PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT, 485APOS, 1995-02-15

PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT
485APOS, 1995-02-15

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As filed with the SEC on . Registration No. 33-20000

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-6

Post-Effective Amendment No. 14

FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED
ON FORM N-8B-2

THE PRUDENTIAL VARIABLE
APPRECIABLE ACCOUNT
(Exact Name of Trust)

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
(Name of Depositor)

Prudential Plaza
Newark, New Jersey 07102-3777
(800) 437-4016 Ext. 46
(Address and telephone number of principal executive offices)

John P. Gualtieri, Jr.
Vice President and Insurance Counsel
The Prudential Insurance Company of America
Prudential Plaza
Newark, New Jersey 07102-3777
(Name and address of agent for service)

Copy to:
Jeffrey C. Martin
Shea & Gardner
1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036

Variable Appreciable Life Insurance Contracts--The Registrant has registered an
indefinite amount of securities pursuant to Rule 24f-2 under the Investment
Company Act of 1940. The Rule 24f-2 notice for fiscal year 1994 will be filed on
or about February 17, 1995.

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

[ ] immediately upon filing pursuant to paragraph (b) of Rule 485

[ ] on pursuant to paragraph (b) of Rule 485
(date)

[ ] 60 days after filing pursuant to paragraph (a) of Rule 485

[X] on May 1, 1995 pursuant to paragraph (a) of Rule 485
(date)

<PAGE>

CROSS REFERENCE SHEET
(as required by Form N-8B-2)

N-8B-2 Item Number Location

1. Cover Page

2. Cover Page

3. Not Applicable

4. Sale of the Contract and
Sales Commissions (Part
IB)

5. The Prudential Variable
Appreciable Account

6. The Prudential Variable
Appreciable Account

7. Not Applicable

8. Not Applicable

9. Litigation

10. Brief Description of the
Contract; Short-Term
Cancellation Right, or
"Free Look"; Contract
Forms; Premiums; Contract
Date; Allocation of
Premiums; Transfers;
Contract Fees and Charges;
How the Contract Fund
Changes with Investment
Experience; How a
Contract's Death Benefit
Will Vary; Surrender of a
Contract; Lapse and
Reinstatement; When
Proceeds are Paid; Other
General Contract
Provisions; Voting Rights;
Withdrawal of Excess Cash
Surrender Value (Part IB);
Increases in Face Amount
(Part IB); Decreases in
Face Amount (Part IB);
Riders; Possible
Replacement of the Series
Fund (Part IB)

11. Brief Description of the
Contract; The Prudential
Variable Appreciable
Account

12. Cover Page; Brief
Description of the
Contract; Fixed Income
Portfolios; Equity
Portfolios; Flexible
Portfolios; Further
Information About the
Series Fund; Sale of the
Contract and Sales
Commissions (Part IB)

13. Brief Description of the
Contract; Contract Fees
and Charges; Reduction of
Charges for Concurrent
Sales to Several
Individuals (Part IB);
Sale of the Contract and
Sales Commissions (Part
IB)

14. Brief Description of the
Contract; Requirements for
Issuance of a Contract

15. Brief Description of the
Contract; Allocation of
Premiums; Transfers;
Fixed-Rate Option;
Information About the
Account, the Real Property
Account and the Fixed Rate
Option

16. Brief Description of the
Contract; Detailed
Information About the
Contract

17. Surrender of a Contract;
When Proceeds are Paid

18. The Prudential Variable
Appreciable Account

19. Reports to Contract Owners

20. Not Applicable

21. Contract Loans

<PAGE>

N-8B-2 Item Number Location

22. Not Applicable

23. Not Applicable

24. Other Standard Contract
Provisions (Part IB)

25. Brief Description of the
Contract

26. Brief Description of the
Contract; Contract Fees
and Charges

27. Brief Description of the
Contract; Further
Information About the
Series Fund

28. Brief Description of the
Contract; Directors and
Officers of The Prudential
and Management of the
Series Fund (Part IB)

29. Brief Description of the
Contract

30. Not Applicable

31. Not Applicable

32. Not Applicable

33. Not Applicable

34. Not Applicable

35. Brief Description of the
Contract

36. Not Applicable

37. Not Applicable

38. Sale of the Contract and
Sales Commissions (Part
IB)

39. Sale of the Contract and
Sales Commissions (Part
IB)

40. Not Applicable

41. Sale of the Contract and
Sales Commissions (Part
IB)

42. Not Applicable

43. Not Applicable

44. Brief Description of the
Contract; Further
Information About the
Series Fund; How the
Contract Fund Changes With
Investment Experience; How
a Contract's Death Benefit
Will Vary

45. Not Applicable

46. Brief Description of the
Contract; The Prudential
Variable Appreciable
Account; Further
Information About the
Series Fund

47. The Prudential Variable
Appreciable Account;
Further Information About
the Series Fund

48. Not Applicable

49. Not Applicable

50. Not Applicable

51. Not Applicable

<PAGE>

N-8B-2 Item Number Location

52. Possible Replacement of
the Series Fund (Part IB)

53. Tax Treatment of Contract
Benefits; Tax Treatment of
Contract Benefits (Part
IB)

54. Not Applicable

55. Not Applicable

56. Not Applicable

57. Not Applicable

58. Not Applicable

59. Financial Statements;
Financial Statements of
The Prudential Variable
Appreciable Account;
Consolidated Financial
Statements of The
Prudential Insurance
Company of America and
Subsidiaries

<PAGE>

PART IA

INFORMATION IN PROSPECTUS

<PAGE>

Prudential's
Variable
Appreciable Life(R)
Insurance

May 1, 1995

PROSPECTUS

The Prudential Series Fund, Inc.
and
The Prudential Variable Appreciable Account

PVAL-1 Ed 5-95 The Prudential Insurance Company of America
Catalog No. 646960S

<PAGE>

PROSPECTUS
May 1, 1995

THE PRUDENTIAL
VARIABLE APPRECIABLE ACCOUNT

Variable
APPRECIABLE
LIFE(R)___________________
INSURANCE CONTRACTS

PROVIDING FOR THE INVESTMENT
OF ASSETS IN THE
INVESTMENT PORTFOLIOS OF

THE PRUDENTIAL SERIES
FUND, INC.

This prospectus describes two forms of a variable life insurance contract
offered by The Prudential Insurance Company of America under the name Variable
Appreciable Life(R) Insurance. The first form provides a death benefit that
generally remains fixed in an amount chosen by the purchaser and cash surrender
values that vary daily. The second form also provides cash surrender values that
vary daily but the death benefit will also vary daily. Under both forms of
contract, the death benefit will never be less than the "face amount" of
insurance chosen by the purchaser. There is no guaranteed minimum cash surrender
value.

The assets held for the purpose of paying benefits under these and other similar
contracts are segregated from the other assets of The Prudential and are
invested in one or more of sixteen investment portfolios of The Prudential
Series Fund, Inc. chosen by the contract owner. This prospectus also describes
the securities issued by the Series Fund. The contract owner may also choose to
have the assets invested in a fixed-rate option or in The Prudential Variable
Contract Real Property Account, described in a prospectus attached to this one.

Although it is advantageous to the purchaser to pay a Scheduled Premium amount
on the dates due, which are at least once a year but may be more often,
purchasers have considerable flexibility as to when and in what amounts they pay
premiums.

Before you sign an application to purchase this life insurance contract, you
should read this prospectus with care and have any questions you may have
answered by your Prudential representative. If you do purchase the contract, you
should retain this prospectus for future reference, together with the contract
itself that you will receive.

Additional information about the contract and the Series Fund is set forth in a
separate Statement of Additional Information which is incorporated by reference
into this prospectus. It is available without charge upon request to The
Prudential Insurance Company of America at the address shown below.

REPLACING EXISTING INSURANCE WITH A CONTRACT DESCRIBED IN THIS PROSPECTUS MAY
NOT BE TO YOUR ADVANTAGE. IF YOU CURRENTLY OWN A LIFE INSURANCE CONTRACT, THE
BENEFITS AND COSTS OF PURCHASING ADDITIONAL INSURANCE UNDER THE EXISTING POLICY
SHOULD BE COMPARED WITH THE BENEFITS AND COSTS OF PURCHASING THE CONTRACT
DESCRIBED IN THIS PROSPECTUS. IN MAKING THIS COMPARISON, YOU SHOULD CONSULT WITH
A QUALIFIED TAX ADVISOR.

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

The Prudential Insurance Company of America
The Prudential Series Fund, Inc.
Prudential Plaza
Newark, New Jersey 07102-3777
Telephone: (800) 437-4016 Ext. 46

*Appreciable Life is a registered mark of The Prudential.
PVAL-1 Ed 5-95

<PAGE>

TABLE OF CONTENTS
Page

INTRODUCTION AND SUMMARY ................................................... 1
Brief Description of the Contract ..................................... 1
Fixed Income Portfolios ............................................... 3
Money Market Portfolio ........................................... 3
Bond Portfolio ................................................... 3
Government Securities Portfolio .................................. 3
Zero Coupon Bond Portfolios 1995, 2000, and 2005 ................ 3
Balanced Portfolios ................................................... 3
Conservatively Managed Flexible Portfolio. ....................... 3
Aggressively Managed Flexible Portfolio. ......................... 3
High Yield Bond Portfolios ............................................ 3
High Yield Bond Portfolio. ....................................... 3
Diversified Stock Portfolios .......................................... 3
Stock Index Portfolio ............................................ 3
High Dividend Stock Portfolio .................................... 4
Common Stock Portfolio ........................................... 4
Growth Stock Portfolio ........................................... 4
Small Capitalization Stock Portfolio ............................. 4
Global Equity Portfolio ......................................... 4
Specialized Portfolios ................................................ 4
Natural Resources Portfolio ...................................... 4
Real Property Account ................................................. 4
Fixed-Rate Option ..................................................... 4
Transfers Between Investment Options .................................. 4
Which Investment Option Should Be Selected? ........................... 4
The Scheduled Premium ................................................. 5
Payment of Substantially Higher Premiums .............................. 5
Contract Loans ........................................................ 5
Differences Between the Contract and Variable Universal Life
Insurance Contracts ................................................. 5

FINANCIAL HIGHLIGHTS OF THE PORTFOLIOS OF THE SERIES FUND .................. 6

PORTFOLIO RATES OF RETURN .................................................. 14

HYPOTHETICAL ILLUSTRATION OF
DEATH BENEFITS AND CASH SURRENDER VALUES ................................. 15

INFORMATION ABOUT THE ACCOUNT,
THE REAL PROPERTY ACCOUNT AND THE FIXED RATE OPTION ...................... 16
The Prudential Variable Appreciable Account ........................... 16
The Prudential Variable Contract Real Property Account ................ 16
The Fixed-Rate Option ................................................. 16

DETAILED INFORMATION ABOUT THE CONTRACT .................................... 17
Requirements for Issuance of a Contract ............................... 17
Contract Forms ........................................................ 17
Short-Term Cancellation Right or "Free Look" .......................... 18
Contract Fees and Charges ............................................. 18
Deductions from Premiums ......................................... 18
Deductions from Portfolios ....................................... 18
Monthly Deductions from Contract Fund ............................ 19
Daily Deduction from the Contract Fund ........................... 20
Surrender or Withdrawal Charges .................................. 20
Transaction Charges .............................................. 21
Contract Date ......................................................... 21
Premiums .............................................................. 21
Allocation of Premiums ................................................ 22
Transfers ............................................................. 23
How the Contract Fund Changes with Investment Experience .............. 24
How a Contract's Death Benefit Will Vary .............................. 24
Contract Loans ........................................................ 24
Surrender of a Contract ............................................... 25
Lapse and Reinstatement ............................................... 26

<PAGE>

Fixed Extended Term Insurance ....................................
Fixed Reduced Paid-Up Insurance ..................................
Variable Reduced Paid-Up Insurance ...............................
What Happens If No Request Is Made? ..............................
When Proceeds Are Paid ................................................
Living Needs Benefit ..................................................
Terminal Illness Option ..........................................
Nursing Home Option ..............................................
Voting Rights .........................................................
Reports to Contract Owners ............................................
Tax Treatment of Contract Benefits ....................................
Riders ................................................................
Participation in Divisible Surplus ....................................
Other Contract Provisions .............................................

FURTHER INFORMATION ABOUT THE SERIES FUND ..................................

INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS .......................
Fixed Income Portfolios ...............................................
Money Market Portfolio ...........................................
Bond Portfolio ...................................................
Government Securities Portfolio ..................................
Zero Coupon Bond Portfolios 1995, 2000, and 2005 .................
Conservatively Managed Flexible Portfolio ........................
Aggressively Managed Flexible Portfolio ..........................
High Yield Bond Portfolios ............................................
High Yield Bond Portfolio ........................................
Diversified Stock Portfolios ..........................................
Stock Index Portfolio ............................................
High Dividend Stock Portfolio ....................................
Common Stock Portfolio ...........................................
Growth Stock Portfolio ...........................................
Small Capitalization Stock Portfolio .............................
Global Equity Portfolio ..........................................
Specialized Portfolios ................................................
Natural Resources Portfolio ......................................
Foreign Securities ....................................................
Options, Futures Contracts and Swaps ..................................
Short Sales ...........................................................
Reverse Repurchase Agreements and Dollar Rolls ........................
Loans of Portfolio Securities .........................................

INVESTMENT RESTRICTIONS APPLICABLE TO THE PORTFOLIOS .......................

INVESTMENT MANAGEMENT ARRANGEMENTS AND EXPENSES ............................
Portfolio Brokerage and Related Practices .............................

STATE REGULATION ...........................................................

EXPERTS ....................................................................

LITIGATION .................................................................

EXPANDED TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION ..........

ADDITIONAL INFORMATION .....................................................

FINANCIAL STATEMENTS .......................................................

FINANCIAL STATEMENTS OF THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT ........

CONSOLIDATED FINANCIAL STATEMENTS OF THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA AND SUBSIDIARIES ......................................

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, ITS STATEMENT OF ADDITIONAL INFORMATION, AND THE PROSPECTUS FOR
THE REAL PROPERTY ACCOUNT.

<PAGE>

INTRODUCTION AND SUMMARY

This section provides only an overview of the more significant provisions of the
Contract. It omits details which are provided in the rest of this prospectus, as
well as in a Statement of Additional Information which is available to you upon
request without charge. A description of the contents of that Statement of
Additional Information is on page 44.

As you read this prospectus you should keep in mind that you are considering the
purchase of a life insurance contract. Because it is variable life insurance --
and variable life insurance has significant investment aspects and requires you
to make investment decisions -- it is also a "security." That is why you have
been given this prospectus. Securities which are offered to the public must be
registered with the Securities and Exchange Commission, and the prospectus that
is a part of the registration statement must be given to all prospective buyers.
But because a substantial part of your premium pays for life insurance that will
pay to your beneficiary, in the event of your death, an amount far exceeding
your total premium payments, you should not buy this contract unless a major
reason for the purchase is to provide life insurance protection. Because the
contract provides whole-life or permanent insurance, it also serves a second
important objective. It can be expected to provide an increasing cash surrender
value that can be used during your lifetime.

Brief Description of the Contract

The Variable Appreciable Life Insurance Contract (referred to from now on as the
"Contract") is issued and sold by The Prudential Insurance Company of America
("The Prudential"), a mutual insurance company founded in 1875 under the laws of
the State of New Jersey. It is licensed to sell life insurance and annuities in
all 50 states, the District of Columbia and Guam. It is also registered as a
broker and dealer under The Securities and Exchange Act of 1934 and as an
investment adviser under The Investment Advisers Act of 1940. The Prudential had
over $xxx billion of total consolidated assets at the end of 1994. The
Prudential's consolidated financial statements begin on page B1.

The Contract is a form of flexible premium variable life insurance. It is built
around a Contract Fund, the amount of which changes every business day. That
amount represents the value of your Contract on that day although you will have
to pay a surrender charge if you decide to surrender the Contract during the
first ten Contract years.

A broad objective of the Contract is to provide benefits that will increase in
value if favorable investment results are achieved. The Prudential has
established a separate account, like a separate division within the Company,
called The Prudential Variable Appreciable Account (from now on, the "Account").
Whenever you pay a premium, The Prudential first deducts certain charges
(described below) and, unless you decide otherwise (as explained below) puts the
remainder -- often called the "net premium" -- into the Account, where it is
combined with the net premiums from all other contracts like this one. The money
in the Account, including your Contract Fund, is then invested in the following
way. The Account is divided into sixteen subaccounts and you must decide which
subaccount or subaccounts will hold the assets of your Contract Fund. The money
allocated to each subaccount is immediately invested in a corresponding
portfolio of The Prudential Series Fund, Inc. (from now on the "Series Fund").
Those sixteen portfolios are described in more detail below. Each has a
different investment objective (for example, common stocks, bonds, money market
securities, government securities) so that you have a wide range of investment
options to choose from.

You also have two additional options which are regulated differently from the
other sixteen because neither one is an investment company registered under the
Investment Company Act of 1940. The first of these is a fixed-rate option that
increases the portion of your Contract Fund allocated to this option at a
guaranteed rate of interest. The remaining option is a real property option
which invests in income-producing real property. It is described in a separate
prospectus that is attached to this one. Thus your Contract Fund value changes
every day depending upon the change in the value of the particular portfolios
(or the other two investment options) that you have selected for the investment
of your Contract Fund.

Although the selection of any of the investment portfolios or of the real
property option offers the possibility that your Contract Fund value will
increase if there is favorable investment performance, you are subject to the
risk that investment performance will be unfavorable and that the value of your
Contract Fund will decrease. The risk will be different, depending upon which
investment options you choose. See Which Investment Option Should Be Selected,
page 4. If you select the fixed-rate option, you are credited with a stated rate
of interest but you assume the risk that this rate may change in later years.

