AMERICAN BENEFIT VARIABLE ANNUITY ACCOUNT, 485BPOS, 1996-04-25

AMERICAN BENEFIT VARIABLE ANNUITY ACCOUNT
485BPOS, 1996-04-25

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<PAGE>

'33 Act File No. 33-19254
'40 Act File No. 811-5422

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No.
----

Post-Effective Amendment No. 11
----

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940

Amendment No. 12

American Benefit Variable Annuity Account
(Exact Name of Registrant)

American Benefit Life Insurance Company
(Name of Depositor)

421 New Karner Road, Albany, New York 12205
(Address of Depositor's Principal Executive Offices Zip Code)

Depositor's Telephone Number, Including Area Code (518) 456-8164

Beverly Stewart
Chief Operations Officer
American Benefit Insurance Company
421 New Karner Road, Albany, New York 12205
(Name and Address of Agent for Service)

It is proposed that this filing will become effective

immediately upon filing pursuant to paragraph (b) of Rule 485
-----
X on May 1, 1996 pursuant to paragraph (b) of Rule 485
-----
60 days after filing pursuant to paragraph (a)(i) of Rule 485
-----
on _______ pursuant to paragraph (a)(i) of Rule 485
-----

If appropriate, check the following box:
_____ this post-effective amendment designates a new effective
date for a previously filed post-effective amendment.

- --------------------------------------------------------------------------------
Pursuant to Rule 24f-2, Registrant has elected to register an indefinite
number of securities under the Securities Act of 1933. The 24f-2 Notice
for the year ended December 31, 1995 was filed February 23, 1996.

<PAGE>

American Benefit Variable Annuity Account

Cross Reference Sheet

Item Number in Form N-4 Caption in Prospectus
or Statement of
Additional Information
Part A - Prospectus

1. Cover Page............................................ Cover Page

2. Definitions........................................... Definitions

3. Synopsis of Highlights................................ Summary

4. Fee Table............................................. Summary

5. Condensed Financial Information....................... Financial Information

6. General Description of
Registrant, Depositor, and
Portfolio Companies................................... The Insurance
Company; The Separate
Account; The Fund;
Voting Rights

7. Deductions and Expenses............................... Contract Charges and
Deductions
8. General Description of
Variable Annuity Contracts............................ The Contract;
Exercise of Rights
Under the Contract

9. Annuity Period........................................ Variable and Fixed
Payment Annuity
Provisions; Annuity
Options; Additional
Variable Payment
Annuity Provisions
<PAGE>

10. Death Benefit......................................... Death Benefit

11. Purchases and Contract Value.......................... The Contract;
Variable Account
Accumulation
Provisions; How to
Purchase a Contract
(Distribution)

12. Redemptions........................................... Exercise of Rights
Under the Contract;
Miscellaneous
Provisions

13. Taxes................................................. Federal Income Tax
Status

14. Legal Proceedings..................................... Other Information

15. Table of Contents of the Statement
of Additional Information............................. Table of Contents -
Statement of
Additional
Information

Part B - Statement of Additional Information

16. Cover Page............................................ Cover Page

17. Table of Contents..................................... Table of Contents

18. General Information and History....................... American Benefit Life
Insurance Company

19. Services.............................................. The Fund; Safekeeping
of Assets;
Independent Auditors

20. Purchase of Securities Being Offered.................. Purchase Payments

21. Underwriters.......................................... Distribution of
Contracts

22. Calculation of Fund Performance....................... Separate Account
Performance

23. Annuity Payments...................................... Annuity Payments

24. Financial Statements.................................. Financial Statements

<PAGE>

Part C

Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this registration statement.
<PAGE>

PAINEWEBBER
ADVANTAGE(SM)

[ART APPEARS HERE]

<PAGE>

AMERICAN BENEFIT LIFE INSURANCE COMPANY
421 NEW KARNER ROAD
ALBANY, NEW YORK 12205
(518) 456-8164

THE PAINEWEBBER ADVANTAGE(SM)

ISSUED BY
AMERICAN BENEFIT VARIABLE ANNUITY ACCOUNT
INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACT

The Individual Deferred Variable Annuity Contract (the "Contract") described in
this prospectus is designed to provide retirement programs for individual
purchasers on both a variable and a fixed payment basis. The Contract may also
be used to provide Annuity benefits to individual purchasers in connection with
retirement plans which qualify for special tax treatment under the Internal
Revenue Code ("Code"). Purchase Payments under the Contract are allocated to
the American Benefit Variable Annuity Account (the "Separate Account") or to
the Fixed Account. The Separate Account will invest in shares of 7 Portfolios
of the PaineWebber Series Trust, an open-end investment company registered
under the Investment Company Act of 1940 ("1940 Act"). The PaineWebber Series
Trust has 9 Portfolios, each having its own investment objective and policies.
The Fixed Account is invested in the General Account of American Benefit Life
Insurance Company.

This prospectus and the prospectus for PaineWebber Series Trust set forth
information that a prospective investor should know before investing. A
Statement of Additional Information about the Contract dated May 1, 1996, has
been filed with the Securities and Exchange Commission and is incorporated
herein by reference and is available without charge upon written request to
American Benefit Life Insurance Company. The table of contents of the Statement
of Additional Information is contained in this prospectus.

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

THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY A CURRENT PROSPECTUS OF
PAINEWEBBER SERIES TRUST. BOTH PROSPECTUSES SHOULD BE READ CAREFULLY AND
RETAINED FOR FUTURE REFERENCE.

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

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

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

Prospectus dated May 1, 1996

AB 1
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
TOPIC PAGE
<S> <C>
DEFINITIONS............................................................. AB 5
SUMMARY................................................................. AB 6
Qualified and Non-Qualified Contracts
Purchase Payments
Separate Account Divisions
The Fund
The Fixed Account
Allocation Options
Contract Charges and Deductions
10 Day Right to Examine
Annuity Payments
Death Benefit
Withdrawals
Transfers Among Allocation Options
Expense Table
FINANCIAL INFORMATION................................................... AB 14
CONDENSED FINANCIAL INFORMATION......................................... AB 14
SEPARATE ACCOUNT PERFORMANCE............................................ AB 15
THE INSURANCE COMPANY................................................... AB 15
THE SEPARATE ACCOUNT.................................................... AB 16
THE FIXED ACCOUNT....................................................... AB 16
CONTRACT CHARGES AND DEDUCTIONS......................................... AB 16
Withdrawal Charges
Transfer Charges
Contract Maintenance Charge
Premium and Other Taxes
Mortality Risk Charge
Expense Risk Charge
Distribution Expense Risk Charge
THE FUND................................................................ AB 19
Money Market Portfolio
Growth Portfolio
Growth and Income Portfolio
Global Growth Portfolio
Global Income Portfolio
Strategic Fixed Income Portfolio
Balanced Portfolio
THE CONTRACT............................................................ AB 21
Purchase Payments
</TABLE>

AB 2
<PAGE>

<TABLE>
<CAPTION>
TOPIC PAGE
<S> <C>
VARIABLE ACCOUNT ACCUMULATION PROVISIONS................................ AB 21
Accumulation Units
Value of an Accumulation Unit
Net Investment Factor
DEATH BENEFIT........................................................... AB 22
Before the Annuity Date
After the Annuity Date
EXERCISE OF RIGHTS UNDER THE CONTRACT................................... AB 22
Beneficiary
Annuitant
Ownership
Collateral Assignment
Transfers
Withdrawals
Substitution and Change
VARIABLE AND FIXED ANNUITY PROVISIONS................................... AB 25
Minimum Annuity Payments
Annuity Date
Proof of Age, Sex and Survival
Misstatement of Age or Sex
Change of Annuity Date or Annuity Option
GENERAL ANNUITY OPTIONS................................................. AB 25
Option 1--Payments for a Guaranteed Fixed Period
Option 2--Life Annuity
Option 3--Life Annuity With Payments Guaranteed for 10 or 20 Years
Option 4--Joint and Survivor Annuity
ADDITIONAL VARIABLE ANNUITY PROVISIONS.................................. AB 26
First Variable Annuity Payment
Assumed Investment Rate
Number of Annuity Units
Value of Each Annuity Unit
Subsequent Variable Annuity Payments
MISCELLANEOUS PROVISIONS................................................ AB 26
Notices, Changes and Elections
Amendment of Contract
10 Day Right to Examine
Retirement Plan Conditions
Reports to Contract Owners
FEDERAL INCOME TAX STATUS............................................... AB 27
HOW TO PURCHASE A CONTRACT (Distribution)............................... AB 28
VOTING RIGHTS........................................................... AB 28
</TABLE>

AB 3
<PAGE>

<TABLE>
<CAPTION>
TOPIC PAGE
<S> <C>
OTHER INFORMATION....................................................... AB 29
Legal Proceedings
Custodian of Assets
Contract Owner Inquiries
TABLE OF CONTENTS--Statement of Additional Information.................. AB 30
SOME QUESTIONS AND ANSWERS ABOUT THE CONTRACT........................... AB 31
</TABLE>

AB 4
<PAGE>

DEFINITIONS

Accumulation Unit: A measuring unit used to determine the value of an owner's
interest in a Division of the Separate Account prior to the Annuity Date.

Allocation Options: The Fixed Account and each of the Divisions of the Separate
Account.

Annuitant: The person on whose life Annuity payments under a Contract may be
based.

Annuity: A series of income payments made to a Contract Owner for a defined
period of time.

Annuity Date: The date on which the initial Annuity payment is determined.

Annuity Unit: A measuring unit used to compute the Variable Annuity payments
from a Division of the Separate Account.

Company: American Benefit Life Insurance Company.

Contract: The variable annuity contract described in this prospectus issued by
the Company.

Contract Owner: The person entitled to exercise all rights under the Contract.

Contract Value: The sum of the Contract Owner's values in the Divisions and in
the Fixed Account.

Division: The Separate Account consists of 7 Divisions. Each Division is
invested in a specified Portfolio of PaineWebber Series Trust.

Early Withdrawal Charge Period: The period of 5 years following the date of
each payment.

Fixed Account: The Fixed Account is an Allocation Option for Purchase Payments
and Contract Value which is allocated to the General Account of American
Benefit Life Insurance Company. Contract Value allocated to the Fixed Account
does not vary with the investment experience of the Separate Account.

Fixed Annuity: A series of periodic guaranteed level payments. Such payments
are not based upon the investment experience of the Separate Account.

Fund: PaineWebber Series Trust.

Net Contract Value: The Contract Value less any applicable withdrawal and
contract maintenance charges.

Purchase Payments: The money paid for a Contract.

Separate Account: American Benefit Variable Annuity Account, a segregated
investment account established by the Company to receive and invest amounts
allocated to provide variable benefits under the Contract.

Valuation Day: Each day the New York Stock Exchange is open for trading and
valuations have not been suspended by the Securities and Exchange Commission.

Valuation Period: The interval from one Valuation Day to the following
Valuation Day.

Variable Annuity: A series of periodic payments which vary in amount according
to the investment experience of the underlying Divisions of the Separate
Account.

AB 5
<PAGE>

SUMMARY

QUALIFIED AND NON-QUALIFIED CONTRACTS--The Contracts are issued to individuals
seeking to accumulate funds for retirement whether or not such individuals are
otherwise participating in qualified or non-qualified retirement plans. The
Contracts are also issued to plans qualifying for special tax treatment
("Qualified Contracts"), such as individual retirement annuities (IRAs),
section 403(b) tax-sheltered annuities (TSAs), section 457 deferred
compensation plans, money purchase pension plans and profit sharing plans.

PURCHASE PAYMENTS--The full amount of each Purchase Payment, undiminished by an
initial sales charge, is credited to the Allocation Options selected by the
Contract Owner. Withdrawal charges may be imposed in the event of a withdrawal
(redemption) of Contract Values. See "Contract Charges and Deductions."

The Contract permits Purchase Payments to be made on a flexible basis at any
time subject to certain restrictions. The minimum initial Purchase Payment the
Company will accept is $5,000 for non-tax qualified Contracts and $1,000 for
tax qualified Contracts. The minimum amount of subsequent Purchase Payments is
$500 and $100, respectively. The Company reserves the right to refuse any
Purchase Payment at any time. See "Purchase Payments." In addition, the Company
will not accept a Purchase Payment in excess of $1,000,000 without prior
written approval by an appropriate officer of the Company.

SEPARATE ACCOUNT DIVISIONS--The Separate Account is divided into 7 Divisions,
each of which is invested in shares of a designated Portfolio of the Fund. When
based on the investment experience of the Separate Account, the Contract Value
and the amount of the periodic annuity payments will reflect the investment
experience of the particular Divisions selected, subject to certain charges and
deductions. See "The Separate Account" and "Contract Charges and Deductions."

THE FUND--The Fund consists of 9 Portfolios. The 7 Portfolios offered by the
Separate Account are: the Money Market Portfolio, the Growth Portfolio, the
Growth and Income Portfolio, the Global Growth Portfolio, the Global Income
Portfolio, the Strategic Fixed Income Portfolio, and the Balanced Portfolio
(formerly named the Asset Allocation Portfolio) (collectively referred to as
the "Portfolios"). See "The Fund."

THE FIXED ACCOUNT--The Fixed Account is held in the General Account of American
Benefit Life Insurance Company. Contract Value allocated to the Fixed Account
is not based on the investment experience of the Separate Account. See "The
Fixed Account."

ALLOCATION OPTIONS--The Separate Account and the Fixed Account are generically
referred to as the "Allocation Options." One or more Allocation Option(s) may
be selected for investment by Contract Owners. Contract Owners may be invested
in no more than 5 Allocation Options at any one time. The selection may be
changed and Contract Values transferred among Allocation Options subject to the
conditions described herein.

CONTRACT CHARGES AND DEDUCTIONS--An early withdrawal charge will be deducted in
the event of withdrawal of the Contract Value or upon annuitization. For
partial withdrawals, the early withdrawal charge is 5% of any amount withdrawn
which represent Purchase Payments with an early withdrawal charge period
remaining. No early withdrawal charge will be made on any withdrawal
representing: (A) the greater of: (1) gain in the Contract, or (2) after the
first year, total withdrawals in a calendar year not in excess of 10% of the
Contract Value in the Separate Account as of the last Valuation Day of the
prior calendar year; or (B) Purchase Payments with no early withdrawal charge
period remaining. See "Withdrawal Charges."

AB 6
<PAGE>

For complete withdrawals, the early withdrawal charge is 5% of any Purchase
Payments with an early withdrawal charge period remaining. The amount of any
sales charge imposed (which includes both any early withdrawal charge and the
distribution expense risk charge), when added to any previous sales charges,
will not exceed 9% of all Purchase Payments.

The Company deducts a daily mortality risk charge at an annual rate of 0.85% of
the total net asset value of each Division. See "Mortality Risk Charge." The
Company deducts a daily expense risk charge at an annual rate of 0.40% of the
total net asset value of each Division. See "Expense Risk Charge."

The Company also deducts a daily distribution expense risk charge from each
Division at an annual rate of 0.15% of the total net assets of each Division.
See "Distribution Expense Risk Charge." The amount of any sales charge imposed
(which includes both any early withdrawal charge and the distribution expense
risk charge), when added to any previous sales charge, will not exceed 9% of
all Purchase Payments. A withdrawal transaction charge of $10 will be imposed
on all withdrawals in excess of 3 per calendar year. See "Withdrawal Charges."

Contract Value may be transferred from the Fixed Account to the Divisions of
the Separate Account. Contract Value may also be transferred from the Divisions
of the Separate Account to the Fixed Account and between the Divisions. The
Contract provides that each transfer between Allocation Options in excess of 6
in a calendar year is subject to a charge of $10. However, the Company has
waived this charge until further notice. See "Transfer Charges."

A contract maintenance charge of $30 will be deducted from the Contract Value
on the last Valuation Day of each year that occurs on or prior to the Annuity
Date. The contract maintenance charge will also be deducted, without proration,
if a full withdrawal is made or Annuity payments are commenced other than on
the last Valuation Day of the year. See "Contract Maintenance Charge."

Premium and other similar policyholder taxes payable to a state or other
governmental entity can be deducted from the Contract Value when they are
incurred; however, the Company may advance them when incurred and subsequently
deduct them. See "Premium and Other Taxes."

The Fund also is subject to charges against its assets. For a complete
description of the Fund charges, reference should be made to the accompanying
prospectus of PaineWebber Series Trust.

10 DAY RIGHT TO EXAMINE--Within 10 days of receipt of the Contract by a
Contract Owner, it may be returned to the Company for cancellation. The Company
will refund the Contract Value computed as of the date the cancellation request
is mailed or delivered to the Company or its agent. The Contract Owner bears
the investment risk during the 10 day period.

ANNUITY PAYMENTS--Annuity payments will start on the Annuity Date. The Contract
Owner selects the Annuity Date and an Annuity payment option, which selections
may be changed prior to the Annuity Date. See "Change of Annuity Date or
Annuity Option." The amount of Variable Annuity payments will vary with the
investment experience of the Divisions in which the Contract Value is invested.
The amount of Fixed Annuity payments will be determined on the Annuity Date and
will not vary.

If the amount to be applied at the Annuity Date is less than $2,000, the
Company reserves the right to pay the amount in a lump sum. If any Annuity
payment would be less than $20, the Company reserves the right to change the
frequency of payments to such intervals as will result in payments of at least
$20. See "Minimum Annuity Payments."

DEATH BENEFIT--If the Annuitant dies prior to the Annuity Date, the Company
will pay to the beneficiary the greatest of (a) the sum of all Purchase
Payments adjusted for previous withdrawals, charges and deductions, (b) the
current Contract Value, or (c) the Contract Value (adjusted for

AB 7
<PAGE>

previous Purchase Payments, withdrawals, charges and deductions) on the first
Valuation Day of each 5 year period. For Contracts issued before May 1, 1989,
the first 5 year period starts at the end of the sixth year. The first 5 year
period starts with the end of the fifth year for Contracts issued on or after
May 1, 1989. See "Death Benefit Before the Annuity Date."

WITHDRAWALS--Prior to the Annuity Date or death of the Annuitant, the Contract
Owner may withdraw all or part of the Net Contract Value. The minimum amount
which may be withdrawn on a partial withdrawal is $500. No withdrawals will be
permitted after Annuity payments commence. If the Contract is to continue in
force, a minimum Contract Value must be maintained. Withdrawals from TSAs are
subject to special restrictions imposed by the Code. See "Withdrawals."
Withdrawal charges and a contract maintenance charge may be imposed. See
"Withdrawal Charges" and "Contract Maintenance Charge." In addition, the
earnings withdrawn will be taxable as ordinary income and may be subject to a
tax penalty. See "Federal Income Tax Status."

TRANSFERS AMONG ALLOCATION OPTIONS--Contract Owners may, subject to certain
conditions, transfer all or part of the Contract Value from one Allocation
Option to one or more of the remaining Allocation Option(s). The Contract Owner
may also transfer Annuity Unit value to one or more Division(s) of the Separate
Account. A transfer charge may be imposed. See "Transfer Charges" and
"Transfers."

AB 8
<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]

AB 9
<PAGE>

EXPENSE TABLE

<TABLE>
<S> <C>
Contract Owner Transaction Expenses
Deferred Sales Load (as a percentage of Purchase Payments).......... 5%
Transfer Fee(/1/)................................................... $10
Charge for Excess Withdrawals(/1/).................................. $10
Annual Contract Maintenance Charge.................................. $30
</TABLE>

<TABLE>
<CAPTION>
MONEY
MARKET GROWTH
DIVISION DIVISION
-------- --------
<S> <C> <C>
Separate Account Annual Expenses
(as a percentage of average account value)
Mortality and Expense Risk Fees............................ 1.25% 1.25%
Distribution Expense Risk Fees............................. 0.15% 0.15%
Total Separate Account Annual Expenses................... 1.40% 1.40%
Portfolio Company Annual Expenses
(as a percentage of portfolio company average net assets)
Management Fees............................................ 0.50% 0.75%
Other Expenses of the Fund................................. 0.29% 0.27%
Total Portfolio Company Annual Expenses.................. 0.79% 1.02%
</TABLE>
- --------
(/1/The Contract provides that each transfer in excess of 6 in a calendar year
is subject to a charge of $10. The Company has waived this fee until
further notice. A withdrawal transaction charge of $10 will be imposed on
each withdrawal in excess of 3 per calendar year.
(/2/THE BALANCED DIVISION WAS FORMERLY NAMED THE ASSET ALLOCATION DIVISION.

AB 10
<PAGE>

<TABLE>
<CAPTION>
GROWTH GLOBAL GLOBAL STRATEGIC
AND INCOME GROWTH INCOME FIXED INCOME BALANCED
DIVISION DIVISION DIVISION DIVISION DIVISION(/2/)
- ---------- -------- -------- ------------ -------------
<S> <C> <C> <C> <C>
1.25% 1.25% 1.25% 1.25% 1.25%
0.15% 0.15% 0.15% 0.15% 0.15%
1.40% 1.40% 1.40% 1.40% 1.40%
0.70% 0.75% 0.75% 0.50% 0.75%
0.67% 1.21% 0.44% 0.49% 0.34%
1.37% 1.96% 1.19% 0.99% 1.09%
</TABLE>

AB 11
<PAGE>

EXAMPLE
<TABLE>
<CAPTION>
MONEY
MARKET GROWTH
DIVISION DIVISION
-------- --------
<S> <C> <C> <C>
If you surrender or annuitize(/1/) your Contract 1 Year $ 73 $ 75
at the end of the applicable time period:
3 Years 121 128
You would pay the following
expenses on a $1,000 invest- 5 Years 172 184
ment, assuming 5% annual
return on assets: 10 Years 262 285

If you do not surrender your 1 Year $ 23 $ 25
Contract:
3 Years 71 78
You would pay the following
expenses on a $1,000 invest- 5 Years 122 134
ment, assuming 5% annual
return on assets: 10 Years 262 285
</TABLE>
- --------
(/1/) The early withdrawal charge will not be assessed at the time of
annuitization if the annuity payment option chosen contains life
contingencies.
(/2/) THE BALANCED DIVISION WAS FORMERLY NAMED THE ASSET ALLOCATION DIVISION.

