment
Income (Loss) to
Average Net Assets ................ (0.07)% (0.53)% (0.59)% (0.23)% 0.11%

Portfolio Turnover Rate ........... 206% 107% 182% 147% 115%

Net Assets,
End of Year (in thousands) ........ $ 448,701 $ 593,698 $ 1,313,865 $ 1,461,124 $ 1,002,577

(1) Computed using average shares outstanding throughout the period.

(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any.
</TABLE>

www.americancentury.com American Century Investments 11

NOTES

12 American Century Investments 1-800-345-3533

NOTES

www.americancentury.com American Century Investments 13

MORE INFORMATION ABOUT THE FUND IS CONTAINED IN THESE DOCUMENTS

ANNUAL AND SEMIANNUAL REPORTS

STATEMENT OF ADDITIONAL INFORMATION (SAI)

You may obtain a copy of the SAI or annual and semiannual reports at no charge
by contacting American Century at the telephone number or address below.

You also can get information about the fund (including the SAI) from the
Securities and Exchange Commission (SEC).

* In person SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location and hours.

* On the Internet www.sec.gov

* By mail SEC Public Reference Section
Washington, D.C. 20549-6009
(The SEC will charge a fee for copying
the documents.)

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

AMERICAN CENTURY INVESTMENTS
P.O. Box 419385
Kansas City, Missouri 64141-6385

INVESTMENT PROFESSIONAL SERVICE REPRESENTATIVE
1-800-345-3533 or 816-531-5575

WWW.AMERICANCENTURY.COM

FAX: 816-340-4360

TELECOMMUNICATIONS DEVICE FOR THE DEAF
1-800-634-4113 or 816-444-3485

BUSINESS, NOT-FOR-PROFIT AND
EMPLOYER-SPONSORED RETIREMENT PLANS
1-800-345-3533

Investment Company Act File No. 811-5188

[american century logo (reg.sm)]
American
Century

9905
SH-PRS-15705
<PAGE>
AMERICAN CENTURY
Statement of Additional Information

VP Advantage Fund
VP Balanced Fund
VP Capital Appreciation Fund
VP Income & Growth Fund
VP International Fund
VP Value Fund

[american century logo(reg.sm)]
American
Century

MAY 1, 1999

THIS STATEMENT OF ADDITIONAL INFORMATION ADDS TO THE DISCUSSION IN THE FUNDS'
PROSPECTUSES, DATED MAY 1, 1999, BUT IS NOT A PROSPECTUS. THE STATEMENT OF
ADDITIONAL INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE FUNDS' CURRENT
PROSPECTUSES. IF YOU WOULD LIKE A COPY OF A PROSPECTUS, PLEASE CONTACT US AT ONE
OF THE ADDRESSES OR TELEPHONE NUMBERS LISTED ON THE BACK COVER OR VISIT AMERICAN
CENTURY'S WEB SITE AT WWW.AMERICANCENTURY.COM.

THIS STATEMENT OF ADDITIONAL INFORMATION INCORPORATES BY REFERENCE CERTAIN
INFORMATION THAT APPEARS IN THE FUNDS' ANNUAL AND SEMIANNUAL REPORTS, WHICH ARE
DELIVERED TO ALL SHAREHOLDERS. YOU MAY OBTAIN A FREE COPY OF THE FUNDS' ANNUAL
OR SEMIANNUAL REPORTS BY CALLING 1-800-345-3533.

Distributed by
Funds Distributor, Inc.

STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1999

TABLE OF CONTENTS

The Funds' History ........................................................ 2

Fund Investment Guidelines ................................................ 2

VP Capital Appreciation, VP Income &
Growth, VP International and the Equity
Portion of VP Advantage ................................................... 2
VP Balanced ........................................................... 3
VP Value .............................................................. 3
The Fixed-Income Portion of VP Advantage .............................. 3

Detailed Information about the Funds ...................................... 4
Investment Strategies and Risks ....................................... 4
Investment Policies ................................................... 14
Portfolio Turnover .................................................... 16

Management ................................................................ 16
The Board of Directors ................................................ 16
Officers .............................................................. 19

The Funds' Principal Shareholders ......................................... 21

Service Providers ......................................................... 21
Investment Advisor .................................................... 21
Transfer Agent and Administrator ...................................... 23
Distributor ........................................................... 23

Other Service Providers ................................................... 23
Custodian Banks ....................................................... 23
Independent Auditors .................................................. 23

Brokerage Allocation ...................................................... 23

VP Capital Appreciation, VP Income & Growth,
VP International, VP Value and
the Equity Portions of VP Advantage and
VP Balanced ........................................................... 23

The Fixed-Income Portions of
VP Advantage and VP Balanced .......................................... 24

Information about Fund Shares ............................................. 24
Valuation of a Fund's Securities ...................................... 25

Taxes ..................................................................... 26
Federal Income Taxes .................................................. 26

How Fund Performance Information Is Calculated ............................ 26
Performance Comparisons ............................................... 27
Permissible Advertising Information ................................... 28

Financial Statements ...................................................... 28

Explanation of Fixed-Income
Securities Ratings ........................................................ 28

Statement of Additional Information 1

THE FUNDS' HISTORY

American Century Variable Portfolios, Inc. is a registered open-end
management investment company that was organized as a Maryland corporation on
June 4, 1987. The corporation was known as TCI Portfolios, Inc. until May 1997.
Throughout this Statement of Additional Information we refer to American Century
Variable Portfolios, Inc. as the corporation.

Each fund described in this Statement of Additional Information is a
separate series of the corporation and operates for many purposes as if it were
an independent company. Each fund has its own investment objective, strategy,
management team, assets, tax identification and stock registration number.

FUND INCEPTION DATE
- ----------------------------------------------
VP Advantage 08/01/1991
VP Balanced 05/01/1991
VP Capital Appreciation 11/20/1987
VP Income & Growth 10/30/1997
VP International 05/01/1994
VP Value 05/01/1996

FUND INVESTMENT GUIDELINES

This section explains the extent to which the funds' advisor, American
Century Investment Management, Inc., can use various investment vehicles and
strategies in managing a fund's assets. Descriptions of the investment
techniques and risks associated with each appear in the section, "Investment
Strategies and Risks," which begins on page 4. In the case of the funds'
principal investment strategies, these descriptions elaborate upon discussions
contained in the Prospectuses.

Each fund is a diversified open-end investment company as defined in the
Investment Company Act of 1940 (the Investment Company Act). Diversified means
that, with respect to 75% of its total assets, each fund will not invest more
than 5% of its total assets in the securities of a single issuer.

To meet federal tax requirements for qualification as a regulated investment
company, each fund must limit its investments so that at the close of each
quarter of its taxable year (1) no more than 25% of its total assets are
invested in the securities of a single issuer (other than the U.S. government or
a regulated investment company), and (2) with respect to at least 50% of its
total assets, no more than 5% of its total assets are invested in the securities
of a single issuer.

In general, within the restrictions outlined here and in the funds'
Prospectuses, the fund managers have broad powers to decide how to invest fund
assets, including the power to hold them uninvested.

VP CAPITAL APPRECIATION, VP INCOME & GROWTH,
VP INTERNATIONAL AND THE EQUITY PORTION OF
VP ADVANTAGE

Investments are varied according to what is judged advantageous under
changing economic conditions. It is the advisor's policy to retain maximum
flexibility in management without restrictive provisions as to the proportion of
one or another class of securities that may be held, subject to the investment
restrictions described below. It is the advisor's intention that each fund
generally will consist of domestic and foreign common stocks and
equity-equivalent securities. However, subject to the specific limitations
applicable to a fund, the funds' management teams may invest the assets of each
fund in varying amounts in other instruments, such as those discussed under
"Investment Strategies and Risks," which begins on page 4, when such a course is
deemed appropriate in order to attempt to attain a fund's investment objective.
Senior securities that, in the opinion of the managers, are high-grade issues
also may be purchased for defensive purposes.

So long as a sufficient number of such securities are available, the
managers intend to keep the funds fully invested in stocks that demonstrate
accelerating growth, regardless of the movement of stock prices generally. In
most circumstances, the funds' actual level of cash and cash equivalents will be
less than 10%. The fund managers may use S&P 500 Index futures as a way to
expose the funds' cash assets to the market while maintaining liquidity. As
mentioned in the Prospectuses, the managers may not leverage the funds'
portfolios, so there is no greater market risk to the funds than if they
purchase stocks. See "Derivative Securities," page 7, "Short-Term Securities"
and "Futures and Options," page 11.

2 American Century Investments

VP BALANCED

As a matter of fundamental policy, the managers will invest approximately
60% of the Balanced portfolio in equity securities and the remainder in bonds
and other fixed-income securities. The equity portion of the fund generally will
be invested in equity securities of companies comprising the 1,500 largest
publicly traded companies in the United States. The fund's investment approach
may cause its equity portion to be more heavily invested in some industries than
in others. However, it may not invest more than 25% of its total assets in
companies whose principal business activities are in the same industry. In
addition, as a diversified investment company, its investments in a single issue
are limited, as described previously in "Fund Investment Guidelines." The fund
managers also may purchase foreign securities, convertible securities, stock
index futures contracts and similar securities, and short-term securities.

The fixed-income portion of the fund generally will be invested in a
diversified portfolio of high-grade government, corporate, asset-backed and
similar securities. There are no maturity restrictions on the fixed-income
securities in which the fund invests, but under normal conditions, the weighted
average maturity for the fixed-income portion of the fund will be in the
three-to-10-year range. The managers will actively manage the portfolio,
adjusting the weighted average portfolio maturity in response to expected
changes in interest rates. During periods of rising interest rates, a shorter
weighted average maturity may be adopted in order to reduce the effect of bond
price declines on the fund's net asset value. When interest rates are falling
and bond prices rising, a longer weighted average portfolio maturity may be
adopted. The restrictions on the quality of the fixed-income securities the fund
may purchase are described in the Prospectus. For a description of the
fixed-income securities rating system, see "Explanation of Fixed-Income
Securities Ratings," page 28.

VP VALUE

The fund managers of VP Value will invest primarily in stocks of medium to
large companies that the managers believe are undervalued at the time of
purchase. The fund managers usually will purchase common stocks of U.S. and
foreign companies, but they can purchase other types of securities as well, such
as domestic and foreign preferred stocks, convertible securities,
equity-equivalent securities, notes, bonds and other debt securities.

THE FIXED-INCOME PORTION OF VP ADVANTAGE

The government securities in which VP Advantage may invest include: (1)
direct obligations of the United States, such as Treasury bills, notes and
bonds, which are supported by the full faith and credit of the United States,
and (2) obligations (including mortgage-related securities) issued or guaranteed
by agencies and instrumentalities of the U.S. government that are established
under an act of Congress. The securities of some of these agencies and
instrumentalities, such as the Government National Mortgage Association, are
guaranteed as to principal and interest by the U.S. Treasury, and other
securities are supported by the right of the issuer, such as the Federal Home
Loan Banks, to borrow from the Treasury. Other obligations, including those
issued by the Federal National Mortgage Association and the Federal Home Loan
Mortgage Corporation, are supported only by the credit of the instrumentality.

Mortgage-related securities in which the fund may invest include
collateralized mortgage obligations (CMOs) issued by a U.S. agency or
instrumentality. A CMO is a debt security that is collateralized by a portfolio
or pool of mortgages or mortgage-backed securities. The issuer's obligation to
make interest and principal payments is secured by the underlying pool or
portfolio of mortgages or securities.

The market value of mortgage-related securities, even those in which the
underlying pool of mortgage loans is guaranteed as to the payment of principal
and interest by the U.S. government, is not insured. When interest rates rise,
the market value of those securities may decrease in the same manner as other
debt, but when interest rates decline, their market value may not increase as
much as other debt instruments because of the prepayment feature inherent in the
underlying mortgages. If such securities are purchased at a premium, the fund
will suffer a loss if the obligation is prepaid. Prepayments will be reinvested
at prevailing rates, which may be less than the rate paid by the prepaid
obligation.

Statement of Additional Information 3

For the purpose of determining the weighted average portfolio maturity of
the fund, the managers shall consider the maturity of a mortgage-related
security to be the remaining expected average life of the security. The average
life of such securities is likely to be substantially less than the original
maturity as a result of prepayments of principal on the underlying mortgages,
especially in a declining interest rate environment. In determining the
remaining expected average life, the managers make assumptions regarding
repayments on underlying mortgages. In a rising interest rate environment, those
prepayments generally decrease, and may decrease below the rate of prepayment
assumed by the managers when purchasing those securities. Such slowdown may
cause the remaining maturity of those securities to lengthen, which will
increase the relative volatility of those securities and, hence, the fund
holding the securities.

DETAILED INFORMATION ABOUT THE FUNDS

INVESTMENT STRATEGIES AND RISKS

This section describes various investment vehicles and techniques that the
fund managers can use in managing a fund's assets. It also details the risks
associated with each, because each technique contributes to a fund's overall
risk profile.

FOREIGN SECURITIES

Each fund may invest in the securities of foreign issuers, including foreign
governments, when these securities meet its standards of selection. Securities
of foreign issuers may trade in the U.S. or foreign securities markets.

An unlimited portion of each fund's total assets may be invested in the
securities of foreign issuers, except for VP Value. VP Value may invest up to
25% of its assets in foreign securities.

Investments in foreign securities may present certain risks, including:

Currency Risk: The value of the foreign investments held by the funds may be
significantly affected by changes in currency exchange rates. The dollar value
of a foreign security generally decreases when the value of the dollar rises
against the foreign currency in which the security is denominated and tends to
increase when the value of the dollar falls against such currency. In addition,
the value of fund assets may be affected by losses and other expenses incurred
in converting between various currencies in order to purchase and sell foreign
securities and by currency restrictions, exchange control regulation, currency
devaluations and political developments.

Political and Economic Risk. The economies of many of the countries in which
the funds may invest are not as developed as the economy of the United States
and may be subject to significantly different forces. Political or social
instability, expropriation, nationalization, or confiscatory taxation, and
limitations on the removal of funds or other assets, could also adversely affect
the value of investments. Further, the funds may encounter difficulties or be
unable to enforce ownership rights, pursue legal remedies or obtain judgments in
foreign courts.

Regulatory Risk. Foreign companies generally are not subject to the
regulatory controls imposed on U.S. issuers and, in general, there is less
publicly available information about foreign securities than is available about
domestic securities. Many foreign companies are not subject to uniform
accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to domestic companies. Income from
foreign securities owned by the funds may be reduced by a withholding tax at the
source, which would reduce dividend income payable to shareholders.

Market and Trading Risk. Brokerage commission rates in foreign countries,
which are generally fixed rather than subject to negotiation as in the United
States, are likely to be higher. The securities markets in many of the countries
in which the funds may invest will have substantially less trading volume than
the principal U.S. markets. As a result, the securities of some companies in
these countries may be less liquid and more volatile than comparable U.S.
securities. Furthermore, one securities broker may represent all or a
significant part of the trading volume in a particular country, resulting in
higher trading costs and decreased liquidity due to a lack of alternative
trading partners. There is generally less government regulation and supervision
of foreign stock exchanges, brokers and issuers, which may make it difficult to
enforce contractual obligations.