The Prudential deducts certain charges from each premium payment and from the
amounts held in the designated investment options. In addition, The Prudential
makes certain additional charges if a Contract lapses or is surrendered during
the first 10 Contract years. All these charges, which are largely designed to
cover insurance costs and risks as well as sales and administrative expenses,
are fully described under Contract Fees and Charges,

<PAGE>

on page 18. In brief, and subject to that fuller description, the following
diagram outlines the charges which may be made:

--------------------------------------------------------
Premium Payment
--------------------------------------------------------

---------------------------------------
o less charge for taxes
attributable to premiums
o less $2 processing fee
---------------------------------------

- --------------------------------------------------------------------------------
Invested Premium Amount
o To be invested in one or a combination of:
o The Investment Portfolios of the Series Fund described below
o The Fixed-Rate Option
o The Real Property Account
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Daily Charges
o Management fees and expenses are deducted from the assets of the Series
Fund.
o A daily charge equivalent to an annual rate of up to 0.9% is deducted from
the assets of the variable investment options for mortality and expense
risks.
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Monthly Charges
o A sales charge is currently deducted from the Contract Fund in the amount
of 1/2 of 1% of the primary annual premium.
o The Contract Fund is reduced by a guaranteed minimum death benefit risk
charge of not more than $0.01 per $1,000 of the face amount of insurance.
o The Contract Fund is reduced by an administrative charge of up to $3 per
Contract and $0.03 per $1,000 of face amount of insurance; if the face
amount of the Contract is greater than $100,000, the charge is reduced.
o A charge for anticipated mortality is deducted, with the maximum charge
based on the Non-Smoker/Smoker 1980 CSO Tables.
o If the Contract includes riders, a deduction from the Contract Fund will be
made for charges applicable to those riders; a deduction will also be made
if the rating class of the insured results in an extra charge.
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Possible Additional Charges
o If the Contract lapses or is surrendered during the first 10 years, a
contingent deferred sales charge is assessed; the maximum contingent
deferred sales charge during the first 5 years is 50% of the first year's
primary annual premium but this charge is both subject to other important
limitations and reduced for Contracts that have been in force for more than
5 years.
o If the Contract lapses or is surrendered during the first 10
years, a contingent deferred administrative charge is assessed; during the
first 5 years, this charge equals $5 per $1,000 of face amount and it
begins to decline uniformly after the fifth Contract year so that it
disappears on the tenth Contract anniversary.
o An administrative processing charge of up to $15 will be made in connection
with each withdrawal of excess cash surrender value or a decrease in face
amount.

- --------------------------------------------------------------------------------
An important feature of the Contract is its death benefit. You have a choice of
two different forms of the Contract which differ in the amount of the death
benefit. Under Contract Form A the death benefit will generally be equal to the
face amount of insurance. It can never be less than this amount, but it is
possible, after the Contract has been held for many years, that the Contract
Fund will become so large that The Prudential -- to meet certain requirements of
the Internal Revenue Code -- will increase the death benefit. Under Contract
Form B, the death benefit will increase and decrease as the amount of the
Contract Fund varies with the investment performance of the selected options.
However, the death benefit under Form B, as is true under Form A, will never be
less than the initial face amount and it may also increase to satisfy Internal
Revenue Code requirements. Throughout this prospectus the word "Contract" refers
to both Form A and B unless specifically stated otherwise. Under both Form A and
B Contracts there is no guaranteed minimum cash surrender value.

<PAGE>

When you first buy the Contract you give instructions to The Prudential as to
which subaccounts (and, therefore, which corresponding portfolios of the Series
Fund) you wish your Contract Fund invested. Thereafter you may make changes in
these allocations either in writing or by telephone. The investment objectives
of each portfolio, described more fully at pages 30 to 38 of this prospectus,
and of the other two investment options are as follows:

Fixed Income Portfolios

Money Market Portfolio. The maximum current income that is consistent with
stability of capital and maintenance of liquidity through investment in
high-quality short-term debt obligations. The rate of return will generally
follow the fluctuations in short term interest rates.

Bond Portfolio. A high level of income over the longer term while providing
reasonable safety of capital through investment primarily in readily marketable
intermediate and long-term fixed income securities that provide attractive
yields but do not involve substantial risk of loss of capital through default.
The securities will be of investment grade and should result in higher returns,
but market value will fluctuate inversely with changes in interest rates of
longer maturities.

Government Securities Portfolio. Achievement of a high level of income over the
longer term consistent with the preservation of capital through investment
primarily in U.S. Government securities, including intermediate and long-term
U.S. Treasury securities and debt obligations issued by agencies of or
instrumentalities established, sponsored or guaranteed by the U.S. Government.
At least 65% of the total assets of the portfolio will be invested in U.S.
Government securities. The rate of return is likely to be somewhat lower than
that of the Bond Portfolio, but the risk of loss through default is
significantly lower. Market value will also vary inversely with changes in
interest rates.

Zero Coupon Bond Portfolios 1995, 2000, and 2005. Achievement of the highest
predictable compounded investment return for a specific period of time,
consistent with the safety of invested capital, by investing primarily in debt
obligations of the United States Treasury and investment-grade corporations that
have been issued without interest coupons or stripped of their unmatured
interest coupons, in interest coupons that have been stripped from such debt
obligations, and receipts and in certificates for such stripped debt obligations
and stripped coupons (collectively "stripped securities"). The three portfolios
differ only in their liquidation dates, which for each portfolio is November 15
of the specified year. Market values are subject to greater fluctuations in
interest rates than they are for the other fixed-income portfolios so that
redemption, by transfer or otherwise prior to the maturity date could result in
a loss.

Balanced Portfolios

Conservatively Managed Flexible Portfolio. Achievement of a favorable total
investment return consistent with a portfolio having a conservatively managed
mix of money market instruments, fixed income securities, and common stocks, in
proportions believed by the investment manager to be appropriate for an investor
desiring diversification of investment who prefers a relatively lower risk of
loss than that associated with the Aggressively Managed Flexible Portfolio
while recognizing that this reduces the chances of greater appreciation.

Aggressively Managed Flexible Portfolio. Achievement of a high total return
consistent with a portfolio having an aggressively managed mix of money market
instruments, fixed income securities, and common stocks, in proportions believed
by the investment manager to be appropriate for an investor desiring
diversification of investment who is willing to accept a relatively high level
of loss in an effort to achieve greater appreciation.

High Yield Bond Portfolios

High Yield Bond Portfolio. Achievement of a high total return through investment
in high yield/high risk fixed income securities in the medium to low quality
ranges. These securities are sometimes known as "junk bonds." Even higher
returns are likely to be achieved but with greater risk of loss because of
investment in lower grade speculative debt securities.

Diversified Stock Portfolios

Stock Index Portfolio. Achievement of investment results that correspond to the
price and yield performance of publicly traded common stocks in the aggregate by
following a policy of attempting to duplicate the price and yield performance of
the Standard & Poor's 500 Composite Stock Price Index.

High Dividend Stock Portfolio. Both current income and capital appreciation
through investment primarily in common stocks and convertible securities that
provide favorable prospects for investment income returns above those of the
Standard & Poor's 500 Stock Index or the NYSE Composite Index.

Common Stock Portfolio. Capital appreciation through investment primarily in
common stocks of companies, including major established corporations as well as
smaller capitalization companies, that appear to offer attractive prospects of
price appreciation that is superior to broadly-based stock indices. Current
income, if any, is incidental.

<PAGE>

Higher total return, through assumption of greater risk, can be expected from
this portfolio. As with all the equity portfolios, significant fluctuations in
market value can be expected, with losses in some years.

Growth Stock Portfolio. Long-term growth of capital through investment primarily
in equity securities of established companies with above-average growth
prospects. Current income, if any, is incidental.

Small Capitalization Stock Portfolio. Long-term growth of capital through
investment primarily in equity securities of publicly-traded companies with
small market capitalization. Current income, if any, is incidental.

Global Equity Portfolio. Long-term growth of capital through investment
primarily in common stock and common stock equivalents of foreign and domestic
issuers. Current income, if any, is incidental. While the characteristics of
this portfolio are similar to other equity portfolios, there will be an
additional risk because the portfolio invests a significant portion of its
assets in foreign securities.

Specialized Portfolios

Natural Resources Portfolio. Long-term growth of capital through investment
primarily in common stocks and convertible securities of "natural resource
companies" and in securities (typically debt securities and preferred stock) the
terms of which are related to the market value of a natural resource. While the
characteristics of this portfolio are similar to the other equity portfolios,
there will be additional risk because the portfolio is concentrated in a limited
number of sectors.

Real Property Account. High current income plus capital appreciation through
investment in a partnership whose assets are primarily 100%-owned unmortgaged
commercial real property and mortgages on real properties. Investment in real
property is also subject to fluctuations in market values.

Fixed-Rate Option. Guarantee against loss of principal plus income at a rate
which may change at yearly intervals, but will never be lower than an effective
annual rate of 4%.

Transfers Between Investment Options

You may at any time change the instructions for the allocation of your premiums
to the various investment options. You may also transfer amounts held in one
option to another. There are restrictions upon transfers out of the Real
Property Account and the fixed-rate option which The Prudential may waive.

Which Investment Option Should Be Selected?

Historically, for investments held over relatively long periods, the investment
performance of common stocks has generally been superior to that of short or
long-term debt securities, even though common stocks have been subject to much
more dramatic changes in value over short periods of time. Accordingly, the
Stock Index, High Dividend Stock, Common Stock, Growth Stock, Small
Capitalization Stock, Global Equity, or Natural Resources Portfolios may be
desirable options if you are willing to accept such volatility in your Contract
values. Each of these equity portfolios involves somewhat different policies and
investment risks.

You may prefer the somewhat greater protection against loss of principal (and
reduced chance of high total return) provided by the Government Securities or
Bond Portfolios. There may be times when you desire even greater safety of
principal and may then prefer the Money Market Portfolio or the fixed-rate
option, recognizing that the level of short-term rates may change rather
rapidly. Money invested in a Zero Coupon Bond Portfolio and held to its
liquidation date will realize a predictable return, although the portfolio's
value may fluctuate significantly with changes in interest rates prior to its
liquidation date. If you are willing to take risks and possibly achieve a higher
total return, you may prefer the High Yield Bond Portfolio, recognizing that
with higher yielding, lower quality bonds the risks are greater. You may wish to
divide your invested premium among two or more of the portfolios. You may wish
to obtain diversification by relying on The Prudential's judgment for an
appropriate asset mix by choosing one of the Balanced Portfolios. The Real
Property Account permits you to diversify your investment under the Contract to
include an interest in a pool of income-producing real property, and real estate
is often considered to be a hedge against inflation.

You should make a choice that takes into account how willing you are to accept
investment risks, the manner in which your other assets are invested, and your
own predictions about what investment results are likely to be in the future.
The Prudential does recommend against frequent transfers among the several
options as experience generally indicates that "market timing" investing,
particularly by non-professional investors, is likely to prove unsuccessful.

The Scheduled Premium

Your Contract sets forth an annual Scheduled Premium, or one that is payable
more frequently, such as monthly. The Prudential guarantees that, if the
Scheduled Premiums are paid when due (or if missed premiums are paid later, with
interest), the death benefit will be paid upon the death of the insured. The
Contract will not lapse even if investment experience is unexpectedly so
unfavorable that the Contract Fund value drops to below zero.

<PAGE>

Your Scheduled Premium consists of two amounts. The first or initial amount is
payable from the time you purchase your Contract until the Contract anniversary
immediately following your 65th birthday or the Contract's seventh anniversary,
whichever is later (the "Premium Change Date"). The second amount is the
guaranteed maximum amount payable after the Premium Change Date. See Premiums,
page 21.

Payment of Substantially Higher Premiums

The payment of premiums in excess of scheduled premiums may cause the Contract
to become a Modified Endowment Contract for federal income tax purposes. If you
make premium payments in amounts high enough to turn the Contract into a
Modified Endowment Contract, The Prudential will notify you, ask whether it is
your intention to do so, and return the premium, if you wish, with interest. See
Premiums, page 21 and Tax Treatment of Contract Benefits, page 28.

Contract Loans

The Contract permits the owner to borrow up to 90% of the amount of the cash
surrender value (100% of the portion allocated to the fixed-rate option) on
favorable terms. See Contract Loans, page 24. When a loan is made, the amount
held under the investment options described above is reduced, proportionately,
by the amount of the loan.

Differences Between the Contract and Variable Universal Life Insurance Contracts

The Prudential believes that the most common form of universal life insurance,
offered by many other life insurance companies, is suitable for many people and,
although it does not now offer such a contract to the general public, it may do
so in the future. It believes, however, that there are features in that form of
universal life insurance, particularly in universal variable life insurance,
that enable it too easily to be used in an unsuitable way. Most universal life
insurance contracts also provide for premiums to be paid at irregular intervals
but with a recommended "target premium" to be paid at specified intervals.
Regular payment of the recommended target premiums, however, does not guarantee
- -- as is the case with this Contract -- that a death benefit will always be
paid. If the target premium is set too low and investment experience for some
period is unfavorable, the Contract Fund can drop to zero and then those
contracts will lapse. Similarly, if a contract owner skips several premium
payments during a period of financial strain, the same thing could happen, even
after a contract has been in force for many years. If that should happen, there
will be little incentive to reinstate the contract and the contract owner will
have bought, unintentionally and unnecessarily, very expensive term insurance.
Two purposes for which permanent insurance is bought -- protection against death
and savings for later use -- will not have been met.

The Prudential's Variable Appreciable Life Insurance Contract is a form of life
insurance that seeks to eliminate these defects. Although it provides much of
the flexibility of variable universal life, it differs in two important ways.
First, The Prudential guarantees that if the Scheduled Premiums are paid when
due (or missed premiums are paid later with interest), the Contract will not
lapse and the face amount of insurance will be paid upon the death of the
insured even if, because of unfavorable investment experience, the Contract Fund
value should drop to below zero. Second, if all premiums are not paid when due
(or made up), the Contract will not lapse as long as the Contract Fund is higher
than a stated amount set forth in a table in the Contract -- an amount that
increases each year and in later years becomes quite high; it is called the
"Tabular Contract Fund." The Contract lapses when the Contract Fund falls to
below this stated amount, rather than when it drops to zero. Thus, when a
Variable Appreciable Life Contract lapses, it may still have considerable value
and you will, therefore, have a substantial incentive to reinstate it, as well
as an opportunity to make a considered decision whether to do so or to take, in
one form or another, the cash surrender value. In effect, The Prudential
provides an early and timely warning against the imprudent use of the
flexibility provided by the Contract.

In the following pages of this prospectus we describe in much greater detail all
of the provisions of the Contract. That description is preceded by two sets of
tables. The first set provides, in condensed form, financial information about
the portfolios of the Series Fund, beginning on the date each of them was first
established. The second set shows what the cash surrender values and death
benefits would be under a Contract issued on a hypothetical person, making
certain assumptions. These tables show generally how the values under the
Contract would vary, with different investment performances.

FINANCIAL HIGHLIGHTS OF THE PORTFOLIOS OF THE SERIES FUND

The tables that follow provide information about the annual investment income,
capital appreciation and expenses of the 14 portfolios of the Series Fund that
were available as of December 31, 1994 for each year, beginning with the year
after the Series Fund was established. They are prepared on a per share basis
and therefore provide useful information about the investment performance of
each portfolio.

<PAGE>

Note, however, that these tables do not tell you how your Contract Fund would
have changed during this period because they do not reflect the deductions from
the Contract Fund other than the deductions for the investment management fees
and expenses.

6
<PAGE>

THE PRUDENTIAL SERIES FUND, INC. FINANCIAL HIGHLIGHTS

To be filed by Post-Effective Amendment pursuant to Rule 485(b).

7
<PAGE>

PORTFOLIO RATES OF RETURN

To be filed by Post-Effective Amendment pursuant to Rule 485(b).

14
<PAGE>

HYPOTHETICAL ILLUSTRATION OF
DEATH BENEFITS AND CASH SURRENDER VALUES

The four tables that follow show how the death benefit and cash surrender values
change with the investment experience of the Account. They are "hypothetical"
because they are based, in part, upon several assumptions, each of which is
described below. All four tables assume, first, that a Contract with a face
amount of $100,000 has been bought by a 35 year old man in a preferred rating
class. It is assumed that the Scheduled Premium of $894.06 is paid on each
anniversary date, and that the deduction for taxes attributable to premiums is
3.25%. The first table assumes that a Form A Contract has been purchased and the
second table assumes that a Form B Contract has been purchased. Both assume that
the current charges will continue for the indefinite future. They assume also
that a termination dividend will be paid, since that is The Prudential's current
intention, upon death or surrender after the 16th year. The third and fourth
tables are based upon the same assumptions except that it is assumed that the
maximum charges permitted by the Contract have been made from the beginning and
that no termination dividends are paid. In effect, the third and fourth tables
represent a kind of "worst case" scenario.

Another assumption is that the Contract Fund has been invested in equal amounts
in each of the 16 available portfolios of the Series Fund. Finally, there are
four assumptions, shown separately, about the average investment performance of
the portfolios. The first is that there will be a uniform 0% gross rate of
return, that is, that the average value of the Contract Fund will uniformly be
adversely affected by very unfavorable investment performance. The other three
assumptions are that investment performance will be at a uniform gross annual
rate of 4%, 8% and 12%. These, of course, are unrealistic assumptions since
actual returns will fluctuate from year to year. Nevertheless, these assumptions
help show how the Contract values will change with investment experience.