The purpose of the above table is to assist the Contract Owner in
understanding the various costs and expenses that a Contract Owner will bear
directly or indirectly. Premium taxes, which currently range from 0 to 3.5%,
can be deducted when incurred; however, the Company may advance them when
incurred and deduct them subsequently. Note that the expense amounts shown
above in the hypothetical example are aggregate amounts for the total number
of years indicated. For additional information about expenses of the Contract,
see "Contract Charges and Deductions." THE EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE SHOWN.

AB 12
<PAGE>

<TABLE>
<CAPTION>
GROWTH GLOBAL GLOBAL STRATEGIC
AND INCOME GROWTH INCOME FIXED INCOME BALANCED
DIVISION DIVISION DIVISION DIVISION DIVISION(2)
- ---------- -------- -------- ------------ -----------
<S> <C> <C> <C> <C>
$ 79 $ 85 $ 77 $ 75 $ 76
139 156 133 127 130
201 229 192 182 187
319 373 301 282 291

$ 29 $ 35 $ 27 $ 25 $ 26
89 106 83 77 80
151 179 142 132 137
319 373 301 282 291
</TABLE>

AB 13
<PAGE>

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION
WITH THE OFFER DESCRIBED HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY JURISDICTION TO ANY PERSON TO
WHOM SUCH OFFER WOULD BE UNLAWFUL THEREIN.

FINANCIAL INFORMATION

Financial statements of the Separate Account and the Company are contained in
the Statement of Additional Information. A copy of the Statement of Additional
Information containing such financial statements may be obtained without charge
by sending a written request to American Benefit Life Insurance Company.

CONDENSED FINANCIAL INFORMATION

The information presented below reflects the Accumulation Unit information for
Divisions of the Separate Account through December 31, 1995.

<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE AT UNIT VALUE AT UNITS AT END
YEAR ENDED 12/31 START OF YEAR END OF YEAR OF YEAR
---------------- ------------- ------------- ------------
<S> <C> <C> <C>
Money Market Division
1988(/1/)........................ $10.00 $10.26 -0-
1989............................. 10.26 10.92 -0-
1990............................. 10.92 11.45 29,492
1991............................. 11.45 11.87 73,408
1992............................. 11.87 12.08 64,773
1993............................. 12.08 12.20 54,823
1994............................. 12.20 12.45 73,868
1995............................. 12.45 12.93 42,317
Growth Division
1988(/1/)........................ 10.00 10.43 -0-
1989............................. 10.43 15.19 -0-
1990............................. 15.19 13.75 22,062
1991............................. 13.75 19.27 51,649
1992............................. 19.27 20.10 59,453
1993............................. 20.10 23.71 63,792
1994............................. 23.71 20.64 49,880
1995............................. 20.64 26.98 39,822
Growth and Income Division
1991(/3/)........................ 10.00 10.00 -0-
1992............................. 10.00 10.19 64,464
1993............................. 10.19 9.83 62,795
1994............................. 9.83 9.10 56,761
1995............................. 9.10 11.71 30,639
Global Growth Division
1988(/1/)........................ 10.00 10.95 5,483
1989............................. 10.95 12.94 4,701
1990............................. 12.94 13.73 38,489
1991............................. 13.73 14.21 51,888
1992............................. 14.21 12.96 56,396
1993............................. 12.96 17.90 61,220
1994............................. 17.90 15.53 58,236
1995............................. 15.53 14.79 32,466
Global Income Division
1988(/1/)........................ 10.00 10.52 106,898
1989............................. 10.52 11.10 103,352
1990............................. 11.10 12.58 131,788
1991............................. 12.58 13.67 192,589
1992............................. 13.67 13.66 206,841
1993............................. 13.66 15.71 205,378
1994............................. 15.71 14.66 186,265
1995............................. 14.66 16.42 76,114
</TABLE>

AB 14
<PAGE>

SEPARATE ACCOUNT PERFORMANCE

From time to time the Separate Account may advertise the individual Division
"yields," "effective yields" or "average total returns." "Yield" and "effective
yield" will be used for the Money Market Division and "average total return"
and "yield" will be used for all other Divisions. Both yield and return
performance figures are based on historical earnings and are not intended to
indicate future performance. The "yield" of the Division refers to the income
generated by an investment in the Division over a stated period expressed as a
percentage of the investment. This percentage is then "annualized" by assuming
the same percentage will be generated for each stated period during a year. The
"effective yield" is calculated similarly but, when annualized, the income
earned by the investment in the Division is assumed to be reinvested in each
successive period during a year. The "average total return" is computed by
calculating the average annual compounded rate of return over the stated period
that would equate the initial amounts invested to the ending redeemable
Contract Value of the stated period.

Recurring charges or deductions from Contract Owner accounts are reflected in
the calculations of the performance figures. Non-recurring charges are not
reflected in the calculations of performance figures; if such charges were
incurred by the Contract Owner, the effect would be to lower the "yield,"
"effective yield," or "average total return." However, the "average total
return" requires the ending redeemable Contract Value be reduced by any early
withdrawal charges which would be applied if the Contract were redeemed at that
time.

In addition, an "average total return not including early withdrawal charges"
may be advertised. This performance figure will only be used in conjunction
with the "average total return" figure and is identical in its calculation
except any early withdrawal charges which would be applied if the Contract were
redeemed are not included.

The "effective yield" will be slightly higher than the "yield" because of the
compounding effect of the assumed reinvestment of income.

THE INSURANCE COMPANY

The Company is a stock life insurance company organized under the laws of the
State of New York in 1987, and is a wholly-owned subsidiary of American
Republic Insurance Company. The executive

AB 15
<PAGE>

offices of the Company are at 421 New Karner Road, Albany, New York 12205. The
Company is admitted to conduct life insurance business in the State of New
York.

THE SEPARATE ACCOUNT

The Separate Account was established by the Company on October 19, 1987,
pursuant to the provisions of the New York law, as a segregated investment
account of the Company. The Separate Account has 7 Divisions: the Money Market
Division, the Growth Division, the Growth and Income Division, the Global
Growth Division, the Global Income Division, the Strategic Fixed Income
Division and the Balanced Division (formerly named the Asset Allocation
Division), each of which is invested in shares of a designated Portfolio of the
Fund. The Separate Account and each Division therein is administered as part of
the general business of the Company; but the income, gains and losses, whether
or not realized, from assets allocated to each Division are credited to or
charged against that Division in accordance with the terms of the Contract,
without regard to other income, gains or losses of any other Division or
arising out of any other business the Company may conduct. The assets within
each Division are not chargeable with liabilities arising out of the business
conducted by any other Division, nor will the Separate Account as a whole be
chargeable with liabilities arising out of any other business the Company may
conduct.

All obligations arising under a Contract, however, including the guarantee to
make Annuity payments, are general obligations of the Company; and all of the
Company's assets are available to meet its expenses and obligations under the
Contract. While the Company is obligated to make the Variable Annuity payments
under a Contract, the amount of such payments is not guaranteed. The Contract
Value allocated to the Divisions and the amount of Variable Annuity payments
will vary with the investment experience of the Division(s) to which the
Contract Value is allocated. Such amounts will be subject to certain charges
and deductions. See "Contract Charges and Deductions."

The Company has caused the Separate Account to be registered with the
Securities and Exchange Commission as a unit investment trust under the 1940
Act. Such registration does not involve supervision of the management of the
Separate Account or the Company by the Securities and Exchange Commission.

THE FIXED ACCOUNT

The Fixed Account is an Allocation Option for Purchase Payments and Contract
Value which is invested in the General Account of American Benefit Life
Insurance Company. Contract Value allocated to the Fixed Account does not vary
with the investment experience of the Separate Account.

BECAUSE OF EXEMPTIVE AND EXCLUSIONARY PROVISIONS, INTERESTS IN AMERICAN
BENEFIT'S GENERAL ACCOUNT ARE NOT REGISTERED UNDER THE SECURITIES ACT OF 1933
AND THE GENERAL ACCOUNT HAS NOT BEEN REGISTERED AS AN INVESTMENT COMPANY UNDER
THE INVESTMENT COMPANY ACT OF 1940. ACCORDINGLY, NEITHER THE GENERAL ACCOUNT
NOR ANY INTERESTS THEREIN ARE SUBJECT TO THE PROVISIONS OF THESE ACTS, AND
AMERICAN BENEFIT HAS BEEN ADVISED THAT THE STAFF OF THE SECURITIES AND EXCHANGE
COMMISSION DOES NOT REVIEW THE DISCLOSURE IN THIS PROSPECTUS RELATING TO THE
FIXED ACCOUNT. DISCLOSURE REGARDING THE FIXED ACCOUNT MAY, HOWEVER, BE SUBJECT
TO CERTAIN GENERALLY APPLICABLE PROVISIONS OF THE FEDERAL SECURITIES LAWS
RELATING TO THE ACCURACY AND COMPLETENESS OF STATEMENTS MADE IN PROSPECTUSES.

CONTRACT CHARGES AND DEDUCTIONS

WITHDRAWAL CHARGES--No initial sales charge is deducted from Purchase Payments.
An early withdrawal charge, however, may be imposed in the event of withdrawal
(redemption) of any portion

AB 16
<PAGE>

of the Contract Value or upon annuitization. The early withdrawal charge is
intended to recover the Company's expenses relating to the sale of the
Contract, including commissions, preparation of sales literature and other
sales activities. In addition to the early withdrawal charge, the Company
deducts a distribution expense risk charge daily from each Division at an
annual rate of 0.15% of the total net assets of each Division. See
"Distribution Expense Risk Charge." The amount of any sales charge imposed
(which includes both the early withdrawal charge and the distribution expense
risk charge), when added to any previous sales charge, will not exceed 9% of
all Purchase Payments.

For partial withdrawals, the early withdrawal charge is 5% of the amount
withdrawn which represents Purchase Payments which have an early withdrawal
charge period remaining. Purchase Payments have an early withdrawal charge
period of 5 years. The charge will be assessed against the amount requested and
will be deducted from the remaining Contract Value after the Contract Owner is
paid the amount requested. Thus, for example, assuming that a Contract Owner
requests a withdrawal of $500 which is subject to the early withdrawal charge,
a total of $525 would be deducted from the Contract Value. For complete
withdrawals, the early withdrawal charge is 5% of any Purchase Payments made
which have an early withdrawal charge period remaining.

No early withdrawal charge will be made for any part of a withdrawal
representing: (A) the greater of: 1) excess of the Contract Value over the sum
of Purchase Payments made under the Contract not already withdrawn (i.e. gain
on the Contract), or 2) after the first year, total withdrawals in a calendar
year not in excess of 10% of the Contract Value as of the last Valuation Day of
the prior calendar year; or (B) Purchase Payments with no early withdrawal
charge period remaining.

In determining if an early withdrawal charge is appropriate, the Company
assumes that all withdrawals are taken first from gain, then from Purchase
Payments with no early withdrawal charge period remaining, and then from any
Purchase Payments with the longest early withdrawal charge period remaining.
This method produces the lowest amount of early withdrawal charge.

However, withdrawals made during the first 12 months are made first from the
Purchase Payments with the longest early withdrawal charge period remaining.
These withdrawals are subject to an early withdrawal charge.

Any early withdrawal charge will be deducted from affected Divisions in the
ratio of the Contract Value withdrawn from each to the total Contract Value
withdrawn. If the amount in any Division is not enough to cover its share of
the charge, the excess will be deducted from the remaining Divisions in the
ratio of the Contract Owner's value in each to the combined value in all
Divisions.

The amount of any sales charge imposed (which includes both any early
withdrawal charge and the distribution expense risk charge), when added to any
previous sales charge, will not exceed 9% of all Purchase Payments.

An annuitization of the Contract will be subject to an early withdrawal charge
(i.e. on Purchase Payments annuitized with an early withdrawal charge period
remaining) unless the Annuity is paid under an Annuity option containing life
contingencies.

A withdrawal transaction charge of $10 will be imposed on each withdrawal in
excess of 3 per calendar year. This transaction charge may be waived by the
Company on any withdrawal effected through an approved systematic withdrawal
service. See "Withdrawals."

The Company reserves the right to waive any early withdrawal charge for
Contracts issued to officers, directors, agents, or full-time employees of the
Company and their families; the investment adviser of the Fund; or the
distributor and agents of the distributor.

AB 17
<PAGE>

In addition, any early withdrawal charge may be waived by the Company on any
withdrawal where the amount withdrawn is used to purchase another Contract
issued by the Company.

TRANSFER CHARGES--Prior to the Annuity Date, the Contract Owner has the right
to transfer all or part of the Contract Value from one Allocation Option to one
or more of the remaining Allocation Option(s) subject to the rules and
procedures of each Allocation Option. After the Annuity Date, the Contract
Owner may also transfer Annuity Unit value among the Divisions of the Separate
Account. The Contract provides that each transfer in excess of 6 in a calendar
year is subject to a charge of $10. The Company has waived this charge until
further notice. The Company does not expect to generate any profits from this
charge.

Prior to the Annuity Date, any transfer charge will be deducted from the
Allocation Option(s) to which amounts are transferred in the ratio of the
Contract Value received by each to the total Contract Value transferred. After
the Annuity Date, any charge will be deducted from the next Annuity payment.

No transfer charge will be assessed on automatic transfers effected through an
approved automatic allocation service.

CONTRACT MAINTENANCE CHARGE--The Company has primary responsibility for
administration of the Contract. Such administrative services include: issuing
Contracts, maintaining Contract Owner records (accounting, valuation and
reporting services) and issuing reports. During the accumulation period, the
Company will deduct a contract maintenance charge of $30 from the Contract
Value of each Contract in force on the last Valuation Day of each calendar
year. The charge will also be deducted upon full withdrawal of the Contract
Value, or commencement of Annuity payments, without proration, if such
withdrawal is made or Annuity payments commence prior to the last Valuation Day
of the year. If the Contract Owner participates in more than one Allocation
Option, a share of the $30 charge will be made against each in the ratio of the
Contract Owner's value in each to the total Contract Value. The Company does
not anticipate realizing a gain from this charge. Even though administrative
expenses may increase, the amount of the charge will not change.

PREMIUM AND OTHER TAXES--The Company will deduct from the Contract Value the
amount of any premium and other similar policyholder taxes levied by any state
or governmental entity with respect to that particular Contract. Such taxes,
which currently range from 0 to 3.5%, can be deducted when incurred; however,
the Company may advance them when incurred and deduct them subsequently. If the
Contract Owner participates in more than one Allocation Option, any premium or
other taxes will be charged against each Division and the Fixed Account which
incurred the charge.

MORTALITY RISK CHARGE--Annuity payments will not be affected by the mortality
experience (death rate) of persons receiving Annuity payments or of the general
population. For assuming this mortality risk and the risk inherent in the death
benefit (see "Death Benefit Before the Annuity Date"), the Company deducts
during the entire life of the Contract a mortality risk charge daily from each
Division at an annual rate of 0.85% of the total net assets of each Division.
If the mortality risk charge is insufficient to cover the actual costs of the
mortality risk, the Company will bear the loss; however, if the amount proves
more than sufficient, the excess will be a gain which the Company may use at
its discretion to pay distribution and other expenses. The rate imposed for the
mortality risk charge may not be changed.

EXPENSE RISK CHARGE--The Company guarantees that the contract maintenance
charge will not increase, regardless of actual expenses incurred by the
Company. For assuming this expense risk,

AB 18
<PAGE>

the Company deducts during the entire life of the Contract an expense risk
charge daily from each Division at an annual rate of 0.40% of the total net
assets of each Division. If the expense risk charge is insufficient to cover
the actual cost of the expense risk, the Company will bear the loss; however,
if the charge is more than sufficient, the excess will be a gain which the
Company may use at its discretion to pay distribution and other expenses. The
rate imposed for the expense risk charge may not be changed.

DISTRIBUTION EXPENSE RISK CHARGE--The Company guarantees that the early
withdrawal charge stated in the Contract will not be increased. For assuming
this distribution expense risk, the Company deducts a distribution expense risk
charge daily from each Division at an annual rate of 0.15% of the total net
assets of each Division. If the distribution expense risk charge and the early
withdrawal charge are insufficient to cover the actual cost of distribution,
the Company will bear the loss; however, if the charges are more than
sufficient, the excess will be a gain which the Company may use at its
discretion. The rate of the distribution expense risk charge may not be
changed. The amount of any sales charge imposed (which includes both the early
withdrawal charge and the distribution expense risk charge), when added to any
previous sales charge, will not exceed 9% of all Purchase Payments.

THE FUND

The Fund is organized as a Massachusetts business trust and is registered as an
open-end management investment company under the 1940 Act. The Fund consists of
9 Portfolios. The 7 Portfolios offered by the Separate Account are: the Money
Market Portfolio, the Growth Portfolio, the Growth and Income Portfolio, the
Global Growth Portfolio, the Global Income Portfolio, the Strategic Fixed
Income Portfolio, and the Balanced Portfolio (formerly named the Asset
Allocation Portfolio), each having its own investment objective and policies.

The Global Income Portfolio is managed as a non-diversified investment company;
the other Portfolios are all managed as diversified investment companies. The
Trustees of the Fund may establish additional Portfolios at any time. Portfolio
assets are segregated and a shareholder's interest is limited to the
Portfolio(s) in which the shareholder invests.

Each Portfolio has, and is subject to, certain investment policies and
restrictions which may not be changed without a majority vote of shareholders
in that Portfolio.

The Fund will offer its shares to insurance company separate accounts only. The
Fund may be offered in connection with variable life insurance policies offered
by the Company ("mixed funding"). Mixed funding presents certain potential
conflicts of interest which will be discussed in the prospectus for the Fund in
the event such offering is made.

Mitchell Hutchins Asset Management Inc. ("Mitchell Hutchins") acts as the
investment adviser and administrator for each Portfolio and the Fund, and as
such provides a continuous investment program for the Portfolios and
supervision of all matters relating to the operations of the Fund. In the case
of certain Portfolios, as is discussed below, Mitchell Hutchins has engaged
other investment managers to act as subadvisers for those Portfolios. Mitchell
Hutchins is a Delaware corporation and a wholly-owned subsidiary of PaineWebber
Incorporated, which is in turn a wholly-owned subsidiary of Paine Webber Group
Inc., a publicly held financial services holding company. As compensation for
its services, Mitchell Hutchins receives a fee from the Fund accrued daily and
paid monthly, based on the average daily net assets of each Portfolio.

Mitchell Hutchins has engaged the following investment management firms to
serve as subadvisers for the Portfolios indicated: (1) Pacific Investment
Management Company ("PIMCO") for the

AB 19
<PAGE>

Strategic Fixed Income Division and (2) GE Investment Management Incorporated
("GEIM") for the Global Growth Portfolio. Pursuant to subadvisory agreements
entered into between Mitchell Hutchins and those firms, each of the subadvisers
is responsible for providing all of the day-to-day investment advisory services
for the respective Portfolios for which it acts as subadviser. As compensation
for such services, Mitchell Hutchins pays each of them a subadvisory fee. Such
fee is paid out of Mitchell Hutchins' advisory fee for the relevant Portfolios,
and not directly by the Portfolios.

A summary of the investment objective of, and the investment advisory fees
charged, each Portfolio of the Fund available for purchase is described below.
MORE DETAILED INFORMATION IS CONTAINED IN THE CURRENT PROSPECTUS OF THE FUND
WHICH ACCOMPANIES THE SEPARATE ACCOUNT PROSPECTUS.

The MONEY MARKET PORTFOLIO seeks maximum current income consistent with
liquidity and conservation of capital. This Portfolio invests in high grade
money market instruments and repurchase agreements secured by such instruments.
As compensation for its services, the Money Market Portfolio pays the
investment adviser a fee at the annual rate of .50% of average daily net
assets.

The GROWTH PORTFOLIO seeks long-term capital appreciation. This Portfolio
invests primarily in equity securities of companies that, in the judgment of
Mitchell Hutchins, have substantial potential for capital growth. As
compensation for its services, the Growth Portfolio pays the investment adviser
a fee at the annual rate of .75% of average daily net assets.

The GROWTH AND INCOME PORTFOLIO seeks current income and capital growth. This
Portfolio invests primarily in dividend-paying equity securities believed by
Mitchell Hutchins to have the potential for rapid earnings growth. As
compensation for its services, the Growth and Income Portfolio pays the
investment adviser a fee at the annual rate of .70% of average daily net
assets.

The GLOBAL GROWTH PORTFOLIO seeks long-term capital appreciation. This
Portfolio invests primarily in common stocks of companies based in the U.S.,
Europe, Japan and the Pacific Basin. As compensation for its services, the
Global Growth Portfolio pays the investment adviser a fee at the annual rate of
.75% of average daily net assets.