Clearance and Settlement Risk. Foreign securities markets also have
different clearance and settlement

American Century Investments 4

procedures, and in certain markets there have been times when settlements have
been unable to keep pace with the volume of securities transactions, making it
difficult to conduct such transactions. Delays in clearance and settlement could
result in temporary periods when assets of the funds are uninvested and no
return is earned thereon. The inability of the funds to make intended security
purchases due to clearance and settlement problems could cause the funds to miss
attractive investment opportunities. Inability to dispose of portfolio
securities due to clearance and settlement problems could result either in
losses to the funds due to subsequent declines in the value of the portfolio
security or, if the funds have entered into a contract to sell the security,
liability to the purchaser.

Ownership Risk. Evidence of securities ownership may be uncertain in many
foreign countries. In many of these countries, the most notable of which is the
Russian Federation, the ultimate evidence of securities ownership is the share
register held by the issuing company or its registrar. While some companies may
issue share certificates or provide extracts of the company's share register,
these are not negotiable instruments and are not effective evidence of
securities ownership. In an ownership dispute, the company's share register is
controlling. As a result, there is a risk that a fund's trade details could be
incorrectly or fraudulently entered on the issuer's share register at the time
of the transaction, or that a fund's ownership position could thereafter be
altered or deleted entirely, resulting in a loss to the fund.

FORWARD CURRENCY EXCHANGE CONTRACTS

Each fund may purchase and sell foreign currency on a spot (i.e. cash) basis
and may engage in forward currency contracts, currency options and futures
transactions for hedging or any other lawful purpose. See "Derivative
Securities," page 7.

The funds expect to use forward contracts under two circumstances:

(1) When the fund managers wish to lock in the U.S. dollar price of a
security when a fund is purchasing or selling a security denominated in
a foreign currency, the fund would be able to enter into a forward
contract to do so; or

(2) When the fund managers believe that the currency of a particular foreign
country may suffer a substantial decline against the U.S. dollar, a fund
would be able to enter into a forward contract to sell foreign currency
for a fixed U.S. dollar amount approximating the value of some or all of
its portfolio securities either denominated in, or whose value is tied
to, such foreign currency.

In the first circumstance, when a fund enters into a trade for the purchase
or sale of a security denominated in a foreign currency, it may be desirable to
establish (lock in) the U.S. dollar cost or proceeds. By entering into forward
contracts in U.S. dollars for the purchase or sale of a foreign currency
involved in an underlying security transaction, the fund will be able to protect
itself against a possible loss between trade and settlement dates resulting from
the adverse change in the relationship between the U.S. dollar at the subject
foreign currency.

Under the second circumstance, when the fund managers believe that the
currency of a particular country may suffer a substantial decline relative to
the U.S. dollar, a fund could enter into a foreign contract to sell for a fixed
dollar amount the amount in foreign currencies approximating the value of some
or all of its portfolio securities either denominated in, or whose value is tied
to, such foreign currency. The fund will segregate on its records cash or
securities in an amount sufficient to cover its obligations under the contract.

The precise matching of forward contracts in the amounts and values of
securities involved generally would not be possible because the future values of
such foreign currencies will change as a consequence of market movements in the
values of those securities between the date the forward contract is entered into
and the date it matures. Predicting short-term currency market movements is
extremely difficult, and the successful execution of short-term hedging strategy
is highly uncertain. The fund managers do not intend to enter into such
contracts on a regular basis. Normally, consideration of the prospect for
currency parities will be incorporated into the long-term investment decisions
made with respect to overall diversification strategies. However, the fund
managers believe that it is important to have flexibility to enter into such
forward contracts when they determine that a fund's best interests may be
served.

Statement of Additional Information 5

At the maturity of the forward contract, the fund may either sell the
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate the obligation to deliver the foreign currency by
purchasing an offsetting forward contract with the same currency trader
obligating the fund to purchase, on the same maturity date, the same amount of
the foreign currency.

It is impossible to forecast with absolute precision the market value of
portfolio securities at the expiration of the forward contract. Accordingly, it
may be necessary for a fund to purchase additional foreign currency on the spot
market (and bear the expense of such purchase) if the market value of the
security is less than the amount of foreign currency the fund is obligated to
deliver and if a decision is made to sell the security and make delivery of the
foreign currency the fund is obligated to deliver.

CONVERTIBLE SECURITIES

A convertible security is a fixed-income security that offers the potential
for capital appreciation through a conversion feature that enables the holder to
convert the fixed-income security into a stated number of shares of common
stock. As fixed-income securities, convertible securities provide a stable
stream of income, with generally higher yields than common stocks. Because
convertible securities offer the potential to benefit from increases in the
market price of the underlying common stock, however, they generally offer lower
yields than non-convertible securities of similar quality. Of course, like all
fixed-income securities, there can be no assurance of current income because the
issuers of the convertible securities may default on their obligations. In
addition, there can be no assurance of capital appreciation because the value of
the underlying common stock will fluctuate.

Convertible securities generally are subordinated to other similar but
non-convertible securities of the same issuer, although convertible bonds, as
corporate debt obligations, enjoy seniority in right of payment to all equity
securities, and convertible preferred stock is senior to common stock of the
same issuer. Because of the subordination feature, however, convertible
securities typically have lower ratings than similar non-convertible securities

Unlike a convertible security that is a single security, a synthetic
convertible security is comprised of two distinct securities that together
resemble convertible securities in certain respects. Synthetic convertible
securities are created by combining non-convertible bonds or preferred stocks
with warrants or stock call options. The options that will form elements of
synthetic convertible securities will be listed on a securities exchange or
NASDAQ. The two components of a synthetic convertible security, which will be
issued with respect to the same entity, generally are not offered as a unit, and
may be purchased and sold by the fund at different times. Synthetic convertible
securities differ from convertible securities in certain respects, including
that each component of a synthetic convertible security has a separate market
value and responds differently to market fluctuations. Investing in synthetic
convertible securities involves the risk normally found in holding the
securities comprising the synthetic convertible security.

SHORT SALES

A fund may engage in short sales if, at the time of the short sale, the fund
owns or has the right to acquire securities equivalent in kind and amount to the
securities being sold short.

In a short sale, the seller does not immediately deliver the securities sold
and is said to have a short position in those securities until delivery occurs.
To make delivery to the purchaser, the executing broker borrows the securities
being sold short on behalf of the seller. While the short position is
maintained, the seller collateralizes its obligation to deliver the securities
sold short in an amount equal to the proceeds of the short sale plus an
additional margin amount established by the Board of Governors of the Federal
Reserve. If a fund engages in a short sale, the collateral account will be
maintained by the fund's custodian. While the short sale is open, the fund will
maintain in a segregated custodial account an amount of securities convertible
into, or exchangeable for, such equivalent securities at no additional cost.
These securities would constitute the fund's long position.

A fund may make a short sale, as described above, when it wants to sell the
security it owns at a current

6 American Century Investments

attractive price, but also wishes to defer recognition of gain or loss for
federal income tax purposes. There will be certain additional transaction costs
associated with short sales, but the fund will endeavor to offset these costs
with income from the investment of the cash proceeds of short sales.

PORTFOLIO LENDING

In order to realize additional income, a fund may lend its portfolio
securities. Such loans may not exceed one-third of the fund's net assets valued
at market except (i) through the purchase of debt securities in accordance with
its investment objective, policies and limitations, or (ii) by engaging in
repurchase agreements with respect to portfolio securities.

DERIVATIVE SECURITIES

To the extent permitted by its investment objectives and policies, each of
the funds may invest in securities that are commonly referred to as derivative
securities. Generally, a derivative is a financial arrangement, the value of
which is based on, or derived from, a traditional security, asset or market
index. Certain derivative securities are described more accurately as
index/structured securities. Index/structured securities are derivative
securities whose value or performance is linked to other equity securities (such
as depositary receipts), currencies, interest rates, indices or other financial
indicators (reference indices).

Some derivatives, such as mortgage-related and other asset-backed
securities, are in many respects like any other investment, although they may be
more volatile or less liquid than more traditional debt securities.

There are many different types of derivatives and many different ways to use
them. Futures and options are commonly used for traditional hedging purposes to
attempt to protect a fund from exposure to changing interest rates, securities
prices or currency exchange rates and for cash management purposes as a low-cost
method of gaining exposure to a particular securities market without investing
directly in those securities.

No fund may invest in a derivative security unless the reference index or
the instrument to which it relates is an eligible investment for the fund. For
example, a security whose underlying value is linked to the price of oil would
not be a permissible investment because the funds may not invest in oil and gas
leases or futures.

The return on a derivative security may increase or decrease, depending upon
changes in the reference index or instrument to which it relates.

There are a range of risks associated with derivative investments,
including:

* the risk that the underlying security, interest rate, market index or
other financial asset will not move in the direction the fund managers
anticipate;

* the possibility that there may be no liquid secondary market, or the
possibility that price fluctuation limits may be imposed by the exchange,
either of which may make it difficult or impossible to close out a
position when desired;

* the risk that adverse price movements in an instrument can result in a
loss substantially greater than a fund's initial investment; and

* the risk that the counterparty will fail to perform its obligations.

The Board of Directors has approved the advisors' policy regarding
investments in derivative securities. That policy specifies factors that must be
considered in connection with a purchase of derivative securities. The policy
also establishes a committee that must review certain proposed purchases before
the purchases can be made. The advisor will report on fund activity in
derivative securities to the Board of Directors as necessary. In addition, the
Board will review the advisors' policy for investments in the derivative
securities annually.

INVESTMENTS IN COMPANIES WITH LIMITED OPERATING HISTORIES

The funds may invest a portion of their assets in the securities of issuers
with limited operating histories. The managers consider an issuer to have a
limited operating history if that issuer has a record of less than three years
of continuous operation. The managers will consider periods of capital
formation, incubation, consolidations, and research and development in
determining whether a particular issuer has a record of three years of
continuous operation.

Investments in securities of issuers with limited operating histories may
involve greater risks than

Statement of Additional Information 7

investments in securities of more mature issuers. By their nature, such issuers
present limited operating histories and financial information upon which the
managers may base their investment decision on behalf of the funds. In addition,
financial and other information regarding such issuers, when available, may be
incomplete or inaccurate.

REPURCHASE AGREEMENTS

Each fund may invest in repurchase agreements when such transactions present
an attractive short-term return on cash that is not otherwise committed to the
purchase of securities pursuant to the investment policies of that fund.

A repurchase agreement occurs when, at the time the fund purchases an
interest-bearing obligation, the seller (a bank or a broker-dealer registered
under the Securities Exchange Act of 1934) agrees to purchase it on a specified
date in the future at an agreed-upon price. The repurchase price reflects an
agreed-upon interest rate during the time the fund's money is invested in the
security.

Because the security purchased constitutes security for the repurchase
obligation, a repurchase agreement can be considered a loan collateralized by
the security purchased. The fund's risk is the ability of the seller to pay the
agreed-upon repurchase price on the repurchase date. If the seller defaults, the
fund may incur costs in disposing of the collateral, which would reduce the
amount realized thereon. If the seller seeks relief under the bankruptcy laws,
the disposition of the collateral may be delayed or limited. To the extent the
value of the security decreases, the fund could experience a loss.

The funds will limit repurchase agreement transactions to securities issued
by the U.S. government and its agencies and instrumentalities, and will enter
into such transactions with those banks and securities dealers who are deemed
creditworthy pursuant to criteria adopted by the funds' Board of Directors.

No fund will invest more than 15% of its assets in repurchase agreements
maturing in more than seven days.

MUNICIPAL NOTES

Municipal notes are issued by state and local governments or government
entities to provide short-term capital or to meet cash flow needs.

Tax Anticipation Notes (TANs) are issued in anticipation of seasonal tax
revenues, such as ad valorem property, income, sales, use and business taxes,
and are payable from these future taxes. TANs usually are general obligations of
the issuer. General obligations are secured by the issuer's pledge of its full
faith and credit (i.e., taxing power) for the payment of principal and interest.

Revenue Anticipation Notes (RANs) are issued with the expectation that
receipt of future revenues, such as federal revenue sharing or state aid
payments, will be used to repay the notes. Typically, these notes also
constitute general obligations of the issuer.

Bond Anticipation Notes (BANs) are issued to provide interim financing until
long-term financing can be arranged. In most cases, the long-term bonds provide
the money for repayment of the notes.

MUNICIPAL BONDS

Municipal bonds, which generally have maturities of more than one year when
issued, are designed to meet longer-term capital needs. These securities have
two principal classifications: general obligation bonds and revenue bonds.

General Obligation (GO) Bonds are issued by states, counties, cities, towns
and regional districts to fund a variety of public projects, including
construction of and improvements to schools, highways, and water and sewer
systems. GO bonds are backed by the issuer's full faith and credit based on its
ability to levy taxes for the timely payment of interest and repayment of
principal, although such levies may be constitutionally or statutorily limited
as to rate or amount.

Revenue Bonds are not backed by an issuer's taxing authority; rather,
interest and principal are secured by the net revenues from a project or
facility. Revenue bonds are issued to finance a variety of capital projects,
including construction or refurbishment of utility and waste disposal systems,
highways, bridges, tunnels, air and sea port facilities, schools and hospitals.
Many revenue bond issuers provide additional security in the form of a
debt-service reserve fund that may be used to make payments of interest and
repayments of principal on the issuer's obligations. Some revenue bond
financings are further protected by a state's assurance (without obliga-

8 American Century Investments

tion) that it will make up deficiencies in the debt-service reserve fund.

Industrial Development Bonds (IDBs), a type of revenue bond, are issued by
or on behalf of public authorities to finance privately operated facilities.
These bonds are used to finance business, manufacturing, housing, athletic and
pollution control projects, as well as public facilities such as mass transit
systems, air and sea port facilities and parking garages. Payment of interest
and repayment of principal on an IDB depend solely on the ability of the
facility's user to meet financial obligations, and on the pledge, if any, of the
real or personal property financed. The interest earned on IDBs may be subject
to the federal alternative minimum tax.

VARIABLE- AND FLOATING-RATE OBLIGATIONS

The funds may buy variable- and floating-rate demand obligations (VRDOs and
FRDOs). These obligations carry rights that permit holders to demand payment of
the unpaid principal plus accrued interest, from the issuers or from financial
intermediaries. Floating-rate securities, or floaters, have interest rates that
change whenever there is a change in a designated base rate; variable-rate
instruments provide for a specified, periodic adjustment in the interest rate,
which typically is based on an index. These rate formulas are designed to result
in a market value for the VRDO or FRDO that approximates par value.

OBLIGATIONS WITH TERM PUTS ATTACHED

Each fund may invest in fixed-rate bonds subject to third-party puts and in
participation interests in such bonds held by a bank in trust or otherwise.
These bonds and participation interests have tender options or demand features
that permit the funds to tender (or put) their bonds to an institution at
periodic intervals and to receive the principal amount thereof.

The fund managers expect that the funds will pay more for securities with
puts attached than for securities without these liquidity features. The fund
managers may buy securities with puts attached to keep a fund fully invested in
municipal securities while maintaining sufficient portfolio liquidity to meet
redemption requests or to facilitate management of the funds' investments.

To ensure that the interest on municipal securities subject to puts is
tax-exempt to the funds, the fund managers limit the funds' use of puts in
accordance with applicable interpretations and rulings of the Internal Revenue
Service (IRS).