The first column in the following tables shows the Contract year. The second
column, to provide context, shows what the aggregate amount would be if the
Scheduled Premiums had been invested in a savings account paying 4% compounded
interest. Of course, if that were done, there would be no life insurance
protection. The next four columns show the death benefit payable in each of the
years shown for the four different assumed investment returns. Note that a gross
return (as well as the net return) is shown at the top of each column. The gross
return represents the combined effect of income and capital appreciation of the
portfolios before any reduction is made for investment advisory fees or other
Series Fund expenses. The net return reflects an average total annual expenses
of the 16 portfolios of 0.59%, and the daily deduction from the Contract Fund of
0.6% per year for the first two tables, which are based on current charges, and
0.9% per year for the two tables that are based upon maximum charges. For
Contracts with face amounts of less than $100,000, the current charge is 0.9%
per year. Thus, assuming maximum charges, gross returns of 0%, 4%, 8% and 12%
are the equivalent of net returns of -1.49%, 2.51%, 6.51% and 10.51%
respectively. The death benefits and cash surrender values shown reflect the
deduction of all expenses and charges both from the Series Fund and under the
Contract.

The amounts shown assume that there is no loan. The cash surrender values shown
for the first 10 years reflect the surrender charges that would be deducted if
the Contract were surrendered in those years. For years after the tenth, the
cash surrender values are equal to the Contract Fund value, plus any termination
dividend.

Note that under the Form B Contract the death benefit changes to reflect
investment returns, while under the Form A Contract the death benefit increases
only when the cash surrender value becomes quite large (the small increase in
death benefit in years 20 to 35 reflects a termination dividend, not investment
results). Correspondingly, the cash surrender values under the Form A Contract
are slightly larger than those under the Form B Contract.

If you are considering the purchase of a variable life insurance contract from
another insurance company, you should not rely upon these tables for comparison
purposes. A comparison between two tables, each showing values for a 35 year old
man, may be useful for a 35 year old man but would be inaccurate if made for a
35 year old woman or a 50 year old man. To take a second example, the death
benefit and cash surrender values under a $50,000 Contract cannot be determined
by dividing by two the amount shown in a table for a $100,000 Contract. Your
Prudential representative can provide you with a comparable hypothetical
illustration for a person of your own age, sex, and rating class. You can obtain
an illustration using premium amounts and payment patterns that you wish to
follow. You may use assumed gross returns different than those shown in the
tables, although they may not be higher than 12%.

<PAGE>

ILLUSTRATIONS
-------------

VARIABLE APPRECIABLE LIFE INSURANCE CONTRACT
FORM A -- FIXED DEATH BENEFIT
MALE PREFERRED ISSUE AGE 35
$100,000 GUARANTEED DEATH BENEFIT
$894.06 MINIMUM INITIAL SCHEDULED PREMIUM (1) (3)
USING CURRENT CONTRACTUAL CHARGES

Death Benefit (2) (4) Cash Surrender Value (2) (4)
------------------------------------------------- -------------------------------------------------
Assuming Hypothetical Gross (and Net) Assuming Hypothetical Gross (and Net)
Premiums Annual Investment Return of Annual Investment Return of
End of Accumulated ------------------------------------------------- -------------------------------------------------
Policy at 4% Interest 0% Gross 4% Gross 8% Gross 12% Gross 0% Gross 4% Gross 8% Gross 12% Gross
Year Per Year (3) (-1.19% Net) (2.81% Net) (6.81% Net) (10.81% Net) (-1.19% Net) (2.81% Net) (6.81% Net) (10.81% Net)
------ -------------- ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 930 $100,000 $100,000 $100,000 $100,000 $ 0 $ 0 $ 0 $ 0
2 $ 1,897 $100,000 $100,000 $100,000 $100,000 $ 272 $ 351 $ 432 $ 515
3 $ 2,903 $100,000 $100,000 $100,000 $100,000 $ 760 $ 912 $ 1,073 $ 1,243
4 $ 3,948 $100,000 $100,000 $100,000 $100,000 $ 1,230 $ 1,478 $ 1,748 $ 2,042
5 $ 5,036 $100,000 $100,000 $100,000 $100,000 $ 1,682 $ 2,049 $ 2,459 $ 2,917
6 $ 6,167 $100,000 $100,000 $100,000 $100,000 $ 2,368 $ 2,878 $ 3,464 $ 4,135
7 $ 7,344 $100,000 $100,000 $100,000 $100,000 $ 3,040 $ 3,717 $ 4,516 $ 5,458
8 $ 8,568 $100,000 $100,000 $100,000 $100,000 $ 3,688 $ 4,557 $ 5,611 $ 6,887
9 $ 9,840 $100,000 $100,000 $100,000 $100,000 $ 4,313 $ 5,398 $ 6,751 $ 8,436
10 $ 11,164 $100,000 $100,000 $100,000 $100,000 $ 4,912 $ 6,238 $ 7,938 $ 10,115
15 $ 18,618 $100,000 $100,000 $100,000 $100,000 $ 6,542 $ 9,426 $ 13,706 $ 20,063
20 $ 27,688 $101,115 $101,115 $101,115 $101,115 $ 8,439 $13,516 $ 22,343 $ 37,721
25 $ 38,723 $102,229 $102,229 $102,229 $125,937 $ 9,470 $17,318 $ 33,538 $ 66,768
30 (Age 65) $ 52,149 $102,225 $102,225 $102,225 $186,385 $ 7,415 $18,647 $ 46,771 $111,742
35 $ 88,496 $102,455 $102,455 $102,455 $272,646 $20,989 $37,060 $ 64,685 $182,845
40 $132,719 $102,672 $102,672 $120,284 $397,831 $30,863 $57,175 $ 89,342 $293,868
45 $186,522 $102,863 $102,863 $150,607 $582,287 $34,980 $80,904 $120,684 $464,936
<FN>
(1) If premiums are paid more frequently than annually, the initial payments would be $456.85 semi-annually, $231.52
or quarterly $78.55 monthly. The ultimate payments would be $2,411.37 semi-annually, $1,218.60 quarterly
or $410.34 monthly. The death benefits and cash surrender values would be slightly different for a Contract
with more frequent premium payments.

(2) Assumes no Contract loan has been made.

(3) For a hypothetical gross investment return of 0%, the second Scheduled Premium will be $4,726.61. For a gross return of 4%,
the second Scheduled Premium will be $4,587.15; on a current basis, a lesser premium of $4,446.89 will guarantee that your
contract will not lapse for one year. For a gross return of 8%, the second Scheduled Premium will be $1,828.70; on a current
basis, a lesser premium of $894.06 will guarantee that your contract will not lapse for one year. For a gross return of 12%,
the second Scheduled Premium will be $894.06. The premiums accumulated at 4% interest in column 2 are those payable if the
gross investment return is 4%. For an explanation of why the scheduled premium may increase on the premium change date, see
Premiums.

(4) Assumes after age 65 payment of the lesser premium amount, if applicable.
</FN>
</TABLE>

THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE OR
LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING INTEREST RATES, AND RATES OF
INFLATION. THE DEATH BENEFIT AND CASH SURRENDER VALUE FOR A CONTRACT WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED 0%, 4%, 8%,
AND 12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES
FOR INDIVIDUAL CONTRACT YEARS. NO REPRESENTATIONS CAN BE MADE BY THE PRUDENTIAL
OR THE SERIES FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR
ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.

<PAGE>

VARIABLE APPRECIABLE LIFE INSURANCE CONTRACT
FORM B -- VARIABLE DEATH BENEFIT
MALE PREFERRED ISSUE AGE 35
$100,000 GUARANTEED DEATH BENEFIT
$894.06 MINIMUM INITIAL SCHEDULED PREMIUM (1) (3)
USING CURRENT CONTRACTUAL CHARGES

Death Benefit (2) (4) Cash Surrender Value (2) (4)
------------------------------------------------- -------------------------------------------------
Assuming Hypothetical Gross (and Net) Assuming Hypothetical Gross (and Net)
Premiums Annual Investment Return of Annual Investment Return of
End of Accumulated ------------------------------------------------- -------------------------------------------------
Policy at 4% Interest 0% Gross 4% Gross 8% Gross 12% Gross 0% Gross 4% Gross 8% Gross 12% Gross
Year Per Year (3) (-1.19% Net) (2.81% Net) (6.81% Net) (10.81% Net) (-1.19% Net) (2.81% Net) (6.81% Net) (10.81% Net)
------ -------------- ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 930 $100,000 $100,000 $100,021 $100,049 $ 0 $ 0 $ 0 $ 0
2 $ 1,897 $100,000 $100,000 $100,061 $100,144 $ 217 $ 295 $ 376 $ 459
3 $ 2,903 $100,000 $100,000 $100,119 $100,288 $ 704 $ 856 $ 1,016 $ 1,186
4 $ 3,948 $100,000 $100,000 $100,198 $100,490 $ 1,189 $ 1,436 $ 1,705 $ 1,997
5 $ 5,036 $100,000 $100,000 $100,301 $100,757 $ 1,671 $ 2,037 $ 2,445 $ 2,901
6 $ 6,167 $100,000 $100,000 $100,479 $101,146 $ 2,365 $ 2,872 $ 3,454 $ 4,121
7 $ 7,344 $100,000 $100,000 $100,687 $101,621 $ 3,036 $ 3,710 $ 4,503 $ 5,437
8 $ 8,568 $100,000 $100,000 $100,928 $102,193 $ 3,685 $ 4,549 $ 5,593 $ 6,858
9 $ 9,840 $100,000 $100,000 $101,205 $102,871 $ 4,310 $ 5,388 $ 6,728 $ 8,394
10 $ 11,164 $100,000 $100,000 $101,519 $103,668 $ 4,909 $ 6,227 $ 7,907 $ 10,056
15 $ 18,618 $100,000 $100,000 $103,751 $109,943 $ 6,539 $ 9,408 $13,590 $ 19,782
20 $ 27,688 $101,115 $101,115 $109,069 $123,844 $ 8,499 $13,597 $22,133 $ 36,908
25 $ 38,723 $102,229 $102,273 $117,669 $149,144 $ 9,596 $17,543 $32,939 $ 64,414
30 (Age 65) $ 52,149 $102,225 $103,996 $129,680 $192,295 $ 7,604 $18,996 $44,680 $107,295
35 $ 88,335 $102,455 $106,709 $128,281 $263,632 $21,317 $37,010 $58,582 $176,827
40 $132,360 $102,672 $110,992 $130,872 $388,122 $31,469 $55,819 $75,699 $286,714
45 $185,924 $102,863 $117,539 $139,314 $573,009 $36,050 $75,066 $96,841 $457,537

<FN>
(1) If premiums are paid more frequently than annually, the initial payments would be $456.85 semi-annually, $231.52
or quarterly $78.55 monthly. The ultimate payments would be $2,411.37 semi-annually, $1,218.60 quarterly
or $410.34 monthly. The death benefits and cash surrender values would be slightly different for a Contract
with more frequent premium payments.

(2) Assumes no Contract loan has been made.

(3) For a hypothetical gross investment return of 0%, the second Scheduled Premium will be $4,726.61. For a gross return of 4%,
the second Scheduled Premium will be $4,632.31; on a current basis, a lesser premium of $4,418.18 will guarantee that your
contract will not lapse for one year. For a gross return of 8%, the second Scheduled Premium will be $3,264.73; on a current
basis, a lesser premium of $894.06 will guarantee that your contract will not lapse for one year. For a gross return of 12%,
the second Scheduled Premium will be $894.06. The premiums accumulated at 4% interest in column 2 are those payable if the
gross investment return is 4%. For an explanation of why the scheduled premium may increase on the premium change date, see
Premiums.

(4) Assumes after age 65 payment of the lesser premium amount, if applicable.
</FN>
</TABLE>

THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE OR
LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING INTEREST RATES, AND RATES OF
INFLATION. THE DEATH BENEFIT AND CASH SURRENDER VALUE FOR A CONTRACT WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED 0%, 4%, 8%,
AND 12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES
FOR INDIVIDUARL CONTRACT YEARS. NO REPRESENTATIONS CAN BE MADE BY THE PRUDENTIAL
OR THE SERIES FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR
ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.

<PAGE>

Death Benefit (2) Cash Surrender Value (2)
------------------------------------------------- -------------------------------------------------
Assuming Hypothetical Gross (and Net) Assuming Hypothetical Gross (and Net)
Premiums Annual Investment Return of Annual Investment Return of
End of Accumulated ------------------------------------------------- -------------------------------------------------
Policy at 4% Interest 0% Gross 4% Gross 8% Gross 12% Gross 0% Gross 4% Gross 8% Gross 12% Gross
Year Per Year (3) (-1.49% Net) (2.51% Net) (6.51% Net) (10.51% Net) (-1.49% Net) (2.51% Net) (6.51% Net) (10.51% Net)
------ -------------- ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 930 $100,000 $100,000 $100,000 $100,000 $ 0 $ 0 $ 0 $ 0
2 $ 1,897 $100,000 $100,000 $100,000 $100,000 $ 266 $ 345 $ 426 $ 509
3 $ 2,903 $100,000 $100,000 $100,000 $100,000 $ 749 $ 900 $ 1,061 $ 1,230
4 $ 3,948 $100,000 $100,000 $100,000 $100,000 $1,212 $ 1,459 $ 1,727 $ 2,019
5 $ 5,036 $100,000 $100,000 $100,000 $100,000 $1,656 $ 2,020 $ 2,427 $ 2,881
6 $ 6,167 $100,000 $100,000 $100,000 $100,000 $2,283 $ 2,787 $ 3,365 $ 4,029
7 $ 7,344 $100,000 $100,000 $100,000 $100,000 $2,896 $ 3,560 $ 4,345 $ 5,271
8 $ 8,568 $100,000 $100,000 $100,000 $100,000 $3,483 $ 4,330 $ 5,360 $ 6,608
9 $ 9,840 $100,000 $100,000 $100,000 $100,000 $4,047 $ 5,098 $ 6,411 $ 8,050
10 $ 11,164 $100,000 $100,000 $100,000 $100,000 $4,585 $ 5,860 $ 7,501 $ 9,607
15 $ 18,618 $100,000 $100,000 $100,000 $100,000 $5,899 $ 8,594 $ 12,616 $ 18,621
20 $ 27,688 $100,000 $100,000 $100,000 $100,000 $6,162 $10,717 $ 18,712 $ 32,750
25 $ 38,723 $100,000 $100,000 $100,000 $106,044 $4,646 $11,371 $ 25,573 $ 55,323
30 (Age 65) $ 52,149 $100,000 $100,000 $100,000 $151,737 $ 62 $ 9,020 $ 32,743 $ 90,235
35 $ 90,072 $100,000 $100,000 $100,000 $211,995 $8,118 $21,241 $ 51,479 $141,536
40 $136,211 $100,000 $100,000 $104,836 $294,423 $8,445 $29,791 $ 77,255 $216,963
45 $192,347 $100,000 $100,000 $137,402 $406,526 $ 0 $30,030 $109,574 $324,192

<FN>
(1) If premiums are paid more frequently than annually, the payments would be $456.85 semi-annually, $231.52 quarterly
or $78.55 monthly. The death benefits and cash surrender values would be slightly different for a Contract with more
frequent premium payments.

(2) Assumes no Contract loan has been made.

(3) For a hypothetical gross investment return of 0%, the premium after age 65 will be $4,726.61; for a
gross return of 4% the premium after age 65 will be $4,726.61; for a gross return of 8% the premium
after age 65 will be $2,986.34; for a gross return of 12% the premium after age 65
will be $894.06. The premiums accumulated at 4% interest in column 2 are those payable if the gross investment
return is 4%. For an explanation of why the scheduled premium may increase on the premium change date, see Premiums.
</FN>
</TABLE>

<PAGE>

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 930 $100,000 $100,000 $100,019 $100,047 $ 0 $ 0 $ 0 $ 0
2 $ 1,897 $100,000 $100,000 $100,055 $100,138 $ 211 $ 289 $ 370 $ 453
3 $ 2,903 $100,000 $100,000 $100,106 $100,275 $ 693 $ 844 $ 1,004 $ 1,173
4 $ 3,948 $100,000 $100,000 $100,177 $100,468 $1,171 $ 1,417 $ 1,684 $ 1,975
5 $ 5,036 $100,000 $100,000 $100,269 $100,721 $1,645 $ 2,008 $ 2,413 $ 2,865
6 $ 6,167 $100,000 $100,000 $100,381 $101,041 $2,280 $ 2,781 $ 3,356 $ 4,016
7 $ 7,344 $100,000 $100,000 $100,517 $101,436 $2,893 $ 3,554 $ 4,333 $ 5,252
8 $ 8,568 $100,000 $100,000 $100,679 $101,915 $3,480 $ 4,323 $ 5,344 $ 6,580
9 $ 9,840 $100,000 $100,000 $100,868 $102,488 $4,045 $ 5,090 $ 6,391 $ 8,011
10 $ 11,164 $100,000 $100,000 $101,086 $103,165 $4,582 $ 5,852 $ 7,474 $ 9,553
15 $ 18,618 $100,000 $100,000 $102,685 $108,535 $5,897 $ 8,584 $ 12,524 $ 18,374
20 $ 27,688 $100,000 $100,000 $105,356 $118,724 $6,159 $10,705 $ 18,420 $ 31,788
25 $ 38,723 $100,000 $100,000 $109,419 $136,638 $4,643 $11,357 $ 24,689 $ 51,908
30 (Age 65) $ 52,149 $100,000 $100,000 $115,169 $166,661 $ 60 $ 9,003 $ 30,169 $ 81,661
35 $ 90,072 $100,000 $100,000 $119,833 $196,791 $8,115 $21,219 $ 50,134 $127,092
40 $136,211 $100,000 $100,000 $128,557 $266,974 $8,442 $29,759 $ 73,384 $196,736
45 $192,347 $100,000 $100,000 $142,796 $371,227 $ 0 $29,978 $100,323 $296,042

(2) Assumes no Contract loan has been made.

