CHARTER NATIONAL VARIABLE ANNUITY ACCOUNT
497, 1999-05-07
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                              Scudder Horizon Plan
                             Prospectus May 1, 1999

              A No-Load Flexible Premium Deferred Variable Annuity
                                   offered by
                     Charter National Life Insurance Company
                                   through the
                    Charter National Variable Annuity Account

   
This prospectus  describes the Scudder Horizon Plan Contract  ("Contract").  The
Contract  has  10  investment  alternatives  --  a  general  account  (paying  a
guaranteed  minimum  fixed rate of interest)  and 9  subaccounts  of the Charter
National Variable Annuity Account.  Money you direct to a subaccount is invested
exclusively in a single  portfolio of the Scudder Variable Life Investment Fund.
The 9 mutual  fund  portfolios  we offer  through  the  subaccounts  under  this
Contract are:

         Scudder Variable Life Investment Fund
                Money Market Portfolio
                Bond Portfolio
                Capital Growth Portfolio
                Balanced Portfolio
                Growth and Income Portfolio
               oInternational Portfolio
               oGlobal Discovery Portfolio
                Large Company Growth Portfolio
                Small Company Growth Portfolio
    

Variable annuity  contracts  involve certain risks,  including  possible loss of
principal.

o    The  investment  performance  of the  portfolios  in which the  subaccounts
     invest will vary.
 
o    We do not guarantee how any of the portfolios will perform.
  
o    The  Contract  is not a deposit  or  obligation  of any  bank,  and no bank
     endorses or guarantees the contract.

o    Neither the U.S.  Government nor any Federal agency insures your investment
     in the Contract.

Please read this prospectus  carefully  before  investing and keep it for future
reference.  It contains  important  information  about the Scudder  Horizon Plan
variable annuity contract.

The  Securities and Exchange  Commission  has not approved or disapproved  these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.


   
The Contract is designed to aid you in long-term financial planning.
    

To learn  more  about the  Contract,  you may want to look at the  Statement  of
Additional  Information  dated May 1, 1999, (the "SAI").  For a free copy of the
SAI, contact us at:

   
Scudder Horizon Plan
Customer Service Center
8301 Maryland  Ave.
St. Louis,  MO 63105
(800) 242-4402
    

Charter has filed the SAI with the U.S.  Securities and Exchange Commission (the
"SEC") and has  incorporated  it by reference  into this  prospectus.  The SAI's
table of contents appears at the end of this prospectus.

   
The SEC  maintains an Internet  website  (http://www.sec.gov)  that contains the
SAI, material  incorporated by reference,  and other  information.  You may also
read and copy any of these  documents  at the  SEC's  public  reference  room in
Washington,  D.C.  Please call  1-800-SEC-0330  for further  information  on the
operation of the public reference room.
    


<PAGE>



                                Table of Contents


   
Definitions                                                                1
Summary                                                                    3
Fee Table                                                                  7
     Financial Statements                                                  8
Calculation of Yields and Total Returns                                    9
Other Performance Data                                                    10
Charter and the Variable Account                                          10
     Charter National Life Insurance Company                              10
     Purchase Agreement with Allstate                                     11
     Charter National Variable Annuity Account                            11
     Services Agreements with Allstate                                    11
Scudder Variable Life Investment Fund                                     12
     Addition, Deletion, or Substitution of Investments                   13
The Contract                                                              14
     Contract Application and Issuing the Contract                        14
     Examination Period                                                   14
     Payments                                                             15
     Allocating Payments                                                  16
     Transfers                                                            17
     Account Value                                                        20
     Contract Ownership                                                   21
     Assignment of Contract                                               22
     State Exceptions                                                     22
Access to Your Money                                                      23
     Full and Partial Surrenders                                          23
     Annuity Payments                                                     24
     Annuity Income Options                                               25
     Maturity Date                                                        26
     Death Benefit                                                        27
     Beneficiary Provisions                                               27
     Death of Owner                                                       27
     Employment-Related Benefit Plans                                     28
     Charges and Deductions                                               28 
     Mortality and Expense Risk Charge                                    28
     Contract Administration Charge                                       29
     Records Maintenance Charge                                           29
     Premium Taxes                                                        29
     Other Taxes                                                          30
     Transfer Charges                                                     30
     Portfolio Charges                                                    30
     Certain Federal Income Tax Consequences                              30
     Tax Status of the Contract                                           31
     Taxation of Nonqualified Contracts                                   31
     Taxation of Qualified Contracts                                      33
     Our Income Taxes                                                     34
     Possible Tax Law Changes                                             34
General Provisions                                                        35
     The Contract                                                         35
     Delay of Payment and Transfers                                       35
     Contract Expiration                                                  35
     Misstatement of Age or Sex                                           36
     Nonparticipating Contract                                            36
     Notices and Inquiries                                                36
     Records and Reports                                                  36
     Year 2000 Disclosure                                                 36
Services Agreement                                                        37
Distribution of the Contract                                              37
The General Account                                                       38
Voting Rights                                                             39
Legal Proceedings                                                         40
    


<PAGE>


Additional Information                                                    40
Table of Contents for Statement of Additional Information                 41
Condensed Financial Information                                           42 

                  This Contract is not available in all states.



<PAGE>

                                   Definitions

     account value -- Your  Contract's  total value in the  subaccounts  and the
general account. The Contract refers to account value as "Accumulated Value."

     age -- The annuitant's  age on his or her birthday  nearest to the Contract
Anniversary.

     annuitant -- The person  whose life is used to  determine  the duration and
amount of any annuity payments.  If the annuitant dies before the Maturity Date,
we will pay a death benefit.

     annuity  payments  -- After the  Maturity  Date,  we  promise to pay you an
income in the form of regular fixed annuity payments.  The amount of the annuity
payments  depends on the amount of money you  accumulate in the Contract  before
the Maturity Date and on the annuity income option you choose.

     beneficiary  -- The  person(s)  you select to receive  the  benefits of the
Contract if no Owner is living.

     Contract  Date --The date listed in the  Contract  that we use to determine
Contract years, Contract months, and Contract  anniversaries.  The Contract Date
is usually the same date as the Effective Date.

     death benefit -- An amount we pay if the annuitant dies before the Maturity
Date.  The death benefit is the greater of the account  value or the  Guaranteed
Death Benefit.

     Declaration  Period  -- A period of time  between  1 and 10 3 years  during
which we will credit specified rates of interest on payments you allocate to the
general account.

     Effective  Date -- A date within two business days after we have received a
completed application and the full initial payment.

     Fund -- The Scudder Variable Life Investment Fund, an open-end, diversified
management investment company in which the subaccounts invest.

     general account -- The account  containing all of Charter's  assets,  other
than those held in its separate accounts. Guaranteed Death Benefit -- The sum of
the payments you made, less any partial surrenders.

   
     Home Office -- The  principal  office of Charter,  located at 8301 Maryland
Avenue. Ave., St. Louis, Missouri MO 63105.
    

     joint annuitant -- If you select annuity income option 2, you may designate
a joint annuitant.  We will use the joint  annuitant's  life, in addition to the
annuitant's life, to determine the duration of the annuity payments.

     joint owner -- A person  sharing the  privileges  of ownership as stated in
the Contract. If a joint owner is named, Charter will presume ownership to be as
joint tenants with right of survivorship.

     Maturity Date -- The date on which we will begin to pay annuity payments if
the annuitant is living.

     monthly anniversary -- The same date in each month as the Contract Date.

     net payment -- A payment less any applicable premium taxes.

     Nonqualified Contract -- A Contract other than a Qualified Contract.

     Owner (you,  your) -- The person having the privileges of ownership  stated
in the  Contract,  including  the  right  to  receive  annuity  payments  if the
annuitant is living on the Maturity Date and the Contract is in force.

     portfolio  -- A  separate  investment  portfolio  of the  Fund  in  which a
subaccount of the Variable Account invests.

     Proof of Death -- One of the  following:  (i) a  certified  copy of a death
certificate,  (ii)  a  copy  of a  certified  decree  of a  court  of  competent
jurisdiction as to the finding of death,  or (iii) any other proof  satisfactory
to Charter.

     Qualified  Contract -- A Contract  issued in  connection  with a retirement
plan that qualifies for special Federal income tax treatment.

     subaccount  --  An  investment  division  of  the  Variable  Account.  Each
subaccount invests  exclusively in a single portfolio of the Fund. Unit Value --
The value of each unit of a subaccount.  It is calculated each Valuation Period.
It is similar to the net asset value of a mutual fund.

   
     Valuation Date -- Each day on which we value the assets in the subaccounts,
which is each  day on  which  the New York  Stock  Exchange  (NYSE)  is open for
trading. We are open for business on each day the NYSE is open.
    

     Valuation  Period -- The period that  begins at the close of one  Valuation
Date and ends at the close of the next Valuation Date.

     Variable Account -- Charter National  Variable Annuity Account,  a separate
account  composed of subaccounts  which we established to receive and invest the
portion of net  payments  under the  Contract  that you do not  allocate  to our
general account.

   
     we, us, our, Charter, the Company: Charter National Life Insurance Company.
    


<PAGE>

                                    Summary

     This  summary  answers  certain  basic  questions  you may have  about  the
Contract.  More detailed  information  about the Contract  appears later in this
Prospectus. Please read this Prospectus carefully.

Why should I purchase this Contract?

     The Contract  provides a way for you to invest on a  tax-deferred  basis in
the subaccounts of the Variable Account and in the general account. The Contract
is designed to enable you to accumulate money for retirement and other long-term
investment purposes.  "Tax-deferred" means that earnings and appreciation on the
assets  in your  Contract  are not taxed  until you take  money out by a full or
partial cash surrender or by annuitizing the Contract, or until we pay the death
benefit.

How can I purchase the Contract?

   
     You may purchase  the Contract  from us (Charter  National  Life  Insurance
Company)  for  a  minimum  payment  of  $2,500  ($2,000  for  certain  Qualified
Contracts).  We do not deduct a commission  or sales charge from any payment you
make. You may make  additional  payments under the Contract,  subject to certain
conditions. Send your payments to:

         Scudder Horizon Plan
         Customer Service Center
         8301 Maryland Avenue
         St. Louis, Missouri 63105
    

Can I use this Contract as an IRA?

     Yes, the Contract is available to most  individuals who wish to purchase an
IRA. It is also available to certain  retirement  plans and retirement  accounts
that qualify for special  Federal income tax  treatment.  We require that if you
desire to invest monies that qualify for different  annuity tax treatment,  then
you must purchase separate Contracts.

What annuity benefits are offered under the Contract?

     The Contract  allows you to receive  fixed  annuity  payments  under one of
three annuity  income  options.  Annuity  payments begin after the Maturity Date
provided the annuitant is living.  The three annuity  income  options  currently
available are: (i) life annuity with installment refund; (ii) joint and survivor
life annuity with installment refund; and (iii) installments for life.

     Other annuity  income  options may be available on the Maturity  Date.  The
dollar  amount of each annuity  payment  will be fixed on the Maturity  Date and
guaranteed by us.

What investments are available under the Contract?

     You may invest your money in any of the following portfolios of the Scudder
Variable Life Investment Fund by directing your payments into the  corresponding
subaccounts:

   
                              o Money Market             
                              o Bond
                              o Capital Growth 
                              o Balanced
                              o Growth and Income
                              o International
                              o Global Discovery
                              o Large Company Growth
                              o Small Company Growth
    

     Each subaccount  invests in Class A shares of its corresponding  portfolio.
The  assets  of each  portfolio  are held  separately  from the  assets of other
portfolios  and  each has  separate  investment  objectives  and  policies.  The
attached  prospectus for the Fund more fully describes the  portfolios.  Scudder
Kemper Investments Inc. is the investment adviser for the portfolios.