Because it is difficult to evaluate the likelihood of exercise or the
potential benefit of a put, puts normally will be determined to have a value of
zero, regardless of whether any direct or indirect consideration is paid.
Accordingly, puts as separate securities are not expected to affect the funds'
weighted average maturities. When a fund has paid for a put, the cost will be
reflected as unrealized depreciation on the underlying security for the period
the put is held. Any gain on the sale of the underlying security will be reduced
by the cost of the put.

There is a risk that the seller of a put will not be able to repurchase the
underlying obligation when (or if) a fund attempts to exercise the put. To
minimize such risks, the funds will purchase obligations with puts attached only
from sellers deemed creditworthy by the fund managers under the direction of the
Board of Directors.

TENDER OPTION BONDS

Tender Option Bonds (TOBs) were created to increase the supply of
high-quality, short-term tax-exempt obligations, and thus they are of particular
interest to money market funds. However, any of the funds may purchase these
instruments.

TOBs are created by municipal bond dealers who purchase long-term tax-exempt
bonds in the secondary market, place the certificates in trusts, and sell
interests in the trusts with puts or other liquidity guarantees attached. The
credit quality of the resulting synthetic short-term instrument is based on the
guarantor's short-term rating and the underlying bond's long-term rating.

There is some risk that a remarketing agent will renege on a tender option
agreement if the underlying bond is downgraded or defaults. Because of this, the
fund managers monitor the credit quality of bonds underlying the funds' TOB
holdings and intend to sell or put back any TOB if the rating on its underlying
bond falls below the second-highest rating category designated by a rating
agency.

The fund managers also take steps to minimize the risk that the fund may
realize taxable income as a result of holding TOBs. These steps may include
consideration of (a) legal opinions relating to the tax-

Statement of Additional Information 9

exempt status of the underlying municipal bonds, (b) legal opinions relating to
the tax ownership of the underlying bonds, and (c) other elements of the
structure that could result in taxable income or other adverse tax consequences.
After purchase, the fund managers monitor factors related to the tax-exempt
status of the fund's TOB holdings in order to minimize the risk of generating
taxable income.

WHEN-ISSUED AND FORWARD COMMITMENT AGREEMENTS

The funds may sometimes purchase new issues of securities on a when-issued
or forward commitment basis in which the transaction price and yield are each
fixed at the time the commitment is made, but payment and delivery occur at a
future date (typically 15 to 45 days later).

When purchasing securities on a when-issued or forward commitment basis, a
fund assumes the rights and risks of ownership, including the risks of price and
yield fluctuations. Market rates of interest on debt securities at the time of
delivery may be higher or lower than those contracted for on the when-issued
security. Accordingly, the value of such security may decline prior to delivery,
which could result in a loss to the fund. While the fund will make commitments
to purchase or sell securities with the intention of actually receiving or
delivering them, it may sell the securities before the settlement date if doing
so is deemed advisable as a matter of investment strategy.

In purchasing securities on a when-issued or forward commitment basis, a
fund will establish and maintain until the settlement date a segregated account
consisting of cash, cash equivalents or other appropriate liquid securities in
an amount sufficient to meet the purchase price. When the time comes to pay for
the when-issued securities, the fund will meet its obligations with available
cash, through the sale of securities, or, although it would not normally expect
to do so, by selling the when-issued securities themselves (which may have a
market value greater or less than the fund's payment obligation). Selling
securities to meet when-issued or forward commitment obligations may generate
taxable capital gains or losses.

INVERSE FLOATERS

An inverse floater is a type of derivative security that bears an interest
rate that moves inversely to market interest rates. As market interest rates
rise, the interest rate on inverse floaters goes down, and vice versa.
Generally, this is accomplished by expressing the interest rate on the inverse
floater as an above-market fixed rate of interest, reduced by an amount
determined by reference to a market-based or bond-specific floating interest
rate (as well as by any fees associated with administering the inverse floater
program).

Inverse floaters may be issued in conjunction with an equal amount of Dutch
Auction floating-rate bonds (floaters), or a market-based index may be used to
set the interest rate on these securities. A Dutch Auction is an auction system
in which the price of the security is gradually lowered until it meets a
responsive bid and is sold. Floaters and inverse floaters may be brought to
market by a broker-dealer who purchases fixed-rate bonds and places them in a
trust or by an issuer seeking to reduce interest expenses by using a
floater/inverse floater structure in lieu of fixed-rate bonds.

In the case of a broker-dealer structured offering (where underlying
fixed-rate bonds have been placed in a trust), distributions from the underlying
bonds are allocated to floater and inverse floater holders in the following
manner:

(i) Floater holders receive interest based on rates set at a six-month
interval or at a Dutch Auction, which typically is held every 28 to 35
days. Current and prospective floater holders bid the minimum interest
rate that they are willing to accept on the floaters, and the interest
rate is set just high enough to ensure that all of the floaters are sold.

(ii) Inverse floater holders receive all of the interest that remains on the
underlying bonds after floater interest and auction fees are paid.

Procedures for determining the interest payment on floaters and inverse
floaters brought to market directly by the issuer are comparable, although the
interest paid on the inverse floaters is based on a presumed coupon rate that
would have been required to bring fixed-rate bonds to market at the time the
floaters and inverse floaters were issued.

Where inverse floaters are issued in conjunction with floaters, inverse
floater holders may be given the right to acquire the underlying security (or to
create a fixed-rate bond) by calling an equal amount

10 American Century Investments

of corresponding floaters. The underlying security may then be held or sold.
However, typically, there are time constraints and other limitations associated
with any right to combine interests and claim the underlying security.

Floater holders subject to a Dutch Auction procedure generally do not have
the right to put back their interests to the issuer or to a third party. If a
Dutch Auction fails, the floater holder may be required to hold its position
until the underlying bond matures, during which time interest on the floater is
capped at a predetermined rate.

The secondary market for floaters and inverse floaters may be limited. The
market value of inverse floaters tends to be significantly more volatile than
fixed-rate bonds. The interest rates on inverse floaters may be significantly
reduced, even to zero, if interest rates rise.

SHORT-TERM SECURITIES

In order to meet anticipated redemptions, to hold pending the purchase of
additional securities for a fund's portfolio, or, in some cases, for temporary
defensive purposes, the funds may invest a portion of their assets in money
market and other short-term securities.

Examples of those securities include:

* Securities issued or guaranteed by the U.S. government and its agencies
and instrumentalities;

* Commercial Paper;

* Certificates of Deposit and Euro Dollar Certificates of Deposit;

* Bankers' Acceptances;

* Short-term notes, bonds, debentures or other debt instruments; and

* Repurchase agreements.

OTHER INVESTMENT COMPANIES

Each of the funds may invest up to 10% of its total assets in any other
mutual fund, including those of the advisor, provided that the investment is
consistent with the fund's investment policies and restrictions. Under the
Investment Company Act, a fund's investment in such securities, subject to
certain exceptions, currently is limited to (a) 3% of the total voting stock of
any one investment company; (b) 5% of the fund's total assets with respect to
any one investment company; and (c) 10% of the fund's total assets in the
aggregate. Such purchases will be made in the open market where no commission or
profit to a sponsor or dealer results from the purchase other than the customary
brokers' commissions. As a shareholder of another investment company, a fund
would bear, along with other shareholders, its pro rata portion of the other
investment company's expenses, including advisory fees. These expenses would be
in addition to the management fee that each fund bears directly in connection
with its own operations.

FUTURES AND OPTIONS

Each fund may enter into futures contracts, options or options on futures
contracts. Funds may not, however, enter into a futures transaction for
speculative purposes. Generally, futures transactions will be used to:

* protect against a decline in market value of the funds' securities
(taking a short futures position); or

* protect against the risk of an increase in market value for securities in
which the fund generally invests at a time when the fund is not fully
invested (taking a long futures position); or

* provide a temporary substitute for the purchase of an individual security
that may be purchased in an orderly fashion.

Some futures and options strategies, such as selling futures, buying puts
and writing calls, hedge a fund's investments against price fluctuations. Other
strategies, such as buying futures, writing puts and buying calls, tend to
increase market exposure.

Although other techniques may be used to control a fund's exposure to market
fluctuations, the use of futures contracts may be a more effective means of
hedging this exposure. While a fund pays brokerage commissions in connection
with opening and closing out futures positions, these costs are lower than the
transaction costs incurred in the purchase and sale of the underlying
securities.

For example, the sale of a future by a fund means the fund becomes obligated
to deliver the security (or securities, in the case of an index future) at a
specified price on a specified date. The purchase of a future means the fund
becomes obligated to buy the security (or securities) at a specified price on a
specified date. Futures contracts provide for the sale

Statement of Additional Information 11

by one party and purchase by another party of a specific security at a specified
future time and price. The fund may engage in futures and options transactions
based on securities indices that are consistent with the fund's investment
objective. Examples of indices that may be used include the Bond Buyer Index of
Municipal Bonds, for fixed-income funds, or the S&P 500 Index, for equity funds.
The fund also may engage in futures and options transactions based on specific
securities, such as U.S. Treasury bonds or notes. Futures contracts are traded
on national futures exchanges. Futures exchanges and trading are regulated under
the Commodity Exchange Act by the Commodity Futures Trading Commission (CFTC), a
U.S. government agency.

Index futures contracts differ from traditional futures contracts in that
when delivery takes place, no stocks or bonds change hands. Instead, these
contracts settle in cash at the spot market value of the index. Although other
types of futures contracts by their terms call for actual delivery or acceptance
of the underlying securities, in most cases, the contracts are closed out before
the settlement date. A futures position may be closed by taking an opposite
position in an identical contract (i.e., buying a contract that has previously
been sold or selling a contract that has previously been bought).

Unlike when the fund purchases or sells a bond, no price is paid or received
by the fund upon the purchase or sale of the future. Initially, the fund will be
required to deposit an amount of cash or securities equal to a varying specified
percentage of the contract amount. This amount is known as initial margin. The
margin deposit is intended to assure completion of the contract (delivery or
acceptance of the underlying security) if it is not terminated prior to the
specified delivery date. They do not constitute margin transactions for purposes
of the fund's investment restrictions. Minimum initial margin requirements are
established by the futures exchanges and may be revised. In addition, brokers
may establish margin deposit requirements that are higher than the exchange
minimums. Cash held in the margin account is not income-producing. Subsequent
payments, called variation margin, to and from the broker, will be made on a
daily basis as the price of the underlying debt securities or index fluctuates,
making the future more or less valuable , a process known as marking the
contract to market. Changes in variation margin are recorded by the fund as
unrealized gains or losses. At any time prior to expiration of the future, the
fund may elect to close the position by taking an opposite position that will
operate to terminate its position in the future. A final determination of
variation margin is then made; additional cash is required to be paid by or
released to the fund and the fund realizes a loss or gain.

RISKS RELATED TO FUTURES AND OPTIONS TRANSACTIONS

Futures and options prices can be volatile, and trading in these markets
involves certain risks. If the fund managers apply a hedge at an inappropriate
time or judge interest rate or equity market trends incorrectly, futures and
options strategies may lower a fund's return.

A fund could suffer losses if it were unable to close out its position
because of an illiquid secondary market. Futures contracts may be closed out
only on an exchange that provides a secondary market for these contracts, and
there is no assurance that a liquid secondary market will exist for any
particular futures contract at any particular time. Consequently, it may not be
possible to close a futures position when the fund managers consider it
appropriate or desirable to do so. In the event of adverse price movements, a
fund would be required to continue making daily cash payments to maintain its
required margin. If the fund had insufficient cash, it might have to sell
portfolio securities to meet daily margin requirements at a time when the fund
managers would not otherwise elect to do so. In addition, a fund may be required
to deliver or take delivery of instruments underlying futures contracts it
holds. The fund managers will seek to minimize these risks by limiting the
contracts entered into on behalf of the funds to those traded on national
futures exchanges and for which there appears to be a liquid secondary market.

A fund could suffer losses if the prices of its futures and options
positions were poorly correlated with its other investments, or if securities
underlying futures contracts purchased by a fund had different maturities than
those of the portfolio securities being hedged. Such imperfect correlation may
give rise to circumstances in which a fund loses money on a futures contract at
the same time that it experiences a

12 American Century Investments

decline in the value of its hedged portfolio securities. A fund also could lose
margin payments it has deposited with a margin broker, if, for example, the
broker became bankrupt.

Most futures exchanges limit the amount of fluctuation permitted in futures
contract prices during a single trading day. The daily limit establishes the
maximum amount that the price of a futures contract may vary either up or down
from the previous day's settlement price at the end of the trading session. Once
the daily limit has been reached in a particular type of contract, no trades may
be made on that day at a price beyond the limit. However, the daily limit
governs only price movement during a particular trading day and, therefore, does
not limit potential losses. In addition, the daily limit may prevent liquidation
of unfavorable positions. Futures contract prices have occasionally moved to the
daily limit for several consecutive trading days with little or no trading,
thereby preventing prompt liquidation of futures positions and subjecting some
futures traders to substantial losses.

OPTIONS ON FUTURES

By purchasing an option on a futures contract, a fund obtains the right, but
not the obligation, to sell the futures contract (a put option) or to buy the
contract (a call option) at a fixed strike price. A fund can terminate its
position in a put option by allowing it to expire or by exercising the option.
If the option is exercised, the fund completes the sale of the underlying
security at the strike price. Purchasing an option on a futures contract does
not require a fund to make margin payments unless the option is exercised.

Although they do not currently intend to do so, the funds may write (or
sell) call options that obligate them to sell (or deliver) the option's
underlying instrument upon exercise of the option. While the receipt of option
premiums would mitigate the effects of price declines, the funds would give up
some ability to participate in a price increase on the underlying security. If a
fund were to engage in options transactions, it would own the futures contract
at the time a call were written and would keep the contract open until the
obligation to deliver it pursuant to the call expired.

RESTRICTIONS ON THE USE OF FUTURES CONTRACTS AND OPTIONS

Each fund may enter into futures contracts, options or options on futures
contracts.

Under the Commodity Exchange Act, a fund may enter into futures and options
transactions (a) for hedging purposes without regard to the percentage of assets
committed to initial margin and option premiums or (b) for purposes other than
hedging, provided that assets committed to initial margin and option premiums do
not exceed 5% of the fund's total assets. To the extent required by law, each
fund will segregate cash or securities on its records in an amount sufficient to
cover its obligations under the futures contracts and options.

RESTRICTED AND ILLIQUID SECURITIES

The funds may, from time to time, purchase restricted or illiquid
securities, including Rule 144A securities, when they present attractive
investment opportunities that otherwise meet the funds' criteria for selection.
Rule 144A securities are securities that are privately placed with and traded
among qualified institutional investors rather than the general public. Although
Rule 144A securities are considered restricted securities, they are not
necessarily illiquid.

With respect to securities eligible for resale under Rule 144A, the staff of
the Securities and Exchange Commission (SEC) has taken the position that the
liquidity of such securities in the portfolio of a fund offering redeemable
securities is a question of fact for the Board of Directors to determine, such
determination to be based upon a consideration of the readily available trading
markets and the review of any contractual restrictions. Accordingly, the Board
of Directors is responsible for developing and establishing the guidelines and
procedures for determining the liquidity of Rule 144A securities. As allowed by
Rule 144A, the Board of Directors of the funds has delegated the day-to-day
function of determining the liquidity of Rule 144A securities to the fund
managers. The Board retains the responsibility to monitor the implementation of
the guidelines and procedures it has adopted.