(3) For a hypothetical gross investment return of 0%, the premium after age 65 will be $4,726.61; for a gross return of 4% the
premium after age 65 will be $4,726.61; for a gross return of 8% the premium after age 65 will be $3,918.92; for a gross
return of 12% the premium after age 65 will be $1,177.12. The premiums accumulated at 4% interest in column 2 are those
payable if the gross investment return is 4%. For an explanation of why the scheduled premium may increase on the premium
change date, see Premiums.

</FN>
</TABLE>

<PAGE>

INFORMATION ABOUT THE ACCOUNT,
THE REAL PROPERTY ACCOUNT AND THE
FIXED RATE OPTION

The Prudential Variable Appreciable Account. The Account was established on
August 11, 1987 under New Jersey law as a separate investment account. The
Account meets the definition of a "separate account" under the federal
securities laws. The Account holds assets that are segregated from all of The
Prudential's other assets.

The obligations to Contract owners and beneficiaries arising under the Contract
are general corporate obligations of The Prudential. The Prudential is also the
legal owner of the assets in the Account. But The Prudential will at all times
maintain assets in the Account with a total market value at least equal to the
liabilities relating to the variable benefits attributable to the Account. These
assets may not be charged with liabilities which arise from any other business
The Prudential conducts. Accordingly, Contract owners, under New Jersey law,
have a prior claim to these assets. In addition to these assets, the Account's
assets may include funds contributed by The Prudential to commence operation of
the Account and may include accumulations of the charges The Prudential makes
against the Account. From time to time these additional assets will be withdrawn
by The Prudential but before making any such withdrawal, The Prudential will
consider any possible adverse impact the withdrawal might have on the Account.

The Account is registered with the Securities and Exchange Commission ("SEC")
under the Investment Company Act of 1940 ("1940 Act") as a unit investment
trust, which is a type of investment company. This does not involve any
supervision by the SEC of the management or investment policies or practices of
the Account. For state law purposes, the Account is treated as a part or
division of The Prudential. There are currently sixteen subaccounts within the
Account that are available investments under the Contract. Additional
subaccounts may be added in the future. The Account's financial statements begin
on page A1.

The Prudential Variable Contract Real Property Account. The Prudential Variable
Contract Real Property Account (the "Real Property Account") is a separate
account of The Prudential that, through a general partnership formed by The
Prudential and two of its subsidiaries, invests primarily in income-producing
real property such as office buildings, shopping centers, agricultural land,
hotels, apartments or industrial properties. It also invests in mortgage loans
and other real estate-related investments, including sale-leaseback
transactions. It is not registered as an investment company under the Investment
Company Act of 1940 and is therefore not subject to the same regulation as the
Series Fund. The objectives of the Real Property Account and the Partnership are
to preserve and protect capital, provide for compounding of income as a result
of reinvestment of cash flow from investments, and provide for increases over
time in the amount of such income through appreciation in the value of assets.

The Partnership has entered into an investment management agreement with The
Prudential, under which The Prudential selects the properties and other
investments held by the Partnership. The Prudential charges the Partnership a
daily fee for investment management which amounts to 1.25% per year of the
average daily gross assets of the Partnership.

A full description of the Real Property Account, its management, policies, and
restrictions, its charges and expenses, the risks associated with investment
therein, the Partnership's investment objectives, and all other aspects of the
Real Property Account's and the Partnership's operations is contained in the
attached prospectus for the Real Property Account, which should be read together
with this prospectus by any Contract owner considering the real estate
investment option. There is no assurance that the investment objectives will be
met.

The Fixed-Rate Option. Because of exemptive and exclusionary provisions,
interests in the fixed-rate option under the Contract have not been registered
under the Securities Act of 1933 and The Prudential has not been registered as
an investment company under the Investment Company Act of 1940. Accordingly,
interests in the fixed-rate option are not subject to the provisions of these
Acts, and The Prudential has been advised that the staff of the Securities and
Exchange Commission has not reviewed the disclosure in this Prospectus relating
to the fixed-rate option. Any inaccurate or misleading disclosure regarding the
fixed-rate option may, however, subject The Prudential and its directors to
civil liability if that results in any damage.

As explained earlier, you may elect to allocate, either initially or by
transfer, all or part of the amount credited under the Contract to the
fixed-rate option, and the amount so allocated or transferred becomes part of
The Prudential's general assets. Sometimes this is referred to as The
Prudential's general account, which consists of all assets owned by The
Prudential other than those in the Account and in other separate accounts that
have been or may be established by The Prudential. Subject to applicable law,
The Prudential has sole discretion over the investment of the assets of the
general account, and Contract owners do not share in the investment experience
of those assets. Instead, The Prudential guarantees that the part of the
Contract Fund allocated to the fixed-rate option will accrue interest daily at
an effective annual rate that The Prudential declares periodically. This rate
may not be less than an effective annual rate of 4%. Currently, declared
interest rates remain in effect from the date money is

16
<PAGE>

allocated to the fixed-rate option until the Monthly date in the same month in
the following year. See Contract Date, page 21. Thereafter, a new crediting rate
will be declared each year and will remain in effect for the calendar year. The
Prudential reserves the right to change this practice. The Prudential is not
obligated to credit interest at a higher rate than 4%, although in its sole
discretion it may do so. Different crediting rates may be declared for different
portions of the Contract Fund allocated to the fixed-rate option. At least
annually and on request, a Contract owner will be advised of the interest rates
that currently apply to his or her Contract.

Transfers from the fixed-rate option are subject to strict limits. (See
Transfers, page 23). The payment of any cash surrender value attributable to the
fixed-rate option may be delayed up to 6 months (see When Proceeds Are Paid,
page 26).

DETAILED INFORMATION ABOUT THE CONTRACT

Requirements for Issuance of a Contract. Generally, the minimum initial
guaranteed death benefit that can be applied for is $60,000; however, higher
minimums apply to insureds over the age of 75. Insureds 14 years of age or less
may apply for a minimum initial guaranteed death benefit of $40,000, which will
increase by 50% at age 21. The Contract may generally be issued on insureds
below the age of 81. Before issuing any Contract, The Prudential requires
evidence of insurability, which may include a medical examination. Non-Smokers
who meet preferred underwriting requirements are offered the most favorable
premium rate. A higher premium is charged if an extra mortality risk is
involved. Certain classes of Contracts, for example a Contract issued in
connection with a tax-qualified pension plan, may be issued on a "guaranteed
issue" basis and may have a lower minimum initial death benefit than a Contract
which is individually underwritten. These are the current underwriting
requirements. The Prudential reserves the right to change them on a
non-discriminatory basis.

Contract Forms. A purchaser may select either of two forms of the Contract. The
Scheduled Premiums shown in the Contract will be the same for a given insured,
regardless of which Contract Form is chosen. Contract Form A has a death benefit
equal to the initial face amount of insurance. The death benefit of a Form A
Contract does not vary with the investment performance of the investment options
selected by the owner, unless the death benefit is increased to ensure that the
Contract meets the Internal Revenue Code's definition of life insurance. See How
a Contract's Death Benefit Will Vary, page 24. Favorable investment results of
the investment options to which the assets related to the Contract are allocated
and payment of greater than Scheduled Premiums will generally result in
increases in the cash surrender value. See How the Contract Fund Changes With
Investment Experience, page 24.

Contract Form B also has an initial face amount of insurance but favorable
investment performance and payment of greater than Scheduled Premiums generally
result in an increase in the death benefit and, over time, in a lesser increase
in the cash surrender value than under the Form A Contract. See How the Contract
Fund Changes With Investment Experience, page 24 and How a Contract's Death
Benefit Will Vary, page 24. Unfavorable investment performance will result in
decreases in the death benefit (but never below the face amount stated in the
Contract) and in the cash surrender value.

Purchasers should select the form that best meets their needs and objectives.
All permanent insurance provides both protection for beneficiaries in the event
of death and the opportunity to accumulate savings for possible use in later
years. The Prudential's Variable Appreciable Life Contract provides more
flexible investment opportunities than do more conventional life insurance
policies because it permits the owner to decide how the assets held under the
Contract will be invested, because it permits considerable flexibility in
determining the amount and timing of premium payments, because it permits
adjustment of the face amount of insurance (subject, in the case of an increase,
to evidence of insurability), and because favorable investment returns result in
an increase in Contract values. Purchasers who prefer to have favorable
investment results and greater than Scheduled Premiums reflected in part in the
form of an increased death benefit should choose Contract Form B. Purchasers who
are satisfied with the amount of their insurance coverage and wish to have
favorable investment results and additional premiums reflected to the maximum
extent in increasing cash surrender values should choose Contract Form A.

In choosing a Contract form, purchasers should also consider whether they intend
to use the withdrawal feature. Purchasers of Form A Contracts should note that
an early withdrawal may result in a portion of the surrender charge being
deducted from the Contract Fund. Furthermore, a purchaser of a minimum face
amount Form A Contract cannot make withdrawals unless the Contract's death
benefit has been increased to comply with the Internal Revenue Code's definition
of life insurance. Purchasers of Form B Contracts will not incur a surrender
charge for a withdrawal and are not precluded from making withdrawals if they
purchase a minimum size Contract. See Withdrawal of Excess Cash Surrender Value
in the Statement of Additional Information. Withdrawal of part of the cash
surrender value may have tax consequences, see Tax Treatment of Contract
Benefits, page 28.

17
<PAGE>

Short-Term Cancellation Right or "Free Look". Generally, you may return the
Contract for a refund within 10 days after you receive it, within 45 days after
Part I of the application for insurance is signed, or within 10 days after The
Prudential mails or delivers a Notice of Withdrawal Right, whichever is latest.
Some states allow a longer period of time during which a Contract may be
returned for a refund. A refund can be requested by mailing or delivering the
Contract to the representative who sold it or to The Prudential Home Office
specified in the Contract. A Contract returned according to this provision shall
be deemed void from the beginning. You will then receive a refund of all premium
payments made, plus or minus any change due to investment experience in the
value of the invested portion of the premiums, calculated as if no charges had
been made against the Account or the Series Fund. However, if applicable law so
requires, if you exercise your short-term cancellation right, you will receive a
refund of all premium payments made, with no adjustment for investment
experience.

Contract Fees and Charges. This section provides a detailed description of each
charge that is described briefly in the chart on page 2, and an explanation of
the purpose of the charge.

In several instances we will use the terms "maximum charge" and "current
charge." The "maximum charge," in each instance, will be the highest charge that
The Prudential is entitled to make under the Contract. The "current charge" is
the lower amount that The Prudential is now charging and which it intends to
charge for the indefinite future. However, if circumstances change, The
Prudential reserves the right to increase each current charge, up to but to no
more than the maximum charge, without giving any advance notice.

A Contract owner may add several "riders" to the Contract which provide
additional benefits, which are charged for separately. The statement and
description of charges that follows assumes there are no riders to the Contract.

Deductions from Premiums

(a) A charge for taxes attributable to premiums is deducted from each premium
payment. That charge is currently made up of two parts. The first part is in an
amount equal to the state or local premium tax. It varies from state to state
and generally ranges from 0.5% to 5% of the premium received by The Prudential.
The second part is for federal income taxes measured by premiums and it is equal
to 1.25% of the premium. The Prudential believes that this charge is a
reasonable estimate of an increase in its federal income taxes resulting from a
1990 change in the Internal Revenue Code. It is intended to recover this
increased tax. During 1994 and 1993, The Prudential deducted a total of
approximately $xx,xxx,xxx and $23,100,000, respectively, in taxes attributable
to premiums.

(b) A charge of $2 is deducted from each premium payment to cover the cost of
collecting and processing premiums. Thus, if you pay premiums annually, this
charge will be $2 per year. If you pay premiums monthly, the charge will be $24
per year. During 1994 and 1993, The Prudential received a total of approximately
$xx,xxx,xxx and $23,566,000, respectively, in processing charges.

Deductions from Portfolios

(a) An investment advisory fee is deducted daily from each portfolio at a rate,
on an annualized basis, from 0.35% for the Stock Index Portfolio to 0.75% for
the Global Equity Portfolio.

(b) The expenses incurred in conducting the investment operations of the
portfolios (such as investment advisory fees, custodian fees and preparation and
distribution of annual reports) are paid out of the portfolio's income. These
expenses also vary from portfolio to portfolio. The total expenses of each
portfolio for the year 1994 expressed as a percentage of the average assets
during the year are shown below:

- --------------------------------------------------------------------------------
Investment Other Total
Portfolio Advisory Fee Expenses* Expenses*
- --------------------------------------------------------------------------------
Money Market 0.40% 0.05% 0.45%
Bond 0.40% 0.06% 0.46%
High Yield Bond 0.55% 0.10% 0.65%
Government Securities 0.40% 0.06% 0.46%
Common Stock 0.45% 0.08% 0.53%
Stock Index 0.35% 0.07% 0.42%
High Dividend Stock 0.40% 0.10% 0.50%
Natural Resources 0.45% 0.10% 0.55%
Global Equity 0.75% 0.69% 1.44%
Conservatively Managed Flexible 0.55% 0.05% 0.60%
Aggressively Managed Flexible 0.60% 0.06% 0.66%
Zero Coupon Bond 1995 0.40% 0.00% 0.40%
Zero Coupon Bond 2000 0.40% 0.00% 0.40%
Zero Coupon Bond 2005 0.40% 0.00% 0.40%
- --------------------------------------------------------------------------------

* For some of the portfolios, the actual expenses were higher than those
shown in the second and third columns. The Prudential currently makes
payments to the following seven subaccounts so that the

18
<PAGE>

portfolio expenses indirectly borne by a Contract owner investing in: (1)
the Zero Coupon Bond Portfolios will not exceed the investment management
fee; and (2) the High Yield Bond, Stock Index, High Dividend Stock, and
Natural Resources Portfolios will not exceed the investment advisory fee
plus 0.1% of the average daily net assets of the Portfolio. Without such
adjustments the portfolio expenses indirectly borne by a Contract owner,
expressed as a percentage of the average daily net assets by portfolio,
would have been 0.66% for the Zero Coupon Bond Portfolio 2005, 0.63% for
the Zero Coupon Bond Portfolio 1995, 0.62% for the Zero Coupon Bond
Portfolio 2000, 0.60% for the Natural Resources Portfolio, 0.54% for the
High Dividend Stock Portfolio, 0.65% for the High Yield Bond Portfolio and
0.42% for the Stock Index Portfolio during 1994. The Prudential intends to
continue making these adjustments in the future, although it retains the
right to stop doing so. For the years 1994, 1993 and 1992, The Prudential
received a total of $xx,xxx,xxx, $51,197,499, and $35,661,075, respectively
in investment advisory fees.

The advisory fee for the Small Capitalization Stock Portfolio is 0.40% and for
the Growth Stock Portfolio is 0.60%. These portfolios were not available for
investment in 1994.

Monthly Deductions from Contract Fund

The following monthly charges are deducted proportionately from the dollar
amounts held in each of the chosen investment option[s].

(a) An administrative charge of $3 plus $0.03 per $1,000 per month of face
amount of insurance is deducted each month. Thus, for a Contract with $60,000
face amount, the charge is $3 plus $1.80 for a total of $4.80. The charge is
intended to pay for processing claims, keeping records, and communicating with
Contract owners. The current charge for Contracts with face amounts greater than
$100,000 is lower. The $0.03 per $1,000 portion of the charge is reduced to
$0.01 per $1,000 for that part of the face amount that exceeds $100,000 and will
not exceed $12. If premiums are paid by automatic transfer under The
Prudential's Pru-Matic Plan, as described on page 21, the $0.03 per $1,000
charge is reduced to $0.01 for all Contract face amounts and will not exceed $1.
During 1994 and 1993, The Prudential received a total of approximately
$xx,xxx,xxx, and $49,021,000, respectively, in monthly administrative charges.

(b) A mortality charge is deducted that is intended to be used to pay death
benefits. When an insured dies, the amount payable to the beneficiary is larger
than the Contract Fund and significantly larger if the insured dies in the early
years of a Contract. The mortality charges collected from all Contract owners
enables The Prudential to pay the death benefit for the few insureds who die.
The maximum mortality charge is determined by multiplying the "net amount at
risk" under a Contract (the amount by which the Contract's death benefit exceeds
the Contract Fund) by a rate based upon the insured's current attained age and
sex (except where unisex rates apply) and the anticipated mortality for that
class of persons. The anticipated mortality is based upon mortality tables
published by The National Association of Insurance Commissioners called the
Non-Smoker/Smoker 1980 CSO Tables. The Prudential's current mortality charge is
lower than the maximum for insureds of 50 years of age and older. In addition,
for insureds of all ages, if a Contract has a face amount of at least $100,000
and the insured under the Contract has met strict underwriting requirements and
qualifies for a "select rating" basis for the particular risk classification,
the current mortality charges may be lower still.

Certain Contracts, for example Contracts issued in connection with tax-qualified
pension plans, may be issued on a "guaranteed issue" basis and may have current
mortality charges which are different from those mortality charges for Contracts
which are individually underwritten. These Contracts with different current
mortality charges may be offered to categories of individuals meeting
eligibility guidelines determined by The Prudential.