     Your  investment  in the  subaccounts  will  fluctuate  daily  based on the
investment  results of the  portfolios in which you invest,  and on the fees and
charges  deducted.  You bear the  investment  risk for amounts you invest in the
subaccounts.

What fixed rate options are available under the Contract?

     You may allocate funds to the general  account and receive a specified rate
of  return.  We will  credit  interest  to your  payments  for the length of the
Declaration  Period you choose at a  guaranteed  rate we specify in advance.  We
offer  Declaration  Periods  of 1 and 3  years.  At the  end of the  Declaration
Period, you have the option to move funds into any available  subaccount or into
another  Declaration  Period that has a new  specified  rate of interest that we
guarantee will be no less than 3.5%.

     We guarantee interest, as well as principal, on money placed in the general
account.

What is the purpose of the Variable Account?

     We established the Variable Account to invest the payments we receive under
our variable annuities, including this Contract. The Variable Account is divided
into  subaccounts.  Each  subaccount  invests  exclusively in a portfolio of the
Fund. Under Missouri law, the assets in the Variable Account associated with the
Contract are not affected by, nor chargeable  with,  liabilities  arising out of
any other business we conduct.

Can I transfer assets within the Contract?

     Yes. You have the flexibility to transfer  assets within the Contract.  You
may transfer  amounts  among the  subaccounts  and from the  subaccounts  to the
general  account at any time.  You may also  transfer  amounts  from the general
account  to the  subaccounts  or  within  the  general  account  at the end of a
Declaration Period.

     We do not impose a charge for any transfers. In the future, we may impose a
transfer  charge of $10 for the  third and  subsequent  transfer  requests  made
during a Contract Year.

What are my expenses under the Contract?

     On each Valuation Date, we deduct an  administrative  fee at an annual rate
of .30%,  and a mortality  and  expense fee at an annual rate of .40%,  from the
amount you have invested in each subaccount. These charges are not deducted from
the general account.  We do not charge an annual  maintenance fee,  although the
Contract permits us to deduct a maximum fee of $40 in the future.

     We will deduct state premium taxes,  which currently range from 0% to 3.5%,
if your state requires us to pay premium taxes.  We will deduct the taxes either
when we incur the tax or at a later time.

     We do not deduct any surrender charges on full or partial surrenders.

   
     The  portfolios  also  deduct  investment  charges  from  amounts  you have
invested in the  portfolios  through the  subaccounts.  These charges range from
0.44% to 1.72% annually,  depending on the portfolio. See the prospectus for the
Fund and the Fee Table in this Prospectus.
    

Do I have access to my money in the Contract?

     Yes.  You may make a full or partial  surrender of the Contract at any time
before the Maturity Date or the annuitant's death. No surrender charges apply.

     For  Qualified  Contracts  issued under the Internal  Revenue Code ("Code")
Section  403(b),  certain  restrictions  will  apply.  You may also  have to pay
Federal  income  taxes  and a  penalty  tax on any  money  you  take  out of the
Contract.

What is the death benefit?

   
     If the annuitant dies before the Maturity Date, we pay you, the owner,  the
greater of the account value or the Guaranteed Death Benefit.  If the owner of a
Nonqualified  Contract dies before the Maturity Date and before the  annuitant's
death,  then we will pay the  account  value in a lump sum to the joint owner no
later than 5 years following the owner's death (if there is no joint owner, then
we will pay the beneficiary).
    

What are the Federal income tax consequences of investing in the Contract?

     The  Contract's  earnings are  generally not taxed until you take them out.
For  Federal  tax  purposes,  if you take money out before  the  Maturity  Date,
earnings come out first and are taxed as income.  If you are younger than 59 1/2
when you take money out,  you may be charged a 10%  Federal  penalty  tax on the
earnings.  The  annuity  payments  you  receive  after  the  Maturity  Date  are
considered  partly a  return  of your  original  investment;  that  part of each
payment is not taxable as income.  Different  tax  consequences  may apply for a
Contract used in connection with a qualified plan.

Can the Contract be returned after I receive it?

     Yes. You may return the Contract for a refund by returning  the Contract to
our home  office  within 10 days after you receive it. The amount of the refund,
will  generally be the initial  payment,  plus (or minus) gains (or losses) from
investing the payment in the subaccounts you selected on your application,  plus
interest earned on amounts you allocated to the general account.  In some states
you may have more  than 10 days,  or  receive a  different  refund  amount.  See
"Examination Period" and "State Exceptions."

<PAGE>

                                    Fee Table

     This Fee Table  illustrates  the current  charges and deductions  under the
Contract,  as well as the Fund's fees and expenses for the 1998  calendar  year.
The purpose of this table is to assist you in understanding the various cost and
expenses that you will bear directly and  indirectly.  The Fund has provided the
information pertaining to the Fund.

Contract Owner Transaction Expenses

         Sales Load Imposed on Payments                              None

         Deferred Sales Load                                         None

         Surrender Fee                                               None

         Transfer Charge (transfers made between  subaccounts
         and/or to the  general  account  during a Contract  Year)   None 

         Annual Records   Maintenance  Charge                        None 

   
         Variable  Account  Annual  Expenses  (as  a
         percentage of your average net assets in the Variable Account)
    
         
         Mortality and Expense Risk Charge                      0.40%
         Contract Administration Charge                         0.30%
                                                                -----
         Total Variable Account Annual Expenses                 0.70%

Scudder  Variable  Life  Investment  Fund Annual  Expenses (as a  percentage  of
average net assets for the 1998 calendar year)

   
                             Management                          Total
                           Fees                       Expenses
                           After Fee       Other               After Fee
Portfolio                  Waiver*        Expenses              Waiver*
- ---------                  ---------   ------------  -------- -------
Money Market                   0.37%         0.07%             0.44%
Bond                           0.48%         0.09%             0.57%
Capital Growth                 0.46%         0.04%             0.50%    
Balanced                       0.48%         0.08%             0.56%    
Growth and Income              0.47%         0.09%             0.56% 
International                  0.87%         0.17%             1.04%    
Global Discovery*              0.91%         0.81%             1.72%
Large Company Growth**         0.58%         0.67%             1.25%
Small Company Growth**         0.88%         0.62%             1.50%


*Until April 30, 1998, Scudder Kemper (the Adviser) agreed to waive a portion of
its management  fee to the extent  necessary to limit the expenses of the Global
Discovery  Portfolio to 1.50% of average daily net assets.  As a result,  actual
1998 expenses without giving effect to the expense  limitation were:  management
fee 0.97% and total expenses 1.78%.

**Until  April  2000,  the  Adviser  has agreed to waive all or a portion of its
management fee to limit the expenses of the Large Company  Growth  Portfolio and
the Small Company Growth  Portfolio to 1.25% and 1.50%  respectively  of average
daily net  assets.  Without  these  limitations  the Fund  estimates  that total
expenses for the Large Company  Growth  Portfolio  and the Small Company  Growth
Portfolio would be 1.09% and 1.90%,
respectively.
    


Example

The following example illustrates the expenses that you would pay on a $1,000
investment, assuming 5% annual return on assets, if you continued the Contract,
surrendered or annuitized at the end of each period:

   
Subaccount                  1 Year        3 Years      5 Years     10 Years
- ----------                  ------        -------      -------     --------
Money Market                $12           $36          $63         $139
Bond                        $13           $40          $70         $153
Capital Growth              $12           $38          $66         $145
Balanced                    $13           $40          $69         $152
Growth and Income           $13           $40          $69         $152
International               $18           $55          $94         $205
Global Discovery            $25           $75          $129        $276
Large Company Growth        $20           $61          ---         ---
Small Company Growth        $22           $69          ---         ---
    


     The fee table and example above are based upon the current level of charges
deducted  under the Contract.  In the future,  we may increase the Mortality and
Expense Risk Charge to .70% per year,  establish a Records Maintenance Charge of
up to $40 per year and  impose a  transfer  charge of $10 for the third and each
subsequent  transfer  request made during a Contract  Year. We currently have no
intention of changing our charges.

     Neither the fee table nor the example reflects the deduction of any premium
tax.

       

     You should not consider this example to represent past or future  expenses,
performance or return.  Actual expenses may be greater or less than those shown.
The assumed 5% annual return is hypothetical.  Past or future annual returns may
be greater or less than the assumed return.

     A financial  history of each  subaccount  is included in Appendix A to this
Prospectus.

Financial Statements

     The financial  statements of Charter and the Variable  Account are included
in the SAI.



<PAGE>


                     Calculation of Yields and Total Returns

   
     We may  periodically  advertise  yields and standard  total returns for the
subaccounts  and the  portfolios.  These  figures  will be based  on  historical
earnings and are not intended to indicate future performance.

     Yields and  standard  total  returns  include all charges and  expenses you
would pay under the Contract -- the  mortality  and expense risk charge  (0.40%)
and the administrative expense charge (0.30%).
    

     The  yield  of  the  Money  Market  subaccount  refers  to  the  annualized
investment  income  that  an  investment  in  the  subaccount  generates  over a
specified  seven-day period.  The effective yield of the Money Market subaccount
is calculated in a similar way but, when  annualized,  we assume that the income
earned by the  investment  has been  reinvested.  The  effective  yield  will be
slightly higher than the yield because of the compounding  effect of the assumed
reinvestment.

     The yield of a subaccount  (except the Money Market  subaccount)  refers to
the  annualized  income that an investment in the  subaccount  generates  over a
specified thirty-day period.

     The average annual total return of a subaccount  assumes that an investment
has been held in the subaccount for certain periods of time including the period
measured  from the date the  subaccount  began  operations.  We will provide the
average annual total return for each  subaccount  that has been in operation for
1, 5, and 10 years.  The total  return  quotations  will  represent  the average
annual  compounded  rates of return that an initial  investment  of $1,000 would
earn as of the last day of the 1, 5 and 10 year periods.

     The yield and total  return  calculations  are not  reduced by any  premium
taxes.  Applying  premium  taxes  will  reduce  the yield and total  return of a
Contract.

     For additional  information  regarding yield and total return calculations,
please refer to the SAI.


                             Other Performance Data

   
     We may disclose other performance data, such as cumulative total return and
nonstandard  total  returns.  This  means  that the data  may be  presented  for
different time periods and different dollar amounts.
    

     We may also present  historic  performance  data for the  portfolios  since
their inception that is reduced by some or all of the fees and charges under the
Contract.  Such adjusted  historic  performance data includes data that precedes
the inception dates of the subaccounts,  but is designed to show the performance
that would have resulted if the Contract had been available during that time.

     We will only disclose non-standard performance data if we also disclose the
standard performance data. For additional  information regarding the calculation
of other performance data, please refer to the SAI.

     Advertising,  sales literature,  and other  communications  may compare the
expense and  performance  data for the Contract and each  subaccount  with other
variable  annuities  tracked by independent  services such as Lipper  Analytical
Services,  Inc.,  Morningstar  and the Variable  Annuity  Research Data Service.
These services monitor and rank the performance and expenses of variable annuity
issuers on an  industry-wide  basis.  We may also make  comparisons  using other
indices that measure performance, such as Standard & Poor's 500 Composite or the
Dow Jones  Industrial  Average.  Unmanaged  indices may assume  reinvestment  of
dividends but do not deduct administrative and management costs and expenses.

     We may  report  other  information  including  the  effect of  tax-deferred
compounding on a subaccount's returns, illustrated by tables, graphs, or charts.
Tax-deferred  compounding  can lead to  substantial  long-term  accumulation  of
assets, if the portfolio's investment experience is positive.  Sales literature,
advertisements or other reports may refer to A.M. Best's rating of Charter as an
insurance company.

                        Charter and the Variable Account

Charter National Life Insurance Company

   
     Charter is a stock life insurance  company  incorporated  under the laws of
the State of Missouri on December 7, 1955. Charter,  with assets of $748 million
as of December  31,  1998,  principally  engages in the  offering  of  insurance
products.  We are authorized to conduct  business in 49 states,  the District of
Columbia and Puerto Rico.  Our  principal  offices are located at: 8301 Maryland
Ave., St. Louis, MO 63105, (800) 242-4402.
    