Because the secondary market for such securities is limited to certain
qualified institutional investors, the liquidity of such securities may be
limited

Statement of Additional Information 13

accordingly and a fund may, from time to time, hold a Rule 144A or other
security that is illiquid. In such an event, the fund managers will consider
appropriate remedies to minimize the effect on such fund's liquidity.

INVESTMENT POLICIES

Unless otherwise indicated, with the exception of the percentage limitations
on borrowing, the restrictions apply at the time transactions are entered into.
Accordingly, any later increase or decrease beyond the specified limitation
resulting from a change in a fund's net assets will not be considered in
determining whether it has complied with its investment restrictions.

FUNDAMENTAL INVESTMENT POLICIES

The funds' investment restrictions are set forth below. These investment
restrictions are fundamental and may not be changed without approval of a
majority of the outstanding votes of shareholders of a fund, as determined in
accordance with the Investment Company Act.

For purposes of the investment restriction relating to concentration, a fund
shall not purchase any securities that would cause 25% or more of the value of
the fund's total assets at the time of purchase to be invested in the securities
of one or more issuers conducting their principal business activities in the
same industry, provided that (a) there is no limitation with respect to
obligations issued or guaranteed by the U.S. government, any state, territory or
possession of the United States, the District of Columbia or any of its
authorities, agencies, instrumentalities or political subdivisions and
repurchase agreements secured by such instruments; (b) wholly owned finance
companies will be considered to be in the industries of their parents if their
activities are primarily related to financing the activities of the parents; (c)
utilities will be divided according to their services, for example, gas, gas
transmission, electric and gas, electric and telephone will each be considered a
separate industry; and (d) personal credit and business credit businesses will
be considered separate industries.

14 American Century Investments

Subject Policy
- --------------------------------------------------------------------------------
Senior Securities A fund may not issue senior securities, except as
permitted under the Investment Company Act.
- --------------------------------------------------------------------------------
Borrowing A fund may not borrow money, except for temporary or
emergency purposes (not for leveraging or investment) in an
amount not exceeding 33 1/3% of the fund's total assets
(including the amount borrowed) less liabilities (other than
borrowings).
- --------------------------------------------------------------------------------
Lending A fund may not lend any security or make any other loan if,
as a result, more than 331/3% of the fund's total assets
would be lent to other parties except, (i) through the
purchase of debt securities in accordance with its
investment objective, policies and limitations or (ii) by
engaging in repurchase agreements with respect to portfolio
securities.
- --------------------------------------------------------------------------------
Real Estate A fund may not purchase or sell real estate unless acquired
as a result of ownership of securities or other instruments.
This policy shall not prevent a fund from investing in
securities or other instruments backed by real estate or
securities of companies that deal in real estate or are
engaged in the real estate business.
- --------------------------------------------------------------------------------
Concentration A fund may not concentrate its investments in securities of
issuers in a particular industry (other than securities
issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities).
- --------------------------------------------------------------------------------
Underwriting A fund may not act as an underwriter of securities issued by
others, except to the extent that the fund may be considered
an underwriter within the meaning of the Securities Act of
1933 in the disposition of restricted securities.
- --------------------------------------------------------------------------------
Commodities A fund may not purchase or sell physical commodities unless
acquired as a result of ownership of securities or other
instruments, provided that this limitation shall not prohibit
the fund from purchasing or selling options and futures
contracts or from investing in securities or other
instruments backed by physical commodities.
- --------------------------------------------------------------------------------
Control A fund may not invest for purposes of exercising control over
management.
- --------------------------------------------------------------------------------

NONFUNDAMENTAL INVESTMENT POLICIES

In addition, the funds are subject to the following additional investment
restrictions that are not fundamental and may be changed by the Board of
Directors.

Subject Policy
- --------------------------------------------------------------------------------
Diversification A fund may not purchase additional investment securities at
any time during which outstanding borrowings exceed 5% of the
total assets of the fund.
- --------------------------------------------------------------------------------
Liquidity A fund may not purchase any security or enter into a
repurchase agreement if, as a result, more than 15% of its
net assets would be invested in repurchase agreements not
entitling the holder to payment of principal and interest
within seven days and in securities that are illiquid by
virtue of legal or contractual restrictions on resale or the
absence of a readily available market.
- --------------------------------------------------------------------------------
Short Sales A fund may not sell securities short, unless it owns or has
the right to obtain securities equivalent in kind and amount
to the securities sold short, and provided that transactions
in futures contracts and options are not deemed to constitute
selling securities short.
- --------------------------------------------------------------------------------
Margin A fund may not purchase securities on margin, except to
obtain such short-term credits as are necessary for the
clearance of transactions, and provided that margin payments
in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on
margin.
- --------------------------------------------------------------------------------

Statement of Additional Information 15

The Investment Company Act imposes certain additional restrictions upon
acquisition by the funds of securities issued by insurance companies,
broker-dealers, underwriters or investment advisors, and upon transactions with
affiliated persons as therein defined. It also defines and forbids the creation
of cross and circular ownership. Neither the SEC nor any other agency of the
federal or state government participates in or supervises the management of the
funds or their investment practices or policies.

The Investment Company Act also provides that the funds may not invest more
than 25% of their assets in the securities of issuers engaged in a single
industry. In determining industry groups for purposes of this restriction, the
SEC ordinarily uses the Standard Industry Classification codes developed by the
United States Office of Management and Budget. In the interest of ensuring
adequate diversification, the funds monitor industry concentration using a more
restrictive list of industry groups than that recommended by the SEC. The funds
believe that these classifications are reasonable and are not so broad that the
primary economic characteristics of the companies in a single class are
materially different. The use of these restrictive industry classifications may,
however, cause the funds to forego investment possibilities that may otherwise
be available to them under the Investment Company Act.

PORTFOLIO TURNOVER

The portfolio turnover rates of the funds are shown in the Financial
Highlights tables in the Prospectuses.

VP INCOME & GROWTH

The fund managers will consider the length of time a security has been held
in determining whether to sell it. Accordingly, the fund's rate of portfolio
rturnover is not expected to exceed 150%.

OTHER FUNDS

With respect to each other fund, the managers will purchase and sell
securities without regard to the length of time the security has been held.
Accordingly, the fund's rate of portfolio turnover may be substantial.

The fund managers intend to purchase a given security whenever the managers
believe it will contribute to the stated objective of the fund. In order to
achieve each fund's investment objective, the managers may sell a given
security, no matter how long or how short a period it has been held in the
portfolio, and no matter whether the sale is at a gain or at a loss, if the
managers believe that the security is not fulfilling its purpose because, among
other things: it did not live up to the managers' expectations; it may be
replaced with another security holding greater promise; it has reached its
optimum potential; there was a change in the circumstances of a particular
company, industry or general economic conditions; or some combination of such
reasons.

Because investment decisions are based on the anticipated contribution of
the security in question to a fund's objective, the managers believe that the
rate of portfolio turnover is irrelevant when they believe a change is in order
to achieve the objective. As a result, a fund's annual portfolio turnover rate
cannot be anticipated and may be higher than other mutual funds with similar
investment objectives. Higher turnover would generate correspondingly greater
brokerage commissions, which is a cost the funds pay directly. Portfolio
turnover also may affect the character of capital gains realized and distributed
by the fund, if any, since short-term capital gains are taxable as ordinary
income. This disclosure regarding portfolio turnover is a statement of
fundamental policy and may be changed only by a vote of the shareholders.

Because the managers do not take portfolio turnover rate into account in
making investment decisions, (1) the managers have no intention of accomplishing
any particular rate of portfolio turnover, whether high or low, and (2) the
portfolio turnover rates in the past should not be considered as representative
of the rates that will be attained in the future.

MANAGEMENT

THE BOARD OF DIRECTORS

The Board of Directors oversees the management of the funds and meets at
least quarterly to review reports about fund operations. Although the Board of
Directors does not manage the funds, it has hired the advisor to do so.
Two-thirds of the directors are

16 American Century Investments

independent of the funds' advisor; that is, they are not employed by and have no
financial interest in the advisor.

The individuals listed in the table below whose names are marked by an
asterisk (*) are interested persons of the funds (as defined in the Investment
Company Act) by virtue of, among other considerations, their affiliation with
either the funds; the advisor, American Century Investment Management, Inc.
(ACIM); the funds' agent for transfer and administrative services, American
Century Services Corporation (ACSC); the parent corporation, American Century
Companies, Inc. (ACC) or ACC's subsidiaries; the funds' distribution agent and
co-administrator, Funds Distributor, Inc. (FDI); or other funds advised by the
advisor. Each director listed below serves as a director of six registered
investment companies in the American Century family of funds, which are also
advised by the advisor.

Name (Age) Position(s) Held Principal Occupation(s)
Address With Fund During Past Five Years
- --------------------------------------------------------------------------------
James E. Stowers, Jr.* (74) Director, Chairman, Director and
4500 Main Street Chairman of the Board controlling shareholder,
Kansas City, MO 64111 ACC
Chairman and Director,
ACIM, ACSC and ACIS
Father of James E. Stowers
III
- --------------------------------------------------------------------------------
James E. Stowers III* (40) Director Director and Chief
4500 Main Street Executive Officer, ACC
Kansas City, MO 64111 ACIM, ACSC and ACIS
Son of James E. Stowers,
Jr.
- --------------------------------------------------------------------------------
Thomas A. Brown (58) Director Director of Plains States
4500 Main Street Development, Applied
Kansas City, MO 64111 Industrial Technologies,
Inc., a corporation
engaged in the sale of
bearings and power
transmission products
- --------------------------------------------------------------------------------
Robert W. Doering, M.D. (65) Director Retired, formerly a
4500 Main Street general surgeon
Kansas City, MO 64111
- --------------------------------------------------------------------------------
Andrea C. Hall, Ph.D. (54) Director Senior Vice President and
4500 Main Street Associate Director,
Kansas City, MO 64111 Midwest Research Institute
- --------------------------------------------------------------------------------
D.D. (Del) Hock (63) Director Retired, formerly
4500 Main Street Chairman, Public Service
Kansas City, MO 64111 Company of Colorado
Director, Service Tech,
Inc., Hathaway
Corporation and J.D.
Edwards & Company
- --------------------------------------------------------------------------------
Donald H. Pratt (60) Director, President and Director,
4500 Main Street Vice Chairman Butler Manufacturing
Kansas City, MO 64111 of the Board Company
- --------------------------------------------------------------------------------
Lloyd T. Silver, Jr. (70) Director President, LSC, Inc.,
4500 Main Street manufacturer's
Kansas City, MO 64111 representative
- --------------------------------------------------------------------------------
M. Jeannine Strandjord (52) Director Senior Vice President,
4500 Main Street Finance, Sprint
Kansas City, MO 64111 Corporation
Director, DST Systems,
Inc.
- --------------------------------------------------------------------------------

Statement of Additional Information 17

COMMITTEES

The Board has four standing committees to oversee specific functions of the
funds' operations. Information about these committees appears in the table
below. The director first named acts as chairman of the committee.

Committee Members Function of Committee
- --------------------------------------------------------------------------------
Executive James E. Stowers, Jr. The Executive Committee performs the
James E. Stowers III function of the Board of Directors
Donald H. Pratt between Board meetings, subject to the
limitations on its power set out in the
Maryland General Corporation Law, and
except for matters required by the
Investment Company Act to be acted upon
by the whole Board.
- --------------------------------------------------------------------------------
Compliance Thomas A. Brown The Compliance Committee reviews the
Donald H. Pratt results of the funds' compliance testing
Lloyd T. Silver, Jr. program, reviews quarterly reports from
Andrea C. Hall, Ph.D. the advisor to the Board regarding
various compliance matters, and monitors
the implementation of the funds' Code of
Ethics, including any violations thereof.
- --------------------------------------------------------------------------------
Audit M. Jeannine Strandjord The Audit Committee recommends the
Robert W. Doering, M.D. engagement of the funds' independent
D.D. (Del) Hock auditors and oversees its activities.
The Committee receives reports from the
advisor's Internal Audit Department,
which is accountable to the Committee.
The Committee also receives reporting
about compliance matters affecting the
funds.
- --------------------------------------------------------------------------------
Nominating Donald H. Pratt The Nominating Committee primarily
D.D. (Del) Hock considers and recommends individuals for
James E. Stowers III nomination as directors. The names of
potential director candidates are drawn
from a number of sources, including
recommendations from Board members,
management and shareholders. This
committee also reviews and makes
recommendations to the Board with respect
to the composition of Board committees
and other Board-related matters,
including its organization, size,
composition, responsibilities, functions
and compensation.
- --------------------------------------------------------------------------------

COMPENSATION OF DIRECTORS

The directors also serve as directors for five American Century investment
companies other than the corporation. Each director who is not an interested
person as defined in the Investment Company Act receives compensation for
service as a member of the Board of all six such companies based on a schedule
that takes into account the number of meetings attended and the assets of the
funds for which the meetings are held. These fees and expenses are divided among
the six investment companies based, in part, upon their relative net assets.
Under the terms of the management agreement with the advisor, the funds are
responsible for paying such fees and expenses.

The table presented shows the aggregate compensation paid by the corporation
for the periods indicated and by the six investment companies served by this
Board to each director who is not an interested person as defined in the
Investment Company Act.

Aggregate Director Compensation for Fiscal Year Ended December 31, 1998
- --------------------------------------------------------------------------------
Total Total Compensation
Compensation from the
from the American Century
Name of Director Funds(1) Family of Funds(2)
- --------------------------------------------------------------------------------
Thomas A. Brown $1,409 $52,167
Robert W. Doering, M.D. 1,312 50,167
Andrea C. Hall, Ph.D. 1,356 50,167
D.D. (Del) Hock 1,356 50,167
Donald H. Pratt 1,409 52,167
Lloyd T. Silver, Jr. 1,356 50,167
M. Jeannine Strandjord 1,410 52,167

(1) Includes compensation paid to the directors during the fiscal year ended
December 31, 1998, and also includes amounts deferred at the election of the
directors under the American Century Mutual Funds Deferred Compensation Plan
for Non-Interested Directors and Trustees. The total amount of deferred
compensation included in the preceding table is as follows: Mr. Brown, $190;
Dr. Hall, $610; Mr. Hock, $1,220; Mr. Pratt, $420; Mr. Silver, $959 and Ms.
Strandjord, $1,206.

(2) Includes compensation paid by the six investment company members of the
American Century family of funds served by this Board.

18 American Century Investments

The funds have adopted the American Century Deferred Compensation Plan for
Non-Interested Directors and Trustees. Under the plan, the independent directors
may defer receipt of all or any part of the fees to be paid to them for serving
as directors of the funds.

All deferred fees are credited to an account established in the name of the
directors. The amounts credited to the account then increase or decrease, as the
case may be, in accordance with the performance of one or more of the American
Century funds that are selected by the director. The account balance continues
to fluctuate in accordance with the performance of the selected fund or funds
until final payment of all amounts credited to the account. Directors are
allowed to change their designation of mutual funds from time to time.