The GLOBAL INCOME PORTFOLIO primarily seeks high current income and secondarily
seeks capital appreciation. This Portfolio invests principally in high quality
debt securities of foreign and U.S. issuers. As compensation for its services,
the Global Income Portfolio pays the investment adviser a fee at the annual
rate of .75% of average daily net assets.

The STRATEGIC FIXED INCOME PORTFOLIO seeks total return consisting of capital
appreciation and income. This Portfolio invests primarily in fixed income
securities of varying maturities with a dollar-weighted average portfolio
duration between three and eight years. As compensation for its services, the
Strategic Fixed Income Portfolio pays the investment adviser a fee at the
annual rate of .50% of average daily net assets.

The BALANCED PORTFOLIO (FORMERLY NAMED THE ASSET ALLOCATION PORTFOLIO) seeks a
high total return with low volatility. This Portfolio invests primarily in a
combination of equity securities, investment grade debt obligations and money
market instruments, based on Mitchell Hutchins' assessment of the optimal
allocation of the Portfolio's assets. As compensation for its services, the
Balanced Portfolio pays the investment adviser a fee at the annual rate of .75%
of the average daily net assets.

AB 20
<PAGE>

THE CONTRACT

PURCHASE PAYMENTS--The minimum initial Purchase Payment for a Contract not
issued pursuant to a plan qualified for special tax treatment is $5,000. The
minimum initial Purchase Payment for a Contract issued pursuant to a qualified
plan is $1,000. The minimum amount of subsequent Purchase Payments is $500 for
non-qualified Contracts and $100 for qualified Contracts. The Company reserves
the right to reduce the amount of the minimum Purchase Payment for certain
qualified plans, for certain automatic purchase plans, and for Contracts issued
to officers, directors, agents, or full-time employees of the Company, the
investment adviser of the Fund, or the distributor and agents of the
distributor. At the time a Purchase Payment is made, Contract Owners should
instruct the Company how it is to be allocated among the Allocation Options.
Contract Owners may be invested in no more than 5 Allocation Options at any one
time.

That part of an initial Purchase Payment to be allocated to a Division will be
applied to purchase Accumulation Units at a price which is next computed no
later than 2 business days after a properly completed application is received
by the Company. In the event that an application fails to recite all of the
necessary information, the Company will promptly request that the Contract
Owner furnish further instructions and will hold the entire initial Purchase
Payment in a suspense account, without interest, for a period of 5 business
days pending receipt of such information. If the necessary information is not
received within 5 business days, the Company will return the entire initial
Purchase Payment to the prospective Contract Owner, unless the prospective
Contract Owner, after being informed of the reasons for the delay, specifically
consents to the Company retaining the initial Purchase Payment until the
application is made complete.

Subsequent Purchase Payments may be made at any time without prior notice.
Subsequent Purchase Payments with improperly completed or no allocations,will
be allocated based on the last allocation made for either a Purchase Payment or
a transfer. The Contract will not be in default if no subsequent Purchase
Payments are made. The Company reserves the right to reject any application or
Purchase Payment. In addition, the Company will not accept a Purchase Payment
in excess of $1,000,000 without prior written approval by an appropriate
officer of the Company.

VARIABLE ACCOUNT ACCUMULATION PROVISIONS

ACCUMULATION UNITS--The number of Accumulation Units purchased for a Contract
Owner with respect to his or her initial Purchase Payment is determined by
dividing the amount credited to each Division by the Accumulation Unit value
for that Division next computed following acceptance of the application
(generally the next business day after receipt of the Purchase Payment by the
Company). The number of Accumulation Units purchased with respect to subsequent
Purchase Payments is determined by dividing the amount credited to each
Division by the applicable Accumulation Unit value for the Valuation Period
next determined following receipt of the Purchase Payment by the Company. Any
transactions involving the purchase, withdrawal or transfer of amounts received
after 4:00 p.m. eastern time will be effected on the following business day.
The Accumulation Unit value of each Division varies in accordance with the
investment experience of that Division.

VALUE OF AN ACCUMULATION UNIT--The value of an Accumulation Unit of each
Division was set at $10 when the Division was established. The value may
increase or decrease from one Valuation Period to the next. The value of an
Accumulation Unit is determined by multiplying the value of an Accumulation
Unit for the last Valuation Period by the net investment factor for that
Division for the current Valuation Period. The Contract Owner bears the
investment risk that the aggregate value of the amounts allocated to the
Divisions of the Separate Account may at any time be less than, equal to, or
more than the amounts invested in those Divisions.

AB 21
<PAGE>

NET INVESTMENT FACTOR--This is an index used to measure the investment
performance of a Division of the Separate Account from one Valuation Period to
the next. For any Division, the net investment factor for a Valuation Period is
found by dividing (A) by (B) and subtracting (C) where: (A) is the net asset
value per share of the Portfolio held in the Division, as of the end of the
Valuation Period, plus the per-share amount of any dividend, capital gain or
other distributions made by the Portfolio in the Valuation Period; (B) is the
net asset value per share of the Portfolio held in the Division as of the end
of the last Valuation Period; and (C) is the sum of the daily risk charges. See
"Contract Charges and Deductions." The net investment factor may be adjusted to
make provision for any income taxes required to be paid on the Separate
Account.

DEATH BENEFIT

BEFORE THE ANNUITY DATE--If the Annuitant dies prior to the Annuity Date, the
Company will pay the death benefit to the beneficiary. The death benefit will
be the greatest of: (a) the sum of all Purchase Payments, adjusted for
withdrawals, charges and deductions; (b) the Contract Value, or (c) the
Contract Value on the first Valuation Day of each 5 year period adjusted for
Purchase Payments, withdrawals, charges and deductions since then. For
Contracts issued prior to May 1, 1989, the first 5 year period starts at the
end of the sixth year. The first 5 year period starts at the end of the fifth
year for Contracts issued on or after May 1, 1989. The death benefit is
determined as of the Valuation Day on which the Company receives due proof of
death and an election of the type of payment by the beneficiary.

If the Annuitant dies before the Annuity Date, the entire Contract Value must
be distributed within 5 years. An exception to this requirement exists for any
portion of the Contract Owner's interest payable to (or for the benefit of) a
designated beneficiary provided (a) such portion will be distributed as an
Annuity for the life or a period not exceeding the life expectancy of the
designated beneficiary and (b) such Annuity payments begin not later than 1
year after the Annuitant's death. If the designated beneficiary is the
Annuitant's surviving spouse, in the case of a Section 401(a) or 403(b) plan or
an IRA, the Annuity payments do not have to commence until the date the
Annuitant would have become age 70 1/2. In the case of a non-qualified contract
or an IRA, the surviving spouse may elect to be treated as the Contract Owner
and Annuitant.

AFTER THE ANNUITY DATE--If the Annuitant dies on or after the Annuity Date, the
remaining portion of his or her interest in the Contract will be distributed at
least as rapidly as under the Annuity option being used at the date of the
Annuitant's death. A beneficiary receiving payments under a Variable Annuity
option after the death of an Annuitant may elect at any time to receive the
present value of the remaining number of guaranteed payments in a single
payment, calculated using the assumed investment rate. If no designated
beneficiary survives the Annuitant, the present value of any remaining
guaranteed payments on the date of death of the Annuitant, calculated using the
assumed investment rate, may be paid in one sum to the owner or owner's estate
unless other provisions have been made and approved by the Company. This value
is calculated as of the date of payment following receipt of due proof of death
by the Company.

EXERCISE OF RIGHTS UNDER THE CONTRACT

BENEFICIARY--The beneficiary is named in the application. Unless the
beneficiary has been irrevocably designated, the beneficiary may be changed if
a written request of the Contract Owner is received by the Company. The estate
or heirs of any beneficiary who dies before the Annuitant have no rights under
the Contract. If no beneficiary survives the Annuitant, payment will be made to
the owner or owner's estate.

AB 22
<PAGE>

ANNUITANT--The Contract Owner, if a natural person, is the Annuitant. If the
Contract Owner is not a natural person, the Annuitant is the person designated
in the application.

OWNERSHIP--The Contract Owner is the person entitled to exercise all rights
under the Contract. Ownership of the Contract may be transferred to a new
Contract Owner with the Company's approval. Such a transfer of ownership does
not affect a beneficiary designation. The Contract Owner should consult a
competent tax adviser prior to making any such designations or transfers.

COLLATERAL ASSIGNMENT--Unless the Contract is issued in connection with a
Qualified Plan, a Contract Owner may assign the Contract as security for an
obligation. No assignment of any interest under the Contract is binding upon
the Company until a written assignment is filed with the Company, and the
Company assumes no obligation with respect to the effect or validity of any
such assignment. In the event that the Contract is issued pursuant to a
qualified retirement plan, it may not be assigned, pledged or transferred
except as allowed by law. The Contract Owner should consult a competent tax
adviser prior to assigning his or her Contract.

TRANSFERS--Prior to the Annuity Date, the Contract Owner may transfer part or
all of the Contract Value among the Allocation Options. After the Annuity Date,
the value of any Annuity Units may be transferred only among the Divisions.
Contract Owners may be invested in no more than 5 Allocation Options at any one
time. Transfers may be effected by writing to American Benefit Life Insurance
Company. Transfers affecting the Divisions will be effected at the unit value
next computed after the transfer request is received by the Company. Transfer
instructions must identify the Division or the Fixed Account affected and the
amount to be transferred. If the request is not received in proper form, the
Contract Owner will be contacted. If the amount in any Division or the Fixed
Account is not enough to cover the requested transfer, the transfer will be
executed up to the amount available. Under certain circumstances, transfers may
be subject to a transfer charge. See "Transfer Charges."

WITHDRAWALS--A Contract Owner may effect a withdrawal by submitting a request
to the Company. The request must be submitted in writing and must be signed by
the Contract Owner. The signature should be exactly the same form as the name
reflected on the Contract Owner's account. The request should include the
Contract Owner's Contract number, and must identify the Division or Fixed
Account affected and the amount to be withdrawn. If the request is not received
in proper form, the Contract Owner will be contacted. The request must be
accompanied by the Contract where a complete withdrawal is requested. Requests
for withdrawals from IRAs and TSAs must be in a form acceptable to the Company
and indicate the reason for the withdrawal. (However, see tax information later
in this section.)

The Contract Owner may make a partial or complete withdrawal (redemption) of
the Contract Value at any time before Annuity payments begin and the death of
the Annuitant. Upon request for a complete withdrawal, the Contract Owner will
receive his or her Net Contract Value as of the Valuation Day a written request
for such withdrawal is received by the Company. Partial withdrawals are subject
to a $500 minimum. No partial withdrawal may be effected if it would cause the
remaining Contract Value to be less than the greater of $1,000 or the
unassessed early withdrawal charge on any Purchase Payments with a remaining
early withdrawal charge period. In the event a partial withdrawal is requested
that would cause the Contract Value to fall below the minimum, such a request
will be treated as a request for a full withdrawal.

Unless otherwise directed by the Contract Owner, a partial withdrawal from the
Separate Account will be made from each Division in which the Contract Value is
invested in the ratio of the Contract Owner's value in each to the combined
value of all Divisions.

AB 23
<PAGE>

Under certain circumstances, withdrawals are subject to an early withdrawal
charge, as well as a contract maintenance charge. In addition, the withdrawal
may be subject to a withdrawal transaction charge of $10. See "Withdrawal
Charges" and "Contract Maintenance Charge."

A withdrawal may result in adverse federal income tax consequences. See
"Federal Income Tax Status."

The Internal Revenue Code ("Code"), as amended by the Tax Reform Act of 1986,
requires the Contract to impose restrictions on withdrawals of Contract Value
from annuity contracts sold to retirement plans qualified under Section 403(b)
of the Code. These restrictions are effective in tax years beginning after
December 31, 1988. Section 403(b)(11) of the Code requires that for such
annuity contracts to receive tax-deferred treatment, they must provide that:

Withdrawals attributable to Purchase Payments made pursuant to a salary
reduction agreement be paid ONLY:

(1) when the employee attains age 59 1/2, separates from service, dies, or
becomes disabled (within the meaning of Section 72(m)(7); or

(2) in the case of hardship. In hardship cases, only the withdrawal of
Purchase Payments is permitted; withdrawal of any income attributable to
these Purchase Payments is prohibited.

Distributions from Contracts of Contract Value as of December 31, 1988, are
not subject to these restrictions.

The above distribution restrictions are made in reliance on a "no-action"
letter issued by the Securities and Exchange Commission on November 28, 1988.

Payment of withdrawals from the Divisions will normally be made within 7 days
of receipt by the Company of a proper request. The Company reserves the right,
however, to defer any withdrawal payment or transfer of values if (a) the New
York Stock Exchange is closed (other than customary weekend and holiday
closings); (b) an emergency exists making disposal of the Divisions' securities
or the valuation of net assets of the Divisions not reasonably practicable; (c)
the Securities and Exchange Commission has by order permitted suspension of
redemptions for the protection of security holders; or (d) at any other time
when payment may be suspended under applicable law. The Commission by rules and
regulations determines the conditions under which trading of securities shall
be deemed to be restricted and the conditions under which an emergency shall be
deemed to exist. Payment of withdrawals from the Fixed Account will be made
promptly; but the Company reserves the right to delay payment up to 6 months.

SUBSTITUTION AND CHANGE--Although there is no present intent to do so, the
Company reserves the right to offer Contract Owners, at some future date and in
accordance with the requirements of the 1940 Act, the option to direct that
their Purchase Payments be allocated to an investment company other than the
Fund.

If shares of the Fund or Portfolio are not available for purchase by the
Separate Account, or if in the judgment of the Company, further investment in
such shares is no longer appropriate in view of the purposes of the Separate
Account, then (i) shares of another registered open-end management investment
company ("mutual fund") or another Portfolio may be substituted for Fund or
Portfolio shares held in the Separate Account and/or (ii) payments received
after a date specified by the Company may be applied to the purchase of shares
of another mutual fund or another Portfolio in lieu of Fund or Portfolio
shares. Approval of the Securities and Exchange Commission and of the New York
Superintendent of Insurance must be obtained if shares of another mutual fund
or if shares of another Portfolio of the Fund are to be substituted for
Portfolio shares held in the Separate Account. It is intended that any
substitution would be of shares of Portfolios with investment objectives
similar to those of the Portfolios of the Fund.

AB 24
<PAGE>

VARIABLE AND FIXED ANNUITY PROVISIONS

MINIMUM ANNUITY PAYMENTS--Annuity payments generally will be made monthly, but
if any payment would be less than $20 the Company may change the frequency so
payments are at least $20 each. If the amount to be applied at the Annuity Date
is less than $2,000, the Company may elect to pay such amount in a lump sum.

ANNUITY DATE--The Contract Owner selects the Annuity Date in the application.
It must be on the first day of a month, and it may not be later than the first
day of the next month after the Annuitant's 85th birthday. If no Annuity Date
is elected, the Annuity Date will be on the first day of the month after the
Annuitant attains age 85. Contracts issued pursuant to qualified retirement
plans, however, may require an earlier Annuity Date.

PROOF OF AGE, SEX AND SURVIVAL--The Company may require proof of age, sex or
survival of any person upon whose life continuation of Annuity payments depend.

MISSTATEMENT OF AGE OR SEX--If the age or sex of the Annuitant has been
misstated, any Annuity amount payable shall be that which the amount applied
would have purchased at the correct age and sex. Overpayments made by the
Company because of such misstatement, with interest at 6% per annum, will be
charged against benefits payable subsequent to adjustment. The dollar amount of
any underpayment made by the Company as a result of a misstatement will be paid
in full with the next payment due under the Contract, with interest at 6% per
annum.

CHANGE OF ANNUITY DATE OR ANNUITY OPTION--The Contract Owner may change the
Annuity Date and/or the Annuity option by written notice received by the
Company at least 30 days prior to the Annuity Date previously selected. Such
notice must be received by the Company at least 30 days prior to the Annuity
Date being requested.

GENERAL ANNUITY OPTIONS

Subject to the provisions of the Code and retirement plan under which a
Contract is purchased, the Contract Owner may elect any one of the Annuity
options listed below. Other Annuity options may be selected by mutual agreement
between the Contract Owner and the Company. If no Annuity option election has
been made by the Annuity Date, Annuity payments will automatically be made
under Option 3, an Annuity payable for the life of the Annuitant with 10 years'
payments certain; account values in the Separate Account will be applied to a
Variable Annuity. Changes in the optional form of Annuity payment may be made
at any time up to 30 days prior to the date on which Annuity payments are to
begin. All options are available as fixed or variable annuities. The Annuity
payments described below are determined on the basis of (i) the mortality table
specified in the Contract, (ii) the age and, where permitted, the sex of the
Annuitant, (iii) the type of Annuity payment option(s) selected, and (iv) the
assumed investment rate.

OPTION 1--PAYMENTS FOR A GUARANTEED FIXED PERIOD: An Annuity payable monthly
for a specified period of time. The period must be at least 5 years. If this
option is taken as a Variable Annuity, the Contract Owner may at any time
choose to receive the present value of the remaining payments in a lump sum
commuted at the assumed investment rate. Because this option is not based on a
life contingency, the Contract Owner will receive no benefit from the deduction
of the mortality risk charge.

OPTION 2--LIFE ANNUITY: Payments will be made for the life of the Annuitant.
Payments will cease with the last payment due prior to the Annuitant's death.

AB 25
<PAGE>

OPTION 3--LIFE ANNUITY WITH PAYMENTS GUARANTEED FOR 10 OR 20 YEARS: An Annuity
payable monthly during the lifetime of the Annuitant (no matter how long he or
she might live) with a guaranteed minimum number of monthly payments. If the
Annuitant dies before receiving the guaranteed number of payments, the
remaining payments for the guaranteed period chosen (10 or 20 years) will
continue to the designated beneficiary.

OPTION 4--JOINT AND SURVIVOR ANNUITY: An Annuity will be paid during the
lifetimes of the Annuitant and the Annuitant's spouse. The amount of such
payments will not change by reason of the first death. Payments will end with
the last payment due prior to the second death.

ADDITIONAL VARIABLE ANNUITY PROVISIONS

FIRST VARIABLE ANNUITY PAYMENT--The dollar amount of the first monthly Annuity
payment will be determined by applying the amount to be annuitized to the
Annuity table applicable to the Annuity option chosen. If more than 1 Division
has been selected, the value of the interest in each Division is applied
separately to the Annuity table to determine the amount of the first Annuity
payment attributable to that Division. The Contract Owner may transfer amounts
from the Fixed Account to the Divisions for annuitization. Such amounts will be
invested as directed by the Contract Owner, up to a maximum of 5 Divisions. The
Annuity tables are in the Contract and are based on the 1983 Table "a" for
Individual Annuity Valuation with interest at 4% for the life of the Contract.

ASSUMED INVESTMENT RATE--A 4% assumed investment rate is built into the Annuity
tables in the Contract. A higher assumption would mean a higher first Annuity
payment but more slowly rising and more rapidly falling subsequent payments. A
lower assumption would have the opposite effect. If the actual net investment
rate is 4% annually, Annuity payments will be level.

NUMBER OF ANNUITY UNITS--The number of Annuity Units for each applicable
Division is the amount of the first monthly Variable Annuity payment
attributable to that Division divided by the value of an Annuity Unit for that
Division as of the Annuity Date. The number used in computing Annuity payments
will remain constant during the Annuity period unless a transfer is made.

VALUE OF EACH ANNUITY UNIT--The value of an Annuity Unit of each Division was
set at $10 when the Division was established. The value may increase or
decrease from one Valuation Period to the next. For any Valuation Period, the
value of an Annuity Unit of a particular Division is the value of that Annuity
Unit during the last Valuation Period, multiplied by the net investment factor
for that Division for the current Valuation Period. The result is then
multiplied by a factor that offsets the effect of the assumed investment rate.

SUBSEQUENT VARIABLE ANNUITY PAYMENTS--Subsequent monthly Annuity payments will
vary in amount according to the investment performance of the applicable
Division(s). The part of each subsequent Variable Annuity payment attributable
to a Division is the number of Annuity Units
for that Division as determined in the first Annuity payment (adjusted for
transfers, if any) multiplied by the value of an Annuity Unit for that Division
for the Valuation Period immediately preceding the Valuation Period in which
payment is made. The amount of each subsequent Annuity payment will not be
affected by variations in expenses or mortality experience.

MISCELLANEOUS PROVISIONS

NOTICES, CHANGES AND ELECTIONS--All notices, changes and elections under the
Contract must be in writing, signed by the proper party and received by the
Company to be effective. All such notices and elections should include the
Allocation Options involved, the Contract Owner's Contract number,

AB 26
<PAGE>

and any other information necessary to process the request. If acceptable to
the Company, notices or elections relating to beneficiaries and ownership will
take effect as of the date signed unless the Company has already acted in
reliance on the prior status. The Company is not responsible for the validity
of such notices and elections.

AMENDMENT OF CONTRACT--A condition or provision of the Contract may be waived
or modified only in writing signed by the President, Vice President or
Secretary of the Company.

The Contract may be amended at any time as required to make it conform with any
law or regulation issued by any government agency to which the Contract is
subject. Any changes made to the Contract will be filed for approval with the
New York Superintendent of Insurance.

10 DAY RIGHT TO EXAMINE--Within 10 days of the receipt of a Contract it may be
returned to the Company for cancellation. The Company will refund the Contract
Value computed as of the date the cancellation request is mailed or delivered
to the Company or its agent. The Contract Owner bears the investment risk
during the 10 day period.