(c) A sales charge, often called a sales load, is deducted to pay part of the
costs The Prudential incurs in selling the Contracts, including commissions,
advertising and the printing and distribution of prospectuses and sales
literature. The charge is equal to 0.5% of the "primary annual premium" which is
equal to the Scheduled Premium that would be payable if premiums were being paid
annually, less the two deductions from premiums (taxes attributable to premiums
and the $2 processing charge), and less the $3 part of the monthly deduction
described in (a) above. The deduction is made whether the Contract owner is
paying premiums annually or more frequently. It is lower on Contracts issued on
insureds over 60 years of age. At present this sales charge is made only during
the first five Contract years. For Contracts with face amounts of at least $7.5
million, this sales charge is made only during the first two Contract years.
However, The Prudential reserves the right to make this charge in all Contract
years. To summarize, for most Contracts, this charge is somewhat less than 6% of
the annual Scheduled Premium for each of the first five Contract years and it
may but probably will not continue to be charged after that.

There is a second sales load, which will be charged only if a Contract lapses or
is surrendered before the end of the 10th Contract year. It is often described
as a contingent deferred sales load ("CDSL") and is described below under
Surrender or Withdrawal Charges. During 1994 and 1993, The Prudential received a
total of approximately $xx,xxx,xxx and $74,384,000, in sales charges.

<PAGE>

(d) A charge of $0.01 per $1000 of face amount of insurance is made to
compensate The Prudential for the risk it assumes by guaranteeing that, no
matter how unfavorable investment experience may be, the death benefit will
never be less than the guaranteed minimum death benefit so long as Scheduled
Premiums are paid on or before the due date or during the grace period. During
1994 and 1993, The Prudential received a total of approximately $x,xxx,xxx and
$7,777,000, respectively, for this risk charge.

(e) If a rider is added to the basic Contract, or if an insured is in a
substandard risk classification (for example, a person in a hazardous
occupation), the annual Scheduled Premium will be increased and the additional
charges will be deducted monthly.

(f) A charge may be deducted to cover federal, state or local taxes (other than
"taxes attributable to premiums" described above) that are imposed upon the
operations of the Account. At present no such taxes are imposed and no charge is
made.

Daily Deduction from the Contract Fund

Each day a charge is deducted from the assets of each of the subaccounts and/or
the Real Property Account (the "variable investment options") in an amount
equivalent to an effective annual rate of 0.9%. For Contracts with face amounts
of $100,000 or more, the current charge is 0.6%. This charge is intended to
compensate The Prudential for assuming mortality and expense risks under the
Contract. The mortality risk assumed is that insureds may live for shorter
periods of time than The Prudential estimated when it determined what mortality
charge to make. The expense risk assumed is that expenses incurred in issuing
and administering the Contract will be greater than The Prudential estimated in
fixing its administrative charges. The Prudential will realize a profit from
this risk charge to the extent it is not needed to provide benefits and pay
expenses under the Contracts. During 1994 and 1993, The Prudential received a
total of approximately $xx,xxx,xxx and $12,102,000, respectively, in mortality
and expense risk charges. This charge is not assessed against amounts allocated
to the fixed-rate option.

Surrender or Withdrawal Charges

(a) An additional sales load (the CDSL) is charged if a Contract is surrendered
for its cash surrender value or lapses during the first 10 Contract years. It is
not deducted from the death benefit if the insured should die during this
period. This contingent deferred charge is generally at its highest in dollar
amount during the Contract's fourth and fifth years and then is reduced daily at
a constant rate until it reaches zero at the end of the 10th year. The exact
amount is determined by a complex formula that is described in the Statement of
Additional Information. The amount of this charge can be more easily understood
by reference to the following table which shows the sales loads that would be
paid by a 35 year old man under a Form B Contract with $100,000 face amount of
insurance, both through the monthly deductions from the Contract Fund described
above and upon the surrender of the Contract.

- --------------------------------------------------------------------------------
Cumulative
Cumulative Total Sales
Cumulative Sales Load Load as Per-
Surrender, Scheduled Deducted Contingent centage of
Last Day of Premiums from Contract Deferred Total Sales Scheduled
Year No. Paid Fund Sales Load Load Premiums Paid
- --------------------------------------------------------------------------------
1 $ 894.06 $ 49.56 $218.66 $268.22 30.00%
2 1,788.12 99.12 367.64 466.76 26.10%
3 2,682.18 148.68 398.55 547.23 20.40%
4 3,576.24 198.24 414.00 612.24 17.12%
5 4,470.30 247.80 414.00 661.80 14.80%
6 5,364.36 247.80 331.00 578.80 10.79%
7 6,258.42 247.80 248.00 495.80 7.92%
8 7,152.48 247.80 166.00 413.80 5.79%
9 8.046.54 247.80 83.00 330.80 4.11%
10 8,940.60 247.80 0.00 247.80 2.77%
- --------------------------------------------------------------------------------

The percentages shown in the last column will not be appreciably different for
insureds of different ages.

(b) An administrative charge of $5 per $1,000 of face amount of insurance is
deducted upon lapse or surrender to cover the cost of processing applications,
conducting medical examinations, determining insurability and the insured's
rating class, and establishing records. However, this charge is reduced
beginning on the Contract's fifth anniversary and declines daily at a constant
rate until it disappears entirely on the tenth Contract anniversary. During 1994
and 1993, The Prudential received a total of approximately $x,xxx,xxx and
$5,583,000, respectively, from surrendered or lapsed Contracts. The Prudential
does not expect to make a profit on this charge.

20
<PAGE>

Transaction Charges

There may be transaction charges if certain events take place. Examples are: the
face amount of insurance is decreased or part of the cash surrender value is
withdrawn. The Prudential is entitled under the Contract to charge a fee in
these situations, which will generally be $15 or less. Currently, it waives the
fee in some instances. These fees are described at the appropriate place in this
prospectus or in the Statement of Additional Information.

Contract Date. When the first premium payment is paid with the application for a
Contract, the Contract Date will ordinarily be the later of the date of the
application or the date of any medical examination. In most cases no medical
examination will be necessary. If the first premium is not paid with the
application, the Contract Date will ordinarily be the date the first premium is
paid and the Contract is delivered. It may be advantageous for a Contract owner
to have an earlier Contract Date when that will result in the use by The
Prudential of a lower issue age in determining the amount of the Scheduled
Premium. The Prudential will permit a Contract to be back-dated but only to a
date not earlier than 6 months prior to the date of the application. The
Prudential will require the payment of all premiums that would have been due had
the application date coincided with the back-dated Contract Date. No Contract
may be back-dated to a date prior to that which is in accordance with The
Prudential's regulations. The death benefit and cash surrender value under the
Contract will be equal to what they would have been had the Contract been issued
on the Contract Date, all Scheduled Premiums been received on their due dates,
and all Contract charges been made. The term Monthly Date means the day of each
month that is the same as the Contract Date.

Premiums. As already explained, the Contract provides for a Scheduled Premium
which, if paid when due or within a 61 day grace period, ensures that the
Contract will not lapse. If you pay premiums other than on a monthly basis, you
will receive a notice that a premium is due about 3 weeks before each due date.
If you pay premiums monthly, you will receive each year a book with 12 coupons
that will serve as a reminder. With The Prudential's consent, you may change the
frequency of premium payments.

You may elect to have monthly premiums paid automatically under the "Pru-Matic
Premium Plan" by pre-authorized transfers from a bank checking account. If you
select the Pru-Matic Premium Plan, one of the current monthly charges will be
reduced. See Monthly Deductions From Contract Fund, page 19. Some Contract
owners may also be eligible to have monthly premiums paid by pre-authorized
deductions from an employer's payroll.

As stated above, your Contract sets forth two Scheduled Premium amounts. Your
first or initial amount is payable from the time you purchase your Contract
until the Contract anniversary immediately following your 65th birthday or the
Contract's 7th anniversary, whichever is later (the "Premium Change Date"). If
your Contract Fund on the Premium Change Date is higher than it would have been
had all Scheduled Premiums been paid when due, maximum contractual charges been
deducted, and only an average net rate of return of 4% been earned, then the
second Scheduled Premium Amount will be lower than the maximum amount stated in
your Contract. You will be told what the amount of your second Scheduled Premium
will be. You will also be told what lesser amount, if any, The Prudential will
accept that will guarantee against lapse for one year. For examples of what the
second Scheduled Premium might be, see Footnote 3 to the tables on pages T1
through T4.

A significant feature of this Contract is that it permits you to pay greater
than Scheduled Premiums. This may be done by making occasional unscheduled
premium payments or on a periodic basis. If you wish, you may select a higher
contemplated premium than the Scheduled Premium. The Prudential will then bill
you for the chosen premium. In general, the regular payment of higher premiums
will result in higher cash surrender values and, at least under Form B, in
higher death benefits. Conversely, payment of a Scheduled Premium need not be
made if the Contract Fund is sufficiently large to enable the charges due under
the Contract to be made without causing the Contract to lapse. See Lapse and
Reinstatement, page 26. The payment of premiums substantially in excess of
Scheduled Premiums may cause the Contract to become a Modified Endowment
Contract. If this happens, loans and other distributions which would otherwise
not be taxable events will be subject to federal income taxation. See Tax
Treatment of Contract Benefits, page 28.

If you elect to add a "rider" to your Contract that provides additional
benefits, see Riders, page 29, the Scheduled Premium may be increased. Some
riders provide additional term insurance in a stated amount that does not vary
with investment experience. One of these "term riders" also allows you to choose
different insurance amounts in different years. For these riders, you may choose
to pay a billed premium higher than your initial Scheduled Premium. Under some
circumstances this could result in a higher cash surrender value and death
benefit than if the same premium had been paid under a Contract with the same
death benefit but without the rider. After several years, however, even if the
billed premiums are paid on time, the Contract could lose its guarantee against
lapse and, after many more years, could have lower cash surrender values.

In states where the necessary approvals have been obtained, you may choose a
level premium option. In that case, the Scheduled Premium, the amount (which can
be obtained from your Prudential representative), will be higher and the
Scheduled Premium will not increase at age 65 (or 7 years after issue, if
later), even if investment

21
<PAGE>

experience has been unfavorable. If that level Scheduled Premium is paid when
due, or within the grace period, the Contract will not lapse.

The Prudential will generally accept any premium payment if the payment is at
least $25. The Prudential does reserve the right, however, to limit unscheduled
premiums to a total of $10,000 in any Contract year, and to refuse to accept
premiums that would immediately result in more than a dollar-for-dollar increase
in the death benefit. See How a Contract's Death Benefit Will Vary, page 24. The
flexibility of premium payments provides Contract owners with different
opportunities under the two Forms of the Contract. Greater than scheduled
payments under a Form A Contract increase the Contract Fund. Greater than
scheduled payments under a Form B Contract increase both the Contract Fund and
the death benefit, but any future increases in the Contract Fund will be less
than under a Form A Contract. This is because the monthly mortality charges
under the Form B Contract will be higher to compensate for the higher amount of
insurance. For all Contracts, the privilege of making large or additional
premium payments offers a way of investing amounts which accumulate without
current income taxation.

Unless you elect otherwise, your Contract will include a "waiver of premium"
provision under which The Prudential will pay your Scheduled Premiums if you
incur a disability before age 60 that lasts over six months. If the disability
begins after you become 60 and before you are 65, premiums will be paid only
until the first Contract anniversary following your 65th birthday. The waiver of
premium provision does not apply if you become disabled after your 65th
birthday.

Allocation of Premiums. On the Contract Date, the $2 processing charge and the
charge for taxes attributable to premiums are deducted from the initial premium,
and the first monthly deductions are made. See Contract Fees and Charges, page
18. The remainder of the initial premium will be allocated on the Contract Date
among the subaccounts, the fixed-rate option or the Real Property Account
according to the desired allocation specified in the application form. The
invested portion of any part of the initial premium in excess of the Scheduled
Premium is placed in the selected investment options on the date of receipt, but
not earlier than the Contract Date. Thus, to the extent that The Prudential
receives the initial premium prior to the Contract Date, there will be a period
during which it will not be invested. All subsequent premium payments, after the
deductions from premiums, when received by The Prudential will be placed in the
subaccounts, the fixed-rate option or the Real Property Account in accordance
with the allocation previously designated. Provided the Contract is not in
default, you may change the way in which subsequent premiums are allocated by
giving written notice to the Prudential Home Office stated in the Contract. You
may also change the way in which subsequent premiums are allocated by
telephoning your Prudential Home Office, provided you are enrolled to use the
Telephone Transfer System. There is no charge for reallocating future premiums.
If any part of the invested portion of a premium is allocated to a particular
investment option, that portion must be at least 10% on the date the allocation
takes effect. All percentage allocations must be in whole numbers. For example,
33% can be selected but 33-1/3% cannot. Of course, the total allocation of all
selected investment options must equal 100%.

Additionally, a feature called Dollar Cost Averaging is available to Contract
owners. If you wish, designated dollar amounts will be transferred monthly from
the Money Market Subaccount into other investment options available under the
Contract, excluding the fixed-rate option, but including the Real Property
Account. At issue, the minimum amount initially designated for transfer under
this feature must be the greater of $2,000 and 10% of the initial premium
payment. After issue, The Prudential will accept an amount less than $2,000
provided it brings the balance in any current Dollar Cost Averaging account up
to $2,000. Monthly transfers must be at least 3% of the amount allocated to the
Dollar Cost Averaging account (that is, if you designate $5,000, the minimum
monthly transfer is $150), with a minimum of $20 transferred into any one
investment option. These amounts are subject to change at The Prudential's
discretion. The minimum transfer amount will only be recalculated if the amount
designated for transfer is increased.

Each automatic monthly transfer will take effect as of the end of the valuation
period on the Monthly Date, provided the New York Stock Exchange is open on that
date. A valuation period is the period of time from one determination of the
value of the amount invested in a subaccount to the next. Such determinations
are made when the net asset values of the portfolios of the Series Fund are
calculated, which is generally 4:15 p.m. New York City time on each day during
which the New York Stock Exchange is open. If the New York Stock Exchange is not
open on that date, or if the Monthly Date does not occur in that particular
month, the transfer will take effect as of the end of the last valuation period
which immediately follows that Monthly Date. Automatic monthly transfers will
continue until the amount designated for Dollar Cost Averaging has been
transferred, or until the Contract owner gives notification of a change in
allocation or cancellation of the feature. Currently there is no charge for
using the Dollar Cost Averaging feature.

Transfers. If the Contract is not in default, or if the Contract is in force as
variable reduced paid-up insurance (see Lapse and Reinstatement, page 26), you
may, up to four times in each Contract year, transfer amounts from one
subaccount to another subaccount, to the fixed-rate option or to the Real
Property Account. There is no charge. All or a portion of the amount credited to
a subaccount may be transferred.

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<PAGE>

In addition, the total amount credited to a Contract held in the subaccounts or
the Real Property Account may be transferred to the fixed-rate option at any
time during the first two Contract years. If you wish to convert your variable
Contract to a fixed-benefit Contract in this manner, you must request a complete
transfer of funds to the fixed-rate option and also change your allocation
instructions regarding future premiums.

Transfers among subaccounts will take effect as of the end of the valuation
period (usually the business day) in which a proper transfer request is received
at your Prudential Home Office. The request may be in terms of dollars, such as
a request to transfer $10,000 from one subaccount to another, or may be in terms
of a percentage reallocation among subaccounts. In the latter case, as with
premium reallocations, the percentages must be in whole numbers. You may
transfer amounts by proper written notice to your Prudential Home Office, or by
telephone, unless you ask that transfers by telephone not be made. The
Prudential has adopted procedures designed to ensure that requests by telephone
are genuine and will require appropriate identification for that purpose. The
Prudential cannot guarantee that you will be able to get through to complete a
telephone transfer during peak periods such as periods of drastic economic or
market change.

On the liquidation date of a Zero Coupon Bond Subaccount, all the shares held by
it in the corresponding portfolio of the Series Fund will be redeemed and the
proceeds of the redemption applicable to each Contract will be transferred to
the Money Market Subaccount unless the owner directs that it be transferred to
another subaccount. Affected owners will be notified in writing prior to the
liquidation date and given the opportunity to transfer their proceeds to another
subaccount. A transfer that occurs upon the liquidation date of a Zero Coupon
Bond Subaccount will not be counted as one of the four permissible transfers in
a Contract year.

Transfers from the fixed-rate option to the subaccounts or the Real Property
Account are currently permitted once each Contract year and only during the
30-day period beginning on the Contract anniversary. The maximum amount which
may be transferred out of the fixed-rate option each year is currently the
greater of: (a) 25% of the amount in the fixed-rate option, or (b) $2,000. Such
transfer requests received prior to the Contract anniversary will be effected on
the Contract anniversary. Transfer requests received within the 30-day period
beginning on the Contract anniversary will be effected as of the end of the
valuation period in which a proper transfer request is received at your
Prudential Home Office. These limits are subject to change in the future.
Transfers from the Real Property Account are also subject to restrictions, and
these restrictions are described in the attached prospectus for that investment
option.

How the Contract Fund Changes with Investment Experience. As explained above,
after the tenth Contract year, there will no longer be a surrender charge and,
if there is no Contract loan, the cash surrender value will be equal to the
Contract Fund, plus any termination dividend. This section, therefore, also
describes how the cash surrender value of the Contract will change with
investment experience.