     Charter  is  currently  a wholly  owned  subsidiary  of  Leucadia  National
Corporation ("Leucadia"), a New York corporation.

Purchase Agreement with Allstate

     On  December  21,  1998,  Allstate  Life  Insurance  Company   ("Allstate")
announced  that it has  entered  into an  agreement  with  Leucadia  to purchase
Charter.  The transaction is subject to regulatory  approvals and is expected to
close before July 1, 1999.

     CNL,  Inc.  ("CNL")  is  the  principal  underwriter  of the  Contract.  On
September 2, 1998,  Leucadia,  then sole owner of all of the stock of CNL,  sold
all of its CNL stock to Allstate.

Charter National Variable Annuity Account

     Charter  established the Variable Account as a separate  investment account
under the laws of the State of Missouri on May 15, 1987.  The  Variable  Account
receives  and  invests  the  payments  under the  Contracts.  We may offer other
variable  annuities  for which the  Variable  Account  may  receive  and  invest
payments.

     Under  Missouri  law,  that portion of the assets of the  Variable  Account
equal to the reserves and other contract liabilities  connected with the account
shall not be chargeable  with  liabilities  arising out of any other business we
may conduct.  However,  the assets of the Variable  Account will be available to
cover the liabilities of our general account to the extent that Variable Account
assets exceed its liabilities  arising under the variable  annuity  contracts it
supports. The obligations under the Contracts are obligations of Charter.

     The Variable Account is divided into subaccounts.  Each subaccount  invests
exclusively in shares of one of the Fund's portfolios.  Income, gains and losses
from each subaccount's assets are credited to or charged against such subaccount
without  regard to income,  gains or losses of any other  subaccount  or income,
gains, or losses arising out of our other business.

     The  Variable  Account  is  registered  with the  Securities  and  Exchange
Commission  ("SEC") as a unit investment  trust under the 1940 Act and meets the
definition  of  a  "separate   account"  under  the  Federal   securities  laws.
Registration  with the SEC does not involve  supervision  of the  management  or
investment practices or policies of the Variable Account or Charter by the SEC.

   
Services Agreements with Allstate 
    

     On September  2, 1998,  Charter and  Leucadia  entered  into a  coinsurance
agreement with Allstate  reinsuring  all of Charter's  rights,  liabilities  and
obligations  with respect to the Variable  Account under the  Contracts.  On the
same  date,  Charter  and  Allstate  entered  into  an  administrative  services
agreement  under which Allstate or an affiliate  will  administer the Contracts.
Neither  of these  agreements  will  change the fact that  Charter is  primarily
liable to you under  your  Contract.  At this time there have been no changes to
the address or phone numbers that you are currently using.

                      Scudder Variable Life Investment Fund

     The Variable Account invests  exclusively in shares of the Scudder Variable
Life Investment Fund (the "Fund"). The Fund is registered with the SEC under the
Investment  Company  Act of 1940,  as  amended,  ("1940  Act")  as an  open-end,
diversified management investment company.  Scudder Kemper Investments,  Inc. is
the  investment  adviser  to the  mutual  fund  portfolios  available  under the
Contract.

     In addition to the Variable Account, the Fund's shares are sold to variable
life  insurance  and  variable  annuity  separate  accounts  of other  insurance
companies, including an insurance company affiliated with us. Someday, it may be
disadvantageous  for variable annuity separate  accounts of other life insurance
companies,  or for both variable life insurance  separate  accounts and variable
annuity separate accounts,  to invest simultaneously in the Fund. But, currently
neither the Fund nor Charter foresees any such  disadvantages to either variable
annuity owners or variable life insurance owners.  The Fund's management intends
to monitor events in order to identify any material  conflicts  between or among
variable annuity owners and variable life insurance owners and to determine what
response,  if any, they should take. In addition,  if we believe that the Fund's
response to any of those events or conflicts insufficiently protects our Owners,
then we will take appropriate action.

     The  subaccounts  invest  exclusively  in the Class A shares  of  following
portfolios of the Fund:

   
                            Money Market Portfolio
                            Bond Portfolio
                            Capital Growth Portfolio
                            Balanced Portfolio
                            Growth and Income Portfolio
                            International Portfolio
                            Global Discovery Portfolio
                            Large Company Growth Portfolio
                            Small Company Growth Portfolio

     Each portfolio  represents,  in effect, a separate mutual fund with its own
distinct  investment  objectives  and  policies.  The  income  or  losses of one
portfolio have no effect on another portfolio's investment performance.
    

     Scudder Kemper  Investments.  Inc. (the "Adviser"),  an investment  adviser
registered  with the SEC under the Investment  Advisers Act of 1940, as amended,
manages  daily  investments  and  business  affairs of the Fund,  subject to the
policies that the Funds'  Trustees  established.  See the Fund's  prospectus for
information regarding the Adviser's fees.

     The general  public may not purchase  these  underlying  portfolios.  Their
investment objectives and policies may be similar to other portfolios and mutual
funds  managed by the same  investment  adviser  that are sold  directly  to the
public.  You  should  not  expect  that  the  investment  results  of the  other
portfolios would be similar to those of the underlying portfolios.

   
     There is no assurance that any portfolio  will achieve its  objective.  The
Scudder  Variable  Life  Investment  Fund  prospectus   contains  more  detailed
information,  including a description of the risks involved in investing in each
portfolio and a description of each portfolio's  investment objective. A copy of
the Fund's prospectus is attached to this Prospectus.  You should carefully read
the Fund's prospectus before investing in a Contract.
    

Addition, Deletion, or Substitution of Investments

     From time to time, we may make certain changes in the Variable  Account and
its investments. We may substitute shares of any portfolio for shares of another
portfolio  of the Fund or  another  registered  open-end  management  investment
company. We may do so if the shares of the portfolio are no longer available for
investment  or  if  we  decide  that   investment  in  any  portfolio  would  be
inappropriate  in view of the  purposes  of the  Variable  Account.  We will not
substitute  or  eliminate  the shares of a portfolio  in which your  Contract is
invested without prior approval of the SEC and we will notify you of our intent.
This will be done to the extent required by the 1940 Act.

     We may add or delete  subaccounts  in our  discretion  when we decide  that
marketing,  tax,  investment,  or other  conditions  warrant  such  additions or
deletions. Each additional subaccount will purchase shares in a portfolio of the
Fund or in  another  mutual  fund  or  investment  vehicle.  If we  eliminate  a
subaccount,  then we will notify you and request that you reallocate the amounts
you have invested in the  eliminated  subaccount.  If you do not provide us with
your desired reallocations,  then we will reinvest the amounts in the eliminated
subaccount into the subaccount that invests in the Money Market Portfolio.

     In the event of any such substitution,  change, or elimination,  we may, by
appropriate endorsement, change the Contracts as may be necessary or appropriate
to reflect such substitution, change, or elimination. Furthermore, if we deem it
to be in the best interests of persons having voting rights under the Contracts,
then the Variable Account may be: (i) operated as a management company under the
1940 Act or any other form permitted by law, (ii)  de-registered  under the 1940
Act, in the event such  registration  is no longer  required,  or (iii) combined
with one or more other separate accounts.  To the extent applicable law permits,
we may transfer the assets of the Variable Account associated with the Contracts
to another separate account.

                                  The Contract

     The  description of the Contract  contained in this prospectus is qualified
in its entirety by reference to the contract for the Flexible  Premium  Variable
Deferred  Annuity.  We have filed a copy of the  Contract  as an exhibit to this
Registration Statement. It is available upon request from us.


Contract Application and Issuing the Contract

   
     The Contract is  available to  individuals,  certain  retirement  plans and
individual retirement accounts (IRA) that qualify for special Federal income tax
treatment.  The Contract is not available for use as a  "Tax-Sheltered  Annuity"
qualifying under Section 403(b) of the Code.
    

     If you purchase a Contract which  qualifies as an IRA under Section 408(b),
you  should  be aware  that  the  Code  imposes  certain  restrictions  on those
Contracts.

     Before  we  issue a  Contract,  we must  receive  your  properly  completed
application  and a  minimum  payment  of  $2,500  ($2,000  in the  case  of some
Qualified  Contracts).  We will mail you a Premium  Receipt  form if you request
one. You must name the  annuitant in the Contract  application.  If the Contract
qualifies as an IRA under Section  408(b),  then you must be the  annuitant.  We
reserve the right to decline an  application  for any  reason.  If we decline an
application, then we will refund the full initial payment.

     After  underwriting  is completed and the Contract is delivered to you, the
Contract  will be  deemed  to  have  commenced  as of the  Effective  Date.  The
Effective  Date is a date within two business  days after we receive a completed
application and the full initial payment.  The Contract Date will be the same as
the Effective Date unless the Effective  Date is the 29th,  30th, or 31st of the
month,  in which case the Contract  Date will be the 28th day of the same month.
We use the Contract  Date to determine  Contract  Years,  Contract  Months,  and
Contract Anniversaries.

Examination Period

     You may cancel  the  Contract  for a refund  within 10 to 30 days after you
receive the Contract.  Depending on the laws of the state of issue and your age,
we will refund the initial  payment in one of the  following  methods.  See your
Contract and the "State Exceptions" section of this prospectus for details.

     Return of Premium Plus or Minus Investment  Experience . In most states, if
you return the Contract, we will refund the initial payment, plus or minus gains
or losses  from  investing  the  payment  in the  subaccounts  you chose on your
application, plus any interest earned on the amount you allocated to the general
account.  We will  calculate  these  refunds as of the date that we receive  the
Contract.  If you allocate all or part of the payment to the  subaccounts,  then
the  amount  of  your  refund  may be more or less  than  the  initial  payment,
depending on the  investment  performance of your selected  subaccounts.  If you
allocate all of the payment to the general  account,  then we will always refund
an amount equal to or greater than the payment.

     Return of Premium . If your state  requires  us to refund  your  premium to
you,  then we will refund the greater  of: (1) the initial  payment,  or (2) the
account  value plus any amount  deducted  for taxes or charges  from the initial
payment.  We will  calculate your refund as of the date we receive the Contract.
During the Examination  Period, the portion of the initial payment you allocated
to the Variable  Account will be invested in the Money Market  subaccount.  Once
the  Examination  Period  expires,  we will  reallocate the account value to the
subaccounts you select.

Payments

     You  should  make  all  checks  or  drafts   payable  as  directed  on  the
application.  You can also make payments by requesting on your  application that
Scudder Investor Services, Inc. redeem shares in an existing Scudder mutual fund
account and apply the proceeds toward a payment.

     Initial  Payment . The minimum  initial  payment you must pay to purchase a
Contract is $2,500 ($2,000 in the case of some Qualified Contracts). The initial
payment is the only payment we require you to make under the Contract.  When you
make the initial  payment,  you must  specify  whether it is for a purchase of a
Nonqualified or Qualified Contract.

     If the initial  payment is derived from an exchange or surrender of another
annuity  contract,  then we may require that you provide  information  about the
Federal  income tax status of the previous  annuity  contract.  If you desire to
invest monies  qualifying  for different  annuity tax treatment  under the Code,
then we will require you to purchase separate Contracts.  Each separate Contract
requires  a  minimum  initial  payment  of  $2,500  ($2,000  in the case of some
Qualified Contracts).  We reserve the right to waive the minimum initial payment
amount and accept less than $2,500.

     If we receive a properly  completed  application  with the initial payment,
then we will credit that  payment to the Contract  within two  business  days of
receiving the payment.  We may deduct  premium taxes from the payment  before we
credit it to the Contract. If we receive an incomplete application, then we will
credit  the  payment  within  two  business  days  of  receiving  the  completed
application.  If, for any reason,  we do not credit the payment to your  account
within five business days, then we will  immediately  return the payment to you.
You may, after receiving  notice of our delay,  specifically  request that we do
not return the payment.