RETIREMENT PLAN CONDITIONS--A Contract acquired in connection with a retirement
plan will be subject to the conditions of the retirement plan. Such plans may
impose restrictions or special taxation consequences in the event of
withdrawal, death, disability, separation from employment, premature
distributions or excess contributions. The Contract Owner should understand the
features of any retirement plan in which he or she participates and, if
necessary, seek an explanation thereof from a qualified tax adviser.

REPORTS TO CONTRACT OWNERS--At least once a year, a report which will set forth
information regarding the Contract Value will be sent to the Contract Owner.
The Contract Owner will also be furnished notices, proxies and solicitation
materials which relate to the Fund.

FEDERAL INCOME TAX STATUS

The operations of the Separate Account form part of the operations of the
Company but the Code provides that no federal income tax will be payable by the
Company on the investment income and capital gains of the Separate Account. If
the Contract is used with a retirement plan qualified for favorable tax
treatment ("Qualified Plan"), the Contract Owner may be permitted to deduct the
Purchase Payments made. Until distribution is made, no federal income tax is
payable by the Contract Owner on the investment earnings of a Contract
purchased for a Qualified Plan or by a natural person. Distributions from a
Qualified Plan to a participant who is age 50 before January 1, 1986, may be
eligible for capital gains treatment on a portion of the distribution and 5 year
or 10 year forward averaging. The Annuitant will be allowed to recover tax-free
any portion of each Annuity payment representing Purchase Payments for which no
deductions were allowed. If, however, a surrender is made before age 59 1/2,
with certain exceptions, it will be subject to a 10% penalty tax on the amount
withdrawn. Distributions from Qualified Plans may be eligible for a tax-free
rollover to another Qualified Plan.

Variable Annuity contracts will be entitled to favorable tax treatment under
the Code so long as the investments of the separate accounts funding them are
"adequately diversified" under Section 817(h) of the Code. If the investments
of a separate account are determined to be not adequately diversified, contract
owners in the separate account would be treated as the owners of the underlying
assets and would be taxed currently on earnings and gains. The investments of
the Separate Account are now and it is intended that they will remain
adequately diversified under Section 817(h) of the Code.

AB 27
<PAGE>

The Company is required to withhold federal income tax on Annuity payments,
lump sum distributions, and partial surrenders. For certain distributions
("Eligible Rollover Distributions") made after December 31, 1992, payers are
required to withhold 20% of the amount of the distribution. An Eligible
Rollover Distribution means the taxable portion of any distribution from
certain types of Qualified Plans, other than required distributions and those
in prescribed forms of annuity payments. This withholding tax cannot be waived,
but it can be avoided by rolling the distribution over to another eligible
Qualified Plan or IRA, at the direction of the Contract Owner, in a direct
transfer. The plan administrator will notify Contract Owners who are to receive
Eligible Rollover Distributions of a more detailed explanation of their
distribution options and of how to elect a direct transfer of the distribution
to another eligible plan or IRA.

Recipients of other distributions are allowed to make an election not to have
federal income tax withheld. After an election is made with respect to Annuity
payments, an Annuitant may revoke the election at any time, and thereafter
commence withholding. The Company will notify the payee at least annually of
his or her right to revoke the election.

Payees are required by law to provide the Company (as payor) with their correct
taxpayer identification number ("TIN"). If the payee is an individual, the TIN
is the same as his or her Social Security number.

HOW TO PURCHASE A CONTRACT
(Distribution)

Contracts may be purchased by completing the application form and forwarding
it, along with the Purchase Payment, to the person from whom you received the
prospectus. This Contract may be sold only by broker-dealers who are licensed
insurance agents of the Company, either individually or through an insurance
agency. Sales commissions are paid by the Company on the sale of Contracts. The
commissions paid range from 0% to 6.2%.

PaineWebber Incorporated ("PWI"), located at 1285 Avenue of the Americas, New
York, New York 10019 serves as distributor of the Contracts pursuant to a
principal underwriting (distribution) agreement. PWI is registered as a broker-
dealer under the Securities Exchange Act of 1934, as amended, and is a member
of the National Association of Securities Dealers, Inc. PWI has entered into a
Distribution Agreement with American Benefit Life to accomplish the retail
distribution of Contracts.

VOTING RIGHTS

Unless otherwise restricted by the retirement plan pursuant to which a Contract
is issued, each Contract Owner invested in Divisions of the Separate Account
will have the right to instruct the Company with respect to voting the shares of
the Fund which are the assets underlying his or her interest in the Separate
Account at all shareholders meetings.

The number of votes which may be cast by a Contract Owner is based on the
number of units owned as of the record date of the meeting. Shares for which no
instructions are received will be voted in the same proportion as the shares
for which instructions have been received. Contract Owners will periodically
receive various materials which relate to voting Fund shares such as proxy
materials and voting instruction forms. Contract Owners will also receive
periodic reports relating to the Fund Portfolio in which they have an interest.

AB 28
<PAGE>

OTHER INFORMATION

LEGAL PROCEEDINGS--There are no legal proceedings to which the Separate Account
is a party or to which the assets of the Separate Account are subject.

CUSTODIAN OF ASSETS--The Company serves as the custodian of the assets of the
Separate Account.

CONTRACT OWNER INQUIRIES--Contract Owner inquiries may be made by writing to
the Company or by calling 1-800-248-4118.

AB 29
<PAGE>

TABLE OF CONTENTS

(STATEMENT OF ADDITIONAL INFORMATION)

TOPIC PAGE

American Benefit Life Insurance Company..................................... 3

The Separate Account........................................................ 3

The Fixed Account........................................................... 3

The Fund.................................................................... 3

The Contract................................................................ 4

Purchase Payments......................................................... 5

Accumulation Provisions................................................... 6

Annuity Payments.......................................................... 6

Distribution of Contracts................................................. 7

Additional Federal Income Tax Information................................... 8

The Company and The Separate Account...................................... 8

Non-Qualified Plans....................................................... 8

Qualified Plans........................................................... 8

Withholding............................................................... 10

Diversification Requirements.............................................. 10

Other Information........................................................... 10

Reports to Contract Owners................................................ 10

Safekeeping of Assets..................................................... 10

Service Agreement......................................................... 10

Independent Auditors...................................................... 10

Registration Statement.................................................... 11

Separate Account Performance................................................ 11

Financial Statements........................................................ 13

AB 30
<PAGE>

SOME QUESTIONS AND ANSWERS ABOUT THE CONTRACT

1. For whom is the Contract designed?

The Contract is designed for anyone seeking to accumulate retirement income
through managed investments. The Contract can be used for either private
(non-qualified) plans or tax-qualified retirement plans. The Contract Owner
must be the Annuitant unless the Contract is purchased by an entity which is
not a natural person.

2. How do you purchase a Contract?

The Contract may be purchased through persons who are licensed to sell
insurance products and securities on agreement with American Benefit Life
Insurance Company. A prospective purchaser must deliver a completed
application, such other completed forms as required and the initial Purchase
Payment to the licensed salesperson, who then forwards such payment and forms
to the Company for acceptance. See "How to Purchase a Contract."

3. What is the difference between a fixed annuity and a variable annuity?

Under a fixed annuity, the amount of each annuity payment is fixed and
guaranteed by the insurance company issuing the contract. With the variable
annuity, the investment risk is borne by the investor to the extent that
while the insurance company guarantees payments for life or a specified
period, the amount of individual payments may vary. See "Variable and Fixed
Annuity Provisions."

4. Can an annuity contract provide both fixed and variable annuity payments?

Yes. An annuity contract can be divided into two segments--the accumulation
period where the purchaser is building retirement income and the annuity
period where the contract owner receives payments based upon the amounts
accumulated. Generally, if accumulation is on a fixed basis, the annuity
payments would also be fixed. If, however, the accumulation is on a variable
basis, a fixed annuity may still be paid by transferring the contract value
to the general account of the insurance company when the annuity payments are
to begin.

5. What type of annuity is the Contract?

The Contract provides an accumulation period with variable as well as fixed
Allocation Options and offers a choice of either fixed or variable annuity
payments after the Annuity Date.

The Contract Value invested in a variable option during the accumulation
period varies to reflect the investment performance of the Division(s) to
which the Contract Value is allocated. Thus, the investment risk is borne by
the Contract Owner. The Contract Value invested in the fixed option during
the accumulation period earns interest at a rate guaranteed by the Company.

When the variable annuity payment is chosen, only the first monthly payment
under the Contract is guaranteed in amount with subsequent payments varying
with the investment performance of the Division(s) to which Contract Values
are allocated.

When the fixed annuity payment is chosen, the amount of each payment is
determined on the Annuity Date and does not vary.

6. What expenses are charged to the Contract?

No initial sales charge is deducted from Purchase Payments. However, an early
withdrawal charge may be deducted upon partial or complete withdrawal. For
partial withdrawals, the early withdrawal charge is 5% of any amount
withdrawn which represents Purchase Payments with an early withdrawal charge
period remaining. For complete withdrawals, the early withdrawal charge is 5%
of Purchase Payments which have an early withdrawal charge period remaining.

AB 31
<PAGE>

No early withdrawal charge is applied to any part of a withdrawal
representing gain on the Contract or Purchase Payments with no early
withdrawal charge period remaining. No early withdrawal charge is applied,
after the first year, to total withdrawals in a calendar year not in excess
of 10% of the Contract Value as of the last Valuation Day of the prior
calendar year. The Fixed Account is also subject to a charge upon withdrawal.
See "Withdrawal Charges."

The Company deducts a distribution expense risk charge daily from each
Division at an annual rate of 0.15% of the total net assets of each Division,
which is included in the 1.40% charge discussed below. The amount of any
sales charge imposed (which includes both any early withdrawal charge and the
distribution expense risk charge), when added to any previous sales charge,
will not exceed 9% of all Purchase Payments. See "Distribution Expense Risk
Charge."

Charges totaling 1.40%, on a yearly basis, of each Division's total net
assets are deducted from each Division in order to reimburse the Company for
undertaking the mortality risk, expense risk and distribution risks in
connection with the Contract. See "Contract Charges and Deductions."

During the accumulation period, each Contract is assessed an annual contract
maintenance charge of $30. This charge, which is guaranteed never to
increase, is designed to reimburse the Company for the cost of administering
the Contract. See "Contract Maintenance Charge."

Transfers among the Allocation Options and withdrawals are permitted without
limit in number. The Contract provides that each transfer in excess of 6 in a
calendar year is subject to a charge of $10. The Company has waived this
charge until further notice. See "Transfer Charges."

A withdrawal may be subject to a withdrawal transaction charge of $10 for
each withdrawal in excess of 3 in any calendar year. See "Withdrawal
Charges."

The Fund is also subject to certain charges. Mitchell Hutchins serves as
investment adviser to the Fund in return for a fee which is accrued daily and
paid monthly and is based on an annual percentage of the net assets of each
Portfolio of the Fund. See "The Fund."

Any premium taxes with respect to a Contract will be paid when due.

7. May the Contract Owner withdraw all or a portion of the Contract Value?

All or a portion of the Contract Value may be withdrawn at any time during
the accumulation period, with the following limits: (a) the minimum
permissible amount of partial withdrawal is $500, and (b) no partial
withdrawal may be made if it would result in a remaining Contract Value of
less than the greater of $1,000 or the unassessed early withdrawal charge on
any Purchase Payments with a remaining early withdrawal charge period.
Withdrawals from TSAs are subject to special restrictions imposed by the
Code. Subject to these limitations, the Contract Owner may make as many
partial withdrawals as he or she wishes. In addition, a withdrawal may be
subject to a withdrawal transaction charge of $10 for each withdrawal in
excess of 3 in any calendar year. See "Withdrawals."

No withdrawal is permitted following the commencement of Annuity payments
with the exception of Option 1 when taken as a Variable Annuity payment which
allows for a lump sum payment of the present value of the remaining payments.
See "Annuity Options."

It should also be noted that a penalty tax may be imposed pursuant to Section
72(q) of the Internal Revenue Code upon withdrawal of amounts accumulated
under the Contract. For federal income tax consequences of partial or
complete withdrawals, see "Federal Income Tax Status."

8. How are the amounts of the Variable Annuity payments determined?

The Contract Value available on the Annuity Date is used to provide Annuity
payments. The Contract Value may be reduced by withdrawal charges or premium
taxes. An early withdrawal

AB 32
<PAGE>

charge may be imposed on the Annuity Date unless an Annuity option involving
lifetime payments is elected. See "Withdrawal Charges" and "Annuity Options."
The Contract Owner's values in the Division(s) will be converted to Annuity
Units. The Contract Owner may also transfer amounts from the Fixed Account to
the Divisions for annuitization. The Annuitant will receive Annuity payments
based on the Contract Value available, the Annuity tables guaranteed by the
Contract and the Annuity option selected. See "Annuity Options."

There can be no assurance that the Contract Value during the accumulation
period or the aggregate amount of Annuity payments after the Annuity Date
will equal or exceed the aggregate Purchase Payments.

9. What if the Annuitant dies during the accumulation period?

If the Annuitant dies prior to the Annuity Date, the Company will pay the
designated beneficiaries a minimum death benefit equal to the greatest of (1)
the aggregate Purchase Payments adjusted for withdrawals, charges and
deductions, (2) the Contract Value next determined following receipt of due
proof of death and payment election by the Company at its home office, or (3)
the Contract Value (adjusted for previous Purchase Payments, withdrawals,
charges and deductions) calculated as of the first Valuation Day of each 5
year period. For Contracts issued before May 1, 1989, the first 5 year period
starts at the end of the sixth year. For Contracts issued on or after May 1,
1989, the first 5 year period starts at the end of the fifth year. See "Death
Benefit."

10. What are the mortality risks assumed under the Contract by the Company?

Under the Contract, the Company guarantees that during the accumulation
period the death benefit will be the amounts as determined in response to
question 9 above.

The Company further guarantees that Annuity payments will not be affected by
a change in the death rate assumed in establishing its obligation to provide
Annuity payments under the Contract. This means that the Annuitant under a
life option will continue to receive Annuity payments no matter how long he
or she lives.

11. What is the nature of the security described in the prospectus?

Because the value of an Accumulation Unit of each Division of the Separate
Account during the accumulation period is based upon the changing net asset
value of the shares of the underlying Fund Portfolio, the Contract Owner
bears the investment risks and rewards. Therefore, the Contract is considered
a security under federal law and is required to be registered under the
Securities Act of 1933. In addition, the Separate Account is registered with
the Securities and Exchange Commission under the Investment Company Act of
1940 as a unit investment trust.

12. Does the Annuitant have the right to examine and reject the Contract?

If after receiving the Contract the Annuitant is not satisfied with it and
returns the Contract within 10 days after receipt, the Company will refund to
the Contract Owner his or her Contract Value. No withdrawal charges will be
assessed.

13. May additional payments be made to the Contract after it is established?

Yes, additional payments of at least $500 for non-qualified retirement plans
and $100 under qualified retirement plans may be made to the Contract at any
time prior to the Annuity Date. The Company may waive these minimum payments
for certain plans including automatic payment plans.

14. Can transfers be made among the Separate Account Divisions?

Transfers among Separate Account Divisions can be made at any time. See
"Transfers Charges."

AB 33
<PAGE>

15. Can transfers be made between the Separate Account Divisions and the Fixed
Account?

Yes, transfers between the Separate Account Divisions and the Fixed Account
will be allowed at any time prior to the Annuity Date. See "The Fixed
Account" and "Transfers Charges."

16. How can Contract inquiries be made?

For further information concerning the Contract, write American Benefit Life
Insurance Company at P.O. Box 12700, Albany, New York 12212 or call 1-800-
248-4118.

AB 34
<PAGE>

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

AMERICAN BENEFIT LIFE INSURANCE COMPANY

ANNUITY ADMINISTRATION

P.O. BOX 12700

ALBANY, NEW YORK 12212

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

Please send me, at no charge, the Statement of
Additional Information, dated May 1, 1996, for the
Individual Deferred Variable Annuity Contract issued
by the American Benefit Variable Annuity Account.

(PLEASE PRINT OR TYPE AND FILL IN ALL INFORMATION.)
-------------------------------------------------------
Name
-------------------------------------------------------
Address
-------------------------------------------------------
City/State/Zip
715 0021 0596
<PAGE>

[LOGO OF AMERICAN BENEFIT LIFE INSURANCE COMPANY APPEARS HERE]

AMERICAN BENEFIT LIFE INSURANCE COMPANY
Albany, New York
(C)1996 American Benefit Life Insurance Company

714 0005 0596
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

MAY 1, 1996

AMERICAN BENEFIT VARIABLE ANNUITY ACCOUNT

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

PAINEWEBBER ADVANTAGESM

AN INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACT

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

AMERICAN BENEFIT LIFE INSURANCE COMPANY

421 NEW KARNER ROAD
ALBANY, NEW YORK 12205

This Statement of Additional Information is not a prospectus. It should be
read only in conjunction with the American Benefit Variable Annuity Account
prospectus dated May 1, 1996, a copy of which may be obtained without charge
by writing to American Benefit Life Insurance Company.

714 0009 0596
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
TOPIC PAGE
----- ----
<S> <C>
AMERICAN BENEFIT LIFE INSURANCE COMPANY.................................... 3
THE SEPARATE ACCOUNT....................................................... 3
THE FIXED ACCOUNT.......................................................... 3
THE FUND................................................................... 3
THE CONTRACT............................................................... 4
Purchase Payments........................................................ 5
Accumulation Provisions.................................................. 6
Annuity Payments......................................................... 6
Distribution of Contracts................................................ 7
ADDITIONAL FEDERAL INCOME TAX INFORMATION.................................. 8
The Company and the Separate Account..................................... 8
Non-Qualified Plans...................................................... 8
Qualified Plans.......................................................... 8
Withholding.............................................................. 10
Diversification Requirements............................................. 10
OTHER INFORMATION.......................................................... 10
Reports to Contract Owners............................................... 10
Safekeeping of Assets.................................................... 10
Service Agreement........................................................ 10
Independent Auditors..................................................... 10
Registration Statement................................................... 11
SEPARATE ACCOUNT PERFORMANCE............................................... 11
FINANCIAL STATEMENTS....................................................... 13
</TABLE>

2
<PAGE>

AMERICAN BENEFIT LIFE INSURANCE COMPANY

American Benefit Life Insurance Company ("Company") is a life insurance
company organized under the laws of the State of New York in April, 1987. The
executive offices of the Company are at 421 New Karner Road, Albany, New York
12205. It is presently licensed to do business in the State of New York.

The employees of the Company are covered under a life insurance company
blanket bond in the aggregate amount of $2,000,000.

THE SEPARATE ACCOUNT

American Benefit Variable Annuity Account ("Separate Account") was
established by the Company on October 19, 1987, pursuant to the provisions of
New York law, as a segregated investment account of the Company. The Separate
Account has 7 Divisions, each of which invests in shares of a designated
Portfolio of PaineWebber Series Trust ("Fund"). The Separate Account and each
Division therein is administered as a part of the general business of the
Company; but the income, gains and losses of each Division are credited to or
charged against the assets held for that Division in accordance with the terms
of the Contract, without regard to other income, gains or losses of any other
Divisions or arising out of any other business the Company may conduct. The
assets within each Division are not chargeable with liabilities arising out of
the business conducted by any other Divisions, nor will the Separate Account
as a whole be chargeable with liabilities arising out of any other business
the Company may conduct.

The Separate Account is registered with the Securities and Exchange
Commission as a unit investment trust under the Investment Company Act of 1940
("1940 Act"). Such registration does not involve supervision of the management
of the Separate Account or the Company by the Securities and Exchange
Commission.

THE FIXED ACCOUNT

THE FUND

The Fund is organized as a Massachusetts business trust and is registered as
an open-end management investment company under the 1940 Act. The Fund, which
was organized in November 1986, consists of 9 Portfolios. The 7 Portfolios
offered by the Separate Account are: the Money Market Portfolio, the Growth
Portfolio, the Growth and Income Portfolio, the Global Growth Portfolio, the
Global Income Portfolio, the Strategic Fixed Income Portfolio, and the
Balanced Portfolio (formerly named the Asset Allocation Portfolio). The Global
Income Portfolio is managed as a non-diversified investment company; the other
Portfolios are all managed as diversified investment companies. The Trustees
of the Fund may establish additional Portfolios at any time. Portfolio assets
are segregated and a Contract Owner's interest is limited to the Portfolio(s)
in which the Contract Owner's Purchase Payments are invested.

Each Portfolio has, and is subject to, certain investment policies and
restrictions which may not be changed without a majority vote of shareholders
in that Portfolio.

The Fund will offer its shares to insurance company separate accounts only.

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Portfolios and supervision of all matters relating to the operations of the
Fund. Mitchell Hutchins is a Delaware corporation and a wholly-owned
subsidiary of PaineWebber Incorporated, which is in turn a wholly-owned
subsidiary of Paine Webber Group Inc., a publicly held financial services
holding company. As compensation for its services, Mitchell Hutchins receives
a fee from the Fund, accrued daily and paid monthly, based on the average
daily net assets of each Portfolio. Certain Portfolios have subadvisers to
Mitchell Hutchins who provide day-to-day management services for those
Portfolios.

The MONEY MARKET PORTFOLIO seeks maximum current income consistent with
liquidity and conservation of capital. This Portfolio invests in high grade
money market instruments and repurchase agreements secured by such
instruments. As compensation for its services, the Money Market Portfolio pays
the investment adviser a fee at the annual rate of .50% of average daily net
assets.