On the Contract Date, the Contract Fund value is the initial premium less the
deductions from premiums and the first monthly deductions. See Contract Fees and
Charges, page 18. This amount is placed in the investment options designated by
the owner. Thereafter the Contract Fund value changes daily, reflecting
increases or decreases in the value of the securities in which the assets of the
subaccount have been invested, the performance of the Real Property Account if
that option has been selected, and interest credited on any amounts allocated to
the fixed-rate option. It is also reduced by the daily asset charge for
mortality and expense risks assessed against the variable investment options.
The Contract Fund value also increases to reflect the receipt of additional
premium payments and is decreased by the monthly deductions.

A Contract's cash surrender value on any date will be the Contract Fund value
plus any termination dividend, reduced by the withdrawal charges, if any, and by
any Contract debt. Upon request, The Prudential will tell a Contract owner the
cash surrender value of his or her Contract. It is possible, although highly
unlikely, that the cash surrender value of a Contract could decline to zero
because of unfavorable investment performance, even if a Contract owner
continues to pay Scheduled Premiums when due.

The tables on pages T1 through T4 of this prospectus illustrate what the death
benefit and cash surrender values would be for a representative Contract,
assuming uniform hypothetical investment results in the selected portfolio[s],
and also provide information about the aggregate premiums payable under the
Contract. The tables also show, if the level premium option has not been chosen,
the maximum Scheduled Premium that may be payable for the period after the
insured reaches the age of 65 for the illustrated Contract under each of the
assumed investment returns.

How a Contract's Death Benefit Will Vary. The death benefit under a Form A
Contract will generally be equal to the face amount of insurance chosen by the
purchaser when the Contract was bought. Generally the investment experience
affects only the value of the Contract Fund. This means that as the Contract
Fund value grows, the deduction for the cost of mortality may decrease because
the "amount at risk" becomes smaller. The death benefit cannot ever fall below
the face amount of insurance. It could happen, however, that it will become
higher. If the Contract is kept in force for several years and if investment
performance is relatively favorable, the Contract Fund value may grow to the
point where, to meet certain provisions of the Internal Revenue Code which
require that the

23
<PAGE>

death benefit always be greater than the Contract Fund value, the death benefit
must be increased. The required difference between the death benefit and
Contract Fund value is higher at younger ages than at older ages. A precise
description is in the Statement of Additional Information.

If the Contract Fund value reaches this level, each premium payment increases
the death benefit by an amount greater than the premium. Accordingly, The
Prudential, when that occurs, reserves the right to refuse further premium
payments, although in practice it will accept a payment equal to two years'
Scheduled Premiums.

Under a Form B Contract, the death benefit will change from the outset with
investment experience. Here again the precise way in which that will occur is
complicated and is described in the Statement of Additional Information. In
general, if the net investment performance is 4% per year or higher, the death
benefit will increase; if it is below 4%, it will decrease. The Prudential
guarantees, however, that it will not decrease below the face amount of
insurance. If unfavorable experience of that kind should occur, it must be
offset by favorable experience before the death benefit begins to increase
again.

The death benefit could also increase to satisfy Internal Revenue Code
requirements, for the same reasons described above respecting Form A Contracts.

Contract Loans. The owner may borrow from The Prudential up to the "loan value"
of the Contract, using the Contract as the only security for the loan. The loan
value is equal to (1) 90% of an amount equal to the portion of the Contract Fund
value attributable to the variable investment options and to any prior loan[s]
supported by the variable investment options, minus the portion of any charges
attributable to variable investment options that would be payable upon an
immediate surrender; plus (2) 100% of an amount equal to the portion of the
Contract Fund value attributable to the fixed-rate option and to any prior
loan[s] supported by the fixed-rate option, minus the portion of any charges
attributable to the fixed-rate option that would be payable upon an immediate
surrender. The minimum amount that may be borrowed at any one time is $200
unless the proceeds are used to pay premiums on the Contract.

If you request a loan you may choose one of two interest rates. You may elect to
have interest charges accrued daily at a fixed effective annual rate of 5.5%.
Alternatively, you may elect a variable interest rate that changes from time to
time. You may switch from the fixed to variable interest loan provision, or
vice-versa, with The Prudential's consent.

If you elect the variable loan interest rate provision, interest charged on any
loan will accrue daily at an annual rate The Prudential determines at the start
of each Contract year (instead of at the fixed 5.5% rate). This interest rate
will not exceed the greatest of (1) the "Published Monthly Average" for the
calendar month ending two months before the calendar month of the Contract
anniversary; (2) 5%; or (3) the rate permitted by law in the state of issue of
the Contract. The "Published Monthly Average" means Moody's Corporate Bond Yield
Average -- Monthly Average Corporates, as published by Moody's Investors
Service, Inc. or any successor to that service, or if that average is no longer
published, a substantially similar average established by the insurance
regulator where the Contract is issued. For example, the Published Monthly
Average in 1994 ranged from 7.25% to 8.94%.

Interest payments on any loan are due at the end of each Contract year. If
interest is not paid when due, it is added to the principal amount of the loan.
The term "Contract debt" means the amount of all outstanding loans plus any
interest accrued but not yet due. If at any time the Contract debt exceeds what
the cash surrender value would be if there were no Contract debt, The Prudential
will notify the Contract owner of its intent to terminate the Contract in 61
days, within which time the owner may repay all or enough of the loan to reduce
it to below the cash surrender value and thus keep the Contract in force.

When a loan is made, an amount equal to the loan proceeds will be transferred
out of the Account, the fixed-rate option and/or the Real Property Account, as
applicable. The reduction will normally be made in the same proportions as the
value in each subaccount, the fixed-rate option, and the Real Property Account
bears to the total value of the Contract Fund. While a fixed-rate (5.5%) loan is
outstanding, the amount that was so transferred will continue to be treated as
part of the Contract Fund and it will be credited with the daily equivalent of
an annual return of 4% rather than with the actual rate of return of the
subaccount[s], fixed-rate option or Real Property Account. While a loan made
pursuant to the variable loan interest rate provision is outstanding, the amount
that was so transferred will be credited with the daily equivalent of a rate
that is 1% less than the loan interest rate for the Contract year. If a loan
remains outstanding at a time when The Prudential fixes a new rate, the new
interest rate will apply.

Choosing the variable rate option will usually mean a higher outlay of cash when
the loan is repaid but it will also result in a greater increase in the Contract
Fund value.

A loan will not affect the amount of the premiums due. Should the death benefit
become payable while a loan is outstanding, or should the Contract be
surrendered, any Contract debt will be deducted from the death benefit or the
cash surrender value.

<PAGE>

A loan will have an effect on a Contract's cash surrender value and may have an
effect on the death benefit, even if the loan is fully repaid, because the
investment results of the selected investment options will apply only to the
amount remaining invested under those options. The longer the loan is
outstanding, the greater the effect is likely to be. The effect could be
favorable or unfavorable. If investment results are greater than the rate being
credited on the loan balance while the loan is outstanding, values under the
Contract will not increase as rapidly as they would have if no loan had been
made. If investment results are below that rate, Contract values will be higher
than they would have been had no loan been made. A loan that is repaid will not
have any effect upon the guaranteed minimum death benefit.

Consider, for example, a Contract issued on a 35 year old male, as illustrated
in the table on page T1, with an 8% gross investment return. Assume a $2,500
fixed-rate (5.5%) loan was made under this Contract at the end of Contract year
8 and repaid at the end of Contract year 10 and loan interest was paid when due.
Upon repayment, the cash surrender value would be $7,794.42. This amount is
lower than the cash surrender value shown on that page for the end of Contract
year 10 because the loan amount was credited with the 4% assumed rate of return
rather than the 6.81% net return for the designated subaccount[s] resulting from
the 8% gross return in the underlying Series Fund. Loans from Modified Endowment
Contracts may be treated for tax purposes as distributions of income. See Tax
Treatment of Contract Benefits, page 28.

Surrender of a Contract. You may surrender a Contract in whole or in part for
its cash surrender value while the insured is living. Partial surrender involves
splitting the Contract into two Contracts. One Contract is surrendered for its
cash surrender value; the other is continued in force on the same terms as the
original Contract except that premiums will be based on the new face amount. You
will be given a new Contract document. The cash surrender value and the
guaranteed minimum death benefit of the new Contract will be proportionately
reduced based upon the reduction in the face amount of insurance. The new
Contract must have a face amount of insurance at least equal to the minimum face
amount applicable to the insured. Otherwise a partial surrender is not
permitted. See Requirements for Issuance of a Contract, page 17.

To surrender a Contract in whole or in part, you must deliver or mail it,
together with a written request, to your Prudential Home Office. The cash
surrender value of a surrendered or partially surrendered Contract (taking into
account the deferred sales and administrative charges, if any) will be
determined as of the end of the valuation period in which such a request is
received in the Home Office. Surrender of all or part of a Contract may have tax
consequences. See Tax Treatment of Contract Benefits, page 28.

Lapse and Reinstatement. As has already been explained, if Scheduled Premiums
are paid on or before each due date, or within the grace period after each due
date, and there are no withdrawals, a Contract will remain in force even if the
investment results of that Contract's variable investment option[s] have been so
unfavorable that the Contract Fund has decreased to zero or less.

In addition, even if a Scheduled Premium is not paid, the Contract will remain
in force as long as the Contract Fund on any Monthly Date is equal to or greater
than the Tabular Contract Fund value on the following Monthly Date. (A Table of
Tabular Contract Fund Values is included in the Contract; the values increase
with each year the Contract remains in force.) This could occur because of such
factors as favorable investment experience, deduction of current rather than
maximum charges, or the previous payment of greater than Scheduled Premiums.

However, if a Scheduled Premium is not paid, and the Contract Fund is
insufficient to keep the Contract in force, the Contract will go into default.
Should this happen, The Prudential will send the Contract owner a notice of
default setting forth the payment necessary to keep the Contract in force on a
premium paying basis. This payment must be received at the Prudential Home
Office within the 61 day grace period after the notice of default is mailed or
the Contract will lapse. A Contract that lapses with an outstanding Contract
loan may have tax consequences. See Tax Treatment of Contract Benefits, page 28.

Neither transfers nor reallocations of premium payments may be made if a
Contract is in default.

A Contract that has lapsed may be reinstated within 5 years after the date of
default unless the Contract has been surrendered for its cash surrender value.
To reinstate a lapsed Contract, The Prudential requires renewed evidence of
insurability, and submission of certain payments due under the Contract.

If your Contract does lapse, it will still provide some benefits. You can
receive the cash surrender value by making a request of The Prudential prior to
the end of the 61 day grace period. You may also choose one of the three forms
of insurance described below for which no further premiums are payable.

Fixed Extended Term Insurance. The amount of insurance that would have been paid
on the date of default will continue for a stated period of time. You will be
told in writing how long that will be. The insurance amount will not change.
There will be a diminishing cash surrender value but no loan value. Extended
term insurance is not available to insureds in high risk classifications or
under Contracts issued in connection with tax-qualified pension plans.

<PAGE>

Fixed Reduced Paid-Up Insurance. This insurance continues for the lifetime of
the insured but at an insurance amount that is lower than that provided by fixed
extended term insurance. It will increase in amount only if dividends are paid
and it will decrease only if a Contract loan is taken. You will be told, if you
ask, what the amount of the insurance will be. Fixed paid-up insurance has a
cash surrender value and a loan value both of which will gradually increase in
value. It is possible for this Contract to be classified as a Modified Endowment
Contract if this option is exercised during the first 7 Contract years. See Tax
Treatment of Contract Benefits, page 28.

Variable Reduced Paid-Up Insurance. This is similar to fixed paid-up insurance
and will initially be in the same amount. The Contract Fund will continue to
vary to reflect the experience of the selected investment options. There will be
a new guaranteed minimum death benefit. Loans will be available subject to the
same rules that apply to premium-paying Contracts.

Variable paid-up insurance is not available to insureds in high risk rating
classes or if the new guaranteed amount is less than $5,000. It is possible for
this Contract to be classified as a Modified Endowment Contract if this option
is exercised during the first 7 Contract years. See Tax Treatment of Contract
Benefits, page 28.

What Happens If No Request Is Made? Except in the two situations described
below, if no request is made the "automatic option" will be fixed extended term
insurance. If that is not available to the insured, then fixed reduced paid-up
insurance will be provided. However, if variable reduced paid-up insurance is
available and the amount is at least as great as the amount of fixed extended
term insurance, then the automatic option will be variable reduced paid-up
insurance. This could occur when there is a Contract debt outstanding when the
Contract lapses.

When Proceeds Are Paid. The Prudential will generally pay any death benefit,
cash surrender value, loan proceeds or withdrawal within 7 days after receipt at
a Prudential Home Office of all the documents required for such a payment. Other
than the death benefit, which is determined as of the date of death, the amount
will be determined as of the end of the valuation period in which the necessary
documents are received. However, The Prudential may delay payment of proceeds
from the subaccount[s] and the variable portion of the death benefit due under
the Contract if the sale or valuation of the Account's assets is not reasonably
practicable because the New York Stock Exchange is closed for other than a
regular holiday or weekend, trading is restricted by the SEC or the SEC declares
that an emergency exists.

With respect to the amount of any cash surrender value allocated to the
fixed-rate option, and with respect to a Contract in force as fixed reduced
paid-up insurance, The Prudential expects to pay the cash surrender value
promptly upon request. However, The Prudential has the right to delay payment of
such cash surrender value for up to 6 months (or a shorter period if required by
applicable law). The Prudential will pay interest of at least 3% a year if it
delays such a payment for 30 days or more (or a shorter period if required by
applicable law).

Living Needs Benefit. Contract applicants may elect to add the Living Needs
Benefit(SM) to their Contracts at issue, subject to The Prudential's receipt
of satisfactory evidence of insurability. The benefit may vary state-by-state.
It can generally be added only to Contracts of $50,000 or more. There is no
charge for adding the benefit to the Contract. However, an administrative charge
(not to exceed $150) will be made at the time the Living Needs Benefit is paid.

The Living Needs Benefit allows the Contract owner to elect to receive an
accelerated payment of all or part of the Contract's death benefit, adjusted to
reflect current value, at a time when certain special needs exist. The adjusted
death benefit will always be less than the death benefit, but will generally be
greater than the Contract's cash surrender value. Depending upon state
regulatory approval, one or both of the following options may be available. A
Prudential representative should be consulted as to whether additional options
may be available.

Terminal Illness Option. This option is available if the insured is diagnosed as
terminally ill with a life expectancy of 6 months or less. When satisfactory
evidence is provided, The Prudential will provide an accelerated payment of the
portion of the death benefit selected by the Contract owner as a Living Needs
Benefit. You may (1) elect to receive the benefit in a single sum or (2) receive
equal monthly payments for 6 months. If the insured dies before all the payments
have been made, the present value of the remaining payments will be paid to the
beneficiary designated in the Living Needs Benefit claim form in a single sum.

Nursing Home Option. This option is available after the insured has been
confined to an eligible nursing home for 6 months or more. When satisfactory
evidence is provided, including certification by a licensed physician, that the
insured is expected to remain in the nursing home until death, The Prudential
will provide an accelerated payment of the portion of the death benefit selected
by the Contract owner as a Living Needs Benefit. You may (1) elect to receive
the benefit in a single sum or (2) receive equal monthly payments for a
specified number of years (not more than 10 nor less than 2), depending upon the
age of the insured. If the insured dies before all of the payments have been
made, the present value of the remaining payments will be paid to the
beneficiary designated in the Living Needs Benefit claim form in a single sum.

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<PAGE>

All or part of the Contract's death benefit may be accelerated under the Living
Needs Benefit. If the benefit is only partially accelerated, a death benefit of
at least $25,000 must remain under the Contract. The Prudential reserves the
right to determine the minimum amount that may be accelerated.

No benefit will be payable if the Contract owner is required to elect it in
order to meet the claims of creditors or to obtain a government benefit. The
Prudential can furnish details about the amount of Living Needs Benefit that is
available to an eligible Contract owner under a particular Contract, and the
adjusted premium payments that would be in effect if less than the entire death
benefit is accelerated.

The Contract owner should consider whether adding this settlement option is
appropriate in his or her given situation. Adding the Living Needs Benefit to
the Contract has no adverse consequences; however, electing to use it could.
Contract owners should consult a qualified tax advisor before electing to
receive this benefit. Unlike a death benefit received by a beneficiary after the
death of an insured, receipt of a Living Needs Benefit payment may give rise to
a federal or state income tax. Receipt of a Living Needs Benefit payment may
also affect a Contract owner's eligibility for certain government benefits or
entitlements.

Voting Rights. As stated above, all of the assets held in the subaccounts of the
Account will be invested in shares of the corresponding portfolios of the Series
Fund. The Prudential is the legal owner of those shares and as such has the
right to vote on any matter voted on at Series Fund shareholders meetings.
However, The Prudential will vote the shares of the Series Fund at any regular
and special shareholders meetings it is required to hold in accordance with
voting instructions received from Contract owners. The Series Fund will not hold
annual shareholders meetings when not required to do so under Maryland law or
the Investment Company Act of 1940. Series Fund shares for which no timely
instructions from Contract owners are received, and any shares indirectly owned
by The Prudential, will be voted in the same proportion as shares in the
respective portfolios for which instructions are received.

Matters on which Contract owners may give voting instructions include the
following: (1) election of the Board of Directors of the Series Fund; (2)
ratification of the independent accountant of the Series Fund; (3) approval of
the investment advisory agreement for a portfolio of the Series Fund
corresponding to the Contract owner's selected subaccount[s]; (4) any change in
the fundamental investment policy of a portfolio corresponding to the Contract
owner's selected subaccount[s]; and (5) any other matter requiring a vote of the
shareholders of the Series Fund. With respect to approval of the investment
advisory agreement or any change in a portfolio's fundamental investment policy,
Contract owners participating in such portfolios will vote separately on the
matter.