No deferred fees are payable until such time as a director resigns, retires
or otherwise ceases to be a member of the Board of Directors. Directors may
receive deferred fee account balances either in a lump sum payment or in
substantially equal installment payments to be made over a period not to exceed
10 years. Upon the death of a director, all remaining deferred fee account
balances are paid to the director's beneficiary or, if none, to the director's
estate.

The plan is an unfunded plan and, accordingly, the funds have no obligation
to segregate assets to secure or fund the deferred fees. The rights of directors
to receive their deferred fee account balances are the same as the rights of a
general unsecured creditor of the funds. The plan may be terminated at any time
by the administrative committee of the plan. If terminated, all deferred fee
account balances will be paid in a lump sum.

No deferred fees were paid to any director under the plan during the fiscal
year ended December 31, 1998.

OFFICERS

Background information for the officers of the funds is provided in the
following table. All persons named as officers of the funds also serve in
similar capacities for the 12 other investment companies advised by American
Century. Not all officers of the funds are listed; only those officers with
policy-making functions for the funds are listed. No officer is compensated for
his or her service as an officer of the funds. The individuals listed in the
table are interested persons of the funds (as defined in the Investment Company
Act) by virtue of, among other considerations, their affiliation with either the
funds, ACC, ACC's subsidiaries (including ACIM and ACSC), or the funds'
distributor (FDI), as specified in the following table.

Statement of Additional Information 19

Position(s) Principal Occupation(s) During
Name (Age) Held With Fund Past Five Years
- --------------------------------------------------------------------------------
George A. Rio (44) President Executive Vice President and
60 State Street, Suite 1300 Director of Client Services, FDI
Boston, MA 02109 (March 1998 to present)
Senior Vice President and Senior
Key Account Manager, Putnam
Mutual Funds (June 1995 to March
1998)
Director of Business Development,
First Data Corporation (May 1994
to June 1995) Senior Vice
President and Manager of Client
Services and Director of Internal
Audit, The Boston Company, Inc.
(September 1983 to May 1994)
- --------------------------------------------------------------------------------
Christopher J. Kelley (34) Vice President Vice President and Associate
60 State Street, Suite 1300 General Counsel, FDI (since July
Boston, MA 02109 1996)
Assistant Counsel, Forum
Financial Group (April 1994 to
July 1996)
Compliance Officer, Putnam
Investments (1992 to April 1994)
- --------------------------------------------------------------------------------
Mary A. Nelson (34) Vice President Vice President and Manager of
60 State Street, Suite 1300 Treasury Services and
Boston, MA 02109 Administration, FDI (1994 to
present)
Assistant Vice President and
Client Manager, The Boston
Company, Inc. (1989 to 1994)
- --------------------------------------------------------------------------------
Maryanne Roepke, CPA (43) Vice President Senior Vice President, Treasurer
4500 Main Street and Treasurer and Principal Accounting Officer,
Kansas City, MO 64111 ACSC
- --------------------------------------------------------------------------------
David C. Tucker (40) Vice President Senior Vice President and General
4500 Main Street Counsel, ACSC and ACIM (June 1998
Kansas City, MO 64111 to present)
General Counsel, ACC (June 1998
to present) Consultant to mutual
fund industry (May 1997 to April
1998) Vice President and General
Counsel, Janus Companies (1990 to
1997)
- --------------------------------------------------------------------------------
Paul J. Carrigan, Jr. (49) Secretary Secretary, ACC (December 1998 to
4500 Main Street present)
Kansas City, MO 64111 Director of Legal Operations,
ACSC (February 1996 to present)
Board Communications Manager,
The Benham Company (April 1994
to January 1996)
Legal Coordinator, State of
California Health & Welfare
Agency (February 1992 to March
1994)
- --------------------------------------------------------------------------------
Merele A. May (36) Controller Vice President and Controller--
4500 Main Street Fund Accounting, ACSC
Kansas City, MO 64111
- --------------------------------------------------------------------------------
Robert J. Leach (32) Controller Controller--Fund Accounting, ACSC
4500 Main Street
Kansas City, MO 64111
- --------------------------------------------------------------------------------
C. Jean Wade (35) Controller Controller--Fund Accounting, ACSC
4500 Main Street
Kansas City, MO 64111
- --------------------------------------------------------------------------------
Jon Zindel (32) Tax Officer Director of Taxation, ACSC (since
4500 Main Street 1996)
Kansas City, MO 64111 Tax Manager, Price Waterhouse LLP
(1989 - 1996)
- --------------------------------------------------------------------------------

20 American Century Investments

THE FUNDS' PRINCIPAL SHAREHOLDERS

As of April 1, 1999, the following companies were the record owners of more
than 5% of a fund's outstanding shares:

Shareholder and Percentage
Fund of Shares Outstanding
- --------------------------------------------------------------------------------
VP Capital Appreciation Nationwide Life Insurance Company
Columbus, Ohio -- 64.3%

Mutual of America
New York, New York -- 9.5%

Great-West Life and Annuity Company
Englewood, Colorado -- 6.9%

Lincoln National Life Insurance Company Ft.
Wayne, Indiana -- 6.6%

Penn Mutual Life Insurance
Philadelphia, Pennsylvania -- 6.3%
- --------------------------------------------------------------------------------
VP Advantage Nationwide Life Insurance Company
Columbus, Ohio -- 98.5%
- --------------------------------------------------------------------------------
VP Balanced Nationwide Life Insurance Company
Columbus, Ohio -- 77.5%

Lincoln National Life Insurance Company Ft.
Wayne, Indiana -- 13.5%
- --------------------------------------------------------------------------------
VP International Nationwide Life Insurance Company
Columbus, Ohio -- 89.6%
- --------------------------------------------------------------------------------
VP Value IDS Life Insurance company
Minneapolis, Minnesota -- 66.2%

Nationwide Life Insurance Company
Columbus, Ohio -- 26.7%
- --------------------------------------------------------------------------------
VP Income & Growth Nationwide Life Insurance Company
Columbus, Ohio -- 82.6%
- --------------------------------------------------------------------------------

The funds are unaware of any other shareholders, beneficial or of record,
who own more than 5% of a fund's outstanding shares. As of April 1, 1999, the
officers and directors of the funds, as a group, own less than 1% of any fund's
outstanding shares.

SERVICE PROVIDERS

The funds have no employees. To conduct the funds' day-to-day activities,
the funds have hired a number of service providers. Each service provider has a
specific function to fill on behalf of the funds and is described below.

ACIM and ACSC are both wholly owned by ACC. James E. Stowers Jr., Chairman
of ACC, controls ACC by virtue of his ownership of a majority of its voting
stock.

INVESTMENT ADVISOR

Each fund has an investment management agreement with the advisor dated
November 16, 1998. This agreement was approved by the shareholders of each of
the funds on November 16, 1998.

A description of the responsibilities of the advisor appears in the
Prospectus under the heading "Management."

For the services provided to the funds, the advisor receives a monthly fee
based on a percentage of the average net assets of the fund as follows:

Fund Percentage of Average Net Assets
- --------------------------------------------------------------------------------
VP Capital Appreciation 1.00% of first $500 million
0.95% of the next $500 million
0.90% over $1 billion
- --------------------------------------------------------------------------------
VP International 1.50% of first $250 million
1.20% of the next $250 million
1.10% over $500 million
- --------------------------------------------------------------------------------
VP Value 1.00% of first $500 million
0.95% of the next $500 million
0.90% over $1 billion
- --------------------------------------------------------------------------------
VP Balanced 0.90% of first $250 million
0.85% of the next $250 million
0.80% over $500 million
- --------------------------------------------------------------------------------
VP Income & Growth 0.70%
- --------------------------------------------------------------------------------
VP Advantage 1.00%
- --------------------------------------------------------------------------------

On the first business day of each month, the funds pay a management fee to
the advisor for the previous month at the specified rate. The fee for the
previous month is calculated by multiplying the applicable fee for the fund by
the aggregate average daily closing value of a fund's net assets during the
previous month, by a fraction, the numerator of which is the number of days in
the previous month and the denominator of which is 365 (366 in leap years).

The management agreement shall continue in effect until the earlier of the
expiration of two years

Statement of Additional Information 21

from the date of its execution or until the first meeting of shareholders
following such execution and for as long thereafter as its continuance is
specifically approved at least annually by (1) the funds' Board of Directors, or
by the vote of a majority of outstanding votes (as defined in the Investment
Company Act) and (2) by the vote of a majority of the directors of the funds who
are not parties to the agreement or interested persons of the advisor, cast in
person at a meeting called for the purpose of voting on such approval.

The management agreement provides that it may be terminated at any time
without payment of any penalty by the funds' Board of Directors, or by a vote of
a majority of outstanding votes, on 60 days' written notice to the advisor, and
that it shall be automatically terminated if it is assigned.

The management agreement provides that the advisor shall not be liable to
the funds or their shareholders for anything other than willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations and duties.

The management agreement also provides that the advisor and its officers,
directors and employees may engage in other business, devote time and attention
to any other business whether of a similar or dissimilar nature, and render
services to others.

Certain investments may be appropriate for the funds and also for other
clients advised by the advisor. Investment decisions for the funds and other
clients are made with a view to achieving their respective investment objectives
after consideration of such factors as their current holdings, availability of
cash for investment and the size of their investment generally. A particular
security may be bought or sold for only one client or fund, or in different
amounts and at different times for more than one but less than all clients or
funds. In addition, purchases or sales of the same security may be made for two
or more clients or funds on the same date. Such transactions will be allocated
among clients in a manner believed by the advisor to be equitable to each. In
some cases this procedure could have an adverse effect on the price or amount of
the securities purchased or sold by a fund.

The advisor may aggregate purchase and sale orders of the funds with
purchase and sale orders of its other clients when the advisor believes that
such aggregation provides the best execution for the funds. The corporation's
Board of Directors has approved the policy of the advisor with respect to the
aggregation of portfolio transactions. Where portfolio transactions have been
aggregated, the funds participate at the average share price for all
transactions in that security on a given day and share transaction costs on a
pro rata basis. The advisor will not aggregate portfolio transactions of the
funds unless it believes such aggregation is consistent with its duty to seek
best execution on behalf of the funds and the terms of the management agreement.
The advisor receives no additional compensation or remuneration as a result of
such aggregation.

Unified management fees incurred by each fund for the fiscal periods ended
December 31, 1998, 1997 and 1996, are indicated in the following table.

UNIFIED MANAGEMENT FEES

Fund 1998 1997 1996
- --------------------------------------------------------------------------------
VP Advantage $253,470 $249,359 $238,392

VP Balanced 2,453,205 2,346,313 1,832,133

VP Capital Appreciation 4,894,589 10,378,643 14,401,981

VP Income & Growth 260,827 1,290 N/A

VP International 5,241,848 2,659,954 1,170,843

VP Value 2,623,453 985,657 62,187
- --------------------------------------------------------------------------------

OTHER ADVISORY RELATIONSHIPS

In addition to managing the funds, the advisor also serves as an investment
advisor to nine institutional accounts and to the following registered
investment companies:

American Century World Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Mutual Funds, Inc.
American Century Capital Portfolios, Inc.
American Century Strategic Asset Allocations, Inc.
American Century Municipal Trust
American Century Government Income Trust
American Century Investment Trust
American Century Target Maturities Trust
American Century Quantitative Equity Funds
American Century International Bond Funds
American Century California Tax-Free and Municipal Funds

22 American Century Investments

TRANSFER AGENT AND ADMINISTRATOR

American Century Services Corporation, 4500 Main Street, Kansas City,
Missouri 64111, acts as transfer agent and dividend-paying agent for the funds.
It provides physical facilities, computer hardware and software and personnel,
for the day-to-day administration of the funds and of the advisor. The advisor
pays ACSC for such services.

From time to time, special services may be offered to shareholders who
maintain higher share balances in our family of funds. These services may
include the waiver of minimum investment requirements, expedited confirmation of
shareholder transactions, newsletters and a team of personal representatives.
Any expenses associated with these special services will be paid by the advisor.

Pursuant to a Sub-Administration Agreement with the advisor, Funds
Distributor, Inc. (FDI) serves as the co-administrator for the funds. FDI is
responsible for (i) providing certain officers of the funds and (ii) reviewing
and filing marketing and sales literature on behalf of the funds. The fees and
expenses of FDI are paid by the advisor out of its unified fee.

DISTRIBUTOR

The funds' shares are distributed by FDI, a registered broker-dealer. The
distributor is a wholly owned, indirect subsidiary of Boston Institutional
Group, Inc. The distributor's principal business address is 60 State Street,
Suite 1300, Boston, Massachusetts 02109.

The distributor is the principal underwriter of the funds' shares. The
distributor makes a continuous, best-efforts underwriting of the funds' shares.
This means that the distributor has no liability for unsold shares.

OTHER SERVICE PROVIDERS

CUSTODIAN BANKS

Chase Manhattan Bank, 770 Broadway, 10th Floor, New York, New York
10003-9598, and Commerce Bank, N.A., 1000 Walnut, Kansas City, Missouri 64105,
each serve as custodian of the assets of the funds. The custodians take no part
in determining the investment policies of the funds or in deciding which
securities are purchased or sold by the funds. The funds, however, may invest in
certain obligations of the custodians and may purchase or sell certain
securities from or to the custodians.

INDEPENDENT AUDITORS

Deloitte & Touche LLP is the independent auditors of the funds. The address
of Deloitte & Touche LLP is 1010 Grand Boulevard, Kansas City, Missouri 64106.
As the independent auditors of the funds, Deloitte & Touche LLP provides
services including (1) audit of the annual financial statements for each fund,
(2) assistance and consultation in connection with SEC filings and (3) review of
the annual federal income tax return filed for each fund.

BROKERAGE ALLOCATION

VP CAPITAL APPRECIATION, VP INCOME & GROWTH,
VP INTERNATIONAL, VP VALUE AND THE EQUITY
PORTIONS OF VP ADVANTAGE AND VP BALANCED

Under the management agreement between the funds and the advisor, the
advisor has the responsibility of selecting brokers and dealers to execute
portfolio transactions. The funds' policy is to secure the most favorable prices
and execution of orders on its portfolio transactions. So long as that policy is
met, the advisor may take into consideration the factors discussed below when
selecting brokers.

The advisor receives statistical and other information and services,
including research, without cost from brokers and dealers. The advisor evaluates
such information and services, together with all other information that it may
have, in supervising and managing the investments of the funds. Because such
information and services may vary in amount, quality and reliability, their
influence in selecting brokers varies from none to very substantial. The advisor
proposes to continue to place some of the funds' brokerage business with one or
more brokers who provide information and services. Such information and services
will be in addition to and not in lieu of services required to be performed by
the advisor. The advisor does not utilize brokers that provide such information
and services for the purpose of reducing the expense of providing required
services to the funds.

Statement of Additional Information 23

In the years ended December 31, 1998, 1997 and 1996, the brokerage
commissions of each fund were as follows:

Fund 1998 1997 1996
- --------------------------------------------------------------------------------
VP Advantage $17,642 $20,302 $19,734
VP Balanced 434,556 294,313 235,149
VP Capital Appreciation 1,644,572 1,573,432 3,879,230
VP Income & Growth 65,385 N/A N/A
VP International 2,408,681 1,329,778 630,547
VP Value 1,067,939 466,557 25,821
- --------------------------------------------------------------------------------

The brokerage commissions paid by the funds may exceed those that another
broker might have charged for effecting the same transactions, because of the
value of the brokerage and research services provided by the broker. Research
services furnished by brokers through whom the funds effect securities
transactions may be used by the advisor in servicing all of its accounts, and
not all such services may be used by the advisor in managing the portfolios of
the funds.