The GROWTH PORTFOLIO seeks long-term capital appreciation. This Portfolio
invests primarily in equity securities of companies that, in the judgment of
Mitchell Hutchins, have substantial potential for capital growth. As
compensation for its services, the Growth Portfolio pays the investment
adviser a fee at the annual rate of .75% of average daily net assets.

The GROWTH AND INCOME PORTFOLIO seeks current income and capital growth. The
Portfolio invests primarily in dividend-paying equity securities believed by
Mitchell Hutchins to have the potential for rapid earnings growth. As
compensation for its services, the Growth and Income Portfolio pays the
investment adviser a fee at the annual rate of .70% of average daily net
assets.

The GLOBAL INCOME PORTFOLIO primarily seeks high current income and
secondarily seeks capital appreciation. This Portfolio invests principally in
high quality debt securities of foreign and U.S. issuers. As compensation for
its services, the Global Income Portfolio pays the investment adviser a fee at
the annual rate of .75% of average daily net assets.

The STRATEGIC FIXED INCOME PORTFOLIO seeks total return consisting of
capital appreciation and income. This Portfolio invests primarily in fixed
income securities of varying maturities with a dollar-weighted average
portfolio duration between three and eight years. As compensation for its
services, the Strategic Fixed Income Portfolio pays the investment adviser a
fee at the annual rate of .50% of average daily net assets.

The BALANCED PORTFOLIO (FORMERLY NAMED THE ASSET ALLOCATION PORTFOLIO) seeks
a high total return with low volatility. This Portfolio invests primarily in a
combination of equity securities, investment grade debt obligations and money
market instruments, based on Mitchell Hutchins' assessment of the optimal
allocation of the Portfolio's assets. As compensation for its services, the
Balanced Portfolio pays the investment adviser a fee at the annual rate of
.75% of the average daily net assets.

THE CONTRACT

The variable Allocation Options are funded by investments in the various
Divisions of the Separate Account. The fixed Allocation Option is invested in
the General Account of American Benefit Insurance Company. All obligations
arising under a Contract, including the guarantee to make Annuity payments,
are general obligations of the Company, and all of the Company's assets are
available to meet its expenses and

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<PAGE>

obligations under the Contract. While the Company is obligated to make the
Variable Annuity payments under the Contract, the amount of such payments is
not guaranteed. The Contract Value in the Divisions of the Separate Account
and the amount of Variable Annuity payments will vary with the investment
experience of the Division(s) in which the Contract Owner's account is
invested. The Contract Value in the Fixed Account will earn interest at a rate
declared in advance by the Company for each interest option selected by the
Contract Owner.

No initial sales charge is deducted from Purchase Payments. However, an
early withdrawal charge is deducted in the event of withdrawal of the Contract
Value or upon annuitization. For partial withdrawals, the early withdrawal
charge is 5% of any amount withdrawn which represents Purchase Payments with
an early withdrawal charge period remaining. For complete withdrawals, the
early withdrawal charge is 5% of Purchase Payments which have an early
withdrawal charge period remaining. No early withdrawal charge is applied to
any part of a withdrawal representing gain on the Contract or Purchase
Payments with no early withdrawal charge period remaining. There is no early
withdrawal charge applied, after the first year, to total withdrawals in a
calendar year not in excess of 10% of the Contract Value as of the last
Valuation Day of the prior calendar year. The Company also deducts a daily
distribution expense risk charge from each Division at an annual rate of 0.15%
of the total net assets of each Division. The amount of any sales charge
imposed (which includes both any early withdrawal charge and the distribution
expense risk charge), when added to any previous sales charge, will not exceed
9% of all Purchase Payments. A withdrawal transaction charge of $10 may be
imposed on all withdrawals in excess of 3 per calendar year. For more
information regarding the withdrawal charges, see "Contract Charges and
Deductions" in the prospectus.

PURCHASE PAYMENTS

The minimum Purchase Payment for a Contract which is not a part of a plan
qualified for special tax treatment under the Internal Revenue Code
("Qualified Plan") is $5,000 for the initial payment and $500 for subsequent
payments. For Qualified Plan Contracts, the minimum Purchase Payment is $1,000
and the minimum additional payment is $100. The Company reserves the right to
waive the minimum Purchase Payment amounts on certain Qualified Plans, certain
automatic purchase plans, and for Contracts issued to officers, directors,
agents, or full-time employees of the Company, the investment adviser to the
Fund, or the distributor and agents of the distributor. Purchase Payments in
excess of $1,000,000 must be approved in writing by an appropriate officer of
the Company before they can be accepted. Purchase Payments will be allocated
to each of the 7 Divisions of the Separate Account or to the Fixed Account as
directed by the Contract Owner. Contract Owners may be invested in no more
than 5 Allocation Options at any one time.

In the event that an application fails to recite all of the information
necessary to record the account properly, the Company will promptly request
that the Contract Owner furnish further instructions and will hold the initial
Purchase Payment in a suspense account, without interest, for a period not
exceeding 5 business days after receipt of the application by the Company. If
the necessary information is not received within 5 business days, the Company
will return the initial Purchase Payment to the prospective Contract Owner,
unless the prospective Contract Owner, after being informed of the reasons for
the delay, specifically consents to the Company retaining the initial Purchase
Payment until the application is made complete.

If the Contract Owner forwards a subsequent Purchase Payment and does not
specifically indicate into which Allocation Option(s) the Purchase Payment is
to be invested, or improperly completes the allocations, the Company will
credit the Purchase Payment based upon the last existing allocation made by
the Contract Owner. Subsequent Purchase Payments may be made at any time
without prior notice. The Contract will not be in default if no subsequent
Purchase Payments are made. The Company reserves the right to reject any
applications or Purchase Payments.

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ACCUMULATION PROVISIONS

ACCUMULATION UNITS--The number of Accumulation Units purchased by a Contract
Owner with respect to his or her initial Purchase Payment is determined by
dividing the amount credited to each Division by the Accumulation Unit value
for that Division next computed following acceptance of the application
(generally the next business day after receipt of the Purchase Payment by the
Company). The number of Accumulation Units purchased with respect to
subsequent Purchase Payments is determined by dividing the amount credited to
each Division by the applicable Accumulation Unit value for the Valuation
Period next determined following receipt of the Purchase Payment by the
Company. The Accumulation Unit value of each Division varies in accordance
with the investment experience of that Division.

VALUE OF AN ACCUMULATION UNIT--The value of an Accumulation Unit of each
Division was set at $10 when the Division was established. The value may
increase or decrease from one Valuation Period to the next. The value of an
Accumulation Unit is determined by multiplying the value of an Accumulation
Unit for the last Valuation Period by the net investment factor for that
Division for the current Valuation Period. The Contract Owner bears the
investment risk that the Contract Value may at any time be less than, equal
to, or more than the amounts invested in the Separate Account.

ANNUITY PAYMENTS

ANNUITY PAYMENTS--The Contract Owner's value in the Allocation Options may
be applied to provide either a Variable Annuity or a Fixed Annuity as selected
by the Contract Owner. (The Contract Owner's value in the Fixed Account may be
transferred to the Separate Account Division if a Variable Annuity is
selected.) The dollar amount of Variable Annuity payments will reflect the
investment experience of the Separate Account Division(s) in which the
Contract Owner is invested but will not be affected by adverse mortality
experience which may exceed the mortality risk charge provided for under the
Contract.

1. FIRST ANNUITY PAYMENT: The amount used to establish the first monthly
payment consists of the Contract Owner's values in the Allocation Options
as of the Annuity Date adjusted for charges and deductions. The Contract
contains tables showing monthly payment factors and annuity premium rates
per $1,000 of the amount applied.

At the time the first monthly Variable Annuity payment is determined, a
number of Annuity Units for each Division is established for the Annuitant
by dividing the monthly payment derived from the tables by the Annuity Unit
value for the Division as of the date the first Annuity payment is due. Any
value in the Fixed Account will be used to purchase Annuity Units in the
Division(s) as directed by the Contract Owner. The number of Annuity Units
forming the basis of an Annuity payment will not change during the Annuity
period unless Annuity Units are transferred to another Division. The value
of the Annuity Units, however, will change based upon investment results.

2. SUBSEQUENT VARIABLE ANNUITY PAYMENTS: The amount of monthly payments
after the first for any Division will be determined by multiplying the
number of Annuity Units for that Division determined for the first payment
(adjusted for transfers, if any) by the Annuity Unit value for that
Division for the Valuation Period immediately preceding the Valuation
Period in which the subsequent payment is made. It will be the Company's
practice to mail Variable Annuity payments no later than 7 days after the
last day of the Valuation Period upon which they are based or the monthly
anniversary thereof.

ASSUMED INVESTMENT RATE--The tables set forth in the Contract are based upon
the 1983 Table "a" for Individual Annuity Valuation, with an assumed
investment rate of 4%. Variable Annuity payments will vary from payments based
on the assumed investment rate depending on whether the investment experience
of the Division(s) in which the Contract Owner is invested is better or worse
than the assumed investment rate. Over a period of time, if the Division(s)
achieved a net investment result equal to the assumed investment rate, the
Annuity Units would not change in value, and the amount of the Annuity
payments would be level. However, if the Division(s) achieved a net investment
result greater than the assumed investment rate, the Annuity Units would
increase in value and the amount of the Annuity payments would increase.
Similarly, if the Division(s)

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<PAGE>

achieved a net investment result smaller than the assumed investment rate, the
Annuity Units would decrease in value and the amount of the Annuity payments
would decrease.

ELECTION OF ANNUITY DATE AND FORM OF ANNUITY--The Annuity Date and the form
of Annuity payment are elected by the Contract Owner. Unless a different
Annuity Date is elected, Annuity payments will begin on the first day of the
month following the Annuitant's 85th birthday. Contracts issued under
Qualified Plans may require an earlier Annuity Date. To the extent not
prohibited by any Qualified Plan requirements, an optional Annuity Date may be
elected; such date may be the first day of any month prior to the normal
Annuity Date. The election must be made at least 30 days before the optional
Annuity Date elected.

ANNUITY OPTIONS--Subject to the provisions of the Internal Revenue Code
("Code") and the retirement plan under which a Contract is purchased, the
Contract Owner may elect any one of the Annuity Options listed below. If the
Annuitant does not elect otherwise, Annuity payments will be made under Option
3, a life Annuity with 10 years' payments certain. Changes in the optional
form of Annuity payment may be made at any time up to 30 days prior to the
date on which Annuity payments are to begin. All Options are available as
fixed or variable payment annuities. The Annuity payments described below are
determined on the basis of (i) the mortality table specified in the Contract,
(ii) the age and, where permitted, the sex of the Annuitant, (iii) the type of
Annuity payment option(s) selected, and (iv) the assumed investment rate.

OPTION 1--PAYMENTS FOR A GUARANTEED FIXED PERIOD: An Annuity payable
monthly for a specified period of time. The period must be at least five
(5) years. If this option is taken as a Variable Annuity, the Contract
Owner may at any time choose to receive the present value of the remaining
payments in a lump sum commuted at the assumed investment rate.

OPTION 2--LIFE ANNUITY: Payments will be made for the life of the
Annuitant. Payments will cease with the last payment due prior to the
Annuitant's death.

OPTION 3--LIFE ANNUITY WITH PAYMENTS GUARANTEED FOR 10 OR 20 YEARS: An
Annuity payable monthly during the lifetime of the Annuitant (no matter how
long he or she might live) with a guaranteed minimum number of monthly
payments. If the Annuitant dies before receiving the guaranteed number of
payments, the remaining payments for the guaranteed period chosen (10 or 20
years) will continue to the designated beneficiary.

OPTION 4--JOINT AND SURVIVOR ANNUITY: An Annuity will be paid during the
lifetimes of the Annuitant and the Annuitant's spouse. The amount of such
payments will not change by reason of the first death. Payments will end
with the last payment due prior to the second death.

FREQUENCY OF PAYMENT--Payments under all options will be made on a monthly
basis, unless a different arrangement has been requested by the Contract Owner
and agreed to by the Company. If at any time any payments to be made to any
Annuitant are less than $20 each, the Company shall have the right to decrease
the frequency of payments to such interval as will result in a payment of at
least $20.

ANNUITY UNIT VALUES--The value of an Annuity Unit of each Division was set
at $10 when the Division was established. The value may increase or decrease
from one Valuation Period to the next. For any Valuation Period, the value of
an Annuity Unit of a particular Division is the value of that Annuity Unit
during the last Valuation Period, multiplied by the net investment factor for
that Division for the current Valuation Period. The result is then multiplied
by a factor that offsets the effect of the assumed investment rate.

DISTRIBUTION OF CONTRACTS

Contracts are offered through licensed insurance agents of the Company (who
are also either broker-dealers or persons associated with broker-dealers),
either individually or through an insurance agency. Sales commissions will be
paid by the Company. The commissions paid by the Company will range from 0% to
6.2%.

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<PAGE>

PaineWebber Incorporated ("PWI"), located at 1285 Avenue of the Americas,
New York, New York 10019 serves as distributor of the Contracts pursuant to a
principal underwriting (distribution) agreement. PWI is registered as a
broker-dealer under the Securities Exchange Act of 1934, as amended, and is a
member of the National Association of Securities Dealers, Inc. PWI has entered
into a Distribution Agreement with the Company to accomplish the retail
distribution of Contracts.

The Distribution Agreement may be terminated by the Company on behalf of the
Separate Account at any time on 90 days' written notice without payment of any
penalty. The Distribution Agreement may be terminated at any time by PWI
without payment of any penalty on 30 days' written notice to the Separate
Account and the Company. The Distribution Agreement automatically terminates
in the event of its assignment. For the fiscal year ended December 31, 1995,
PWI waived compensation.

ADDITIONAL FEDERAL INCOME TAX INFORMATION

THE COMPANY AND THE SEPARATE ACCOUNT

Under current law, the Company is taxed as a life insurance company under
Subchapter L of the Code. It is intended that the operations of the Separate
Account form, and be taxed as, a part of the total operations of the Company.
The Contracts issued will meet the definition of a "variable contract" under
Section 817(d) of the Code. The Code provides that if the Separate Account
meets certain diversification requirements, set forth in Treasury Regulations
under Section 817(h) of the Code, the income from the assets of the Separate
Account used to fund the annuities will not be subject to current federal
income tax. (See "Diversification Requirements"). There is no short-term or
long-term capital gain or loss recognized with respect to the assets of the
Separate Account.

NON-QUALIFIED PLANS

ACCUMULATION PERIOD--The Contract may be issued to individuals in connection
with personal retirement plans which do not qualify for the tax benefits which
are available to Qualified Plans. A non-Qualified Plan may be established by
an individual seeking to accumulate funds for retirement or by an employer for
one or more employees. With certain exceptions a Contract held by a non-
natural person will not be treated as an Annuity contract. The tax
consequences of participation in a non-Qualified Plan will vary from plan to
plan. Income credited to a non-Qualified Contract is not includible in the
gross income of the Contract Owner. Amounts received before the Annuity Date
are includible as ordinary income to the extent Contract Value exceeds the
Contract Owner's Purchase Payments.

WITHDRAWALS--A partial or complete withdrawal of a non-Qualified Contract
before commencement of Annuity payments will be treated first as a withdrawal
of income earned on investments to the extent of such income, then as a tax-
free return of capital. Moreover, amounts received upon assignment or pledge
of the Contract will be treated as amounts withdrawn under the Contract and
therefore subject to income taxes. A withdrawal before the Contract Owner
attains age 59 1/2 will be subject to an additional income tax of 10% of the
income withdrawn. This penalty would not apply where the withdrawal is made on
account of the Contract Owner's death or disability or where substantially
equal Annuity payments are received over the life of the Contract Owner or the
lives of the Contract Owner and a designated beneficiary. After the Annuity
Date, the Annuitant is allowed to recover tax-free any portion of each Annuity
payment representing Purchase Payments.

QUALIFIED PLANS

TAX ADVANTAGES--Certain tax advantages are available under a Qualified Plan
(a retirement plan which satisfies the requirements of Sections 401(a),
403(b), 408(b) or 457 of the Code). The tax advantages available under a
Qualified Plan include: the deductibility of employer or Contract Owner
contributions; the inclusion of contributions and their earnings in the
participant's gross income only when received or made available to the
participant; and, within certain limits, the exclusion from the decedent's
gross estate and from the beneficiary's

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<PAGE>

gross income of distributions to the beneficiary of a deceased employee. A
general information outline with respect to each type is provided below. If
the contract is to be used to fund a Qualified Plan, competent tax advice
should be sought.

1. PLANS FOR CORPORATIONS AND SELF-EMPLOYED INDIVIDUALS: Under Section
401(a) of the Code, contributions may be made on behalf of the participants
up to the limits provided by Section 415 and the payments will be
deductible as provided by Section 404. Participants are also permitted to
make non-deductible voluntary contributions subject to certain non-
discrimination rules.

A plan established by an organization which primarily benefits "key
employees" (known as a "top-heavy" plan) will be subject to special rules
on: vesting, minimum contributions and benefits for non-key employees,
compensation which may be taken into account to determine contributions or
benefits for key employees, the aggregate limit on contributions and
benefits, and rollovers. A key employee is any employee who during the plan
year or the preceding four plan years was: an officer whose compensation
exceeded 1 1/2 times the dollar limit on contributions, one of the ten
employees owning the largest interests in the employer and whose
compensation exceeded the dollar limit on contributions, a 5% owner of the
employer, or a 1% owner of the employer whose compensation exceeded
$150,000.

The tax treatment of plans established by self-employed individuals
(known as "Keogh" or "H.R. 10" plans) is essentially the same as corporate
plans. Some special restrictions apply to self-employed individuals who are
"owner-employees." An owner-employee is a sole proprietor or a partner who
owns more than a 10% capital or profits interest in the partnership.

2. TAX-SHELTERED ANNUITIES: Contributions made by public school systems,
churches and certain tax-exempt organizations made to purchase contracts on
behalf of their employees are excludible from the employees' gross income,
within certain limits, if the requirements of Section 403(b) of the Code
are met.

3. DEFERRED COMPENSATION PLANS FOR STATE AND LOCAL GOVERNMENT EMPLOYEES:
Section 457 of the Code provides special tax treatment for certain deferred
compensation plans for employees of state and local governments, their
political subdivisions, agencies, instrumentalities and affiliates, and
certain tax-exempt rural electric cooperatives. Such plans permit the
employees to specify the form of investment for their deferred
compensation, which can include investment in the Contract. However, the
investments will be owned by, and subject to, the claims of the general
creditors of the employer.

4. INDIVIDUAL RETIREMENT ANNUITIES: Section 408(b) of the Code permits
individuals to establish an Individual Retirement Annuity ("IRA"). No more
than $2,000 or 100% of compensation may be contributed to an IRA. Under
Section 219 of the Code the entire amount is deductible if the individual
is not a participant in an employer's Qualified Plan. If the individual
participates in an employer's Qualified Plan, all, a portion, or none of
the contribution may be deductible, depending on adjusted gross income. An
IRA is subject to penalty and excise taxes on excess contributions and
insufficient distributions, as well as early distributions (see below).

DISTRIBUTIONS--A participant who has attained age 50 before January 1, 1986,
may elect favorable tax treatment for a lump-sum distribution from a Section
401(a) plan. This may include capital gains treatment on the pre-1974 portion
and 5-year or 10-year forward averaging. A distribution before age 59 1/2 from
a Qualified Plan (except a Section 457 plan) will be subject to a 10%
additional income tax on the amount of the distribution. The penalty does not
apply to a distribution: of an Annuity for life or life expectancy, on early
retirement under the plan at age 55, used to pay medical expenses, and after
death. Distributions from Tax-Sheltered Annuities are subject to special
restrictions imposed by Section 403(b)(11) of the Code. See "Withdrawals" in
the prospectus. A participant who receives an eligible rollover distribution
from a Qualified Plan can make a "tax-free rollover" of the distribution
within 60 days into another employer's Qualified Plan, in certain
circumstances, or into an IRA and continue to defer taxation of the amount
rolled over. Except for the recovery of nondeductible contributions, the
entire amount of Annuity payments will be included in the participant's gross
income. The participant is entitled to recover tax-free any portion of each
Annuity payment representing non-deductible contributions.

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<PAGE>

WITHHOLDING

With certain exceptions, withholding on Annuity payments and other
distributions is required. However, recipients of Annuity payments or other
distributions not eligible for rollover to a Qualified Plan or IRA are allowed
to make an election not to have federal income tax withheld. After such
election is made with respect to Annuity payments, a payee may revoke the
election at any time, and thereafter, commence withholding. In such a case,
the Company will notify the payee at least annually of his or her right to
change such election.

For Annuity payments, distributions from non-Qualified Plans, and
distributions from Qualified Plans not eligible for rollover treatment, the
withholding rate followed by the Company will be applied only against the
taxable portion of the Annuity payments or distribution. This rate will be
determined based upon the nature of the distribution(s). Federal income tax
will be withheld from Annuity payments pursuant to the recipient's withholding
certificate. If no withholding certificate is filed with the Company, federal
income tax will be withheld from Annuity payments on the basis that the payee
is married with three withholding exemptions. On non-periodic payments or
distributions, federal income tax will be withheld at a flat 10% rate.

IF A DISTRIBUTION FROM A QUALIFIED PLAN ELIGIBLE FOR ROLLOVER TREATMENT IS
NOT PAID DIRECTLY TO ANOTHER QUALIFIED PLAN OR IRA, FEDERAL INCOME TAX WILL BE
WITHHELD AT A FLAT 20% RATE. THE RECIPIENT MAY NOT ELECT TO WAIVE THIS
WITHHOLDING.