     Additional  Payments.  You may make additional payments while the annuitant
is  living  and  before  the  Maturity  Date.  Currently,  there  is no  minimum
additional payment amount or maximum number of additional  payments per Contract
Year.  In the future,  we may require that each  additional  payment be at least
$1,000 and limit the frequency of  additional  payments to a maximum of four per
Contract Year.

     Additional  payments must qualify for the same Federal income tax treatment
as the  initial  payment  made under the  Contract.  If the  Federal  income tax
treatment of a payment will be different from that of the initial payment,  then
we will not accept it. We will credit any  additional  payments to the  Contract
upon receiving them at our home office.

     Automatic Investment Plan. You may arrange to make regular investments ($50
minimum) into any of the  subaccounts  through  automatic  deductions  from your
checking account. The Automatic Investment Plan cannot be used to allocate money
to the general account. Please call (800) 242-4402 for more information.

     Limitations  on  Payments  . We  reserve  the right to reject  any  initial
payment.  We may require you to complete a financial  questionnaire for payments
in excess of  $250,000.  If any  additional  payments  would  cause  your  total
payments to exceed $1,000,000,  we may reject those payments. We will reject any
payment  that would  cause the account  value in the  general  account to exceed
$500,000.

     For Contracts  that qualify as IRAs under Section  408(b) of the Code,  the
total  payments  (including  the initial  payment) in any calendar  year may not
exceed  $2,000,  unless the portion in excess of $2,000  qualifies as a rollover
amount or contribution  under Section 402(c),  403(b)(8),  or 408(d)(3) or other
applicable provisions of the Code.

Allocating Payments

     You may allocate payments to one or more of the subaccounts, to the general
account,  or to both.  If you  allocate  any portion of a payment to the general
account,  then you must  specify  the  Declaration  Period(s)  to which  you are
allocating  those  funds.  You must  specify  the  payment  allocations  in your
application.   We  will   allocate  the  initial   payment   according  to  your
specifications, once we receive it at our home office.

     You must make all  allocations  in whole  percentages  and they must  total
100%.  If the  allocations  do not  total  100%,  then  we  will  recompute  the
allocations  proportionately  by dividing the percentage in each  subaccount you
selected,  by the sum of the percentages  you indicated.  We will apply this new
percentage to the payment.  The following  example  illustrates how we make this
recomputation:

Example
                              Indicated                               Actual
                              Allocation                            Allocation
         Subaccount#1             25%       25% / 105% =               24%
         Subaccount#2             40%       40% / 105% =               38%
         Subaccount#3             40%       40% / 105% =               38%
                                -----                   ------         ---
                    Total       105%                                   100%

We will  allocate  all  payments  at the time we credit  such  payments  to your
Contract.

     We will allocate any additional payments you make to the subaccounts and/or
the  general  account in the same  proportion  as the initial  payment.  You may
change the allocation  percentages by sending us written notice. Once you make a
change in allocation,  we will allocate all future  payments in accordance  with
your new  allocation  percentages.  This will continue until you send us written
notice of any  changes.  However,  if you have  funds  deducted  from a checking
account under the  Automatic  Investment  Plan option,  then you must provide us
with written notice to change the allocation of future additional payments.

Transfers

     Before the Maturity Date, you may transfer  amounts among the  subaccounts,
between  the  subaccounts  and  the  general  account,   and  between  different
Declaration Periods in the general account.

     You may transfer amounts from the general account to any of the subaccounts
and to different  Declaration  Periods in the general account only at the end of
the  Declaration  Period to which you  allocated  that amount.  You may transfer
amounts from a subaccount  to the general  account at any time,  as long as that
transfer would not cause your Contract's  value in the general account to exceed
$500,000.

     We do not impose a charge for any transfers.  In the future, if you request
more than two  transfers  during a  Contract  Year,  we may deduct $10 from each
subaccount from which you transfer funds.

     You must  request a transfer by sending us written  notice or by  telephone
(if you have a currently valid telephone transfer request form on file with us).
We employ  reasonable  procedures to confirm that  instructions  communicated by
telephone are genuine. If we follow such procedures,  then we will not be liable
for any losses due to  unauthorized  or  fraudulent  instructions.  If we do not
follow those reasonable  procedures,  then we may be liable for such losses. The
procedures  we follow for telephone  transfers  include  confirming  the correct
name, the contract number and the personal code for each telephone transfer.

     We will deem transfers  effective and determine  values in connection  with
transfers  at the end of the  Valuation  Period  during  which  we  receive  the
transfer request.

     Asset Rebalancing  Option . You may select the Asset Rebalancing  Option if
you wish to maintain a particular  percentage  allocation among the subaccounts.
With Asset  Rebalancing,  we  automatically  reallocate the account value in the
subaccounts quarterly to your selected allocations.  Over a period of time, this
method of investing may help you buy low and sell high although  there can be no
assurance of this. This  investment  method does not assure profits and does not
protect against a loss in declining markets.

     To elect the Asset Rebalancing  Option,  the account value in your Contract
must be at least $2,500 and we must receive a completed Asset Rebalancing Option
form at our home office.  You must designate the  subaccounts and the percentage
allocations  that you want us to rebalance each quarter.  The  percentages  must
total 100%. If you elect the Asset  Rebalancing  Option,  then all the new money
you  direct  into the  subaccounts  will be  included  in the Asset  Rebalancing
Option.  You may not participate in Dollar Cost Averaging and Asset  Rebalancing
at the same time. The general account is not available for the Asset Rebalancing
Option.

   
     Selecting Asset  Rebalancing will result in the transfer of funds to one or
more of the subaccounts on the date you specify.  If you have  specified,  or we
receive the form on, the 29th, 30th or 31st, then we will consider the effective
date to be the  first  Valuation  Date  of the  following  month.  If you do not
specify a date or if we receive the request after your specified  date,  then we
will transfer funds on the date we receive the Asset Rebalancing Option form and
on the quarterly anniversary of the applicable date thereafter.  We will execute
the  rebalancing  and determine all values in connection with the rebalancing at
the end of the  Valuation  Date on which the transfers  occur.  If the effective
date is not a Valuation Date, then the transfer will occur on the next Valuation
Date.
    

     You may terminate this option at any time by sending us written notice.  We
will  automatically  terminate this option if you request any transfers  outside
the  Asset  Rebalancing  program.  If you wish to resume  the Asset  Rebalancing
Option  after  it  has  been  canceled,  then  you  must  complete  a new  Asset
Rebalancing  Option  form and send it to our home  office.  We may  discontinue,
modify, or suspend the Asset Rebalancing Option at any time.

     Dollar Cost  Averaging . Dollar Cost  Averaging is a  systematic  method of
investing by which you purchase  units in fixed dollar  amounts so that the cost
is averaged over time.  You may begin dollar cost averaging by authorizing us to
make  periodic   transfers  from  any  one  subaccount  to  one  or  more  other
subaccounts.  Amounts  transferred  will purchase units in those  subaccounts at
that  subaccount's  Unit Value as of the  Valuation  Date on which the  transfer
occurs.  Since the value of the units will vary,  the amounts  transferred  to a
subaccount  will  purchase more units when the Unit Value is low and fewer units
when the Unit Value is high. Similarly,  the amounts transferred to a subaccount
will  result in the  liquidation  of more  units  when the Unit Value is low and
fewer units when the Unit Value is high. Dollar Cost Averaging does not assure a
profit or protect against a loss in declining markets.

     You may elect Dollar Cost  Averaging if the account  value in your Contract
is at  least  $2,500  and you  send our home  office  a  completed  Dollar  Cost
Averaging  form.  You  must  designate  the  frequency  of  the  transfers,  the
expiration  date  for the  program,  the  subaccount  from  which  to  take  the
transfers, the subaccounts to receive the funds, and the allocation percentages.

     You may not  participate in Dollar Cost Averaging and Asset  Rebalancing at
the same  time.  The  general  account  is not  available  for the  Dollar  Cost
Averaging Option.

     After we receive a completed  Dollar Cost Averaging  form, we will transfer
your  designated  amounts  from  the  subaccount  from  which  you  wish to make
transfers  to your chosen  subaccounts.  $50 is the minimum  amount that you may
transfer.  Each transfer  occurs on your specified  date. If you specify,  or we
receive the form on the 29th,  30th or 31st, then we will consider the effective
date to be the  first  Valuation  Date  of the  following  month.  If you do not
specify  a date,  then we will  transfer  the funds on the  monthly,  quarterly,
semiannual  or  annual  anniversary  (whichever  corresponds  to  your  selected
frequency) of the date that we received  your  completed  Dollar Cost  Averaging
form.  The amounts  transferred  will  receive the Unit Values for the  affected
subaccounts  at the end of the Valuation Date on which the transfers  occur.  If
the  anniversary  is not a Valuation  Date,  then the transfer will occur on the
next  Valuation  Date.  Dollar  Cost  Averaging  will  terminate  when  we  have
transferred the total amount  elected,  or when the value in the subaccount from
which  transfers  are made is  insufficient  to support the  requested  transfer
amount.

     You may  terminate  this  option at any time by sending us written  notice.
When we receive written notice that you want to terminate Dollar Cost Averaging,
then we will  stop  all  transfers,  unless  you  instruct  otherwise.  You must
complete a new Dollar Cost Averaging  option form and send it to our home office
if you wish to continue  Dollar Cost  Averaging  after the  expiration  date you
specified,  or the amount in the elected subaccount is depleted, or you canceled
the Dollar Cost Averaging option.

     We may discontinue,  modify, or suspend the Dollar Cost Averaging option at
any time.

Account Value

     On the Effective Date, your account value equals your initial payment minus
any amounts we deducted for premium taxes.  On any other day, your account value
equals:

     your account value from the previous Valuation Date

                                             increased by:

                           (1)      any additional net payments we receive,
                           (2)      any increase in the account value due to 
                                    positive investment results of the 
                                    subaccounts you selected, and
                           (3)      any interest earned on your account value 
                                    held in the general account;



                                             and reduced by:

                           (1)      any decrease in the account value due to 
                                    negative  investment results of the 
                                    subaccounts you selected,
                           (2)      a daily charge to cover our assumed  
                                    mortality and expense risks and
                                    the cost of administering the Contract, and
                           (3)      any amounts you withdrew from the Contract.

If we charge a records  maintenance  fee or transfer fee in the future,  we will
deduct those amounts from your account value.

     A Valuation  Period is the period between  successive  Valuation  Dates. It
begins at the close of business on each  Valuation Date and ends at the close of
business on the next  Valuation  Date. A Valuation Date is each day that the New
York Stock Exchange (NYSE) is open for business.

     You should  expect  your  account  value to change  between  the  Valuation
Periods to reflect the  investment  experience of the  subaccounts  in which you
invest,  any  interest  earned in the  general  account,  and the  deduction  of
charges. Your Contract stops accumulating value after the Maturity Date.

     Unit Value . Each subaccount has a distinct value ("Unit Value").  When you
allocate a payment or transfer an amount to a subaccount,  we base the number of
units  you  purchase  on the  Unit  Value  of the  subaccount  at the end of the
Valuation  Period during which you make the allocation.  Units are redeemed in a
similar  manner when you transfer  amounts out of, or withdraw  amounts  from, a
subaccount.

     For each  subaccount,  the Unit Value on a given Valuation Date is based on
the net asset  value of a share of the  corresponding  portfolio  in which  such
subaccount  invests.  Each Valuation Period has a single Unit Value that applies
to each day in the Valuation Period and which is calculated as of the end of the
Valuation  Period.  The Unit Value for each subsequent  Valuation  Period is the
Investment  Experience  Factor  (described  below)  for  that  Valuation  Period
multiplied by the Unit Value for the immediately preceding Valuation Period.

