Fidelity Income Advantage
Supplement to teh Prospectus
Dated April 30, 1996
Variable Insurance Products Fund III is an open-end, diversified management
investment company organized by Fidelity Management & Research Company. It
is the type of investment company commonly known as a series mutual fund.
Three Subaccounts are available which invest exclusively in the shares of
Growth Opportunities Portfolio, Growth & Income Portfolio and Balanced
Portfolio, mutual fund Portfolios of Variable Insurance Products Fund III.
Growth Opportunities Portfolio's objective is to seek capital growth by
investing in a wide range of common stocks, convertible and foreign
securities and bonds that may offer long-term growth potential. Growth &
Income Portfolio's objective is to seek high total return through a
combination of current income and capital appreciation by investing mainly
in equity securities. The fund may also invest in equity securities that
are not paying current dividends, but offer potential for capital
appreciation of future income. Balanced Portfolio's objective is to seek
both income and growth of capital by investing in a broad selection of
stocks, bonds, and convertible securities. When FMR's outlook is neutral,
it will invest approximately 60% of the fund's assets in equity securities
and will always invest at least 25% of the fund's assets in fixed-income
securities.
You will find more complete information about the Portfolios, including
management fees, and the risks associated with each Portfolio, in the
accompanying Fund prospectus.
The purpose of the tables is to assist you in understanding the various
costs and expenses of the Separate Account as well as the Portfolios. See
"Charges" on page 18 of the prospectus for additional information. The
following table represents each Portfolios' estimated annual expenses for
fiscal year 1996 (expressed as a percentage of each Portfolio's average net
assets):
SEE REVERSE SIDE FOR ADDITIONAL INFORMATION
The Portfolios May Not be Available in all States
N.FIA-STK-0197 JANUARY 27, 1997
MANAGEMENT OTHER TOTAL ANNUAL
FEES EXPENSES EXPENSES *
Growth Opportunities 0.61% 0.16% 0.77%***
Growth & Income 0.50% 0.20% 0.70%
Balanced 0.46%** 0.32% 0.78%***
* The Portfolios' investment advisor has voluntarily agreed to limit total
expenses to 1.50%, 1.50% and 1.00% for the Growth Opportunities, Balanced
and Growth & Income Portfolio's average net assets, respectively. See the
Portfolio's prospectus for more information.
**Effective August 1, 1996, FMR voluntarily agreed to reduce VIP III
Balanced Fund's individual fund fee rate from .20% to .15%
***A portion of the brokerage commissions that the funds pay is used to
reduce fund expenses. In addition, Balanced and Growth Opprtunities have
entered into arrangements with their custodians whereby interest earned on
uninvested cash balances is used to reduce custodian expense. Including
these reductions, the total operating expenses presented in the table would
have been .75% and .76% for Balanced and Growth Opportunities respectively.
The effects of the fees and charges shown above are reflected in the
illustrations of annuity income contained in the Appendix of the
prospectus. The illustrations are intended to assist you in assessing the
effects of these fees and charges, and the effect of investment
performance, on the amount of your annuity income.