DIVERSIFICATION REQUIREMENTS

Non-Qualified variable contracts funded through segregated asset accounts,
such as the Separate Account, will not be treated as annuities under the Code
unless they are "adequately diversified." Whether the Separate Account is
adequately diversified is presently determined from the regulations issued by
the Treasury Department in September 1989. It is intended that the Fund and
the Separate Account will be operated in such a manner as to satisfy the
requirements of the temporary regulations, and any final regulations which
follow, so that the Contracts qualify as annuities under the Code.

OTHER INFORMATION

REPORTS TO CONTRACT OWNERS

The Company will maintain all records which relate to the Contract. At least
once a year, a report which will set forth information regarding the Contract
Value will be sent to the Contract Owners. The Contract Owner will also be
furnished notices, proxies and solicitation materials which relate to the
Fund.

SAFEKEEPING OF ASSETS

The Company maintains custody of the assets of the Separate Account. The
Fund shares owned by the Separate Account will be held in "book" form. That
is, actual certificates will not be issued by the Fund, rather, the record of
shares issued to the Separate Account will be recorded on the books of the
Fund by the Fund's transfer agent. The Company also maintains the records of
portfolio transactions of the Separate Account.

SERVICE AGREEMENT

American Benefit Life Insurance Company has contracted with American
Republic Insurance Company to assist in administrative services and
recordkeeping in connection with the Registrant until such time as American
Benefit Life Insurance Company is completely self-sufficient in all
administrative services and recordkeeping. These services are provided at
cost.

INDEPENDENT AUDITORS

Ernst & Young LLP, Des Moines, Iowa, serves as independent auditors for the
Separate Account and the Company and performs audit and accounting services
for the Separate Account and the Company.

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REGISTRATION STATEMENT

A registration statement has been filed with the Securities and Exchange
Commission under the Securities Act of 1933, with respect to the Contract. The
Prospectus and this Statement of Additional Information do not contain all
information set forth in the registration statement, its amendments and
exhibits, reference to which is made for further information concerning the
Separate Account, the Company and the Contract. Statements contained in this
Statement of Additional Information and the related Prospectus as to the
content of the Contract and other legal instruments are summaries. For a
complete statement of the terms thereof, reference is made to such instruments
as filed.

SEPARATE ACCOUNT PERFORMANCE

From time to time the Separate Account may advertise the individual Division
"yields," "effective yields," or "average total return." These figures are
based on historical earnings and are not intended to indicate future
performance.

(a) YIELD--The yield quotation is based on a seven-day period. If the seven-
day period falls on a non-valuation day, a calculation will be made as if the
seventh day were a valuation day for this purpose only. The yield is computed
by determining the net change, exclusive of capital changes, in the value of a
hypothetical pre-existing account having a balance of one accumulation unit of
the Division at the beginning of the period, subtracting a hypothetical charge
reflecting deductions from contract owner accounts, and dividing the
difference by the value of the Division at the beginning of the base period to
obtain the base period return, and then multiplying the base period return by
365/7 with the resulting yield figure carried to at least the nearest
hundredth of one percent. Recurring charges are prorated among the Divisions
by multiplying the flat fee by a fraction, the numerator of which is the
average number of contract owner accounts that have money allocated to the
Division and the denominator of which is the sum of the average number of
contract owner accounts that have money allocated to each of the Divisions. A
Division's prorated flat fee is divided by the average number of accumulation
units per contract owner in that Division in order to equate the flat fee to a
one-unit basis.

(b) EFFECTIVE YIELD--The effective yield quotation is based on a seven-day
period. If the seven-day period falls on a non-valuation day, a calculation
will be made as if the seventh day were a valuation day for this purpose only.
The effective yield is computed by determining the net change, exclusive of
capital changes, in the value of a hypothetical pre-existing account having a
balance of one accumulation unit of the Division at the beginning of the
period, subtracting a hypothetical charge reflecting deductions from contract
owner accounts, and dividing the difference by the value of the Division at
the beginning of the base period to obtain the base period return, and then
compounding the base period return by adding 1, raising the sum to a power
equal to 365 divided by 7, and subtracting 1 from the result.

Recurring charges are prorated among the Divisions by multiplying the flat
fee by a fraction, the numerator of which is the average number of contract
owner accounts that have money allocated to the Division and the denominator
of which is the sum of the average number of contract owner accounts that have
money allocated to each of the Divisions. A Division's prorated flat fee is
divided by the average number of accumulation units per contract owner in that
Division in order to equate the flat fee to a one-unit basis.

(c) TOTAL RETURN--In general, the total return is computed by finding the
average annual compounded rates of return over the 1-, 5-, and 10-year
periods, or from the inception date if the Division has been in effect less
than the stated periods, that would equate the initial amount invested to the
ending redeemable value. The total return quotation computed below is based on
the following periods:

1-year: December 31, 1994 to December 31, 1995.
5-year: December 31, 1990 to December 31, 1995 for all Divisions except
Growth and Income.
10-year: Inception date to December 31, 1995 for all Divisions.

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Recurring charges are prorated among the Divisions by multiplying the flat
fee by a fraction, the numerator of which is the average number of contract
owner accounts that have money allocated to the Division and the denominator
of which is the sum of the average number of contract owner accounts that have
money allocated to each of the Divisions. A Division's prorated flat fee is
divided by the average account value per $1,000 per contract owner in that
Division in order to equate the flat fee to a $1,000 account size basis.

(d) TOTAL RETURN NOT INCLUDING EARLY WITHDRAWAL CHARGES--In general, the
total return not including early withdrawal charges is computed by finding the
average annual compounded rates of return over the 1-, 5-, and 10-year
periods, or from the inception date if the Division has been in effect less
than the stated periods, that would equate the initial amount invested to an
ending value. The total return quotation computed below is based on the
following periods:

Recurring charges are prorated among the Divisions by multiplying the flat
fee by a fraction, the numerator of which is the average number of contract
owner accounts that have money allocated to the Division and the denominator
of which is the sum of the average number of contract owner accounts that have
money allocated to each of the Divisions. A Division's prorated flat fee is
divided by the average account value per $1,000 per contract owner in that
Division in order to equate the flat fee to a $1,000 account size basis.

12
<PAGE>

PERFORMANCE

YIELD AND EFFECTIVE YIELD
SEVEN-DAY PERIOD ENDED DECEMBER 31, 1995

<TABLE>
<CAPTION>
EFFECTIVE
DIVISION (INCEPTION DATE) YIELD YIELD
------------------------- ----- ---------
<S> <C> <C>
Money Market (5/1/88)...................................... 3.49% 3.55%
</TABLE>

AVERAGE ANNUAL TOTAL RETURN
PERIOD ENDED DECEMBER 31, 1995
(Based on a $1,000 investment)

<TABLE>
<CAPTION>
SINCE
DIVISION (INCEPTION DATE) 1 YEAR 5 YEARS INCEPTION
------------------------- ------ ------- ---------
<S> <C> <C> <C>
Global Growth (5/1/88)
With Early Withdrawal Charges.................. -9.84% .48% 5.19%
Without Early Withdrawal Charges............... -4.84% 1.44% 5.19%
Growth (5/1/88)
With Early Withdrawal Charges.................. 25.65% 13.81% 13.79%
Without Early Withdrawal Charges............... 30.65% 14.40% 13.79%
Growth and Income (12/30/91)
With Early Withdrawal Charges.................. 23.67% NA 2.87%
Without Early Withdrawal Charges............... 28.67% NA 4.00%
Balanced (formerly named Asset Allocation)
(5/1/88)
With Early Withdrawal Charges.................. 16.64% 7.73% 7.22%
Without Early Withdrawal Charges............... 21.64% 8.46% 7.22%
Global Income (5/1/88)
With Early Withdrawal Charges.................. 6.87% 4.62% 6.57%
Without Early Withdrawal Charges............... 11.87% 5.44% 6.57%
Strategic Fixed Income (5/1/89)
With Early Withdrawal Charges.................. 11.87% 6.73% 6.81%
Without Early Withdrawal Charges............... 16.87% 7.49% 6.81%
</TABLE>

FINANCIAL STATEMENTS

The financial statements of the Company included in the Statement of
Additional Information should be distinguished from the financial statements
of the Separate Account and should be considered only as bearing on the
ability of American Benefit Life Insurance Company to meet its obligations
under the Contracts. They should not be considered as bearing on the
investment performance of the assets held in the Separate Account.

The name of the Asset Allocation Division was changed to "Balanced Division"
on January 26, 1996. Since the change became effective after December 31,
1995, references in the financial statements of the American Benefit Variable
Annuity Account are to the name of the Division on December 31, 1995.

13
<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]

14
<PAGE>

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
American Benefit Life Insurance Company

We have audited the accompanying statement of net assets of American Benefit
Variable Annuity Account [comprising, respectively, the Money Market, Growth,
Growth and Income (formerly Dividend Growth), Global Growth, Global Income,
Strategic Fixed Income (formerly Government), and Asset Allocation Divisions]
as of December 31, 1995, and the related statements of operations for the year
then ended and changes in net assets for each of the two years in the period
then ended. These financial statements are the responsibility of the Account's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1995
by correspondence with the transfer agent. An audit also includes assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of each of the respective
divisions constituting the American Benefit Variable Annuity Account at
December 31, 1995, and the results of their operations for the year then ended
and the changes in their net assets for each of the two years in the period
then ended in conformity with generally accepted accounting principles.

/s/ Ernst & Young LLP

Des Moines, Iowa
January 26, 1996

15
<PAGE>

AMERICAN BENEFIT VARIABLE ANNUITY ACCOUNT

STATEMENT OF NET ASSETS

DECEMBER 31, 1995

<TABLE>
<CAPTION>
MONEY
MARKET
COMBINED DIVISION
---------- --------
<S> <C> <C>
ASSETS
Investments at net asset value:
PaineWebber Series Trust Money Market Portfolio, 547,326
shares at $1.00 per share (cost--$547,326).............. $ 547,326 $547,326
PaineWebber Series Trust Growth Portfolio, 55,895 shares
at $17.57 per share (cost--$788,438).................... 982,084 --
PaineWebber Series Trust Growth and Income Portfolio,
30,003 shares at $11.83 per share (cost--$295,053)...... 354,939 --
PaineWebber Series Trust Global Growth Portfolio, 40,009
shares at $12.00 per share (cost--$495,619)............. 480,103 --
PaineWebber Series Trust Global Income Portfolio, 102,012
shares at $11.20 per share (cost--$1,137,987)........... 1,142,534 --
PaineWebber Series Trust Strategic Fixed Income
Portfolio, 59,094 shares at $10.61 per share (cost--
$685,858)............................................... 626,984 --
PaineWebber Series Trust Asset Allocation Portfolio,
57,547 shares at $10.70 per share (cost--$633,501)...... 615,748 --
---------- --------
Total investments (cost--$4,583,782)....................... 4,749,718 547,326
Accrued investment income................................ 362,367 --
---------- --------
Total net assets....................................... $5,112,085 $547,326
========== ========

Net assets represented by:
Currently payable annuity contracts:
Strategic Fixed Income Division................... $ 32,211
<CAPTION>
UNITS VALUE
------ ------
<S> <C> <C> <C>
Contracts in accumulation period:
Money Market Division............................... 42,317 $12.93 547,326
Growth Division..................................... 39,822 26.98 1,074,444
Growth and Income Division.......................... 30,639 11.71 358,727
Global Growth Division.............................. 32,466 14.79 480,103
Global Income Division.............................. 76,114 16.42 1,249,876
Strategic Fixed Income Division..................... 44,575 15.53 692,234
Asset Allocation Division........................... 39,662 17.07 677,164
----------
5,079,874
----------
$5,112,085
==========
</TABLE>

See accompanying notes.

16
<PAGE>

<TABLE>
<CAPTION>
GROWTH AND GLOBAL GLOBAL STRATEGIC ASSET
GROWTH INCOME GROWTH INCOME FIXED INCOME ALLOCATION
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
-------- ---------- -------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C>
$ -- $ -- $ -- $ -- $ -- $ --
982,084 -- -- -- -- --
-- 354,939 -- -- -- --
-- -- 480,103 -- -- --
-- -- -- 1,142,534 -- --
-- -- -- -- 626,984 --
-- -- -- -- -- 615,748
- ---------- -------- -------- ---------- -------- --------
982,084 354,939 480,103 1,142,534 626,984 615,748
92,360 3,788 -- 107,342 97,461 61,416
- ---------- -------- -------- ---------- -------- --------
$1,074,444 $358,727 $480,103 $1,249,876 $724,445 $677,164
========== ======== ======== ========== ======== ========
</TABLE>

See accompanying notes.

17
<PAGE>

AMERICAN BENEFIT VARIABLE ANNUITY ACCOUNT

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 1995

<TABLE>
<CAPTION>
MONEY
MARKET GROWTH
COMBINED DIVISION DIVISION
-------- -------- --------
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends........................................ $254,058 $ 45,120 $ 4,579
Capital gains distributions...................... 178,907 -- 91,507
Expenses (Note 2):
Administrative charges........................... (32,209) (900) (2,427)
Mortality, distribution, and expense risk........ (97,421) (12,110) (15,614)
-------- -------- --------
Net investment income (loss)....................... 303,335 32,110 78,045
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(NOTE 4)
Net realized gain (loss) on investments............ 195,599 -- 74,946
Change in net unrealized appreciation/depreciation
of investments.................................... 389,614 -- 146,529
-------- -------- --------
Net increase (decrease) in net assets resulting
from operations................................... $888,548 $ 32,110 $299,520
======== ======== ========
</TABLE>

See accompanying notes.

18
<PAGE>

<TABLE>
<CAPTION>
GROWTH AND GLOBAL GLOBAL STRATEGIC FIXED ASSET
INCOME GROWTH INCOME INCOME ALLOCATION
DIVISION DIVISION DIVISION DIVISION DIVISION
- ---------- -------- -------- --------------- ----------
<S> <C> <C> <C> <C>
$ 3,028 $ -- $129,094 $ 52,169 $ 20,068
760 -- -- 45,292 41,348
(12,051) (5,568) (8,764) (1,252) (1,247)
(6,642) (10,193) (33,316) (10,857) (8,689)
-------- -------- -------- -------- --------
(14,905) (15,761) 87,014 85,352 51,480
34,665 (14,905) 93,673 (1,466) 8,686
93,976 (18,247) 72,238 39,426 55,692
-------- -------- -------- -------- --------
$113,736 $(48,913) $252,925 $123,312 $115,858
======== ======== ======== ======== ========
</TABLE>

See accompanying notes.

19
<PAGE>

AMERICAN BENEFIT VARIABLE ANNUITY ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 1995 AND 1994

<TABLE>
<CAPTION>
MONEY
MARKET GROWTH
COMBINED DIVISION DIVISION
----------- --------- ----------
<S> <C> <C> <C>
NET ASSETS AT JANUARY 1, 1994.............. $ 8,716,963 $ 669,085 $1,512,363
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)............. 204,407 5,715 69,837
Net realized gain (loss) on investments.. 80,560 -- 74,503
Change in net unrealized
appreciation/depreciation of
investments............................. (1,019,602) -- (323,648)
----------- --------- ----------
Net increase (decrease) in net assets re-
sulting from operations................... (734,635) 5,715 (179,308)
Changes from principal transactions:
Purchase payments........................ 93,853 2,492 29,035
Contract distributions and terminations.. (1,039,009) (231,039) (219,362)
Transfer payments from (to) other divi-
sions................................... 386,774 473,502 (112,961)
Annuity payments......................... (4,419) -- --
Actuarial adjustment in reserves for
currently payable annuity contracts..... 2,648 -- --
----------- --------- ----------
Increase (decrease) in net assets derived
from principal transactions............... (560,153) 244,955 (303,288)
----------- --------- ----------
Total increase (decrease).................. (1,294,788) 250,670 (482,596)
----------- --------- ----------
Net assets at December 31, 1994............ 7,422,175 919,755 1,029,767
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)............. 303,335 32,110 78,045
Net realized gain (loss) on investments.. 195,599 -- 74,946
Change in net unrealized
appreciation/depreciation of
investments............................. 389,614 -- 146,529
----------- --------- ----------
Net increase (decrease) in net assets re-
sulting from operations................... 888,548 32,110 299,520
Changes from principal transactions:
Purchase payments........................ 18,920 -- 3
Contract distributions and terminations.. (3,276,011) (383,692) (323,389)
Transfer payments from (to) other divi-
sions................................... 62,885 (20,847) 68,543
Annuity payments......................... (4,552) -- --
Actuarial adjustment in reserves for
currently payable annuity contracts..... 122 -- --
----------- --------- ----------
Increase (decrease) in net assets derived
from principal transactions............... (3,198,636) (404,539) (254,843)
----------- --------- ----------
Total increase (decrease).................. (2,310,088) (372,429) 44,677
----------- --------- ----------
Net assets at December 31, 1995............ $ 5,112,085 $ 547,326 $1,074,444
=========== ========= ==========
</TABLE>

See accompanying notes.

20
<PAGE>

<TABLE>
<CAPTION>
GROWTH AND GLOBAL GLOBAL STRATEGIC FIXED ASSET
INCOME GROWTH INCOME INCOME ALLOCATION
DIVISION DIVISION DIVISION DIVISION DIVISION
---------- ---------- ----------- --------------- ----------
<S> <C> <C> <C> <C>
$ 617,272 $1,096,059 $ 3,227,460 $ 905,283 $ 689,441
(5,642) 34,942 622 50,731 48,202
(2,308) 20,639 (3,326) (7,271) (1,677)
(40,132) (196,171) (223,215) (108,211) (128,225)
--------- ---------- ----------- --------- ---------
(48,082) (140,590) (225,919) (64,751) (81,700)
-- 27,995 17,501 12,830 4,000
(41,306) (88,574) (311,997) (31,262) (115,469)
(11,605) 9,448 23,353 (29,901) 34,938
-- -- -- (4,419) --
-- -- -- 2,648 --
--------- ---------- ----------- --------- ---------
(52,911) (51,131) (271,143) (50,104) (76,531)
--------- ---------- ----------- --------- ---------
(100,993) (191,721) (497,062) (114,855) (158,231)
--------- ---------- ----------- --------- ---------
516,279 904,338 2,730,398 790,428 531,210
(14,905) (15,761) 87,014 85,352 51,480
34,665 (14,905) 93,673 (1,466) 8,686
93,976 (18,247) 72,238 39,426 55,692
--------- ---------- ----------- --------- ---------
113,736 (48,913) 252,925 123,312 115,858
271 558 (109) 13,968 4,237
(286,755) (365,243) (1,619,918) (103,851) (193,173)
15,196 (10,637) (113,420) (94,982) 219,032
-- -- -- (4,552) --
-- -- -- 122 --
--------- ---------- ----------- --------- ---------
(271,288) (375,322) (1,733,447) (189,295) 30,096
--------- ---------- ----------- --------- ---------
(157,552) (424,235) (1,480,522) (65,983) 145,954
--------- ---------- ----------- --------- ---------
$ 358,727 $ 480,103 $ 1,249,876 $ 724,445 $ 677,164
========= ========== =========== ========= =========
</TABLE>

See accompanying notes.

21
<PAGE>

AMERICAN BENEFIT VARIABLE ANNUITY ACCOUNT

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1995

1. INVESTMENT AND ACCOUNTING POLICIES

American Benefit Variable Annuity Account was organized by American Benefit
Life Insurance Company (the Company) (a wholly-owned subsidiary of American
Republic Insurance Company) in accordance with the provisions of the New York
Insurance laws and is a part of the total operations of the Company. The
assets and liabilities of the American Benefit Variable Annuity Account are
clearly identified and distinguished from the other assets and liabilities of
the Company. The American Benefit Variable Annuity Account invests solely in
specified portfolios of PaineWebber Series Trust, an open-end management
investment company under the Investment Company Act of 1940, as directed by
eligible contract owners. All series of shares are diversified except Global
Income Portfolio. Investments are stated at the closing net asset values per
share on December 31, 1995.

Effective August 14, 1995, the name of the Dividend Growth Division changed
to Growth and Income Division. Effective September 21, 1995, the name of the
Government Division changed to Strategic Fixed Income Division.

The average cost method is used to determine realized gains and losses.
Dividends are taken into income on an accrual basis as of the ex-dividend
date.

Currently payable annuity contract reserves are computed according to the
Individual Annuity Valuation 1983 Table using an assumed interest rate of
4.0%. If the amount paid to the contractholder is less than originally
estimated, charges paid for mortality and expense risks are reimbursed to the
Company. If additional amounts are required, the Company reimburses the
American Benefit Variable Annuity Account.

2. EXPENSES

The Company is compensated for certain expenses. Mortality, distribution,
and expense risks assumed by the Company are compensated for by a charge
equivalent to an annual rate of 1.40% of the total net assets of each
division. These charges amounted to $97,421 in 1995.

An annual contract administration charge of $30 is deducted on the last
valuation date of each calendar year, upon full withdrawal of a contract's
value or upon commencement of annuity payments if such withdrawal is made or
annuity payments commence prior to the last valuation date of the year. A
transfer charge of $10 will be imposed on each transfer between divisions
(portfolios) of the account in excess of six in any one calendar year.
However, the Company has waived this charge until further notice. An early
withdrawal charge may be imposed in the event of withdrawal of any portion of
the contract value or upon annuitization. The early withdrawal charge is 5% of
the amount withdrawn for purchase payments made within six years prior to the
date of withdrawal. Purchase payments made after May 1, 1989 will have an
early withdrawal charge period of five years. A withdrawal transaction charge
of $10 will be imposed on each withdrawal in excess of three per calendar
year. Total administrative charges amounted to $32,209 in 1995.