     Investment  Experience Factor . The Investment Experience Factor measures a
subaccount's  investment  performance  during a Valuation  Period. An Investment
Experience  Factor  is  calculated  separately  for each of the  subaccounts.  A
subaccount's  Investment  Experience  Factor for a Valuation  Period  equals (a)
divided by (b), minus (c), where:

                    (a)  is  (i)  the  value  of  the  net  assets  held  in the
                         subaccount at the end of the Valuation Period; plus

                    (ii) the  investment  income and capital gains  (realized or
                         unrealized)   credited   to  the  net  assets  of  that
                         subaccount  during  the  Valuation  Period for which we
                         determine the Investment Experience Factor; minus

                    (iii)the capital  losses  (realized or  unrealized)  charged
                         against those assets during the Valuation Period; minus

                    (iv) any amount charged  against the subaccount for taxes or
                         any  amount  that we set  aside  during  the  Valuation
                         Period as a  provision  for taxes  attributable  to the
                         operation or maintenance of that subaccount; and

                    (b)  is the value of the net  assets of that  subaccount  at
                         the end of the preceding Valuation Period; and

                    (c)  is a charge to compensate us for certain administrative
                         expenses and mortality and expense risks that we assume
                         in connection with the Contracts.


Contract Ownership

     You may  designate  a new  Owner or joint  owner  at any  time  during  the
annuitant's  life. If you name a joint owner, then we will presume the ownership
to be as joint tenants with right of survivorship, unless you otherwise specify.
If any Owner dies before the  annuitant and before the Maturity  Date,  then the
Owner's  rights will belong to the joint  owner,  if any,  or  otherwise  to the
beneficiary.  The  interest  of any Owner or joint  owner may be  subject to the
rights of any assignee.

   
     A new Owner or a joint owner may not be  designated  under a Contract  that
qualifies as an individual  retirement annuity under Section 408(b) of the Code.
An Owner's  designation  of a new Owner may be subject  to Federal  income  tax.
Please consult a qualified tax adviser before you designate a new Owner.
    

     You may designate a new Owner by sending us written notice. The change will
take  effect as of the date you sign the written  notice.  We will not be liable
for any  payment  made or other  action  taken  before we receive and record the
written notice.

Assignment of Contract

     Except in the case of a Contract that qualifies as an individual retirement
annuity  under  Section  408(b) of the Code,  you may assign all or a portion of
your right to receive annuity payments under the Contract or assign the Contract
as  collateral  security.  If you  assign  any  portion  of the right to receive
annuity  payments  before the  Maturity  Date,  then the assignee is entitled to
receive the assigned annuity payments in a lump sum, as of the Maturity Date. If
you assign any portion of the right to receive the  assigned  annuity  payments,
after the Maturity  Date,  then the assignee  will receive the assigned  annuity
payments in accordance  with the annuity income option in effect on the Maturity
Date. The assignee may not select an annuity income option or change an existing
annuity income option.

     For a Qualified  Contract,  certain  assignments  may adversely  affect the
qualification  for  special  Federal  income  tax  treatment  of the  underlying
retirement plan or individual  retirement account. We urge potential  purchasers
of Qualified Contracts to consult their tax advisers.

     If you assign the right to receive annuity  payments or assign the Contract
as collateral  security,  then your rights and those of any beneficiary  will be
subject  to the  assignment.  We are not  responsible  for the  adequacy  of any
assignment and will not be bound by the assignment until we receive satisfactory
written evidence of the assignment. In certain circumstances, an assignment will
be subject to Federal income tax.

State Exceptions

     Contracts  may  vary  according  to the  requirements  of  state  insurance
departments.  At the time of this  prospectus'  printing,  the  following  state
variations were in effect:

Massachusetts and Montana Residents:

     Massachusetts  and  Montana  prohibit  the  use of  actuarial  tables  that
distinguish  between men and women in determining  annuity  benefits for annuity
contracts issued on the lives of residents.  Therefore, Contracts offered on the
lives of Montana and  Massachusetts  residents  will have annuity income options
which are based on actuarial  tables that do not  differentiate  on the basis of
sex.


Iowa, Missouri, North Carolina, Oklahoma, South Carolina and Utah:

     An Owner of a Contract issued in Iowa, Missouri, North Carolina,  Oklahoma,
South Carolina and Utah who cancels the Contract within the  Examination  Period
will receive the greater of:

               a full refund of the initial  payment,  or 

               the account  value plus any amount  deducted for taxes or charges
               from the initial payment.

Washington:

     An Owner of a Contract issued in Washington who cancels the Contract within
the Examination Period will receive a refund of the initial payment.

                              Access to Your Money

Full and Partial Surrenders

     At any time before the Maturity  Date,  you may fully or partial  surrender
the Contract,  subject to certain conditions. If you surrender the Contract, you
will receive the full account value.

     We do not deduct surrender  charges from full or partial  surrenders of the
Contract.

     The minimum  amount of a partial  surrender is $500. The Contract must have
an account value of at least $2,500 after the partial surrender.

     Your partial  surrender  request must specify the amount you want withdrawn
from each of the subaccounts  and/or the general account.  If you withdraw value
from the general account,  we will deduct the requested  amount  proportionately
from  each  Declaration  Period  on  a  first-in,  first-out  basis  within  the
Declaration Period(s).

     You must provide us with specific instructions about how we should withdraw
value from the subaccounts and/or the general account.

     To make a partial  surrender,  you should send us a written request or call
us, if you have a valid telephone transfer request form on file with us. You may
make a full  surrender only by sending us a written  request.  We will calculate
the account value  payable to you upon a full or partial  surrender at the price
next computed after we receive your surrender request.

     If,  when you make a  surrender  request,  you have not  provided us with a
written  election,  not to have Federal income taxes withheld,  then we, by law,
must withhold taxes from the taxable portion of the surrender. A Federal penalty
tax may be assessed.

     Systematic Withdrawals. We offer an option under which you may take partial
surrenders of the Contract by systematic  withdrawals.  You may elect to receive
systematic  withdrawals  before the  Maturity  Date by  sending  us a  completed
Systematic  Withdrawal form at our home office that includes the written consent
of any assignee or  irrevocable  beneficiary.  You may designate the  systematic
withdrawal  amount as either a percentage of the account value or as a specified
dollar amount.  You may designate that  systematic  withdrawals be made monthly,
quarterly, semiannually, or annually on a specific date. If you do not specify a
date,  then the systematic  withdrawal  option will begin on the date we receive
the form. We will consider the effective date to be the first  Valuation Date of
the following  month if we receive the form on the 29th,  30th or 31st or if you
specify one of those dates.

     Each systematic withdrawal must be at least $250. The systematic withdrawal
option will terminate if the amount to be withdrawn exceeds the account value or
would  cause  the  account  value  to be below  $2,500.  If any  portion  of the
systematic  withdrawal is to be withdrawn from the general account, then we will
deduct the requested amount  proportionately  from each Declaration  Period on a
first-in, first-out basis within the Declaration Period(s).

     Each systematic  withdrawal  will occur at the end of the Valuation  Period
during which you scheduled a  withdrawal.  We deduct the  systematic  withdrawal
from your account value in the subaccounts and/or the general account, according
to your specifications.

     You may terminate this option at any time by sending us written notice.  We
will  terminate this option if the amount to be withdrawn has caused the account
value to be below $2,500. If you wish to resume systematic withdrawals, then you
must  send us a new  Systematic  Withdrawal  form  at our  home  office.  We may
discontinue,  modify,  or suspend the systematic  withdrawal option at any time.
You should carefully  consider the tax consequences of a systematic  withdrawal,
including a 10% penalty tax imposed on withdrawals made before you attain age 59
1/2.

Annuity Payments

     If the  annuitant  is living on the  Maturity  Date and the  Contract is in
force,  then we will make fixed annuity payments to you under the annuity income
option you select.  We will make the first  annuity  payment  within  seven days
after the Maturity Date.

     The amount of the periodic annuity payments you receive depends upon:

               (i) the account value you have accumulated on the Maturity Date,

               (ii)  the  annuitant's  age and sex (or,  in the case of  Annuity
               Income  Option 2, the age and sex of the  annuitant and the joint
               annuitant) on the Maturity Date, and

               (iii) the annuity income option you selected.


     On the  Maturity  Date,  we  determine  the dollar  amount of each  annuity
payment. That amount is fixed and will not change.

     After  the  Maturity  Date,  the  Contract  no longer  participates  in the
Variable Account.  If, at the time of an annuity payment,  you have not provided
us with a written  election not to withhold  Federal  income taxes,  then we, by
law, must withhold such taxes from the taxable portion of such Annuity  payment.
In  addition,  the Code  provides  that a Federal  penalty tax may be imposed on
certain premature annuity payments.

     We  determine  the amount of the monthly  annuity  payments  under  annuity
income  options 1, 2, and 3, described  below,  by dividing the account value on
the Maturity Date by 1,000 and multiplying the result by the appropriate  factor
contained in your Contract on the table for your selected annuity income option.
The appropriate  factor is based on a guaranteed minimum annual interest rate of
3.5%.  We  determine  this  factor at the time of  maturity,  subject to current
market conditions.

Annuity Income Options

     At any time before the Maturity  Date, you may designate the annuity income
option under which we will pay annuity payments. If you do not select an annuity
income option by the Maturity Date, then we will make monthly  annuity  payments
to you under annuity income option 1.

     If the  account  value is less  than  $2,500  or if it is  insufficient  to
produce  monthly  payments of at least $100, then no annuity income options will
be available  unless we consent or as  otherwise  required by state law. In such
cases, we will pay the account value in a lump sum.

     We may offer other  annuity  income  options on the Maturity  Date. We will
provide you with  information  concerning  the  availability  of any  additional
annuity income options before the time that you have to select an annuity income
option.

     We currently offer the following annuity income options:

     Option 1.  Life  Annuity  with  Installment  Refund - We will make  monthly
     annuity payments to you for the longer of:

                    (i)  the annuitant's life; or

                    (ii) until the sum of the monthly  annuity  payments  equals
                         the account value on the Maturity Date.

     If the Owner dies  before the sum of the monthly  annuity  payments we paid
     equals  the  account  value  on the  Maturity  Date,  then we will  pay the
     remaining annuity payments to your designated beneficiary.


     Option 2. Joint and Survivor Life Annuity with Installment Refund - We will
     make monthly annuity payments to you for the longer of:

                    (i)  either the annuitant's or the joint  annuitant's  life;
                         or

                    (ii) until  the sum of the  monthly  annuity  payments  made
                         under the  Contract  equals  the  account  value on the
                         Maturity Date.

     If all Owners die before the sum of the  monthly  annuity  payments we paid
     equals  the  account  value  on the  Maturity  Date,  then we will  pay the
     remaining annuity payments to your designated beneficiary.

     If you select  annuity  income  option 2, then you must  designate  a joint
     annuitant. We will use the joint annuitant's life to determine the duration
     of annuity  payments under annuity income option 2. The age and sex of both
     the annuitant and the joint  annuitant  determine the amount of the monthly
     annuity  payments  under  annuity  income  option 2. At any time before the
     Maturity  Date,  you may select a different  joint  annuitant by sending us
     written notice. You may not select a new joint annuitant after the Maturity
     Date.

     Option 3.  Installments for Life - We will make monthly annuity payments to
     you for as long as the annuitant lives. Payments under this option will end
     with the last payment made before the annuitant's  death. Under this option
     it is  possible  that you will  receive  only one  annuity  payment  if the
     annuitant died before the date of the second payment, two if he or she dies
     before the third annuity payment date, etc.

     For a Contract qualifying as an individual retirement annuity under Section
408(b) of the Code,  you may not select an annuity  income  option with a Period
Certain that will guarantee  annuity  payments beyond the  annuitant's  life (or
life expectancy).