The number of shares in a portfolio for which you may give instructions is
determined by dividing the portion of your Contract Fund attributable to the
portfolio, by the value of one share of the portfolio. The number of votes for
which each Contract owner may give The Prudential instructions will be
determined as of the record date chosen by the Board of Directors of the Series
Fund. The Prudential will furnish Contract owners with proper forms and proxies
to enable them to give these instructions. The Prudential reserves the right to
modify the manner in which the weight to be given voting instructions is
calculated where such a change is necessary to comply with current federal
regulations.

The Prudential may, if required by state insurance regulations, disregard voting
instructions if such instructions would require shares to be voted so as to
cause a change in the sub-classification or investment objectives of one or more
of the Series Fund's portfolios, or to approve or disapprove an investment
advisory contract for the Series Fund. In addition, The Prudential itself may
disregard voting instructions that would require changes in the investment
policy or investment advisor of one or more of the Series Fund's portfolios,
provided that The Prudential reasonably disapproves such changes in accordance
with applicable federal regulations. If The Prudential does disregard voting
instructions, it will advise Contract owners of that action and its reasons for
such action in the next annual or semi-annual report to Contract owners.

Contract owners also share with the owners of all Prudential Contracts and
policies the right to vote in elections for members of the Board of Directors of
The Prudential.

Reports to Contract Owners. Once each Contract year (except where the Contract
is in force as fixed extended term insurance or fixed reduced paid-up
insurance), you will be sent a statement that provides certain information
pertinent to your own Contract. These statements show all transactions during
the year that affected the value of your Contract Fund, including monthly
changes attributable to investment experience. That statement will also show the
current death benefit, cash surrender value, and loan values of your Contract.
On request, you will be sent a current statement in a form similar to that of
the annual statement described above, but The Prudential may limit the number of
such requests or impose a reasonable charge if such requests are made too
frequently.

You will also receive, usually at the end of February, an annual report of the
operations of the Account and of the Series Fund. That report will list the
investments held in each portfolio and include audited financial statements for
the Account and the Series Fund. A semi-annual report, with similar unaudited
information for the Series Fund, will be sent to you, usually at the end of
August.

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<PAGE>

Tax Treatment of Contract Benefits. The tax treatment of life insurance is
complex and may change, therefore you should consult with a qualified tax
advisor. A more technical discussion of what follows is contained in the
Statement of Additional Information. Here The Prudential provides, not tax
advice but, a general statement of how it believes the tax laws currently apply
in the most commonly occurring circumstances.

Treatment as Life Insurance. The Prudential believes that the Contract should
qualify as "life insurance" under the Internal Revenue Code. This means that,
except as noted below, any annual increases in your Contract Fund, whether
attributable to income or capital appreciation, should not be included in your
income. In addition, the receipt of a death benefit by a beneficiary should not
result in taxable income.

Although The Prudential believes the Contract should qualify as "life insurance"
for federal tax purposes, there are uncertainties, particularly because the
Secretary of the Treasury has not yet issued final regulations that bear on this
question. Accordingly, we have reserved the right to make changes -- which will
be applied uniformly to all Contract owners after advance written notice -- that
we deem necessary to insure that the Contract will continue to qualify as life
insurance.

Pre-Death Distributions. The tax treatment of any distribution received by an
owner prior to an insured's death will depend upon whether the Contract is
classified as a Modified Endowment Contract.

If the Contract is not classified as a Modified Endowment Contract, proceeds
received in the event of a lapse, total or partial surrender of the Contract, or
withdrawal of part of the cash surrender value will generally not be taxable
unless the total amount received exceeds the gross premiums paid less the
untaxed portion of any prior withdrawals. In certain limited circumstances, all
or a portion of a withdrawal or partial surrender during the first 15 contract
years may be taxable even if total withdrawals do not exceed total premiums paid
to date. The proceeds of any loan will be treated as indebtedness of the owner
and will not be treated as taxable income.

If the Contract is classified as a Modified Endowment Contract, pre-death
distributions, including loans, withdrawals and partial surrenders (even those
made during the 2 year period before the Contract became a Modified Endowment
Contract), will be taxed first as investment income to the extent of gain in the
Contract, and then as a return of the Contract owner's investment in the
Contract. In addition, pre-death distributions (including full surrenders) will
be subject to a penalty of 10% of the amount includible in income unless the
amount is distributed on or after the owner reaches age 59 1/2, on account of
the owner's disability, or as a life annuity.

A policy may be classified as a Modified Endowment Contract if premiums
substantially (or sometimes slightly) in excess of Scheduled Premiums are paid
or the face amount of insurance is decreased during the first seven Contract
years, or if the face amount of insurance is increased or if a rider is added to
(or a rider is removed from) the Contract. You should consult with your tax
advisor or a Prudential representative before making any of these policy
changes.

Other Tax Consequences. There may be federal estate taxes and state and local
estate and inheritance taxes payable if either the owner or the insured dies.
The transfer or assignment of the Contract to a new owner may also have tax
consequences. The individual situation of each Contract owner or beneficiary
will be significant.

Riders. When the Contract is first issued, the owner may be able to obtain
additional fixed benefits which may increase the Scheduled Premium. If they do
cause an increase in the Scheduled Premium, they will be charged for by making
monthly deductions from the Contract Fund. These optional insurance benefits
will be described in what is known as a "rider" to the Contract. One rider pays
an additional amount if the insured dies in an accident. Another waives certain
premiums if the insured is disabled within the meaning of the provision (or, in
the case of a Contract issued on an insured under the age of 15, if the
applicant dies or becomes disabled within the meaning of the provision). Others
pay an additional amount if the insured dies within a stated number of years
after issue; similar benefits may be available if the insured's spouse or child
should die. The amounts of these benefits are fully guaranteed at issue; they do
not depend on the performance of the Account, although they will no longer be
available if the Contract should lapse. Certain restrictions may apply; they are
clearly described in the applicable rider.

Under other riders, which provide a fixed amount of term insurance in exchange
for increasing total scheduled annual premiums, the amount payable upon death of
the insured may be substantially increased for a given total initial annual
premium. The rider may be appropriate for Contract owners who reasonably expect
their incomes to increase regularly so that they will be able to afford the
increasing scheduled annual premiums or who may be willing to rely upon their
future Contract Fund values to prevent the Contract from lapsing in later years.

Certain term riders issued by The Prudential may provide for a conversion
premium credit if the rider or policy is converted to a Prudential whole life
policy, including the Contracts described in this prospectus. If a Contract is
purchased through exercise of such a conversion privilege, the first year's
scheduled premium will be reduced by the amount of the premium credit. The
Prudential will add to first year scheduled premiums paid by the Contract owner
the pro rata portion of the premium credit.

28
<PAGE>

Any Prudential representative authorized to sell the Contract can explain these
extra benefits further. Samples of the provisions are available from The
Prudential upon written request.

Participation in Divisible Surplus. Because the Contract is issued by The
Prudential, a mutual life insurance company, it is a participating policy. This
means that the Contract is eligible to be credited part of The Prudential's
divisible surplus attributable to the Contracts, as determined by The
Prudential's Board of Directors. That determination is made, with respect to the
insurance contracts issued by The Prudential, every year. However, The
Prudential does not expect to credit any dividends upon these Contracts while
they remain in force because favorable investment performance will be reflected
in Contract values and because The Prudential intends, if experience indicates
that current charges are greater than needed to cover expenses, to reduce those
charges further so that there will be no source of distributable surplus
attributable to these Contracts. If a Contract is kept in force for a number of
years, The Prudential currently intends to add a termination dividend to the
proceeds payable upon death or surrender.

Other Contract Provisions. There are several other Contract provisions that are
of less significance to you than those already described in detail either
because they relate to options that you may choose under the Contract but are
not likely to exercise for several years after you first purchase it or because
they are of a routine nature not likely to influence your decision to buy the
Contract. These provisions are summarized in the Expanded Table of Contents of
the Statement of Additional Information, page 44 and described in greater detail
in the Statement of Additional Information.

FURTHER INFORMATION ABOUT THE SERIES FUND

The Prudential Series Fund, Inc. (the "Series Fund") is a Maryland corporation
organized on November 15, 1982. It is registered under the Investment Company
Act of 1940 (the "1940 Act") as an open-end, diversified, management investment
company. This registration does not imply any supervision by the Securities and
Exchange Commission over the Series Fund's management or its investment policies
or practices.

The Series Fund is currently made up of sixteen separate portfolios. Each
portfolio is, for many purposes, in effect a separate investment fund, and a
separate class of capital stock is issued for each portfolio. Each share of
capital stock issued with respect to a portfolio has a pro-rata interest in the
assets of that portfolio and has no interest in the assets of any other
portfolio. Each portfolio bears its own liabilities and also its proportionate
share of the general liabilities of the Series Fund. In other respects the
Series Fund is treated as one entity. For example, the Series Fund has only one
Board of Directors and owners of the shares of each portfolio are entitled to
vote for members of the Board.

Shares in the Series Fund are currently sold and redeemed at the close of each
business day, at their net asset value, determined in the manner described in
the Statement of Additional Information, only to separate accounts of The
Prudential and its subsidiaries. They may, in the future, be sold to other
insurers to fund benefits under variable life insurance and variable annuity
contracts issued by those companies.

The Prudential is the investment advisor of the Series Fund. The Prudential has
entered into a Service Agreement with its wholly-owned subsidiary The Prudential
Investment Corporation ("PIC"), which provides that PIC will furnish to The
Prudential such services as The Prudential may require in connection with the
performance of its obligations under an Investment Advisory Agreement with the
Series Fund. In addition, The Prudential has entered into a Subadvisory
Agreement with its wholly-owned subsidiary Jennison Associates Capital Corp.
("Jennison"), under which Jennison furnishes investment advisory services in
connection with the management of the Growth Stock Portfolio. See Investment
Management Arrangements and Expenses, page 43.

INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS

Each portfolio of the Series Fund has a different objective which it pursues
through separate investment policies as described below. Since each portfolio
has a different investment objective, each can be expected to have different
investment results and incur different market and financial risks. Those risks,
as explained above, are borne by the Contract owner. The Series Fund may in the
future establish other portfolios with different investment objectives.

The investment objectives of each portfolio are fundamental and may not be
changed without the approval of the holders of a majority of the outstanding
shares of the portfolio affected (which for this purpose and under the 1940 Act
means the lesser of: (i) 67% of the shares represented at a meeting at which
more than 50% of the outstanding shares are represented; or (ii) more than 50%
of the outstanding shares). The policies by which a portfolio seeks to achieve
its investment objectives, however, are not fundamental. They may be changed by
the Board of Directors of the Series Fund without the approval of the
shareholders.

<PAGE>

The investment objectives of each portfolio are set forth on pages 3 through 4.
For the sake of convenience, they are repeated here, followed in each case by a
brief description of the policies of each portfolio. In some cases a fuller
description of those policies is in the Statement of Additional Information.
There is no guarantee that any of these objectives will be met.

Fixed Income Portfolios

Money Market Portfolio. The objective of this portfolio is to achieve, through
investment in high-quality short-term debt obligations, the maximum current
income that is consistent with stability of capital and maintenance of
liquidity.

The portfolio seeks to achieve this objective by following the policy of
investing primarily in money market instruments denominated in U.S. dollars that
mature in 13 months or less from the date the portfolio acquires them.
Money-market instruments include short-term obligations of the United States and
foreign governments, their agencies, instrumentalities, and political
subdivisions, and of domestic and foreign banks and corporations. They also
include commercial paper, other corporate obligations, obligations of savings
and loan associations and savings banks, and variable amount demand master
notes. The portfolio may also enter into repurchase and reverse repurchase
agreements and may purchase and sell securities on a when-issued and delayed
delivery basis. These investment techniques may involve additional risks. A
detailed description of the money market instruments in which the portfolio may
invest, of the repurchase and reverse repurchase agreements it may enter into,
and of the risks associated with those instruments and agreements is in the
Statement of Additional Information.

Because of the high quality, short-term nature of the portfolio's holdings,
increases in the value of an investment in the portfolio will be derived almost
entirely from interest on the securities held by it. Accordingly, the results
for the portfolio will follow generally the fluctuation in short-term interest
rates.

Bond Portfolio. The objective of this portfolio is to achieve a high level of
income over the longer term while providing reasonable safety of capital through
investment primarily in readily marketable intermediate and long-term fixed
income securities that provide attractive yields but do not involve substantial
risk of loss of capital through default.

The portfolio seeks to achieve this objective by following the policies of
purchasing only debt securities of investment grade or, if not rated, of
comparable quality in the opinion of the portfolio manager and of investing from
time to time a portion of its assets in short-term debt obligations of the kind
held in the Money Market Portfolio as described in the Statement of Additional
Information. Since the value of fixed income securities generally fluctuates
inversely with changes in interest rates, the proportions of intermediate or
longer-term securities and short-term debt obligations held in the portfolio
will vary to reflect The Prudential's assessment of prospective changes in
interest rates, so that the portfolio may benefit from relative price
appreciation when interest rates decline and suffer lesser declines in value
when interest rates rise. The success of this strategy will depend on The
Prudential's ability to forecast changes in interest rates, and there is a
corresponding risk that the value of the securities held in the portfolio will
decline.

At least 80% of the portfolio's holdings (including short-term debt obligations)
will generally consist of debt securities that at the time of purchase have a
rating within the four highest grades determined by Moody's Investor Services,
Inc. ("Moody's"), Standard & Poor's Corporation ("S&P"), or a similar
nationally-recognized rating service. The portfolio may retain a security whose
rating has dropped below the four highest grades as determined by a commercial
rating service. Without limitation, the portfolio may invest in obligations of
the U.S. Government and its agencies and instrumentalities. The Statement of
Additional Information defines the ratings that are given to debt securities by
Moody's and S&P and describes the standards applied by them in assigning these
ratings.

The remaining assets of the portfolio may be invested in, among other things,
debt securities that are not rated within the four highest grades or in
convertible debt securities and preferred or convertible preferred stocks that
are rated within the four highest grades applicable to such securities. On
occasion, however, the portfolio may acquire common stock, not through direct
investment but by the conversion of convertible debt securities or the exercise
of warrants. No more than 10% of the value of the total assets of the portfolio
will be held in common stocks, and those will usually be sold as soon as a
favorable opportunity is available.

The portfolio may invest up to 20% of its total assets in United States currency
denominated debt securities issued outside the United States by foreign or
domestic issuers. The particular risks of investments in foreign securities are
described under Foreign Securities on page 41.

In addition, the portfolio may (i) purchase and sell options on debt securities;
(ii) purchase and sell interest rate futures contracts and options thereon;
(iii) purchase securities on a when-issued or delayed delivery basis; (iv) use
interest rate swaps; and (v) make short sales. These techniques are described
briefly under Options, Futures Contracts and Swaps and Short Sales on page 41,
and in detail in the Statement of Additional Information.

<PAGE>

Barbara Kenworthy, Managing Director, PIC, has been portfolio manager of the
Bond Portfolio since 1995. Ms. Kenworthy is also portfolio manager of the
Prudential Diversified Bond Fund, Inc. and the Prudential Government Income
Fund. Prior to 1994, Ms. Kenworthy was a portfolio manager and president of
several taxable fixed-income funds for The Dreyfus Corp.

Government Securities Portfolio. The objective of this portfolio is to achieve a
high level of income over the longer term consistent with the preservation of
capital through investment primarily in U.S. Government securities, including
intermediate and long-term U.S. Treasury securities and debt obligations issued
by agencies of or instrumentalities established, sponsored or guaranteed by the
U.S. Government. At least 65% of the total assets of the portfolio will be
invested in U.S. Government securities.

The portfolio seeks to achieve this objective by investing at least 65% of its
assets in U.S. Treasury securities, obligations issued or guaranteed by U.S.
Government agencies and instrumentalities, mortgage-related securities issued by
U.S. Government instrumentalities or non-governmental corporations, or related
collateralized mortgage obligations. These instruments are described below. The
portfolio may invest up to a total of 35% of its assets in the following three
categories: (1) short-term debt obligations of the kind held in the Money Market
Portfolio; (2) securities of issuers other than the U.S. government and related
entities, usually foreign governments, where the principal and interest are
substantially guaranteed (generally to the extent of 90% thereof) by U.S.
Government agencies whose guarantee is backed by the full faith and credit of
the United States and where an assurance of payment on the unguaranteed portion
is provided for in a comparable way; and (3) asset-backed securities rated in
either of the top two ratings by Moody's or Standard & Poor's, or if not rated,
determined by the investment manager to be of comparable quality. A description
of debt ratings is in the Statement of Additional Information.

U.S. Government Securities are considered among the most creditworthy of fixed
income investments. Their values (like those of fixed-income securities,
generally) will vary inversely with changes in interest rates. The magnitude of
these fluctuations will generally be greater for securities with longer
maturities.

U.S. Treasury securities are direct obligations of the U.S. Government and, as
such, are backed by the full faith and credit of the United States. Obligations
issued by agencies of the U.S. Government or instrumentalities established or
sponsored by the U.S. Government include securities that are guaranteed by
federal agencies or instrumentalities, and may or may not be backed by the full
faith and credit of the United States. Obligations of the Government National
Mortgage Association ("GNMA"), the Farmers Home Administration, and the
Export-Import Bank, for example, are backed by the full faith and credit of the
United States. Obligations issued by the Tennessee Valley Authority, The Federal
National Mortgage Association ("FNMA"), the Federal Home Loan Mortgage
Corporation ("FHLMC"), the United States Postal Service, the Federal Farm Credit
Bank and the Federal Home Loan Bank are not, and the portfolio must look
principally to the agency issuing or guaranteeing the obligation for ultimate
repayment.