The staff of the SEC has expressed the view that the best price and
execution of over-the-counter transactions in portfolio securities may be
secured by dealing directly with principal market makers, thereby avoiding the
payment of compensation to another broker. In certain situations, the officers
of the funds and the advisor believe that the facilities, expert personnel and
technological systems of a broker often enable the funds to secure as good a net
price by dealing with a broker instead of a principal market maker, even after
payment of the compensation to the broker. The funds regularly place their
over-the-counter transactions with principal market makers, but may also deal on
a brokerage basis when utilizing electronic trading networks or as circumstances
warrant.

THE FIXED-INCOME PORTIONS OF VP ADVANTAGE
AND VP BALANCED

Under the management agreement between the funds and the advisor, the
advisor has the responsibility of selecting brokers and dealers to execute
portfolio transactions. In many transactions, the selection of the broker or
dealer is determined by the availability of the desired security and its
offering price. In other transactions, the selection of broker or dealer is a
function of the selection of market and the negotiation of price, as well as the
broker's general execution and operational and financial capabilities in the
type of transaction involved. The advisor will seek to obtain prompt execution
of orders at the most favorable prices or yields. The advisor may choose to
purchase and sell portfolio securities to and from dealers who provide services
or research, statistical and other information to the funds and to the advisor.
Such information or services will be in addition to and not in lieu of the
services required to be performed by the advisor, and the expenses of the
advisor will not necessarily be reduced as a result of the receipt of such
supplemental information.

INFORMATION ABOUT FUND SHARES

Each of the six funds named on the front of this Statement of Additional
Information is a series of shares issued by the corporation, and shares of each
fund have equal voting rights.

Each fund votes separately on matters affecting that fund exclusively.
Voting rights are not cumulative, so that investors holding more than 50% of the
corporation's (i.e., all funds') outstanding shares may be able to elect a Board
of Directors. The corporation undertakes dollar-based voting, meaning that the
number of votes a shareholder is entitled to is based upon the dollar amount of
the shareholder's investment. The election of directors is determined by the
votes received from all the corporation shareholders without regard to whether a
majority of shares of any one fund voted in favor of a particular nominee or all
nominees as a group.

The assets belonging to each series of shares are held separately by the
custodian and the shares of each series represent a beneficial interest in the
principal, earnings and profit (or losses) of investments and other assets held
for each series. Your rights as a shareholder are the same for all series of
securities unless otherwise stated. Within their respective series, all shares
have equal redemption rights. Each share, when issued, is fully paid and
non-assessable.

24 American Century Investments

In the event of complete liquidation or dissolution of the funds,
shareholders of each series of shares shall be entitled to receive, pro rata,
all of the assets less the liabilities of that series.

Each shareholder has rights to dividends and distributions declared by the
fund he or she owns and to the net assets of such fund upon its liquidation or
dissolution proportionate to his or her share ownership interest in the fund.

VALUATION OF A FUND'S SECURITIES

Each fund's net asset value per share (NAV) is calculated as of the close of
business of the New York Stock Exchange (the Exchange), usually at 4 p.m.
Eastern time on each day the Exchange is open for business. The Exchange
typically observes the following holidays: New Year's Day, Martin Luther King
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day. Although the funds expect the same
holidays to be observed in the future, the Exchange may modify its holiday
schedule at any time.

Each fund's NAV is calculated by adding the value of all portfolio
securities and other assets, deducting liabilities and dividing the result by
the number of shares outstanding. Expenses and interest earned on portfolio
securities are accrued daily.

The portfolio securities of the fund, except as otherwise noted, listed or
traded on a domestic securities exchange are valued at the last sale price on
that exchange. Portfolio securities primarily traded on foreign securities
exchanges are generally valued at the preceding closing values of such
securities on the exchange where primarily traded. If no sale is reported, or if
local convention or regulation so provides, the mean of the latest bid and asked
prices is used. Depending on local convention or regulation, securities traded
over-the-counter are priced at the mean of the latest bid and asked prices, or
at the last sale price. When market quotations are not readily available,
securities and other assets are valued at fair value as determined in accordance
with procedures adopted by the Board of Directors.

Debt securities not traded on a principal securities exchange are valued
through valuations obtained from a commercial pricing service or at the most
recent mean of the bid and asked prices provided by investment dealers in
accordance with procedures established by the Board of Directors.

Because there are hundreds of thousands of municipal issues outstanding, and
the majority of them do not trade daily, the prices provided by pricing services
for these types of securities are generally determined without regard to bid or
last sale prices. In valuing securities, the pricing services generally take
into account institutional trading activity, trading in similar groups of
securities, and any developments related to specific securities. The methods
used by the pricing service and the valuations so established are reviewed by
the advisor under the general supervision of the Board of Directors. There are a
number of pricing services available, and the advisor, on the basis of ongoing
evaluation of these services, may use other pricing services or discontinue the
use of any pricing service in whole or in part.

Securities maturing within 60 days of the valuation date may be valued at
cost, plus or minus any amortized discount or premium, unless the directors
determine that this would not result in fair valuation of a given security.
Other assets and securities for which quotations are not readily available are
valued in good faith at their fair value using methods approved by the Board of
Directors.

The value of an exchange-traded foreign security is determined in its
national currency as of the close of trading on the foreign exchange on which it
is traded or as of the close of business on the New York Stock Exchange, if that
is earlier. That value is then translated to dollars at the prevailing foreign
exchange rate.

Trading in securities on European and Far Eastern securities exchanges and
over-the-counter markets is normally completed at various times before the close
of business on each day that the New York Stock Exchange is open. If an event
were to occur after the value of a security was established but before the net
asset value per share was determined that was likely to materially change the
net asset value, then that security would be valued at fair value as determined
in accordance with procedures adopted by the Board of Directors.

Statement of Additional Information 25

Trading of these securities in foreign markets may not take place on every
New York Stock Exchange business day. In addition, trading may take place in
various foreign markets on Saturdays or on other days when the New York Stock
Exchange is not open and on which a fund's net asset value is not calculated.
Therefore, such calculation does not take place contemporaneously with the
determination of the prices of many of the portfolio securities used in such
calculation, and the value of a fund's portfolio may be affected on days when
shares of the fund may not be purchased or redeemed.

TAXES

FEDERAL INCOME TAXES

Each fund intends to qualify annually as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code).
By so qualifying, a fund will be exempt from federal income taxes to the extent
that it distributes substantially all of its net investment income and net
realized capital gains (if any) to shareholders. If a fund fails to qualify as a
regulated investment company, it will be liable for taxes, significantly
reducing its distributions to shareholders and eliminating shareholders' ability
to treat distributions of the funds in the manner they were realized by the
funds.

Dividends and interest received by a fund on foreign securities may give
rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. Foreign countries generally do not impose taxes on capital
gains in respect of investments by non-resident investors. The foreign taxes
paid by a fund will reduce its dividends.

If more than 50% of the value of a fund's total assets at the end of each
quarter of its fiscal year consists of securities of foreign corporations, the
fund may qualify for and make an election with the Internal Revenue Service with
respect to such fiscal year so that fund shareholders may be able to claim a
foreign tax credit in lieu of a deduction for foreign income taxes paid by the
fund. If such an election is made, the foreign taxes paid by the fund will be
treated as income received by you. In order for the shareholder to utilize the
foreign tax credit, the mutual fund shares must have been held for 16 days or
more during the 30-day period, beginning 15 days prior to the ex-dividend date
for the mutual fund shares. The mutual fund must meet a similar holding period
requirement with respect to foreign securities to which a dividend is
attributable. Any portion of the foreign tax credit that is ineligible as a
result of the fund not meeting the holding period requirement will be separately
disclosed and may be eligible as an itemized deduction.

If a fund purchases the securities of certain foreign investment funds or
trusts called passive foreign investment companies (PFIC), capital gains on the
sale of such holdings will be deemed to be ordinary income regardless of how
long the fund holds its investment. The fund also may be subject to corporate
income tax and an interest charge on certain dividends and capital gains earned
from these investments, regardless of whether such income and gains are
distributed to shareholders. In the alternative, the fund may elect to recognize
cumulative gains on such investments as of the last day of its fiscal year and
distribute them to shareholders. Any distribution attributable to a PFIC is
characterized as ordinary income.

HOW FUND PERFORMANCE INFORMATION IS CALCULATED

The funds may quote performance in various ways. Fund performance may be
shown by presenting one or more performance measurements, including cumulative
total return, average annual total return or yield.

All performance information advertised by the funds is historical in nature
and is not intended to represent or guarantee future results. The value of fund
shares when redeemed may be more or less than their original cost.

Total returns quoted in advertising and sales literature reflect all aspects
of a fund's return, including the effect of reinvesting dividends and capital
gains distributions (if any) and any change in the fund's NAV during the period.

Average annual total returns are calculated by determining the growth or
decline in value of a hypothetical historical investment in a fund during a
stated period and then calculating the annually compounded percentage rate that
would have produced the same result if the rate of growth or

26 American Century Investments

decline in value had been constant throughout the period. For example, a
cumulative total return of 100% over 10 years would produce an average annual
return of 7.18%, which is the steady annual rate that would equal 100% growth on
a compounded basis in 10 years. While average annual total returns are a
convenient means of comparing investment alternatives, investors should realize
that the funds' performance is not constant over time, but changes from
year-to-year, and that average annual total returns represent averaged figures
as opposed to actual year-to-year performance.

The following table sets forth the average annual total returns of the funds
for the periods indicated as of December 31, 1998.

AVERAGE ANNUAL TOTAL RETURNS

From
Fund 1 year 5 years 10 years Inception(1)
- --------------------------------------------------------------------------------
VP Advantage 17.19% 11.25% N/A 9.75%
VP Balanced 15.77% 12.89% N/A 11.65%
VP Capital Appreciation -2.16% 3.25% 8.70% 8.25%
VP Income & Growth 26.87% N/A N/A 30.68%
VP International 18.76% N/A N/A 12.30%
VP Value 4.81% N/A N/A 15.94%
- --------------------------------------------------------------------------------

(1) The inception dates are: VP Advantage: August 1, 1991; VP Balanced: May 1,
1991; VP Capital Appreciation: November 20, 1987; VP Income & Growth:
October 30, 1997; VP International: May 1, 1994; and VP Value: May 1, 1996.

In addition to average annual total returns, each fund may quote unaveraged
or cumulative total returns reflecting the simple change in value of an
investment over a stated period, including periods other than one, five and 10
years. Average annual and cumulative total returns may be quoted as percentages
or as dollar amounts and may be calculated for a single investment, a series of
investments, or a series of redemptions over any time period. Total returns may
be broken down into their components of income and capital (including capital
gains and changes in share price) to illustrate the relationship of these
factors and their contributions to total return.

Yield is calculated by adding over a 30-day (or one-month) period all
interest and dividend income (net of fund expenses) calculated on each day's
market values, dividing this sum by the average number of fund shares
outstanding during the period, and expressing the result as a percentage of the
fund's share price on the last day of the 30-day (or one-month) period. The
percentage is then annualized. Capital gains and losses are not included in the
calculation.

The following table sets forth yield quotations for the fixed-income
portions of VP Advantage and VP Balanced, and for VP Income & Growth and VP
Value, for the 30-day period ended December 31, 1998, the last day of the fiscal
year pursuant to computation methods prescribed by the SEC.

Fund 30-Day Yield
- --------------------------------------------------------------------------------
VP Advantage (fixed-income portion) 2.15%
VP Balanced (fixed-income portion) 2.25%
VP Income & Growth 1.22%
VP Value 1.15%
- --------------------------------------------------------------------------------

The funds also may elect to advertise cumulative total return. The following
table shows the cumulative total return for the funds since their respective
dates of inception (as noted) through December 31, 1998.

Cumulative
Total Return Date of
Fund Since Inception Inception
- --------------------------------------------------------------------------------
VP Advantage 99.38% 8/1/91
VP Balanced 132.86% 5/1/91
VP Capital Appreciation 141.29% 11/20/87
VP Income & Growth 36.76% 10/30/97
VP International 71.82% 5/1/94
VP Value 48.38% 5/1/96
- --------------------------------------------------------------------------------

PERFORMANCE FIGURES ADVERTISED BY THE CORPORATION SHOULD NOT BE USED FOR
COMPARATIVE PURPOSES BECAUSE SUCH FIGURES WILL NOT INCLUDE CHARGES AND
DEDUCTIONS IMPOSED BY THE INSURANCE COMPANY SEPARATE ACCOUNT UNDER THE VARIABLE
ANNUITY OR VARIABLE LIFE INSURANCE CONTRACTS.

PERFORMANCE COMPARISONS

The funds' performance may be compared with the performance of other mutual
funds tracked by mutual fund rating services or with other indices of market
performance. This may include comparisons with funds that, unlike the American
Century funds,

Statement of Additional Information 27

are sold with a sales charge or deferred sales charge. Sources of economic data
that may be used for such comparisons may include, but are not limited to, U.S.
Treasury bill, note and bond yields, money market fund yields, U.S. government
debt and percentage held by foreigners, the U.S. money supply, net free
reserves, and yields on current-coupon GNMAs (source: Board of Governors of the
Federal Reserve System); the federal funds and discount rates (source: Federal
Reserve Bank of New York); yield curves for U.S. Treasury securities and
AA/AAA-rated corporate securities (source: Bloomberg Financial Markets); yield
curves for AAA-rated, tax-free municipal securities (source: Telerate); yield
curves for foreign government securities (sources: Bloomberg Financial Markets
and Data Resources, Inc.); total returns on foreign bonds (source: J.P. Morgan
Securities Inc.); various U.S. and foreign government reports; the junk bond
market (source: Data Resources, Inc.); the CRB Futures Index (source: Commodity
Index Report); the price of gold (sources: London a.m./p.m. fixing and New York
Comex Spot Price); rankings of any mutual fund or mutual fund category tracked
by Lipper, Inc. or Morningstar, Inc.; mutual fund rankings published in major,
nationally distributed periodicals; data provided by the Investment Company
Institute; Ibbotson Associates, Stocks, Bonds, Bills and Inflation; major
indices of stock market performance; and indices and historical data supplied by
major securities brokerage or investment advisory firms. The funds also may
utilize reprints from newspapers and magazines furnished by third parties to
illustrate historical performance or to provide general information about the
funds.

PERMISSIBLE ADVERTISING INFORMATION

From time to time, the funds may, in addition to any other permissible
information, include the following types of information in advertisements,
supplemental sales literature and reports to shareholders: (1) discussions of
general economic or financial principles (such as the effects of compounding and
the benefits of dollar-cost averaging); (2) discussions of general economic
trends; (3) presentations of statistical data to supplement such discussions;
(4) descriptions of past or anticipated portfolio holdings for one or more of
the funds; (5) descriptions of investment strategies for one or more of the
funds; (6) descriptions or comparisons of various savings and investment
products (including, but not limited to, qualified retirement plans and
individual stocks and bonds), which may or may not include the funds; (7)
comparisons of investment products (including the funds) with relevant market or
industry indices or other appropriate benchmarks; (8) discussions of fund
rankings or ratings by recognized rating organizations; and (9) testimonials
describing the experience of persons that have invested in one or more of the
funds. The funds also may include calculations, such as hypothetical compounding
examples, which describe hypothetical investment results in such communications.
Such performance examples will be based on an express set of assumptions and are
not indicative of the performance of any of the funds.