Maturity Date

     The Maturity  Date is the date on which  annuity  payments  begin.  You may
specify the Maturity Date in your application.  You may change the Maturity Date
at any time during the  annuitant's  life by sending us a written request before
the currently scheduled Maturity Date.

     The Maturity Date must be a Contract Anniversary that is not later than:

                    (i)  the Contract  Anniversary  nearest the annuitant's 80th
                         birthday; or

                    (ii) ten years from the next Contract Anniversary, whichever
                         is later.

If you do not specify a Maturity Date,  then the Maturity Date will be the later
of: (a) the 10th Contract  Anniversary;  or (b) the Contract Anniversary nearest
the annuitant's 80th birthday.

     For a Qualified  Contract,  other than an IRA that satisfied Section 408(b)
of the Code,  the  selection  of certain  Maturity  Dates may  adversely  affect
qualifying  the  underlying  retirement  plan for  special  Federal  income  tax
treatment.  We urge potential  purchasers of such Qualified Contracts to consult
their tax advisers.

     For a Qualified  Contract that is an IRA under Section  408(b) of the Code,
other than a Roth IRA, the minimum required  distribution  must be no later than
April 1 of the calendar year  following the calendar year in which the annuitant
attains age 70 1/2.

Death Benefit

   
     If the annuitant dies before the Maturity  Date,  then we will pay you, the
Owner,  a death  benefit as  specified  in the  Contract.  We do not pay a death
benefit if the annuitant dies on or after the Maturity Date.
    

     If the annuitant dies before the Maturity Date, then we will pay you a lump
sum death benefit equal to the greater of:

                    (i)  the account value; or

                    (ii) the sum of the payments you made,  minus the sum of any
                         partial surrenders.

     If the Owner is a natural person,  then the Owner may elect to continue the
Contract and become the annuitant if the deceased annuitant was not an Owner. We
calculate the amount of the death  benefit at the price next  computed  after we
receive Proof of Death for the  annuitant.  We will pay you within seven days of
receiving the Proof of Death,  or as soon as we have  sufficient  information to
make the payment.  If the deceased  annuitant was an Owner,  then we will in all
events  pay the Death  Benefit  within  five  years of the date of the  deceased
annuitant's death.

Beneficiary Provisions

     If the beneficiary survives the Owner(s), then the beneficiary will receive
amounts payable under the Contract.  If you do not specify a beneficiary,  or if
no  beneficiary  survives  you by 30 days,  then your  estate  will  receive any
remaining amounts payable under the Contract.

     While  the  annuitant  is  living,   you  may  change  the  beneficiary  or
beneficiaries by sending us written notice.  Once we receive the notice, we will
initiate the change as of the date you signed the written notice. We will not be
liable for any payment  made or other  action taken before we receive and record
such written notice at our home office. A beneficiary  named irrevocably may not
be changed  without  written  consent  of such  beneficiary.  Any  beneficiary's
interest is subject to the rights of any assignee.

Death of Owner

     For a Nonqualified  Contract in which any owner is a natural person, is not
the  annuitant,  and dies before the  Maturity  Date and before the  annuitant's
death, the death benefit provisions described above do not apply.

     In such circumstances,  we will pay to the joint owner the account value in
a lump sum no later than five years  following the date of the Owner's death. If
there is no joint owner,  then we will pay the  beneficiary.  We  calculate  the
account value at the price next  computed  after we receive the Owner's Proof of
Death.  If the joint owner or the beneficiary is the Owner's  surviving  spouse,
then he or she may  elect  to  continue  the  Contract  as if he or she were the
original Owner.

Employment-Related Benefit Plans

     In 1983, the Supreme Court held in, Arizona Governing  Committee v. Norris,
that  optional   annuity   payments   provided  under  an  employer's   deferred
compensation  plan could not,  under Title VII of the Civil  Rights Act of 1964,
vary between men and women on the basis of sex. This Contract  contains  annuity
payment rates for certain  annuity income options that  distinguish  between men
and women. Accordingly, employers and employee organizations should consider, in
consultation with legal counsel,  the impact of Norris, and Title VII generally,
on any  employment-related  insurance  or  benefit  program  for which  they may
purchase a Contract.

                             Charges and Deductions

     We do not deduct  commissions  or sales charges from your payments when you
invest  in the  Contract.  Nor do we not take  surrender  charges  upon  full or
partial surrender of the Contract.  We pay distribution  expenses out of our own
funds.  

     We will deduct certain  charges and  deductions  from your account value to
compensate  us for  providing the annuity  payments,  assuming  certain risks in
connection with the Contract, and administering the Contract.

     If there are  profits  from the fees and charges  that we deduct  under the
Contract,  including but not limited to mortality and expense risk charges, then
we may use such profits to finance the distribution of the Contracts.

Mortality and Expense Risk Charge

     We deduct a daily charge from your Contract's  value in the subaccounts for
certain  mortality  and  expense  risks in  connection  with the  Contracts.  We
currently  charge  a daily  rate of  .000010997  of the  value  you have in each
subaccount.  That charge  corresponds  to an annual rate of .40%. We reserve the
right to increase the  Mortality  and Expense  Risk Charge to .70%.  That charge
corresponds  to a  daily  rate of  .000019245,  the  maximum  set  forth  in the
Contract.

     The mortality  and expense risk charge only applies  during the period from
the Effective  Date to the Maturity Date and is not imposed  against the general
account.  The Investment  Experience  Factor for each  subaccount  reflects this
charge.

     Changes in actual mortality  experience or actual expense do not affect the
account  value  or  annuity  payments.   The  mortality  risks  arise  from  the
contractual  obligations  to pay death  benefit  before the Maturity Date and to
make  annuity  payments  for the  annuitant's  entire  life (or,  in the case of
annuity  income  option  2,  the  entire  life of the  annuitant  and the  joint
annuitant).  Thus, we assure you that neither the annuitant's  longevity (or, in
the case of annuity income option 2, the annuitant's  and the joint  annuitant's
longevity)  nor a greater than expected  improvement  in life  expectancy,  will
adversely affect the annuity payments. This eliminates the risk of outliving the
funds accumulated for retirement in instances in which the Contract is purchased
to provide funds for retirement.

     The  expense  risk  is the  risk  that  the  actual  expenses  involved  in
administering   the   Contracts,    including   Contract    maintenance   costs,
administrative  costs,  mailing costs, data processing costs, and costs of other
services may exceed the amount recovered from any administrative charges.

Contract Administration Charge

     The Contract's  administrative  expenses include  processing  applications,
Contract changes, tax reporting, full and partial surrenders,  death claims, and
initial and subsequent  payments;  preparing  annual and  semiannual  reports to
Owners and regulatory compliance reports; and overhead costs.

     We deduct a daily charge from your Contract's  value in the subaccounts for
the  administrative  expenses we incur in  connection  with the Contract and the
Variable  Account.  We  charge a daily  rate of  .000008248  of the value of net
assets you have in each subaccount. This charge corresponds to an annual rate of
 .30%. The Contract Administration Charge only applies during the period from the
Effective  Date to the  Maturity  Date and is not  imposed  against  the general
account.  The Investment  Experience  Factor for each  subaccount  reflects this
charge.

Records Maintenance Charge

     Currently,  we do not charge for records maintenance.  The Contract permits
us to deduct a maximum amount of $40 from your account value at the beginning of
each Contract Year to reflect the cost of performing records maintenance for the
Contracts.  If we imposed this charge,  then we would deduct it  proportionately
from  each  subaccount  and each of the  Declaration  Period(s)  in the  general
account (on a first-in, first-out basis within each Declaration Period) in which
you have allocated funds. If we deducted a Records  Maintenance  Charge, then it
would apply only during the period from the Effective Date to the Maturity Date.
If you surrender the Contract  during a Contract Year, then we would not prorate
it.

Premium Taxes

     Most states and political  subdivisions do not assess premium taxes.  Where
state premium taxes are assessed, we will deduct the amount of tax due from each
payment at rates  ranging  from a minimum of 0.5% to a maximum of 3.5%.  We will
deduct any premium taxes levied by political  subdivisions  from payments.  Such
taxes are generally at rates of less than 1%.

     If the premium tax exceeds 3.5% of the payment,  we will accept the payment
only if you provide written  authorization  allowing us to deduct the applicable
premium tax from the account value.

Other Taxes

     We currently do not charge the Variable Account for any Federal,  state, or
local taxes other than premium  taxes.  If we decide to impose any such taxes on
the  Variable  Account,  then we may deduct  such taxes  from  amounts  you have
invested in the Variable Account.

Transfer Charges

     We do not charge for transfers  among  subaccounts.  However,  the Contract
permits  us to deduct $10 from each  subaccount  for each  transfer  you make in
excess of two in a Contract Year.

     We do not consider the following to be transfers:  (i) initial  allocations
of payments, (ii) reallocations among the Declaration Periods within the general
account,  or (iii)  reallocations from the general account to any subaccounts at
the end of a Declaration Period.

     We treat all transfer requests,  made at the same time, as one request.  We
may impose the transfer charge at any time.

Portfolio Charges

   
     The portfolios deduct investment  charges from amounts you have invested in
the portfolios.  These charges range from 0.44% to 1.72% annually,  depending on
the portfolio. For more information, see the Fund's prospectus.
    

                    Certain Federal Income Tax Consequences

     The  discussion  set forth below is included  for  general  purposes  only.
Before  making any payment  you should  consult  your own tax  adviser  with any
questions  regarding your own situation and as to the consequences of investment
in a contract under Federal and applicable state, local, and foreign tax laws.

     The  following  is  provided  as  general  information.  It is based on our
understanding of current Federal income tax laws and no  representation  is made
as to the  likelihood  that such laws, or their  interpretation  by the Internal
Revenue Service (IRS) will continue. The following is not intended as tax advice
to any individual or Qualified Plan.

     The  Statement  of  Additional   Information   (SAI)  contains   additional
information regarding the possible tax consequences of exchanges or surrenders.

Tax Status of the Contract

     If  you  invest  in a  variable  annuity  as  part  of a  pension  plan  or
employer-sponsored  retirement  program,  your  contract  is called a  Qualified
Contract.  If your annuity is  independent  of any formal  retirement or pension
plan,  it is  termed  a  Nonqualified  Contract.  The tax  rules  applicable  to
Qualified  Contracts vary according to the type of retirement plan and the terms
and conditions of the plan.

Taxation of Nonqualified Contracts

     Diversification  Requirements  . The Code requires that the  investments of
each  investment  division of the separate  account  underlying the contracts be
"adequately  diversified"  in order for the  contracts  to be treated as annuity
contracts  for Federal  income tax  purposes.  It is intended  that the Variable
Account, through the Fund and its portfolios, will satisfy these diversification
requirements.

     Owner  Control.   In  certain  circumstances,  owners of  variable  annuity
contracts have been  considered for Federal income tax purposes to be the owners
of the assets of the separate  account  supporting  their contracts due to their
ability to exercise investment control over those assets. When this is the case,
the contract owners have been currently  taxed on income and gains  attributable
to the Variable Account assets.  There is little guidance in this area, and some
features  of the  Contract,  such as the  flexibility  of an owner  to  allocate
premium  payments and transfer  amounts  among the  investment  divisions of the
separate account, have not been explicitly addressed in published rulings. While
we believe  that the  Contract  does not give an Owner  investment  control over
separate  account  assets,  we  reserve  the right to  modify  the  Contract  as
necessary  to prevent an Owner from being  treated as the owner of the  separate
account assets supporting the Contract.

     Required  Distributions.  In order to be treated as an annuity contract for
Federal income tax purposes, section 72(s) of the Code requires any Nonqualified
Contract  to contain  certain  provisions  specifying  how your  interest in the
Contract  will be  distributed  in the  event of the  death  of a holder  of the
Contract.  The Nonqualified  Contracts  contain  provisions that are intended to
comply with these Code requirements,  although no regulations interpreting these
requirements  have yet been  issued.  We intend to review  such  provisions  and
modify  them if  necessary  to  assure  that  they  comply  with the  applicable
requirements, when such requirements are clarified by regulation or otherwise.