3. FEDERAL INCOME TAXES

Operations of the American Benefit Variable Annuity Account are part of the
operations of the Company which is taxed as a life insurance company under the
Internal Revenue Code. Under current law, no federal income taxes are payable
with respect to operations of American Benefit Variable Annuity Account.

22
<PAGE>

AMERICAN BENEFIT VARIABLE ANNUITY ACCOUNT

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

4. PURCHASES AND SALES OF INVESTMENT SECURITIES

The aggregate cost of purchases and proceeds from sales of investments were
as follows:

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
-------------------- ---------------------
PURCHASES SALES PURCHASES SALES
--------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
PORTFOLIO
Money Market......................... $117,075 $ 485,616 $ 657,795 $ 409,911
Growth............................... 180,809 376,317 168,815 420,943
Growth and Income.................... 27,936 312,351 10,821 65,537
Global Growth........................ 50,231 391,184 130,275 156,879
Global Income........................ 68,097 1,775,555 414,950 410,021
Strategic Fixed Income............... 86,970 221,624 177,221 173,967
Asset Allocation..................... 292,353 211,298 133,063 146,233
-------- ---------- ---------- ----------
$823,471 $3,773,945 $1,692,940 $1,783,491
======== ========== ========== ==========
</TABLE>

5. SUMMARY OF CHANGES FROM UNIT TRANSACTIONS

Transactions in units were as follows:

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
------------------ ------------------
PURCHASED REDEEMED PURCHASED REDEEMED
--------- -------- --------- --------
<S> <C> <C> <C> <C>
DIVISION
Money Market.............................. 5,405 36,956 46,613 27,568
Growth.................................... 4,542 14,600 6,006 19,918
Growth and Income......................... 2,094 28,216 -- 6,034
Global Growth............................. 9 25,779 7,057 10,041
Global Income............................. 8 110,159 3,696 22,809
Strategic Fixed Income.................... 1,354 13,925 7,881 11,713
Asset Allocation.......................... 14,032 12,217 3,584 9,578
------ ------- ------ -------
27,444 241,852 74,837 107,661
====== ======= ====== =======
</TABLE>

6. NET ASSETS

Net assets at December 31, 1995 consisted of the following:

<TABLE>
<CAPTION>
MONEY GROWTH
MARKET GROWTH AND INCOME
COMBINED DIVISION DIVISION DIVISION
---------- ---------- ------------ ----------
<S> <C> <C> <C> <C>
Unit transactions............... $4,204,550 $ 525,973 $ 780,443 $306,316
Accumulated net investment in-
come (loss).................... 741,599 21,353 100,355 (7,475)
Net unrealized appreciation (de-
preciation) of investments..... 165,936 -- 193,646 59,886
---------- ---------- ---------- --------
$5,112,085 $ 547,326 $1,074,444 $358,727
========== ========== ========== ========
<CAPTION>
GLOBAL GLOBAL STRATEGIC ASSET
GROWTH INCOME FIXED INCOME ALLOCATION
DIVISION DIVISION DIVISION DIVISION
---------- ---------- ------------ ----------
<S> <C> <C> <C> <C>
Unit transactions............... $ 465,981 $1,021,125 $ 588,633 $516,079
Accumulated net investment in-
come........................... 29,638 224,204 194,686 178,838
Net unrealized appreciation (de-
preciation) of investments..... (15,516) 4,547 (58,874) (17,753)
---------- ---------- ---------- --------
$ 480,103 $1,249,876 $ 724,445 $677,164
========== ========== ========== ========
</TABLE>

23
<PAGE>

REPORT OF INDEPENDENT AUDITORS

THE BOARD OF DIRECTORS AND STOCKHOLDER
AMERICAN BENEFIT LIFE INSURANCE COMPANY

We have audited the accompanying balance sheets of American Benefit Life
Insurance Company (a wholly-owned subsidiary of American Republic Insurance
Company--a mutual life insurance company) as of December 31, 1995 and 1994,
and the related statements of operations, changes in capital and surplus and
cash flows for each of the three years in the period ended December 31, 1995.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of American Benefit Life
Insurance Company at December 31, 1995 and 1994, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles
and with accounting practices prescribed or permitted by the Insurance
Department of the State of New York.

/s/ ERNST & YOUNG LLP

Des Moines, Iowa
March 15, 1996

24
<PAGE>

AMERICAN BENEFIT LIFE INSURANCE COMPANY

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31
-----------------------
1995 1994
----------- -----------
<S> <C> <C>
ADMITTED ASSETS
Bonds--at amortized cost (Note 3)...................... $ 8,017,684 $ 6,916,695
Cash and cash equivalents:
Short-term investments (Note 3)...................... 410,984 245,000
Cash................................................. 27,513 80,194
----------- -----------
438,497 325,194
----------- -----------
Total cash and investments............................. 8,456,181 7,241,889
Investment income due and accrued...................... 146,139 150,139
Receivable from securities sold........................ 40,104 2,019,988
Other admitted assets.................................. 10,578 14,889
Separate account assets (Note 7)....................... 5,112,085 7,422,267
----------- -----------
Total admitted assets.................................. $13,765,087 $16,849,172
=========== ===========
LIABILITIES AND CAPITAL AND SURPLUS
Liabilities:
Policy reserves:
Annuity (Note 5)................................... $ 122,349 $ 209,574
Accident and health (Note 6)....................... 75,600 120,149
----------- -----------
197,949 329,723
Policy and contract claims........................... 45,600 51,800
Due to parent under tax allocation agreement (Note
4).................................................. 132,000 61,000
Asset valuation reserve.............................. 57,545 61,462
Interest maintenance reserve......................... 24,557 29,103
Payable for securities purchased..................... -- 995,930
Other liabilities.................................... 26,220 36,507
Separate account liabilities (Notes 5 and 7)......... 5,087,694 7,328,814
----------- -----------
Total liabilities...................................... 5,571,565 8,894,339
Lease commitment (Note 10)
Capital and surplus:
Common Stock, par value $2,000 per share--1,000
shares authorized, issued and outstanding........... 2,000,000 2,000,000
Additional paid-in capital........................... 5,000,000 5,000,000
Separate account contingency reserve................. 127,802 185,557
Unassigned surplus................................... 1,065,720 769,276
----------- -----------
Total capital and surplus.............................. 8,193,522 7,954,833
----------- -----------
Total liabilities and capital and surplus.............. $13,765,087 $16,849,172
=========== ===========
</TABLE>

See accompanying notes.

25
<PAGE>

AMERICAN BENEFIT LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------
1995 1994 1993
----------- --------- ----------
<S> <C> <C> <C>
Premiums and other considerations:
Annuity deposits......................... $ 51,449 $ 96,777 $ 456,703
Accident and health...................... 18,200 56,467 62,645
----------- --------- ----------
69,649 153,244 519,348
Net investment income (Note 3)............. 570,073 512,400 536,549
Miscellaneous income....................... 134,395 160,693 133,661
----------- --------- ----------
774,117 826,337 1,189,558
Benefits and expenses:
Benefits paid or provided for:
Surrender benefits..................... 3,285,960 1,095,478 382,483
Annuity and other benefits............. 58,768 25,620 134,146
Accident and health benefits........... 37,326 132,069 102,023
Decrease in policy reserves............ (131,774) (406,437) (168,142)
----------- --------- ----------
3,250,280 846,730 450,510
Insurance expenses:
Commissions.............................. 6,175 11,116 26,033
General insurance expenses............... 300,049 298,392 302,755
Insurance taxes, licenses and fees....... 7,039 27,094 16,478
Net transfers to (from) separate account
(Note 7)................................ (3,230,846) (589,036) 164,226
----------- --------- ----------
(2,917,583) (252,434) 509,492
----------- --------- ----------
332,697 594,296 960,002
----------- --------- ----------
Gain from operations before federal income
taxes and net realized capital gains...... 441,420 232,041 229,556
Federal income taxes (Note 4).............. 130,420 38,515 65,000
----------- --------- ----------
Net gain from operations before net
realized capital gains.................... 311,000 193,526 164,556
Net realized capital gains, net of federal
income taxes (1995--$1,580; 1994--$7,435;
1993--$8,135) and amounts transferred to
interest maintenance reserve (1995--
$2,934; 1994--$13,807; 1993--$15,107)
(Note 3).................................. -- -- --
----------- --------- ----------
Net income................................. $ 311,000 $ 193,526 $ 164,556
=========== ========= ==========
</TABLE>

See accompanying notes.

26
<PAGE>

AMERICAN BENEFIT LIFE INSURANCE COMPANY

STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS

<TABLE>
<CAPTION>
SEPARATE
ADDITIONAL ACCOUNT
COMMON PAID-IN CONTINGENCY UNASSIGNED
STOCK CAPITAL RESERVE SURPLUS TOTAL
---------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Balance at January 1,
1993................... $2,000,000 $5,000,000 $187,394 $ 513,159 $7,700,553
Net income............ -- -- -- 164,556 164,556
Decrease in asset
valuation reserve.... -- -- -- 65 65
Decrease in
nonadmitted assets... -- -- -- 2,037 2,037
Decrease in surplus of
separate account..... -- -- -- (56,329) (56,329)
Transfer of unassigned
surplus to
contingency reserve.. -- -- 30,698 (30,698) --
---------- ---------- -------- ---------- ----------
Balance at December 31,
1993................... 2,000,000 5,000,000 218,092 592,790 7,810,882
Net income............ -- -- -- 193,526 193,526
Decrease in asset
valuation reserve.... -- -- -- 5,443 5,443
Decrease in
nonadmitted assets... -- -- -- 601 601
Decrease in surplus of
separate account..... -- -- -- (55,619) (55,619)
Transfer of
contingency reserve
back to unassigned
surplus.............. -- -- (32,535) 32,535 --
---------- ---------- -------- ---------- ----------
Balance at December 31,
1994................... 2,000,000 5,000,000 185,557 769,276 7,954,833
Net income............ -- -- -- 311,000 311,000
Decrease in asset
valuation reserve.... -- -- -- 3,917 3,917
Decrease in
nonadmitted assets... -- -- -- 356 356
Decrease in surplus of
separate account..... -- -- -- (69,062) (69,062)
Transfer of
contingency reserve
back to unassigned
surplus.............. -- -- (57,755) 57,755 --
Other................. -- -- -- (7,522) (7,522)
---------- ---------- -------- ---------- ----------
Balance at December 31,
1995................... $2,000,000 $5,000,000 $127,802 $1,065,720 $8,193,522
========== ========== ======== ========== ==========
</TABLE>

See accompanying notes.

27
<PAGE>

AMERICAN BENEFIT LIFE INSURANCE COMPANY

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Premiums and other considerations....... $ 69,504 $ 153,244 $ 519,348
Investment income, less expenses........ 599,720 559,484 574,308
Miscellaneous income.................... 126,915 155,402 131,743
Accident and health claims.............. (43,526) (88,639) (102,023)
Annuity surrenders...................... (3,285,960) (1,095,478) (382,483)
Annuity and other benefits paid......... (58,768) (25,620) (134,146)
Insurance expenses...................... (326,057) (322,678) (349,530)
Federal income taxes paid............... (65,501) (64,818) (80,213)
Net transfer (to) from separate account. 3,230,846 589,036 (164,226)
----------- ----------- -----------
Net cash provided by (used in) operating
activities (Note 9).................... 247,173 (140,067) 12,778
INVESTING ACTIVITIES
Proceeds from investments sold, matured
or repaid:
Bonds................................. 1,692,370 1,811,804 1,850,314
Common stock.......................... -- 812,000 2,680,938
Cost of investments acquired:
Bonds................................. (1,826,241) (2,097,745) (1,910,770)
Common stock.......................... -- (802,000) (2,690,938)
Other................................... 1 (26,367) 5,620
----------- ----------- -----------
Net cash used in investing activities... (133,870) (302,308) (64,836)
----------- ----------- -----------
Increase (decrease) in cash and cash
equivalents............................ 113,303 (442,375) (52,058)
Cash and cash equivalents at beginning
of year................................ 325,194 767,569 819,627
----------- ----------- -----------
Cash and cash equivalents at end of
year................................... $ 438,497 $ 325,194 $ 767,569
=========== =========== ===========
</TABLE>

See accompanying notes.

28
<PAGE>

AMERICAN BENEFIT LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1995

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

American Benefit Life Insurance Company (the Company) is wholly owned by
American Republic Insurance Company (American Republic), a mutual life
insurance company. The Company offers flexible premium annuities and long-term
care products. The Company is licensed in the State of New York.

BASIS OF PRESENTATION

The financial statements have been prepared in conformity with accounting
practices prescribed or permitted by the Insurance Department of the State of
New York. Such statutory accounting practices are currently regarded as
generally accepted accounting principles (GAAP) for mutual life insurance
companies and their stock life insurance subsidiaries.

Beginning in 1996, however, under the requirements of Financial Accounting
Standards Board (FASB) Interpretation No. 40, Applicability of Generally
Accepted Accounting Principles to Mutual Life Insurance and Other Enterprises,
as amended, financial statements prepared on the basis of statutory accounting
practices will no longer be described as being prepared "in conformity with
GAAP". The Accounting Standards Executive Committee of the American Institute
of Certified Public Accountants and the FASB issued authoritative accounting
and reporting pronouncements in January 1995, effective for calendar year
1996, addressing how mutual life insurance companies, and their stock life
subsidiaries, should account for certain insurance activities. Applying the
provisions of these authoritative accounting and reporting pronouncements may
result in surplus and net income that differ from the amounts reported under
existing statutory accounting practices. The Company has not yet determined
the impact of these pronouncements on its financial statements. The Company
has also not yet determined whether for general purposes it will continue to
issue statutory-basis financial statements or statements adopting all
applicable authoritative GAAP pronouncements. If the Company decides that
their financial statements will be prepared in accordance with GAAP rather
than statutory accounting practices, the financial statements included herein
would have to be restated to reflect all applicable authoritative GAAP
pronouncements. These statutory-basis financial statements, however, will
continue to be required by insurance regulatory authorities.

The National Association of Insurance Commissioners (NAIC) currently is in
the process of recodifying statutory accounting practices, the result of which
is expected to constitute the only source of "prescribed" statutory accounting
practices. Accordingly, that project, which is not expected to be completed
before 1997, will likely change, to some extent, prescribed statutory
accounting practices and may result in changes to the accounting practices
that the Company uses to prepare its financial statements.

USE OF ESTIMATES

The preparation of financial statements of insurance companies requires
management to make estimates and assumptions that affect amounts reported in
the financial statements and accompanying notes. Such estimates and
assumptions could change in the future as more information becomes known,
which could impact the amounts reported and disclosed herein.

INVESTMENTS

Investments in bonds and short-term investments are stated at cost adjusted
for amortization of premiums or accrual of discounts. The discounts or
premiums on bonds are amortized using the scientific (interest) method, which
results in a constant yield over the investments' expected lives. Common stock
is carried at market value. Other admitted assets are valued as required or
permitted by the Insurance Department of the State of New York.

29
<PAGE>

AMERICAN BENEFIT LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Realized capital gains and losses on investments are determined on the basis
of specific identification and are recorded in the statements of operations
net of related federal income taxes and amounts transferred to the interest
maintenance reserve. Unrealized capital gains and losses on investments are
taken directly to surplus. The Asset Valuation Reserve (AVR) is established by
the Company to provide for anticipated losses in the event of default by
issuers of certain invested assets. These amounts are determined using a
formula prescribed by the NAIC and are reported as a liability. The formula
for the AVR provides for a corresponding adjustment for realized gains and
losses, net of amounts attributed to changes in the general level of interest
rates. Under a formula prescribed by the NAIC, the Company defers, in the
Interest Maintenance Reserve (IMR), the portion of realized gains and losses
on sales of fixed income investments, principally bonds and mortgage loans,
attributable to changes in the general level of interest rates and amortizes
those deferrals over the remaining period to maturity of the security.

CASH AND CASH EQUIVALENTS

For purposes of the statement of cash flows, the Company considers all
highly liquid investments with a maturity of one year or less when purchased
to be cash equivalents.

POLICY RESERVES

The annuity policy reserves are established and maintained using assumed
interest rates and valuation methods that will provide, in the aggregate,
reserves that are greater than the minimum valuation required by law or
guaranteed policy cash values.

The accident and health policy reserves represent unearned premiums on
accident and health policies and an estimate of unpaid claims. Policy and
contract claims are determined using individual claim evaluations and
statistical analyses. Policy and contract claims represent estimates of the
ultimate net costs of all losses, reported and unreported, which remain unpaid
at December 31 of each year. These estimates are necessarily subject to the
impact of future changes in claim severity, frequency and other factors. In
spite of the variability inherent in such situations, management believes that
the unpaid claim amounts are adequate. The estimates are continuously reviewed
and as adjustments to these amounts become necessary, such adjustments are
reflected in current operations.

RECOGNITION OF PREMIUM REVENUE AND COSTS

Premiums are recognized as revenue over the premium-paying period and all
costs related to the acquisition of new business are charged to operations as
incurred.

SEPARATE ACCOUNTS

Separate account assets and liabilities represent funds held for the
exclusive benefit of variable annuity contractholders. Fees are received for
administrative expenses and for assuming certain mortality, distribution and
expense risks. The statement of operations includes the premiums, benefits and
other items (including transfers to and from the separate account) arising
from the operations of the separate account. The statement of changes in
capital and surplus reflects the gain from operations arising from the
difference between the fair market value of assets and the policy reserves of
the separate account.

30
<PAGE>

AMERICAN BENEFIT LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

2. FAIR VALUES OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards (SFAS) No. 107, "Disclosures
about Fair Value of Financial Instruments", requires disclosure of fair value
information about financial instruments, whether or not recognized in the
balance sheet, for which it is practicable to estimate that value. In cases
where quoted market prices are not available, fair values are based on
estimates using present value or other valuation techniques. Those techniques
are significantly affected by the assumptions used, including the discount
rate and estimates of future cash flows. In that regard, the derived fair
value estimates cannot be substantiated by comparisons to independent markets
and, in many cases, could not be realized in immediate settlement of the
instrument. SFAS 107 excludes certain financial instruments and all
nonfinancial instruments from its disclosure requirements. Accordingly, the
aggregate fair value amounts presented do not represent the underlying value
of the Company.

The following methods and assumptions were used by the Company in estimating
its fair value disclosures for financial instruments:

Cash and cash equivalents: The carrying amounts of $438,497 and $325,194
at December 31, 1995 and 1994, respectively, for these instruments
approximate their fair values.

Investment securities: Fair values for bonds are based on quoted market
prices, where available. For bonds not actively traded, fair values are
estimated using values obtained from independent pricing services. The
carrying amounts and fair values of the Company's bonds were $8,017,684 and
$8,262,541 at December 31, 1995 and $6,916,695 and $6,731,137 at December
31, 1994, respectively. The fair value of common stock is based on quoted
market prices and are recognized in the balance sheet.

Separate account assets: The carrying amount of $5,112,085 and $7,422,267
at December 31, 1995 and 1994, respectively, equals the fair value of these
assets.

Investment contracts: Fair values for the Company's liabilities under
investment-type insurance contracts are based on the cash surrender values
of the underlying contracts. The carrying amounts and fair values of the
Company's liabilities for investment-type insurance contracts, including
separate account liabilities, was $5,210,000 and $5,169,000 at December 31,
1995 and $7,538,000 and $7,314,000 at December 31, 1994, respectively.

31
<PAGE>

AMERICAN BENEFIT LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

3. INVESTMENT OPERATIONS

At December 31, 1995 and 1994, the amortized cost and estimated market
values of the Company's portfolio of debt securities is as follows:

<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
DECEMBER 31, 1995
Bonds:
United States Government and
agencies........................ $3,295,601 $119,399 $ -- $3,415,000
State, municipal and other
government...................... 299,207 8,793 -- 308,000
Public utilities................. 1,680,253 39,511 (1,967) 1,717,797
Industrial and miscellaneous..... 2,742,623 82,217 (3,096) 2,821,744
---------- -------- --------- ----------
8,017,684 249,920 (5,063) 8,262,541
Short-term investments:
Industrial and miscellaneous..... 410,984 -- -- 410,984
---------- -------- --------- ----------
410,984 -- -- 410,984
---------- -------- --------- ----------
$8,428,668 $249,920 $ (5,063) $8,673,525
========== ======== ========= ==========
DECEMBER 31, 1994
Bonds:
United States Government and
agencies........................ $2,297,101 $ 6,929 $ (38,030) $2,266,000
State, municipal and other
government...................... 299,149 -- (7,149) 292,000
Public utilities................. 1,686,828 12,693 (62,474) 1,637,047
Industrial and miscellaneous..... 2,633,617 15,553 (113,080) 2,536,090
---------- -------- --------- ----------
6,916,695 35,175 (220,733) 6,731,137
Short-term investments:
Industrial and miscellaneous..... 245,000 -- -- 245,000
---------- -------- --------- ----------
245,000 -- -- 245,000
---------- -------- --------- ----------
$7,161,695 $ 35,175 $(220,733) $6,976,137
========== ======== ========= ==========
</TABLE>

The amortized cost and estimated market value of debt securities at December
31, 1995, by contractual maturity, are shown below. Expected maturities will
differ from contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
ESTIMATED
AMORTIZED MARKET
COST VALUE
---------- ----------
<S> <C> <C>
Due in one year or less............................... $2,810,676 $2,823,006
Due after one year through five years................. 3,601,647 3,768,750
Due after five years through ten years................ 2,016,345 2,081,769
---------- ----------
$8,428,668 $8,673,525
========== ==========
</TABLE>

32
<PAGE>

AMERICAN BENEFIT LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

3. INVESTMENT OPERATIONS (CONTINUED)

For the years ended December 31, 1995, 1994 and 1993, net realized
investment gains as shown in the statement of operations includes gross gains
on the sale of debt securities of $4,514, $21,242 and $23,242, respectively.