FINANCIAL STATEMENTS

The financial statements of the funds are included in the Annual Reports to
shareholders for the fiscal year ended December 31, 1998. Each Annual Report is
incorporated herein by reference. You may receive copies of the reports without
charge upon request to American Century at the address and telephone number
shown on the back cover of this Statement of Additional Information.

EXPLANATION OF FIXED-INCOME SECURITIES RATINGS

As described in the Prospectuses, the funds may invest in fixed-income
securities. Those investments, however, are subject to certain credit quality
restrictions, as noted in the Prospectuses. The following is a summary of the
rating categories referenced in the prospectus disclosure.

28 American Century Investments

BOND RATINGS

S&P Moody's Description
- --------------------------------------------------------------------------------
AAA Aaa These are the highest ratings assigned by S&P and Moody's to
a debt obligation. The ratings indicate an extremely strong
capacity to pay interest and repay principal.
- --------------------------------------------------------------------------------
AA Aa Debt rated in this category is considered to have a very strong
capacity to pay interest and repay principal. It differs from
AAA/Aaa issues only in a small degree.
- --------------------------------------------------------------------------------
A A Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than debt in higher-rated categories.
- --------------------------------------------------------------------------------
BBB Baa Debt rated BBB/Baa is regarded as having an adequate
capacity to pay interest and repay principal. Whereas it
normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to
lead to a weakened capacity to pay interest and repay principal
for debt in this category than in higher-rated categories.
- --------------------------------------------------------------------------------
BB Ba Debt rated BB/Ba has less near-term vulnerability to default
than other speculative issues. However, it faces major ongoing
uncertainties or exposure to adverse business, financial or
economic conditions that could lead to inadequate capacity to
meet timely interest and principal payments. The BB rating
category also is used for debt subordinated to senior debt that
is assigned an actual or implied BBB-rating.
- --------------------------------------------------------------------------------
B B Debt rated B has a greater vulnerability to default but
currently has the capacity to meet interest payments and
principal repayments. Adverse business, financial or economic
conditions will likely impair capacity or willingness to pay
interest and repay principal. The B rating category also is used
for debt subordinated to senior debt that is assigned an actual
or implied BB/Ba or BB-/Ba3 rating.
- --------------------------------------------------------------------------------
CCC Caa Debt rated CCC/Caa has a currently identifiable vulnerability to
default and is dependent upon favorable business, financial and
economic conditions to meet timely payment of interest and
repayment of principal. In the event of adverse business,
financial or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The CCC/Caa rating
category also is used for debt subordinated to senior debt that
is assigned an actual or implied B or B-/B3 rating.
- --------------------------------------------------------------------------------
CC Ca The rating CC/Ca typically is applied to debt subordinated to
senior debt that is assigned an actual or implied CCC/Caa
rating.
- --------------------------------------------------------------------------------
C C The rating C typically is applied to debt subordinated to senior
debt, which is assigned an actual or implied CCC-/Caa3 debt
rating. The C rating may be used to cover a situation where a
bankruptcy petition has been filed, but debt service payments
are continued.
- --------------------------------------------------------------------------------
CI -- The rating CI is reserved for income bonds on which no
interest is being paid.
- --------------------------------------------------------------------------------
D D Debt rated D is in payment default. The D rating category is
used when interest payments or principal payments are not made
on the date due even if the applicable grace period has not
expired, unless S&P believes that such payments will be made
during such grace period. The D rating is used upon the filing
of a bankruptcy petition if debt service payments are
jeopardized.
- --------------------------------------------------------------------------------

Statement of Additional Information 29

To provide more detailed indications of credit quality, the Standard &
Poor's ratings from AA to CCC may be modified by the addition of a plus or minus
sign to show relative standing within these major rating categories. Similarly,
Moody's adds numerical modifiers (1,2,3) to designate relative standing within
its major bond rating categories. Fitch Investors Service, Inc. also rates bonds
and uses a ratings system that is substantially similar to that used by Standard
& Poor's.

COMMERCIAL PAPER RATINGS

S&P Moody's Description

- --------------------------------------------------------------------------------
A-1 Prime-1 This indicates that the degree of safety regarding
(P-1) timely payment is strong. Standard & Poor's rates those
issues determined to possess extremely strong safety
characteristics as A-1+.

- --------------------------------------------------------------------------------
A-2 Prime-2 Capacity for timely payment on commercial paper is
(P-2) satisfactory, but the relative degree of safety is not
as high as for issues designated A-1. Earnings trends
and coverage ratios, while sound, will be more subject
to variation. Capitalization characteristics, while
still appropriated, may be more affected by external
conditions. Ample alternate liquidity is maintained.

- --------------------------------------------------------------------------------
A-3 Prime-3 Satisfactory capacity for timely repayment. Issues that
(P-3) carry this rating are somewhat more vulnerable to the
adverse changes in circumstances than obligations
carrying the higher designations.

NOTE RATINGS
- --------------------------------------------------------------------------------
S&P Moody's Description
- --------------------------------------------------------------------------------
SP-1 MIG-1; VMIG-1 Notes are of the highest quality enjoying
strong protection from established cash flows of funds
for their servicing or from established and broad-based
access to the market for refinancing, or both.
- --------------------------------------------------------------------------------
SP-2 MIG-2; VMIG-2 Notes are of high quality, with margins
of protection ample, although not so large as in the
preceding group.
- --------------------------------------------------------------------------------
SP-3 MIG-3; VMIG-3 Notes are of favorable quality, with all security
elements accounted for, but lacking the undeniable
strength of the preceding grades. Market access for
refinancing, in particular, is likely to be less
well-established.
- --------------------------------------------------------------------------------
SP-4 MIG-4; VMIG-4 Notes are of adequate quality, carrying
specific risk but having protection and not distinctly
or predominantly speculative.

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

30 American Century Investments

MORE INFORMATION ABOUT THE FUNDS IS CONTAINED IN THESE DOCUMENTS

ANNUAL AND SEMIANNUAL REPORTS

These contain more information about the funds' investments and the market
conditions and investment strategies that significantly affected the funds'
performance during the most recent fiscal period. The annual and semiannual
reports are incorporated by reference into this SAI. This means that these are
legally part of this SAI.

You can receive free copies of the annual and semiannual reports, and ask
questions about the funds, by contacting American Century at one of the
addresses or telephone numbers listed below.

If you own or are considering purchasing fund shares through

* an employer-sponsored retirement plan
* a bank
* a broker-dealer
* an insurance company
* another financial intermediary

you can receive the annual and semiannual reports directly from them.

You also can get information about the funds from the Securities and Exchange
Commission (SEC).

* In person SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location and hours.

* On the Internet www.sec.gov

* By mail SEC Public Reference Section
Washington, D.C. 20549-6009
(The SEC will charge a fee for copying the documents.)

Investment Company Act File No. 811-5188

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

[american century logo(reg.sm)]
American
Century

AMERICAN CENTURY INVESTMENTS
P.O. Box 419385
Kansas City, Missouri 64141-6385

INVESTMENT PROFESSIONAL SERVICE REPRESENTATIVE
1-800-345-3533 or 816-531-5575

WWW.AMERICANCENTURY.COM

TELECOMMUNICATIONS DEVICE FOR THE DEAF
1-800-634-4113 or 816-444-3485

FAX 816-340-4360

SH-SAI-15710 9905
<PAGE>

AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.

PART C OTHER INFORMATION

ITEM 23 EXHIBITS (all exhibits not filed herewith are being incorporated
herein by reference).

(a) (1)Articles of Incorporation of TCI Portfolios, Inc. dated June 3,
1987 (filed electronically as Exhibit 1.1 to Post-Effective Amendment
No. 17 to the Registration Statement on January 16, 1996, File No.
33-14567).

(2) Articles of Amendment of TCI Portfolios, Inc. dated July 22, 1988
(filed electronically as Exhibit 1.2 to Post-Effective Amendment No.
17 to the Registration Statement on January 16, 1996, File No.
33-14567).

(3) Articles of Amendment of TCI Portfolios, Inc. dated August 11,
1993 (filed electronically as Exhibit 1.3 to Post-Effective Amendment
No. 17 to the Registration Statement on January 16, 1996, File No.
33-14567).

(4) Articles Supplementary of TCI Portfolios, Inc., dated November 30,
1992 (filed electronically as Exhibit 1.4 to Post-Effective Amendment
No. 18 to the Registration Statement on March 20, 1996, File No.
33-14567).

(5) Articles Supplementary of TCI Portfolios, Inc., dated April 24,
1995 (filed electronically as Exhibit 1.5 to Post-Effective Amendment
No. 18 to the Registration Statement on March 20, 1996, File No.
33-14567).

(6) Articles Supplementary of TCI Portfolios, Inc., dated March 11,
1996 (filed electronically as Exhibit 1.6 to Post-Effective Amendment
No. 17 to the Registration Statement on January 16, 1996, File No.
33-14567).

(7) Articles of Amendment of TCI Portfolios, Inc., dated April 1, 1997
(filed electronically as Exhibit 1.7 to Post-Effective Amendment No.
20 to the Registration Statement on April 28, 1997, File No.
33-14567).

(8) Articles Supplementary of American Century Variable Portfolios,
Inc., dated May 1, 1997 (filed electronically as Exhibit 1.8 to
Post-Effective Amendment No. 20 to the Registration Statement on April
28, 1997, File No. 33-14567).

(9) Articles Supplementary of American Century Variable Portfolios,
Inc. dated July 28, 1997 (filed electronically as Exhibit 1.9 to
Post-Effective Amendment No. 23 to the Registration Statement on April
27, 1998, File No. 33-14567).

(10) Articles Supplementary of American Century Variable Portfolios,
Inc. dated February 16, 1999 (filed electronically as Exhibit a10 to
Post-Effective Amendment No. 25 to the Registration Statement on March
17, 1999, File No. 33-14567).

(b) (1) Amended and Restated By-Laws of TCI Portfolios, Inc. (filed
electronically as Exhibit 2 to Post-Effective Amendment No. 17 to the
Registration Statement on January 16, 1996, File No. 33-14567).

(2) Amendment to Amended and Restated By-Laws of American Century
Variable Portfolios, Inc. (filed electronically as Exhibit b2 to
Post-Effective Amendment No. 24 to the Registration Statement on
January 15, 1999, File No. 33-14567).

(c) Registrant hereby incorporates by reference, as though set forth fully
herein, Article Fifth, Article Seventh and Article Eighth of
Registrants Articles of Incorporation, appearing as Exhibit 1.1 to
Post-Effective Amendment No. 17 on Form N-1A of the Registrant, and
Article Fifth of Registrants Articles of Amendment, apearing as
Exhibit 1.3 to Post-Effective Amendment No. 17 on Form N-1A of the
Registrant; and Sections 3, 4, 5, 6, 7, 8, 9, 10, 11, 22, 25, 30, 31,
33, 39, ,40, 45 and 46 of Registrants Amendment to By-Laws appearing
as Exhibit 2 to Post-Effective Amendment No. 17 on Form N-1A of the
Registrant, and Sections 25, 32 & 32 of Registrants By-Laws appearing
as Exhibit 2.2 to Post-Effective Amendment No. 23 on Form N-1A of the
Registrant.

(d) Management Agreement between American Century Variable Portfolios,
Inc. and American Century Investment Management, Inc. dated November
16, 1998 (filed electronically as Exhibit d to Post-Effective
Amendment No. 24 to the Registration Statement on January 15, 1999,
File No. 33-14567).

(e) (1) Distribution Agreement between American Century Variable
Portfolios, Inc. and Funds Distributor, Inc. dated January 15, 1998
(filed electronically as Exhibit 6 to Post-Effective Amendment No. 28
to the Registration Statement of American Century Target Maturities
Trust on January 30, 1998, File No. 2-94608).

(2) Amendment No. 1 to the Distribution Agreement between American
Century Variable Portfolios, Inc. and Funds Distributor, Inc. dated
June 1, 1998 (filed electronically as Exhibit 6b to Post-Effective
Amendment No. 11 to the Registration Statment of American Century
Capital Portfolios, Inc. on June 26, 1998, File No. 33-64872).

(3) Amendment No. 2 to the Distribution Agreement between American
Century Variable Portfolios, Inc. and Funds Distributor, Inc. dated
December 1, 1998 (filed electronically as Exhibit 6c to Post-Effective
Amendment No. 12 to the Registration Statement of American Century
World Mutual Funds, Inc. on November 13, 1998, File No. 33-39242).

(4) Amendment No. 3 to the Distribution Agreement between American
Century World Mutual Funds, Inc. and Funds Distributor, Inc. dated
January 29, 1999 (filed electronically as Exhibit e4 to Post-Effective
Amendment No. 24 to the Registration Statement on January 15, 1999,
File No. 33-14567).

(f) Not applicable.

(g) (1) Global Custody Agreement between The Chase Manhattan Bank and the
Twentieth Century and Benham Funds, dated August 9, 1996 (filed
electronically as Exhibit 8 to Post-Effective Amendment No. 31 to the
Registration Statement of American Century Government Income Trust, on
February 7, 1997, File No. 2-99222).

(2) Master Agreement by and between Twentieth Century Services, Inc.
and Commerce Bank, N.A. dated January 22, 1997 (filed electronically
as Exhibit 8e to Post-Effective Amendment No. 76 to the Registration
Statement of American Century Mutual Funds, on February 28, 1997, File
No. 33-14213).

(h) Transfer Agency Agreement with Twentieth Century Services, Inc.
(formerly J.E. Stowers & Company) dated October 15, 1987 (filed
electronically as Exhibit 9 to Post-Effective Amendment No. 19 to the
Registration Statement on September 27, 1996, File No. 33-14567).

(i) Opinion and Consent of Counsel is included herein.

(j) (1) Consent of Deloitte & Touche LLP is included herein.

(2) Power of Attorney dated July 25, 1998 (filed electronically as
Exhibit j3 to Post-Effective Amendment No. 24 to the Registration
Statement on January 15, 1999, File No. 33-14567).

(k) Not applicable.

(l) Not applicable.

(m) Not applicable.

(n) (1) Financial Data Schedule for VP Capital Appreciation is included
herein.

(2) Financial Data Schedule for VP Balanced is included herein.

(3) Financial Data Schedule for VP Advantage is included herein.

(4) Financial Data Schedule for VP International is included herein.

(5) Financial Data Schedule for VP Value is included herein.

(6) Financial Data Schedule for VP Income & Growth is included herein.

(o) Not applicable.

ITEM 24. Persons Controlled by or Under Common Control with Registrant - Not
applicable.

ITEM 25. Indemnification.

The Registrant is a Maryland corporation. Section 2- 418 of the
Maryland General Corporation Law allows a Maryland corporation to
indemnify its officers, directors, employees and agents to the extent
provided in such statute.

Article XIII of the Registrant's Amended Articles of Incorporation,
Exhibits 1(a) and 1(b), requires the indemnification of the
Registrant's directors and officers to the extent permitted by
Section 2-418 of the Maryland General Corporation Law, the Investment
Company Act of 1940 and all other applicable laws.