     Non-Natural  Person . If a  non-natural  person (e.g.,  a corporation  or a
trust) owns a Nonqualified  Contract,  the taxpayer  generally must include,  in
income, any increase in the excess of the accumulation value over the investment
in the Contract  (generally,  the premiums or other  consideration  paid for the
Contract)  during the taxable year. There are some exceptions to this rule and a
prospective  owner that is not a natural  person should discuss these with a tax
adviser.

     The following  discussion  generally  applies to Contracts owned by natural
persons.

     Withdrawals . When a withdrawal from a Nonqualified  Contract  occurs,  the
amount  received  will be treated as  ordinary  income,  subject to tax up to an
amount equal to the excess (if any) of the accumulation value immediately before
the distribution  over the Owner's  investment in the Contract  (generally,  the
premiums or other  consideration  paid for the  Contract,  reduced by any amount
previously  distributed  from the Contract  that was not subject to tax) at that
time.  In the case of a  surrender  under a  Nonqualified  Contract,  the amount
received  generally  will be taxable  only to the extent it exceeds  the Owner's
investment in the Contract.

     Penalty Tax on Certain  Withdrawals . In the case of a distribution  from a
Nonqualified  Contract,  there may be imposed a Federal tax penalty equal to ten
percent  of the  amount  treated as income.  In  general,  however,  there is no
penalty on distributions:

                  made on or after the taxpayer reaches age 59 1/2;
                  made on or after the death of an Owner;
                  attributable to the taxpayer's becoming disabled;
                  or
                  made as part of a  series  of  substantially  equal  periodic
                  payments for the life (or life expectancy) of the taxpayer.

     Other exceptions may be applicable under certain  circumstances and special
rules may be applicable in connection with the exceptions  enumerated above. You
should consult a tax adviser with regard to exceptions from the penalty tax.

     Annuity  Payments . Although  tax  consequences  may vary  depending on the
payout  option  elected  under an annuity  contract,  a portion of each  annuity
payment is generally  not taxed and the  remainder is taxed as ordinary  income.
The  non-taxable  portion of an annuity  payment is  generally  determined  in a
manner that is designed to allow you to recover your  investment in the contract
ratably on a tax-free  basis over the expected  stream of annuity  payments,  as
determined when annuity payments start. Once your investment in the Contract has
been  fully  recovered,  however,  the full  amount of each  annuity  payment is
subject to tax as ordinary income.

     Taxation of Death Benefit  Proceeds . Amounts may be  distributed  from the
Contract  because of your death or the death of the Annuitant.  Generally,  such
amounts  are  includible  in the  income of the  recipient  as  follows:  (i) if
distributed  in a lump sum,  they are taxed in the same manner as a surrender of
the Contract,  or (ii) if distributed  under a payout option,  they are taxed in
the same way as annuity payments.

     Transfers,  Assignments  or  Exchanges  of  a  Contract  .  A  transfer  or
assignment of ownership of a Contract,  the  designation  of an  annuitant,  the
selection of certain maturity dates, or the exchange of a Contract may result in
certain  tax  consequences  to you  that  are not  discussed  herein.  An  owner
contemplating  any such transfer,  assignment or exchange,  should consult a tax
advisor as to the tax consequences.

     Withholding . Annuity  distributions  are generally  subject to withholding
for the  recipient's  Federal  income tax  liability.  Recipients  can generally
elect, however, not to have tax withheld from distributions.

     Multiple  Contracts . All annuity  contracts  that are issued by us (or our
affiliates)  to the same  owner  during  any  calendar  year are  treated as one
annuity  contract  for purposes of  determining  the amount  includible  in such
owner's income when a taxable distribution occurs.

Taxation of Qualified Contracts

     Your rights  under a Qualified  Contract may be subject to the terms of the
retirement  plan  itself,  regardless  of the terms of the  qualified  contract.
Adverse tax  consequences  may result if you do not ensure  that  contributions,
distributions  and other  transactions  with respect to the contract comply with
the law.

     Individual  Retirement  Accounts (IRAs), as defined in Sections 219 and 408
of the Code, permit individuals to make annual contributions of up to the lesser
of $2,000 or 100% of their  adjusted  gross  income.  The  contributions  may be
deductible  in  whole  or  in  part,   depending  on  the  individual's  income.
Distributions  from certain  pension plans may be "rolled over" into an IRA on a
tax-deferred  basis without  regard to these  limits.  Amounts in the IRA (other
than nondeductible contributions) are taxed when distributed from the IRA. A 10%
penalty tax generally  applies to  distributions  made before age 59 1/2, unless
certain exceptions apply.

     Corporate pension and profit-sharing plans under Section 401(a) of the Code
allow  corporate  employers to establish  various types of retirement  plans for
employees,  and  self-employed  individuals  to  establish  qualified  plans for
themselves and their employees. Adverse tax consequences to the retirement plan,
the  participant  or both may  result  if the  Contract  is  transferred  to any
individual as a means to provide benefit payments, unless the plan complies with
all the  requirements  applicable to such  benefits  prior to  transferring  the
Contract.

     Other Tax Issues.  Qualified Contracts have minimum distribution rules that
govern  the  timing  and  amount  of  distributions.  You  should  refer to your
retirement  plan,  adoption  agreement,  or  consult  a  tax  advisor  for  more
information about these distribution rules.

     Distributions from Qualified Contracts generally are subject to withholding
for the  Owner's  Federal  income tax  liability.  The  withholding  rate varies
according to the type of distribution and the Owner's tax status. The Owner will
be  provided  the   opportunity  to  elect  not  to  have  taxes  withheld  from
distributions.

     "Eligible rollover  distributions" from section 401(a) plans are subject to
a  mandatory  Federal  income  tax  withholding  of 20%.  An  eligible  rollover
distribution is the taxable portion of any distribution from such a plan, except
certain   distributions   such  as   distributions   required  by  the  Code  or
distributions  in a specified  annuity form. The 20% withholding does not apply,
however,  if the  Owner  chooses a "direct  rollover"  from the plan to  another
tax-qualified plan or IRA.

Our Income Taxes

     At the  present  time,  we make no charge for any  Federal,  state or local
taxes  (other than the charge for state and local  premium  taxes) that we incur
that may be attributable to the investment  divisions of the separate account or
to the contracts.  We do have the right in the future to make additional charges
for any such tax or other economic burden  resulting from the application of the
tax laws that we determine is  attributable  to the investment  divisions of the
separate account or the contracts.

     Under  current laws in several  states,  we may incur state and local taxes
(in addition to premium  taxes).  These taxes are not now significant and we are
not currently  charging for them. If they  increase,  we may deduct  charges for
such taxes.

Possible Tax Law Changes

     Although the  likelihood  of  legislative  changes is  uncertain,  there is
always the  possibility  that the tax treatment of the Contract  could change by
legislation  or  otherwise.  Consult a tax adviser with  respect to  legislative
developments and their effect on the Contract.

     We have the right to modify the Contract in response to legislative changes
that could otherwise  diminish the favorable tax treatment that annuity contract
owners currently receive.  We make no guarantee  regarding the tax status of any
contact and do not intend the above discussion as tax advice.

                               General Provisions

The Contract

     The  Contract,  its  endorsements,  riders,  and the  Contract  application
constitute  the  entire  contract  between  Charter  and  the  Owner.  Only  the
President, a Vice President, the Secretary, or an Assistant Secretary of Charter
is authorized  to change or waive the terms of a Contract.  Any change or waiver
must be in writing and signed by one of those persons.

Delay of Payment and Transfers

     We will pay any amount due from the Variable  Account for a full or partial
surrender,  the  death  benefit,  or the  death of the  owner of a  Nonqualified
Contract,  generally  within seven days from the date we receive written notice.
We may be permitted to defer such payment, and transfers, if:

               the NYSE is closed for other than usual weekends or holidays,  or
               trading on the Exchange is otherwise restricted;

               an  emergency  exists as defined  by the SEC or the SEC  requires
               that trading be restricted; or

               the SEC permits a delay for the protection of Owners.

     We anticipate  that payments and  transfers  from the general  account will
occur within seven  business days after receipt of written  notice.  Pursuant to
state insurance law  requirements,  we reserve the right to defer payments to be
made from the general account for up to six months.

     We may  postpone  any  payment  that is derived,  all or in part,  from any
amount paid to us by check or draft until we determine that such  instrument has
been honored.

Contract Expiration

     The  Contract  will expire and be of no effect  when the  account  value is
insufficient to cover deductions for the mortality and expense risk charge,  the
contract  administration  charge,  any records  maintenance  charge, or transfer
charges.

Misstatement of Age or Sex

     If the annuitant's age or sex (and/or the joint  annuitant's age or sex, if
annuity income option 2 is selected) has been misstated on the application, then
we will recalculate the annuity payments to reflect the calculations  that would
have been made had the annuitant's  (and/or joint  annuitant's) age and sex been
correctly stated.

Nonparticipating Contract

     The Contract does not  participate in our divisible  surplus.  The Contract
does not pay dividends.

Notices and Inquiries

         Please send any written notice or request to:

   
                  Scudder Horizon Plan
                  Customer Service Center
                  8301 Maryland Ave.
                  St. Louis,  MO 63105.
    

     Any notice or request  must be on the form and contain the  information  we
require. This includes the Contract number and your full name and signature. Any
notice  that we send you will be sent to the  address  shown in the  application
unless we have on file a written  notice of an  address  change.  All  inquiries
should  include  your  Contract  number  and full name.  If you need  additional
information, you may call us at (800) 242-4402.

Records and Reports

     At the end of each calendar  quarter,  Allstate,  or its  designee,  on our
behalf, will send you, at your last known address of record,  statements listing
the account value, additional payments,  transfers, any charges, and any partial
surrenders  made  during the year.  You will also be sent the Fund's  annual and
semiannual reports.

Year 2000 Disclosure

   
     Like all financial  services  providers,  Charter,  Allstate and Allstate's
affiliates  (we) are heavily  dependent  upon complex  computer  systems for all
phases   of  our   operations,   including   customer   service   and   contract
administration.  Since many of our older computer  software  programs  recognize
only the last two  digits of the year in any  date,  some  software  may fail to
operate  properly in or after the year 1999,  if  software is not  reprogrammed,
remediated  or  replaced  ("Year  2000  Issue").  We  believe  that  many of our
counterparties and suppliers also have Year 2000 Issues that could affect us. In
1995,  Allstate commenced a plan intended to mitigate and/or prevent the adverse
effects of Year 2000 Issues.  These  strategies  include normal  development and
enhancement of new and existing  systems,  upgrades to operating systems already
covered by maintenance  agreements and modifications to existing systems to make
them Year 2000  compliant.  The plan also includes us actively  working with our
major external  counterparties  and suppliers to assess their compliance efforts
and our exposure to them.  Allstate is  currently in the process of  identifying
key processes  and  developing  contingency  plans in the event that the systems
supporting  its key  processes  are not Year 2000  compliant at the end of 1999.
Management  believes  these  contingency  plans should be completed by mid-1999.
Until these plans are complete, management is unable to determine an estimate of
the most  reasonably  possible worst case scenario due to issues relating to the
Year 2000.  We  presently  believe that we will resolve the Year 2000 Issue in a
timely manner,  and the financial impact will not materially  affect the results
of our operations,  liquidity or financial position.  Allstate's Year 2000 costs
are and will be expensed as incurred.
    

                               Services Agreement

     On September 2, 1998, we entered into an administrative  services agreement
("Services  Agreement")  with Allstate  under which  Allstate,  or its designee,
provides the  administrative  services in connection  with the Contracts and the
Variable Account on our behalf.  Included among the services are premium payment
processing,  all transfer,  withdrawal  or surrender  requests,  preparation  of
records (including records of all purchases and redemption of the shares of each
portfolio) and reports  relating to the Variable  Account and the Contracts.  In
addition  Allstate is responsible for payment of all expenses in connection with
the Contract and Separate Account. Allstate's principal address is: 3100 Sanders
Road, Northbrook, Illinois 60062.