Major categories of net investment income are summarized as follows:

<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Bonds............................................ $561,809 $502,500 $520,347
Common stocks.................................... -- 2,781 8,986
Short-term investments........................... 15,440 22,291 19,822
-------- -------- --------
577,249 527,572 549,155
Less investment expenses......................... 7,176 15,172 12,606
-------- -------- --------
Net investment income............................ $570,073 $512,400 $536,549
======== ======== ========
</TABLE>

At December 31, 1995, affidavits of deposits covering investments of
$500,000 were on deposit with state agencies to meet regulatory requirements.

4. FEDERAL INCOME TAXES

The Company files a consolidated federal income tax return with American
Republic. However, it is American Republic's policy to compute taxes allocated
to the Company as if the Company filed a separate tax return.

The effective tax rate is different than the prevailing federal income tax
rates of 35% in 1995, 1994 and 1993, principally due to the following:

<TABLE>
<CAPTION>
1995 1994 1993
-------- ------- -------
<S> <C> <C> <C>
Federal income tax at statutory rate............. $154,497 $81,214 $80,345
Tax increase (decrease) from:
Separate account gain (loss)................... (24,171) (19,466) (19,715)
Market discount on bonds -- net................ (5,884) (17,450) (6,937)
Deferred acquisition costs -- tax basis........ (4,044) (3,763) (809)
Other items.................................... 10,022 (2,020) 12,116
-------- ------- -------
Federal income taxes............................. $130,420 $38,515 $65,000
======== ======= =======
</TABLE>

5. ANNUITY RESERVES

The Company's annuity policy reserves (including separate account
liabilities) relate to liabilities established on a variety of the Company's
products that are not subject to significant mortality and morbidity risk;
however, there may be certain restrictions placed upon the amount of funds
that can be withdrawn without penalty. The amount of reserves on these
products, by withdrawal characteristics, and the related percentage of the
total, are summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31
-------------------------------------------
1995 1994
--------------------- ---------------------
AMOUNT PERCENTAGE AMOUNT PERCENTAGE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Subject to discretionary
withdrawal at book value less
surrender charge.............. $5,104,893 98% $7,389,920 98%
Not subject to discretionary
withdrawal.................... 105,150 2 148,119 2
---------- --- ---------- ---
Total annuity reserves and
deposit fund liabilities...... $5,210,043 100% $7,538,039 100%
========== === ========== ===
</TABLE>

33
<PAGE>

AMERICAN BENEFIT LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
6. LIABILITY FOR UNPAID CLAIMS

Activity in the liability for unpaid accident and health claims is
summarized as follows:

<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Balance at January 1............................. $100,000 $ 70,010 $ 70,010
Incurred related to:
Current year................................... -- -- --
Prior years.................................... (10,874) 118,629 102,023
-------- -------- --------
Total incurred................................... (10,874) 118,629 102,023
Paid related to:
Current year................................... -- -- --
Prior years.................................... 43,526 88,639 102,023
-------- -------- --------
Total paid....................................... 43,526 88,639 102,023
-------- -------- --------
Balance at December 31........................... $ 45,600 $100,000 $ 70,010
======== ======== ========
</TABLE>

7. SEPARATE ACCOUNT

A reconciliation of the amounts transferred to and from the separate account
for the year ended December 31, 1995 is presented below:

<TABLE>
<S> <C>
Transfers as reported in the summary of operations of the
separate account statement:
Transfers to separate account................................ $ 81,085
Transfers from separate account.............................. (3,410,160)
-----------
Net transfers from separate account............................ (3,329,075)
Reconciling adjustments:
General account annuity management fee income................ 97,387
Separate account miscellaneous income........................ 842
-----------
98,229
-----------
Transfers as reported in the summary of operations of the life,
accident and health annual statement.......................... $(3,230,846)
===========
</TABLE>

8. RELATED PARTY TRANSACTION

Under a service agreement with American Republic, the Company reimburses
American Republic for the cost of services which it provides to the Company.
The cost of these services was $49,933, $58,915 and $58,041 for 1995, 1994 and
1993, respectively.

34
<PAGE>

AMERICAN BENEFIT LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

9. RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Net income................................... $ 311,000 $ 193,526 $ 164,556
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Decrease (increase) in investment income
due and accrued........................... (4,000) 11,671 7,572
Decrease in policy reserves................ (131,774) (406,437) (168,142)
Increase (decrease) in policy and contract
claims.................................... (6,200) 43,430 --
Change in due to/from parent............... 71,000 (18,868) (7,078)
Net realized capital gains, before related
federal income taxes...................... (4,514) (21,242) (23,242)
Increase in interest maintenance reserve... (4,546) 8,515 13,190
Provision for amortization of investment
discounts and premiums.................... 26,415 34,661 30,329
Provision for depreciation................. 2,571 631 1,611
Other...................................... (12,779) 14,046 (6,018)
--------- --------- ---------
Net cash provided by (used in) operating
activities.................................. $ 247,173 $(140,067) $ 12,778
========= ========= =========
</TABLE>

10. LEASE COMMITMENTS

The Company has entered into an operating lease agreement for rental of space
for the home office. Rent expense was $10,050 for 1995 and $9,960 in 1994 and
1993.

35
<PAGE>

PART C

Other Information

Item 24. Financial Statements and Exhibits

a) Financial Statements contained herein

1) American Benefit Variable Annuity Account
Part A - Condensed Financial Information
Part B - Separate Account's financial statements with notes

2) American Benefit Life Insurance Company
Part B - Depositor's financial statements with notes

b) Exhibits
<TABLE>
<S> <C> <C>
(1) Resolution Establishing Registrant................. previously filed December, 1987
(3)(a) Distribution Agreement............................. previously filed May 1, 1994
(4) Form of Variable Annuity Contract.................. previously filed as Endorsed
May 1, 1989
(5) Form of Application for
Variable Annuity Contract.......................... previously filed May 1, 1989
(6) Copies of Charter and
By-laws of the Depositor........................... previously filed December, 1987
(a) Form of Fund Participation Agreement............... previously filed May 1, 1988
(b) Service Agreement.................................. previously filed December, 1987
(9) Opinion and Consent of Counsel..................... previously filed April, 1988
(10) Consent of Independent Auditors.................... herewith
(12) Power of Attorney.................................. previously filed May 1, 1993
(27) Financial Data Schedule............................ herewith
</TABLE>

Previously filed exhibits are hereby incorporated by reference.

Item 25. Directors and Officers of the Depositor

The officers and directors of American Benefit Life Insurance Company are
listed below. The principal business address is 421 New Karner Road, Albany, New
York 12205.

Name Positions and Offices with Depositor

Watson W. Powell, Jr. Chairman, Chief Executive Officer and President

Beverly C. Stewart Chief Operations Officer and Director

Ronald P. Morden Chief Financial Officer

Mary K. Durand Secretary
<PAGE>

Burdette N. Heikens Director

Michael E. Abbott Director

Ivan Chermayeff Director

Charles Cowles Director

James C. Enyart Director

Brent B. Green Director

Robert G. Harper Director

Watson W. Powell, III Director

Diane K. Powell Director

Nancy P. Montgomery Director

Richard T. Williams Director

Item 26. Persons controlled by or under Common Control with Depositor of
Registrant

The Registrant is a Separate Account of American Benefit Life Insurance
Company (Depositor). Depositor is a life insurance company incorporated in
New York. Depositor is a wholly owned subsidiary of American Republic
Insurance Company. American Republic Insurance Company is a mutual
insurance company incorporated in Des Moines, Iowa, which is owned by
policyholders. Action/Reaction, Inc. and American Republic Equities
Corporation are all direct or indirect wholly-owned subsidiaries of
American Republic Insurance Company, are Iowa corporations, and are
included in the consolidated financial statements of American Republic
Insurance Company. Action/Reaction, Inc. is engaged in the business of
leasing telecommunications equipment.

Item 27. Number of Contract Owners

As of March 8, 1996, the Registrant had 120 Contract Owners.

Item 28. Indemnification

The following is a copy of the resolution adopted at the Annual Meeting of
the Board of Directors of American Republic Insurance Company, held March
4, 1986: "Resolved, that all officers and directors of American Republic
Insurance Company and all officers and
<PAGE>

directors of all wholly owned subsidiaries of American Republic Insurance
Company are hereby indemnified by American Republic Insurance Company."

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

Item 29. Principal Underwriters

PaineWebber, Incorporated is the principal underwriter for American Benefit
Variable Annuities. In addition to the registrant, PWI serves as principal
underwriter for the following investment companies: PaineWebber Cashfund,
Inc., PaineWebber Managed Municipal Trust, PaineWebber RMA Money Fund,
Inc., PaineWebber RMA Tax-Free Fund, Inc., and PaineWebber Life Insurance
Company.

The following are the directors and officers of PaineWebber, Incorporated.
Their principal business address is 1285 Avenue of the Americas, New York,
New York 10019.

Name Positions and Offices with Underwriter

Margo N. Alexander Director - President and Chief Executive
Officer, Mitchell Hutchins Asset Management,
Inc.

Terry L. Atkinson Director, Managing Director and Director,
Municipal Securities Group

Brian M. Barefoot Director, Executive Vice President and
Director, Investment Banking

Steven P. Baum Director, Executive Vice President and
Director - Global Fixed Income

Timothy E. Cronin Director, Executive Vice President and Global
Risk Strategist

Regina A. Dolan Director, Executive Vice President and Chief
Financial Officer

Joseph J. Grano, Jr. Director and President

Edward M. Kerschner Director, Managing Director and
<PAGE>

Chairman, Investment Policy Committee

Jerome A. Lichtstein Director, Executive Vice President and
Director, Retail Branches

James P. MacGilvray Director, Executive Vice President and
Director, Global Equities and Transaction
Services

Donald B. Marron Director, Chairman, Chief Executive Officer

Robert W. Pangia Director and Executive Vice President

Ronald M. Schwartz Director, Executive Vice President and Chief
Administrative Officer

Robert H. Silver Director, Executive Vice President and
Director, Operations and Systems

Mark B. Sutton Director, Executive Vice President and
Director, Private Client Group

Anthony M. Di Iorio Executive Vice President and Controller

Theodore A. Levine Executive Vice President

Pierce R. Smith Executive Vice President and Treasurer

Dorothy F. Haughey Secretary

Geraldine L. Banyai Assistant Secretary

Name of Net Underwriting Compensation on
Principal Discount and Redemption or Brokerage
Underwriter Commissions Annuitization Commissions Compensation

PaineWebber None None None None
Incorporated

Item 30. Location of Accounts and Records

PaineWebber Incorporated (PWI), principal underwriter for the registrant,
is located at 1285 Avenue of the Americas, New York, New York 10019. It
maintains those accounts and records required to be maintained by it
pursuant to Section 31(a) of the Investment Company Act and the rules
promulgated thereunder.

American Benefit Life Insurance Company, the depositor for the registrant,
is located at 421 New Karner Road, Albany, New York 12205. It maintains
those accounts and records required to be maintained by it pursuant to
Section 31(a) of the Investment Company Act and the rules promulgated
thereunder.

American Benefit Life Insurance Company has contracted with American
Republic Insurance Company to assist with administrative services and
recordkeeping in connection with the Registrant until such time as American
Benefit Life Insurance Company is completely self-sufficient in all
administrative services and recordkeeping.
<PAGE>

Item 31. Management Services

None

Item 32. Undertakings

Registrant hereby undertakes to file a post-effective amendment to this
registration statement as frequently as is necessary to ensure that the
audited financial statements in the registration statement are never more
than 16 months old for so long as payments under the variable annuity
contracts may be accepted. Registrant further undertakes that a postcard or
similar written communication will be affixed to or included in the
prospectus for the contracts which are the subject of this registration
statement that the applicant can remove and send for a Statement of
Additional Information. Registrant further undertakes to deliver a
Statement of Additional Information and any financial statements required
to be made available under this Form N-4 promptly upon written or oral
request.

Representations pursuant to 403(b) of the Internal Revenue Code

The Company represents that it is relying upon a November 28, 1988
Securities and Exchange Commission no-action letter issued to the American
Council of Life Insurance (ACLI) and that the provisions of paragraphs 1-4 of
the no-action letter have been complied with.

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets the requirement of Securities Act
Rule 485(b) for effectiveness of this Registration Statement and has caused this
Post-Effective Amendment to the Registration Statement to be signed on its
behalf, in the City of Albany and State of New York on this 5th day of March,
1996.

AMERICAN BENEFIT VARIABLE
ANNUITY ACCOUNT
Registrant

By: AMERICAN BENEFIT LIFE INSURANCE
COMPANY
Depositor

By: /s/ Watson W. Powell, Jr.
--------------------------------
Watson W. Powell, Jr.
Principal Executive Officer

As required by the Securities Act of 1933, this Post-Effective Amendment to
the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:

Signature Title Date

/s/ Watson W. Powell, Jr. Principal Executive March 5, 1996
Watson W. Powell, Jr. Officer and Director
<PAGE>

/s/ Ronald P. Morden Principal Financial March 5, 1996
Ronald P. Morden Officer and Principal
Accounting Officer

/s/ Michael E. Abbott Director March 5, 1996
Michael E. Abbott

/s/ Ivan Chermayeff Director March 5, 1996
Ivan Chermayeff

/s/ Charles Cowles Director March 5, 1996
Charles Cowles

/s/ James C. Enyart Director March 5, 1996
James C. Enyart

/s/ Brent B. Green Director March 5, 1996
Brent B. Green

/s/ Robert G. Harper Director March 5, 1996
Robert G. Harper

/s/ Burdette N. Heikens Director March 5, 1996
Burdette N. Heikens

/s/ Nancy P. Montgomery Director March 5, 1996
Nancy P. Montgomery

/s/ Diane K. Powell Director March 5, 1996
Diane K. Powell

/s/ Watson W. Powell, III Director March 5, 1996
Watson W. Powell, III

/s/ Beverly C. Stewart Director March 5, 1996
Beverly C. Stewart

/s/ Richard T. Williams Director March 5, 1996
Richard T. Williams

<PAGE>

Exhibit 10

Consent of Independent Auditors

We consent to the reference to our firm under the caption "Independent Auditors"
and to the use of our reports dated January 26, 1996, with respect to American
Benefit Variable Annuity Account and March 15, 1996, with respect to American
Benefit Life Insurance Company in this Post Effective Amendment No. 11 to the
Registration Statement (Form N-4 No. 33-19254) and related Prospectus of
American Benefit Variable Annuity Account dated May 1, 1996.

/s/ Ernst & Young LLP

Des Moines, Iowa

April 22, 1996

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> AMERICAN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT MONEY MARKET DIVISION

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 547,326
<INVESTMENTS-AT-VALUE> 547,326
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 547,326
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 547,326
<SHARES-COMMON-STOCK> 42,317
<SHARES-COMMON-PRIOR> 73,868
<ACCUMULATED-NII-CURRENT> 21,353
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 547,326
<DIVIDEND-INCOME> 45,120
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 13,010
<NET-INVESTMENT-INCOME> 32,110
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 32,110
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,405
<NUMBER-OF-SHARES-REDEEMED> 36,956
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (372,429)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 12.45
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.93
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> AMERICAN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT GROWTH DIVISION

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 788,438
<INVESTMENTS-AT-VALUE> 982,084
<RECEIVABLES> 92,360
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,074,444
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,074,444
<SHARES-COMMON-STOCK> 39,822
<SHARES-COMMON-PRIOR> 49,880
<ACCUMULATED-NII-CURRENT> 100,355
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 193,646
<NET-ASSETS> 1,074,444
<DIVIDEND-INCOME> 4,579
<INTEREST-INCOME> 0
<OTHER-INCOME> 91,507
<EXPENSES-NET> 18,041
<NET-INVESTMENT-INCOME> 78,045
<REALIZED-GAINS-CURRENT> 74,946
<APPREC-INCREASE-CURRENT> 146,529
<NET-CHANGE-FROM-OPS> 299,520
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,542
<NUMBER-OF-SHARES-REDEEMED> 14,600
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 44,677
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 20.64
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 26.98
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> AMERICAN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT GROWTH AND INCOME
DIVISION<F1>

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 295,053
<INVESTMENTS-AT-VALUE> 354,939
<RECEIVABLES> 3,788
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 358,727
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 358,727
<SHARES-COMMON-STOCK> 30,639
<SHARES-COMMON-PRIOR> 56,761
<ACCUMULATED-NII-CURRENT> (7,475)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 59,886
<NET-ASSETS> 358,727
<DIVIDEND-INCOME> 3,028
<INTEREST-INCOME> 0
<OTHER-INCOME> 760
<EXPENSES-NET> 18,693
<NET-INVESTMENT-INCOME> (14,905)
<REALIZED-GAINS-CURRENT> 34,665
<APPREC-INCREASE-CURRENT> 93,976
<NET-CHANGE-FROM-OPS> 113,736
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,094
<NUMBER-OF-SHARES-REDEEMED> 28,216
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (157,552)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 9.10
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.71
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

<FN>
<F1>Division was formerly named Dividend Growth Division
</FN>

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> AMERICAN BENEFIT VARIABLE ANNUITY ACCOUNT GLOBAL GROWTH DIVISION

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 495,619
<INVESTMENTS-AT-VALUE> 480,103
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 480,103
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 480,103
<SHARES-COMMON-STOCK> 32,446
<SHARES-COMMON-PRIOR> 58,236
<ACCUMULATED-NII-CURRENT> 29,638
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (15,516)
<NET-ASSETS> 480,103
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 15,761
<NET-INVESTMENT-INCOME> (14,905)
<REALIZED-GAINS-CURRENT> 34,665
<APPREC-INCREASE-CURRENT> 93,976
<NET-CHANGE-FROM-OPS> 113,736
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9
<NUMBER-OF-SHARES-REDEEMED> 25,779
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (424,235)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 15.53
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.79
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> AMERICAN BENEFIT VARIABLE ANNUITY ACCOUNT GLOBAL INCOME DIVISION

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 1,137,987
<INVESTMENTS-AT-VALUE> 1,142,534
<RECEIVABLES> 107,342
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,249,876
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,249,876
<SHARES-COMMON-STOCK> 76,114
<SHARES-COMMON-PRIOR> 186,265
<ACCUMULATED-NII-CURRENT> 224,204
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,547
<NET-ASSETS> 1,249,876
<DIVIDEND-INCOME> 129,094
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 42,080
<NET-INVESTMENT-INCOME> 87,014
<REALIZED-GAINS-CURRENT> 93,673
<APPREC-INCREASE-CURRENT> 72,238
<NET-CHANGE-FROM-OPS> 252,925
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8
<NUMBER-OF-SHARES-REDEEMED> 110,159
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (1,480,522)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 14.66
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.42
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> AMERICAN BENEFIT VARIABLE ANNUITY ACCOUNT STRATEGIC FIXED INCOME
DIVISION<F1>

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 685,858
<INVESTMENTS-AT-VALUE> 626,984
<RECEIVABLES> 97,461
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 724,445
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 724,445
<SHARES-COMMON-STOCK> 44,575
<SHARES-COMMON-PRIOR> 57,146
<ACCUMULATED-NII-CURRENT> 194,686
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (58,874)
<NET-ASSETS> 724,445
<DIVIDEND-INCOME> 52,169
<INTEREST-INCOME> 0
<OTHER-INCOME> 45,292
<EXPENSES-NET> 12,109
<NET-INVESTMENT-INCOME> 85,352
<REALIZED-GAINS-CURRENT> (1,466)
<APPREC-INCREASE-CURRENT> 39,426
<NET-CHANGE-FROM-OPS> 123,312
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,354
<NUMBER-OF-SHARES-REDEEMED> 13,925
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (65,983)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 13.29
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.53
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

<FN>
<F1>Division was formerly named Government Division
</FN>

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> AMERICAN BENEFIT VARIABLE ANNUITY ACCOUNT ASSET ALLOCATION DIVISION

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 633,501
<INVESTMENTS-AT-VALUE> 615,748
<RECEIVABLES> 61,416
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 677,164
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 677,164
<SHARES-COMMON-STOCK> 39,662
<SHARES-COMMON-PRIOR> 37,847
<ACCUMULATED-NII-CURRENT> 178,838
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (17,753)
<NET-ASSETS> 677,164
<DIVIDEND-INCOME> 20,068
<INTEREST-INCOME> 0
<OTHER-INCOME> 41,348
<EXPENSES-NET> 9,936
<NET-INVESTMENT-INCOME> 51,480
<REALIZED-GAINS-CURRENT> 8,686
<APPREC-INCREASE-CURRENT> 55,692
<NET-CHANGE-FROM-OPS> 115,858
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14,032
<NUMBER-OF-SHARES-REDEEMED> 12,217
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 145,954
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 14.04
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.07
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>