The Registrant has purchased an insurance policy insuring its
officers and directors against certain liabilities which such
officers and directors may incur while acting in such capacities and
providing reimbursement to the Registrant for sums which it may be
permitted or required to pay to its officers and directors by way of
indemnification against such liabilities, subject in either case to
clauses respecting deductibility and participation.

ITEM 26. Business and Other Connections of Investment Advisor.

American Century Investment Management, Inc., the investment advisor,
is engaged in the business of managing investments for registered
investment companies, deferred compensation plans and other
institutional investors.

ITEM 27. Principal Underwriters.

(a) Funds Distributor, Inc. (the "Distributor") acts as principal
underwriter for the following investment companies.

American Century California Tax-Free and Municipal Funds
American Century Capital Portfolios, Inc.
American Century Government Income Trust
American Century International Bond Funds
American Century Investment Trust
American Century Municipal Trust
American Century Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Quantitative Equity Funds
American Century Strategic Asset Allocations, Inc.
American Century Target Maturities Trust
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.
The Brinson Funds
Dresdner RCM Capital Funds, Inc.
Dresdner RCM Equity Funds, Inc.
Harris Insight Funds Trust
HT Insight Funds, Inc. d/b/a Harris Insight Funds
J.P. Morgan Institutional Funds
J.P. Morgan Funds
JPM Series Trust
JPM Series Trust II
LaSalle Partners Funds, Inc.
Kobrick Investment Trust
Merrimac Series
Monetta Fund, Inc.
Monetta Trust
The Montgomery Funds I
The Montgomery Funds II
The Munder Framlington Funds Trust
The Munder Funds Trust
The Munder Funds, Inc.
National Investors Cash Management Fund, Inc.
Orbitex Group of Funds
SG Cowen Funds, Inc.
SG Cowen Income + Growth Fund, Inc.
SG Cowen Standby Reserve Fund, Inc.
SG Cowen Standby Tax-Exempt Reserve Fund, Inc.
SG Cowen Series Funds, Inc.
St. Clair Funds, Inc.
The Skyline Funds
Waterhouse Investors Family of Funds, Inc.
WEBS Index Fund, Inc.

The Distributor is registered with the Securities and Exchange
Commission as a broker-dealer and is a member of the National
Association of Securities Dealers. The Distributor is located at
60 State Street, Suite 1300, Boston, Massachusetts 02109. The
Distributor is an indirect wholly-owned subsidiary of Boston
Institutional Group, Inc., a holding company all of whose
outstanding shares are owned by key employees.

(b) The following is a list of the executive officers, directors
and partners of the Distributor:

<TABLE>
Name and Principal Business Positions and Offices with Positions and Offices with
Address* Underwriter Registrant

<S> <C> <C>
Marie E. Connolly Director, President and Chief none
Executive Officer

George A. Rio Executive Vice President President, Principal Executive
and Principal Financial Officer

Donald R. Roberson Executive Vice President none

William S. Nichols Executive Vice President none

Margaret W. Chambers Senior Vice President, General none
Counsel, Chief Compliance
Officer, Secretary and Clerk

Joseph F. Tower, III Director, Senior Vice President, none
Treasurer and Chief Financial
Officer

Paula R. David Senior Vice President none

Gary S. MacDonald Senior Vice President none

Judith K. Benson Senior Vice President none

William J. Nutt Chairman and Director none
- --------------------
* All addresses are 60 State Street, Suite 1300, Boston, Massachusetts 02109
</TABLE>

ITEM 28. Location of Accounts and Records.

All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act, and the rules promulgated thereunder,
are in the possession of Registrant, American Century Services
Corporation and American Century Investment Management, Inc., all
located at American Century Tower, 4500 Main Street, Kansas City,
Missouri 64111.

ITEM 29. Management Services - Not applicable.

ITEM 30. Undertakings.

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

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, American Century Variable Portfolios, Inc., the
Registrant, certifies that it meets all the requirements for effectiveness of
this Post-Effective Amendment No. 26 to its Registration Statement pursuant to
Rule 485(b) promulgated under the Securities Act of 1933, as amended, and has
duly caused this Post-Effective Amendment No. 26 to its Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Kansas City, State of Missouri on the 15th day of April, 1999.

American Century Variable Portfolios, Inc.
(Registrant)

By:/*/George A. Rio
George A. Rio, President, Principal Executive
and Principal Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 25 has been signed below by the following persons
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
*George A. Rio President, Principal Executive April 15, 1999
- ------------------------- and Principal Financial Officer
George A. Rio

*Maryanne Roepke Vice President and Treasurer April 15, 1999
- -------------------------
Maryanne Roepke

*James E. Stowers, Jr. Director April 15, 1999
- -------------------------
James E. Stowers, Jr.

*James E. Stowers III Director April 15, 1999
- -------------------------
James E. Stowers, III

*Thomas A. Brown Director April 15, 1999
- -------------------------
Thomas A. Brown

*Robert W. Doering, M.D. Director April 15, 1999
- -------------------------
Robert W. Doering, M.D.

*Andrea C. Hall, Ph.D. Director April 15, 1999
- -------------------------
Andrea C. Hall, Ph.D.

*D. D. (Del) Hock Director April 15, 1999
- -------------------------
D. D. (Del) Hock

*Donald H. Pratt Director April 15, 1999
- -------------------------
Donald H. Pratt

*Lloyd T. Silver, Jr. Director April 15, 1999
- -------------------------
Lloyd T. Silver, Jr.

*M. Jeannine Strandjord Director April 15, 1999
- -------------------------
M. Jeannine Strandjord

*By /s/Charles A. Etherington
Charles A. Etherington
Attorney-in-Fact
</TABLE>

EXHIBIT INDEX

Exhibit Description of Document
Number

EX-99.a1 Articles of Incorporation of TCI Portfolios, Inc. dated June 3, 1987
(filed as Exhibit 1.1 to Post-Effective Amendment No. 17 to the
Registration Statement on Form N-1A of the Registrant, File No.
33-14567, filed on January 16, 1996, and incorporated herein by
reference).

EX-99.a2 Articles of Amendment of TCI Portfolios, Inc. dated July 22, 1988
(filed as Exhibit 1.2 to Post-Effective Amendment No. 17 to the
Registration Statement on Form N-1A of the Registrant, File No.
33-14567, filed on January 16, 1996, and incorporated herein by
reference).

EX-99.a3 Articles of Amendment of TCI Portfolios, Inc. dated August 11, 1993
(filed as Exhibit 1.3 to Post-Effective Amendment No. 17 to the
Registration Statement on Form N-1A of the Registrant, File No.
33-14567, filed on January 16, 1996, and incorporated herein by
reference).

EX-99.a4 Articles Supplementary of TCI Portfolios, Inc., dated November 30,
1992 (filed as Exhibit 1.4 to Post-Effective Amendment No. 18 to the
Registration Statement on Form N-1A of the Registrant, File No.
33-14567, filed on March 20, 1996, and incorporated herein by
reference).

EX-99.a5 Articles Supplementary of TCI Portfolios, Inc., dated April 24, 1995
(filed as Exhibit 1.5 to Post-Effective Amendment No. 18 to the
Registration Statement on Form N-1A of the Registrant, File No.
33-14567, filed on March 20, 1996, and incorporated herein by
reference).

EX-99.a6 Articles Supplementary of TCI Portfolios, Inc., dated March 11, 1996
(filed as Exhibit 1.6 to Post-Effective Amendment No. 19 to the
Registration Statement on Form N-1A of the Registrant, File No.
33-14567, filed on September 27, 1996, and incorporated herein by
reference).

EX-99.a7 Articles of Amendment of TCI Portfolios, Inc., dated April 1, 1997
(filed as Exhibit 1.7 to Post-Effective Amendment No. 20 to the
Registration Statement on Form N-1A of the Registrant, File No.
33-14567, filed on April 28, 1997, and incorporated herein by
reference).

EX-99.a8 Articles Supplementary of American Century Variable Portfolios, Inc.
dated May 1, 1997 (filed as Exhibit 1.8 to Post-Effective Amendment
No. 20 to the Registration Statement on Form N-1A of the Registrant,
File No. 33-14567, filed on April 28, 1997, and incorporated herein
by reference).

EX-99.a9 Articles Supplementary of American Century Variable Portfolios, Inc.
dated July 28, 1997 (filed as Exhibit 1.9 to Post-Effective
Amendment No. 23 to the Registration Statement on Form N-1A of the
Registrant, File No. 33-14567, filed on April 27, 1998, and
incorporated herein by reference).

EX-99.a10 Articles Supplementary of American Century Variable Portfolios, Inc.
dated February 16, 1999 (filed as Exhibit a10 to Post-Effective
Amendment No. 25 to the Registration Statement on Form N-1A of the
Registrant, File No. 33-14567, filed on March 17, 1999, and
incorporated herein by reference).

EX-99.b1 Amended and Restated By-Laws of TCI Portfolios, Inc.(filed as
Exhibit 2 to Post-Effective Amendment No. 17 to the Registration
Statement on Form N-1A of the Registrant, File No. 33-14567, filed
on January 16, 1996, and incorporated herein by reference).

EX-99.b2 Amendment to Amended and Restated By-Laws of American Century
Variable Portfolios, Inc. (filed as Exhibit b2 to Post-Effective
Amendment No. 24 to the Registration Statement on Form N-1A of the
Registrant, File No. 33-14567, filed on January 15, 1999, and
incorporated herein by reference).

EX-99.d Management Agreement between American Century Variable Portfolios,
Inc. and American Century Investment Management, Inc. dated November
16, 1998 (filed as Exhibit d to Post-Effective Amendment No. 24 to
the Registration Statement on Form N-1A of the Registrant, File No.
33-14567, filed on January 15, 1999, and incorporated herein by
reference).

EX-99.e1 Distribution Agreement between American Century Variable Portfolios,
Inc. and Funds Distributor, Inc., dated January 15, 1998 (filed as
Exhibit 6.1 to Post-Effective Amendment No. 28 to the Registration
Statement on Form N-1A of the American Century Target Maturities
Trust, File No. 2-94608, filed on January 30, 1998, and incorporated
herein by reference).

EX-99.e2 Amendment No. 1 to the Distribution Agreement between American
Century Variable Portfolios, Inc. and Funds Distributor, Inc. dated
June 1, 1998 (filed as Exhibit 6b to Post-Effective Amendment No. 11
to the Registration Statement on Form N-1A of American Century
Capital Portfolios, Inc., File No. 33-64872, filed on June 26, 1998,
and incorporated herein by reference).

EX-99.e3 Amendment No. 2 to the Distribution Agreement between American
Century Variable Portfolios, Inc. and Funds Distributor, Inc. dated
December 1, 1998 (filed as Exhibit 6c to Post-Effective Amendment
No. 12 to the Registration Statement of American Century World
Mutual Funds, Inc. , File No. 33-39242, filed on November 13, 1998
and incorporated herein by reference).

EX-99.e4 Amendment No. 3 to Distribution Agreement between American Century
Variable Portfolios, Inc. and Funds Distributor, Inc. dated January
29, 1999 (filed as Exhibit e4 to Post-Effective Amendment No. 24 to
the Registration Statement on Form N-1A of the Registrant, File No.
33-14567, filed on January 15, 1999, and incorporated herein by
reference).

EX-99.g1 Global Custody Agreement between The Chase Manhattan Bank and the
Twentieth Century and Benham Funds, dated August 9, 1996 (filed as
Exhibit 8 to Post-Effective Amendment No. 31 to the Registration
Statement on Form N-1A of American Century Government Income Trust,
File No. 2-99222, filed on February 7, 1997, and incorporated herein
by reference).

EX-99.g2 Master Agreement by and between Twentieth Century Services, Inc. and
Commerce Bank, N.A. dated January 22, 1997 (filed as Exhibit 8e to
Post-Effective Amendment No. 76 to the Registration Statement on
Form N-1A of American Century Mutual Funds, Inc., File No. 2-14213,
filed on February 28, 1997, and incorporated herein by reference).

EX-99.h Transfer Agency Agreement with Twentieth Century Services, Inc.
(formerly J. E. Stowers & Company) dated October 15, 1987 (filed as
Exhibit 9 to Post-Effective Amendment No. 19 to the Registration
Statement on Form N-1A of the Registrant, File No. 33-14567, filed
on September 27, 1996, and incorporated herein by reference).

EX-99.i Opinion and Consent of Counsel is included herein.

EX-99.j1 Consent of Deloitte & Touche LLP is included herein.

EX-99.j2 Power of Attorney dated July 25, 1998 (filed as Exhibit j3 to
Post-Effective Amendment No. 24 to the Registration Statement on
Form N-1A of the Registrant, File No. 33-14567, filed on January 15,
1999, and incorporated herein by reference).

EX-27.1.1 Financial Data Schedule for American Century VP Capital Appreciation
is included herein.

EX-27.7.2 Financial Data Schedule for American Century VP Balanced is included
herein.

EX-27.7.3 Financial Data Schedule for American Century VP Advantage is
included herein.

EX-27.1.4 Financial Data Schedule for American Century VP International is
included herein.

EX-27.1.5 Financial Data Schedule for American Century VP Value is included
herein.

EX-27.1.6 Financial Data Schedule for American Century VP Income & Growth is
included herein.

Charles A. Etherington
Attorney at Law
4500 Main Street * P.O. Box 418210
Kansas City, Missouri 64141-9210

April 15, 1999

American Century Variable Portfolios, Inc.
American Century Tower
4500 Main Street
Kansas City, Missouri 64111

Ladies and Gentlemen:

As counsel to American Century Variable Portfolios, Inc. (the
"Corporation"), I am generally familiar with its affairs. Based upon this
familiarity, and upon the examination of such documents as I deemed relevant, it
is my opinion that the shares of the Corporation described in Post-Effective
Amendment No. 26 to its Registration Statement on Form N-1A, to be filed with
the Securities and Exchange Commission on or about April 15, 1999, will, when
issued, be validly issued, fully paid and nonassessable.

For the record, it should be stated that I am an officer of American
Century Services Corporation, an affiliated corporation of American Century
Investment Management, Inc., the investment advisor of the Corporation.

I hereby consent to the use of this opinion as an exhibit to Post-
Effective Amendment No. 26.

Very truly yours,

/s/Charles A. Etherington
Charles A. Etherington

Independent Auditors' Consent

We consent to the incorporation by reference in this Post-Effective Amendment
No. 26 to the Registration Statement No. 33-14567 of American Century Variable
Portfolios, Inc. on Form N-1A of our reports dated February 5, 1999, appearing
in the respective Annual Reports of the six funds comprising American Century
Variable Portfolios, Inc. for the year ended December 31, 1998, and to the
reference to us under the caption "Financial Highlights" in the Prospectuses,
which are part of such Registration Statement.

/s/Deloitte & Touche LLP

Kansas City, Missouri
April 14, 1999

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000814680
<NAME> AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
<SERIES>
<NUMBER> 1
<NAME> AMERICAN CENTURY VP CAPITAL APPRECIATION

<S> <C>
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</TABLE>

<S> <C>
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<S> <C>
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</TABLE>

<S> <C>
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</TABLE>

<S> <C>
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</TABLE>

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