     At this time you should continue to use the addresses and phone numbers set
forth in this prospectus.

                          Distribution of the Contract

     The principal  underwriter of the Contracts is CNL. CNL is  wholly-owned by
Allstate. CNL is registered with the SEC as a broker-dealer under the Securities
Exchange  Act of 1934,  as  amended  (the " 1934  Act"),  and is a member of the
National Association of Securities Dealers, Inc. The principal address of CNL is
8301 Maryland Avenue, St. Louis, Missouri 63105.

   
     For its services as principal underwriter,  we pay CNL, on a monthly basis,
 .50% of new and additional payments for the Contracts. We have also entered into
a general expense reimbursement  agreement with CNL for expenses incurred by CNL
in  connection  with  distribution  expenses  relating  to the  offering  of the
Contracts and other variable annuity and variable life insurance  contracts that
we issue.  We paid  commissions  to CNL for the sale of the  Contracts  totaling
$189,889 in 1998, $238,447.78 in 1997, and $230,970.90 in 1996.
    

     CNL has contracted with Scudder  Investor  Services,  Inc.  ("Scudder") for
Scudder's services in connection with the distribution of the Contracts. Scudder
is registered with the SEC as a broker-dealer under the 1934 Act and is a member
of the National  Association of Securities Dealers,  Inc.  Individuals  directly
involved in the sale of the Contracts are registered  representatives of Scudder
and our licensed agents.  The principal  address of Scudder is Two International
Place, Boston, Massachusetts 02110-4103.

     CNL is doing  business under the following  names in the states  indicated:
CNL Insurance Marketing, Inc. in California,  Florida,  Minnesota,  Montana, New
Hampshire, and New Jersey; CNL Insurance & Financial Services, Inc. in Illinois,
Kentucky,  Maine,  Maryland,  Nevada,  Rhode Island,  and Utah; and CNL, Inc. of
Missouri in Vermont.

     The Contracts will be offered to the public on a continuous basis. Both CNL
and Scudder reserve the right to discontinue the offering at any time.

                               The General Account

     Payments you allocate or transfer to the general account become part of our
general account assets that support our annuity and insurance  obligations.  The
general account  includes all of our assets,  except those assets  segregated in
separate accounts.  According to the coinsurance agreement executed on September
2,  1998,  between  Charter  and  Allstate,  the assets of the  general  account
attributable to the Contracts were transferred to Allstate. This agreement makes
it  Allstate's  responsibility  to invest  the  assets of the  general  account,
subject to applicable law.

     Because of exemptive and exclusionary  provisions in the Federal securities
laws,  we have  not  registered  interests  in the  general  account  under  the
Securities  Act of 1933  (the  "1933  Act"),  and  the  general  account  is not
registered as an investment company under the 1940 Act. Accordingly, neither the
general  account nor any interest  therein is subject to the  provisions of such
statutes,  and,  as a  result,  the  staff  of the  SEC  has  not  reviewed  the
disclosures  in  this  prospectus  relating  to the  general  account.  However,
disclosures  about the  general  account  may be subject  to  certain  generally
applicable  provisions of the Federal  securities  laws relating to the accuracy
and completeness of statements made in prospectuses.

     We  guarantee  that we will credit  interest to amounts you allocate to the
general account at an effective annual rate of at least 3.5% compounded monthly.
We may declare  higher  interest rates from time to time at our  discretion.  We
will credit the declared  interest  rate for a specific  period of time called a
Declaration  Period. A Declaration Period will not be less than one year or more
than 3 years. You may elect one or more Declaration  Periods  currently  offered
when you  allocate or transfer  funds to the general  account.  At any one time,
your  money held in a  Declaration  Period  may be  earning  different  declared
interest rates, if you allocated funds to that  Declaration  Period at different
times.

     We cannot accept  allocations  to the general  account that would  increase
your Contract's value in the general account to over $500,000. We guarantee that
the value held in the general  account will equal all amounts that you allocated
or  transferred to the general  account,  plus any interest  credited,  less any
amounts that you surrendered or transferred from the general  account,  and less
any applicable charges. Amounts you allocate to the general account do not share
in the investment experience of the general account.

     You may not  allocate  or  transfer  an amount  from or within the  general
account  to the  general  account  before the end of that  amount's  Declaration
Period.  We  will  send  notice  to you  30  days  before  the  expiration  of a
Declaration  Period and ask you how to  reallocate  the amounts in the  expiring
Declaration Period. If we do not receive your instructions before the end of the
Declaration Period, then we will transfer your value in the expiring Declaration
Period to the Money Market Subaccount.

                                  Voting Rights

     We will vote the Fund's shares held in the Variable  Account at regular and
special  shareholder  meetings of the Fund in accordance  with  instructions  we
received  from  persons  having  voting  interests  in  the  subaccounts.  If we
determine  that the law  permits us to vote the Fund's  shares in our own right,
then we may elect to do so.

     We will separately calculate the number of votes that you have the right to
instruct for each  subaccount.  We will  determine  the number of votes for each
subaccount,  that you have the right to instruct,  by dividing  your  Contract's
value in a  subaccount  by the net asset  value  per share of the  corresponding
portfolio in which the  subaccount  invests.  We count  fractional  shares.  The
number of votes of a  portfolio,  that you have the right to  instruct,  will be
determined as of the date coincident  with the date  established by the Fund for
determining  shareholders  eligible to vote at the  meeting of the Fund.  Voting
instructions will be solicited by written  communications before that meeting in
accordance with procedures established by the Fund.

     We will  vote  the  Fund's  shares,  for  which  we do not  receive  timely
instructions,  in proportion to the voting instructions which we receive for all
of the variable  annuity  contracts  (including the Contracts) that we issue and
are  participating in that portfolio.  We will also vote our shares that are not
attributable to variable annuity contracts in the same proportion.

     Separate  accounts  of  other  insurance  companies,   including  insurance
companies  affiliated  with us, may also invest  premiums for variable  life and
variable  annuity  contracts in the Fund.  It is to be expected that Fund shares
held by those separate  accounts will be voted according to the  instructions of
the owners of those  variable  life and variable  annuity  contracts.  This will
dilute  the  effect  of  the  your  voting  instructions.  We  do  not  see  any
disadvantages to this dilution.

     Each person  having a voting  interest in a subaccount  will receive  proxy
material,  reports,  and other materials relating to the appropriate  portfolio.

                               Legal Proceedings

     The Company and its subsidiaries,  like other life insurance companies, are
involved in lawsuits,  including class action lawsuits. In some class action and
other lawsuits involving  insurers,  substantial damages have been sought and/or
material  settlement  payments  have been  made.  Although  the  outcome  of any
litigation  cannot be predicted with  certainty,  we believe that at the present
time there are no pending or threatened  lawsuits that are reasonably  likely to
have a material adverse impact on the Variable Account or us.

                             Additional Information

     A  registration  statement has been filed with the SEC under the Securities
Act of 1933, as amended,  and the 1940 Act with respect to the Contract  offered
hereby. This prospectus does not contain all of the information set forth in the
full registration  statement.  For instance, this prospectus only summarizes the
contents of the  Contract  and other  legal  instruments  contained  in the full
registration  statement.  For  a  complete  statement  of  the  terms  of  those
documents, please refer to the full registration statement as filed.


<PAGE>

           Table of Contents for Statement of Additional Information

   
State Regulation of Charter                                           1
Certain Federal Income Tax  Consequences of Certain
   Exchanges and Surrenders                                           1
Safekeeping of the Variable Accounts Assets                           1
Purchase and Services Agreement                                       2
Calculation of Yields And Total Returns                               2
         Money Market Subaccount Yields                               3
         Other Subaccount Yields                                      4
         Total Returns                                                5
         Effect of the Records Maintenance Charge on
                  Performance Data                                    6
Other Performance Data                                                7
         Cumulative Total Returns                                     7
         Adjusted Historic Portfolio Performance                      8
         Comparison of Performance and  Expense Information           8
Legal Matters                                                         9
Independent Accountants                                               9
Financial Statements                                                  9
    


<PAGE>


         Condensed Financial Information

     The following condensed financial information is derived from the financial
statements  of the  Variable  Account.  You should  read the data along with the
financial statements, related notes, and other financial information included in
the Statement of Additional Information.

     The following table sets forth information  regarding the subaccounts for a
Contract for the period from the  commencement  of business  operations  through
December 31, 1998.

   
                             Money Market Subaccount
         Accumulation Unit Value            Number of Accumulation
         at End of Year                     Units at End of Year

1998              19.749                             3,438,822
1997              18.890                             2,521,329
1996              18.074                             2,615,942
1995              17.316                             2,260,561
1994              16.507                             3,197,824
1993              16.030                             1,491,258
1992              15.740                             1,380,156
1991              15.341                               972,042
1990              14.606                               989,667
1989              13.683                               344,621
    




<PAGE>


   
                           Bond Subaccount
         Accumulation Unit Value            Number of  Accumulation
         at End of Year                     Units at End of Year

1998              26.344                             1,338,386
1997              24.894                                951,724
1996              22.979                                764,803
1995              22.508                                896,538
1994              19.181                                690,782
1993              20.287                                755,914
1992              18.179                                631,581
1991              17.109                                406,545
1990              14.653                                210,921
1989              13.697                                182,698
    

   
                            Capital Growth Subaccount
         Accumulation Unit Value            Number of Accumulation
         at End of Year                     Units at End of Year
    

   
1998              55.857                             3,421,630
1997              45.649                             2,923,166
1996              33.863                             2,729,711
1995              28.388                             2,884,663
1994              22.222                             2,683,112
1993              24.773                             2,351,022
1992              20.638                             1,798,119
1991              19.514                               933,120
1990              14.096                               400,044
1989              15.389                               227,343
    




<PAGE>



   
                           Balanced Subaccount
         Accumulation Unit Value            Number of Accumulation
         at End of Year                     Units at End of Year

1998              42.735                             1,895,133
1997              34.936                             1,527,371
1996              28.326                             1,490,127
1995              25.496                             1,603,656
1994              20.270                             1,426,280
1993              20.840                             1,477,645
1992              19.531                             1,243,891
1991              18.389                               779,317
1990              14.592                               492,406
1989              15.029                               399,068

                            International Subaccount
         Accumulation Unit Value            Number of Accumulation
         at End of Year                     Units at End of Year

1998              39.486                             2,282,222
1997              33.560                             2,251,880
1996              30.987                             2,593,037
1995              27.188                             2,869,930
1994              24.641                             3,543,387
1993              25.027                             2,767,700
1992              18.287                               785,559
1991              19.003                               446,099
1990              17.174                               370,916
1989              18.830                               107,751

                          Growth and Income Subaccount
         Accumulation Unit Value            Number of Accumulation
         At End of Year                     Units at End of Year

1998              28.485                             3,836,652
1997              26.835                             4,225,162
1996              20.713                             3,491,709
1995              17.075                             2,659,025
1994*             13.053                             1,311,518

                           Global Discovery Subaccount
         Accumulation Unit Value            Number of Accumulation
         at End of Year                     Units at End of Year
1998              16.937                             1,004,053
1997              14.648                               986,445
1996*             13.126                             1,025,244
    

* The Growth and Income Subaccount commenced operations on May 1, 1994.  The
Global Discovery Subaccount commenced operations on May 1, 1996.  The Unit
Value at commencement was 12.500.


<PAGE>





   
Because the Large Company  Growth and Small Company Growth  subaccounts  did not
begin operations until May 1, 1999, there is no condensed financial  information
for these subaccounts for the year ended December 31, 1998.
    



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