The portfolio may invest in mortgage-backed securities issued by GNMA, FNMA or
FHLMC and representing undivided ownership interests in pools of mortgages. The
mortgages backing these securities include conventional 30 year fixed rate
mortgages, 15 year fixed rate mortgages, graduated payment mortgages, and
adjustable rate mortgages. The U.S. Government or the issuing agency guarantees
the payment of interest and principal of these securities. However, the
guarantees do not extend to the securities' yield or value of the portfolio's
shares. The portfolio may also purchase collateralized mortgage obligations
("CMOs"). A CMO is a debt security issued by a corporation or a U.S. Government
instrumentality. The payment of principal and interest is secured by an
underlying portfolio of mortgages or mortgage-backed securities. The portfolio
will invest in only those privately issued CMOs that are collateralized by
mortgage-backed securities issued by GNMA, FHLMC or FNMA, and in CMOs issued by
FHLMC, GNMA or FNMA. Neither the United States Government nor any U.S.
Government agency guarantees the payment of principal or interest on these
securities.

The portfolio may also invest in asset-backed securities. Asset-backed
securities represent a participation in, or are secured by and payable from, a
stream of payments generated by particular assets, such as automobile or credit
card receivables. Asset-backed securities present certain risks, including the
risk that the underlying obligor on the asset, such as the automobile purchaser
or the credit card holder, may default on his or her obligation. In addition,
asset-backed securities often do not provide a security interest in the related
collateral. For example, credit card receivables are generally unsecured, and
for automobile receivables the security interests in the underlying automobiles
are often not transferred when the pool is created, with the resulting
possibility that the collateral could be resold. In general, however, these
types of loans are of shorter average life than mortgage loans and are less
likely to have substantial prepayments.

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<PAGE>

Under normal circumstances, this portfolio's turnover rate is not expected to
exceed 200%. Purchases of U.S. Government Securities are generally made from
dealers at prices which usually include a profit to the dealer.

David Graham, Vice President, PIC, has been portfolio manager of the Government
Securities Portfolio since 1995. Mr. Graham also manages the Prudential GNMA
Fund, the Prudential Adjustable Rate Securities Fund, and the Prudential U.S.
Government Fund. He has been employed by PIC as a portfolio manager since 1993.
Prior to 1993, Mr. Graham was a portfolio manager for Alliance Capital
Management Group.

Zero Coupon Bond Portfolios 1995, 2000, and 2005. The objective of each of these
portfolios is to achieve the highest predictable compounded investment return
for a specific period of time, consistent with the safety of invested capital,
by investing primarily in debt obligations of the United States Treasury and
investment-grade corporations that have been issued without interest coupons or
stripped of their unmatured interest coupons, interest coupons that have been
stripped from such debt obligations, and receipts and certificates for such
stripped debt obligations and stripped coupons (collectively "stripped
securities"). The three portfolios differ only in their liquidation dates, which
for each portfolio is November 15 of the specified year.

In pursuing this objective, each Zero Coupon Bond portfolio invests only in
readily marketable debt securities that do not involve substantial risk of loss
of capital through default, although their value may vary because of changes in
the general level of interest rates. It is the policy of each Zero Coupon Bond
portfolio to invest at least 70% of its assets in stripped securities that are
obligations of the United States Government maturing within 2 years of the
portfolio liquidation date. Up to 30% of the assets may be invested and held
either in stripped securities issued by investment-grade corporations or in
high-grade interest bearing corporate debt securities, in each case with a
quality rating of Baa or better, provided that no more than 20% of the assets of
the portfolio may be invested in interest bearing securities. The Prudential
will evaluate the creditworthiness of the potential investments in corporate
securities in order to determine whether such securities are suitable for
purchase by the portfolios. A small portion of the portfolios may be invested in
short-term debt obligations of the kind held in the Money Market Portfolio in
order to make effective use of cash reserves pending investments in the
securities described above.

At the beginning of each week, The Prudential will calculate the anticipated
compounded growth rate that investors purchasing shares of each portfolio that
day are predicted to achieve if their investment is maintained until the
portfolio liquidation date. That rate will change from day to day depending on
various factors, including particularly the general level of interest rates, but
daily changes will generally not be significant. If there is a significant
change in interest rates (greater than a 0.30% change in the yield of a zero
coupon Treasury bond maturing in the specified year), The Prudential will
recalculate the predicted yield. The Prudential will furnish the anticipated
compounded growth rate on request.

In order to achieve a predictable compounded investment return to each
portfolio's liquidation date that will be as little affected as possible by
variations in the general level of interest rates during the intervening period,
the composition of the securities held in each portfolio is such that the
weighted average period of time until receipt of scheduled cash payments
(whether of principal or interest) -- sometimes referred to as the portfolio's
"duration" -- will be kept within 1 year of the period remaining until the
portfolio liquidation date. When the portfolio's duration is thus maintained,
differences between the market value and the face amount of unmatured bonds on
the portfolio's liquidation date resulting from changes in the general level of
interest rates will be approximately equal in magnitude to, but opposite in
direction from, the difference between the amount of interest accumulated
through the reinvestment of earlier coupon or principal payments and the amount
that would have been accumulated at the originally predicted rate. Each
portfolio is thus able to hold interest bearing securities and stripped
securities with maturity dates before, during, and after the portfolio's
liquidation date. The concept of "duration" is explained more fully in the
Statement of Additional Information.

Each portfolio seeks to realize a higher yield than would be obtained simply by
maintaining the portfolio's initial investments. The portfolios are actively
managed by The Prudential to take advantage of trading opportunities that may
exist from time to time when, for various reasons, some of the securities
available for purchase by the portfolio appear underpriced. There is a
corresponding risk that, to the extent that this strategy is unsuccessful, the
initial yield objective will not be met.

Stripped securities are purchased at a substantial (or "deep") discount from
their principal amounts payable at maturity. If held to maturity, these
obligations provide a predictable yield. But because interest on stripped
securities is not paid in cash on a current basis but rather is in effect
compounded until maturity (or the payment date in the case of a coupon), the
market values of securities of this type are subject to greater fluctuations, as
a result of changes in interest rates, than are the values of debt securities
that provide for the periodic payment of interest; and the longer the term to
maturity of a portfolio, the greater the risk of such fluctuations. Accordingly,
if you redeem an interest in the portfolio (for example, by a transfer to
another portfolio) prior to the portfolio liquidation date, you are likely to
achieve quite a different investment return than the return that was predicted
on the date your investment was made. You may suffer a loss.

<PAGE>

On the liquidation date of a Zero Coupon Bond Portfolio, all of the securities
held by the portfolio will be sold, all outstanding shares of the portfolio will
be redeemed, and the proceeds will, unless otherwise directed by Contract
owners, be allocated to the Money Market Subaccount and invested in the Money
Market Portfolio.

May Ngai, Senior Associate, PIC, has been portfolio manager of the Zero Coupon
Bond Portfolios 1995, 2000, and 2005 since 1995. From 1991 to the present, Ms.
Ngai has held the position of mortgage strategist, Taxable Mutual Funds,
Prudential Investment Advisors. Prior to 1991, Ms. Ngai was an Applications
Specialist for Gifford Fong Associates.

Balanced Portfolios

Conservatively Managed Flexible Portfolio. The objective of this portfolio is to
achieve a favorable total investment return consistent with a portfolio having a
conservatively managed mix of money market instruments, fixed income securities,
and common stocks in proportions believed by the investment manager to be
appropriate for an investor desiring diversification of investment who prefers a
relatively lower risk of loss than that associated with the Aggressively Managed
Flexible Portfolio while recognizing that this reduces the chances of greater
appreciation.

To achieve this objective, the Conservatively Managed Flexible Portfolio will
follow a policy of maintaining a more conservative asset mix among stocks, bonds
and money market instruments than the Aggressively Managed Flexible Portfolio.
In general, the portfolio manager will observe the following range of target
asset allocation mixes:

Asset Type Minimum Normal Maximum
---------- ------- ------ -------
Stocks 15% 35% 50%
Bonds 15% 35% 50%
Money Market 0% 30% 70%

The bond portion of the portfolio will be invested primarily in securities with
maturities of 2 to 10 years and ratings at the time of purchase within the four
highest grades determined by Moody's, S&P, or a similar nationally-recognized
rating service. A description of debt ratings is in the Statement of Additional
Information. Because of their shorter maturities, the value of the notes and
bonds in this portfolio will be less sensitive to changes in interest rates than
the longer-term bonds likely to be held in the Aggressively Managed Flexible
Portfolio. Thus, there will be less of a risk of loss of principal, but not as
much of a likelihood for greater appreciation in value. Up to 20% of the bond
portion of this portfolio may be invested in United States currency denominated
debt securities issued outside the United States by foreign or domestic issuers.
The common stock portion of this portfolio will be invested primarily in the
equity securities of major, established corporations in sound financial
condition that appear to offer attractive prospects of a total return from
dividends and capital appreciation that is superior to broadly based stock
indices. The money market portion of the portfolio will hold high-quality
short-term debt obligations with a maturity of 12 months or less (as described
in the Statement of Additional Information) and will maintain a dollar-weighted
average maturity of 120 days or less.

To the extent permitted by applicable insurance law, this portfolio may invest
up to 30% of its total assets in non-United States currency denominated debt and
equity securities of foreign and U.S. issuers. The particular risks of
investments in foreign securities are described under Foreign Securities on page
41.

In addition, the portfolio may (i) purchase and sell options on equity
securities, debt securities, stock indices and foreign currencies (ii) purchase
and sell stock index, interest rate and foreign currency futures contracts and
options thereon; (iii) enter into forward foreign currency exchange contracts;
(iv) purchase securities on a when-issued or delayed delivery basis; (v) use
interest rate swaps; and (vi) make short sales. These techniques are described
briefly under Options, Futures Contracts and Swaps and Short Sales on page 41,
and in detail in the Statement of Additional Information.

The Conservatively Managed Flexible Portfolio is managed by Prudential
Investment Advisors ("PIA") and Prudential Diversified Investment Strategies
("PDI"), units of PIC, using a team of portfolio managers under the supervision
of Mark Stumpp, Managing Director, PIC. Mr. Stumpp has been providing overall
asset allocation for the portfolio since 1994. Mr. Stumpp also supervises the
team of portfolio managers for the Aggressively Managed Flexible Portfolio of
the Series Fund and is portfolio manager for several employee benefit trusts
including The Prudential Retirement System for U.S. Employees and Special
Agents. Prior to 1994, he was responsible for corporate pension asset management
for Prudential Diversified Investment Strategies' corporate clients.

Aggressively Managed Flexible Portfolio. The objective of this portfolio is
achievement of a high total return consistent with a portfolio having an
aggressively managed mix of money market instruments, fixed income securities,
and common stocks, in proportions believed by The Prudential to be appropriate
for an investor desiring diversification of investment who is willing to accept
a relatively high level of loss in an effort to achieve greater appreciation.

<PAGE>

To achieve this objective, the Aggressively Managed Flexible Portfolio will
follow a policy of maintaining a more aggressive asset mix among stocks, bonds
and money market investments than the Conservatively Managed Flexible Portfolio.
In general, the portfolio manager will observe the following range of target
asset allocation mixes:

Asset Type Minimum Normal Maximum
---------- ------- ------ -------
Stocks 25% 60% 100%
Bonds 0% 40% 75%
Money Market 0% 0% 75%

The bond component of this portfolio is expected under normal circumstances to
have a weighted average maturity of greater than 10 years. The values of bonds
with longer maturities are generally more sensitive to changes in interest rates
than those of shorter maturities. The bond portion of this portfolio will
primarily be invested in securities that have a rating at the time of purchase
within the four highest grades determined by Moody's, S&P, or a similar
nationally-recognized rating service. A description of debt ratings is in the
Statement of Additional Information. However, up to 25% of the bond component of
this portfolio may be invested in securities having ratings at the time of
purchase of "BB," "Ba" or lower, or if not rated, of comparable quality in the
opinion of the portfolio manager, these securities are also known as high risk
securities. Up to 20% of the bond portion of this portfolio may be invested in
United States currency denominated debt securities issued outside the United
States by foreign or domestic issuers. The established company common stock
component of this portfolio will consist of the equity securities of major
corporations that are believed to be in sound financial condition. In selecting
stocks of smaller capitalization companies, the portfolio manager will
concentrate on companies with a capitalization range of $75 million to $600
million that show above-average profitability (measured by return-on-equity,
earnings, and dividend growth rates) with modest price/earnings ratios. The
individual equity selections for this portfolio may tend to have more volatile
market values than the equity securities selected for the Common Stock Portfolio
or the Conservatively Managed Flexible Portfolio. The money market portion of
the portfolio will hold high-quality short-term debt obligations with a
maturity of 12 months or less (as described in the Statement of Additional
Information) and will maintain a dollar-weighted average maturity of 120 days or
less.

To the extent permitted by applicable insurance law, this portfolio may invest
up to 30% of its total assets in non-United States currency denominated debt and
equity securities of foreign and U.S. issuers. The particular risks of
investment in foreign securities are described under Foreign Securities, below.

The Aggressively Managed Flexible Portfolio is managed by Prudential Investment
Advisors ("PIA") and Prudential Diversified Investment Strategies ("PDI"), units
of PIC, using a team of portfolio managers under the supervision of Mark Stumpp,
Managing Director, PIC. Mr. Stumpp has been providing overall asset allocation
for the portfolio since 1994. Mr. Stumpp also supervises the team of portfolio
managers for the Conservatively Managed Flexible Portfolio of the Series Fund
and is portfolio manager for several employee benefit trusts including The
Prudential Retirement System for U.S. Employees and Special Agents. Prior to
1994, he was responsible for corporate pension asset management for Prudential
Diversified Investment Strategies' corporate clients.

High Yield Bond Portfolios

High Yield Bond Portfolio. The objective of this portfolio is to achieve a high
total return through investment in a diversified portfolio of high yield/high
risk fixed income securities.

The portfolio seeks to achieve its objective by following a policy of generally
investing in fixed income securities rated in the medium to lower categories by
recognized rating services or in unrated fixed income securities of comparable
quality. The portfolio expects to invest principally in fixed income securities
rated Baa or lower by Moody's, or BBB or lower by S&P. Corporate bonds which are
rated Baa by Moody's are described by Moody's as being investment grade, but are
also characterized as having speculative characteristics. Corporate bonds rated
below Baa by Moody's and BBB by S&P are considered speculative. A description of
corporate bond ratings is in the Statement of Additional Information.

Medium to lower rated fixed income securities tend to offer higher yields than
higher rated securities because they are subject to the higher risk of an
issuer's inability to meet principal and interest payments on the obligations
(credit risk) and also to higher price volatility due to such factors as
interest rate sensitivity, market perception of the creditworthiness of the
issuer and general market liquidity (market risk). In the lower quality segments
of the fixed income securities market, changes in perception of the
creditworthiness of individual issuers tend to occur

<PAGE>

more frequently and in a more pronounced manner than do changes in higher
quality segments of the fixed income securities market. The Prudential considers
both credit risk and market risk in selecting securities for the portfolio. It
will evaluate, among other things, an issuer's financial history, condition,
prospects and management. It will make its own independent credit analysis and
will not rely principally on the ratings assigned by the ratings services (e.g.,
Moody's and S&P), although such ratings will be considered. By holding a
diversified selection of such securities, the portfolio seeks to reduce both
credit risk and volatility.

The portfolio may invest up to 20% of its total assets in United States currency
denominated debt issues issued outside the United States by foreign and domestic
issuers. The particular risks of investments in foreign securities are described
under Foreign Securities on page 41.

The portfolio may also (i) purchase and sell options on debt securities; (ii)
purchase and sell interest rate futures contracts and options thereon; (iii)
purchase securities on a when-issued or delayed delivery basis; (iv) use
interest rate swaps; and (v) make short sales. These techniques are described
briefly under Options, Futures Contracts and Swaps and Short Sales on page 41,
and in detail in the Statement of Additional Information.

Although the portfolio is not expected to engage in substantial short-term
trading, it may sell securities it owns without regard to the length of time
they have been held. The portfolio's turnover rate is not expected to exceed
150%.

Lars Berkman, Managing Director, PIC, and Michael Snyder, Vice President, PIC,
have been co-managers of the High Yield Bond Portfolio since 1995. Mr. Berkman
is also portfolio manager of The Prudential High Yield Fund and has been
employed by PIC as a portfolio manager since 1990. Mr. Snyder is also the
portfolio manager of the U.S. High Yield Income Fund for The Prudential and has
been employed by PIC since 1987.

Diversified Stock Portfolios

Stock Index Portfolio. The objective of this portfolio is to achieve investment
results that correspond to the price and yield performance of publicly-traded
common stocks in the aggregate.

The portfolio seeks to achieve this objective by following the policy of
attempting to duplicate the price and yield performance of the Standard & Poor's
500 Composite Stock Price Index (the "S&P 500 Index"), an index which represents
more than 70% of the total market value of all publicly-traded common stocks and
is widely viewed among investors as representative of the performance of
publicly-traded common stocks as a whole. The S&P 500 Index is composed of 500
selected common stocks, over 95% of which are listed on the New York Stock
Exchange ("NYSE"). Standard & Poor's Corporation chooses the stocks to be
included in the index on a statistical basis taking into account market values
and industry diversification. Inclusion in the index in no way implies an
opinion by Standard & Poor's Corporation as to a stock's attractiveness as an
investment, and Standard & Poor's Corporation is not in any way affiliated with
this portfolio. "Standard & Poor's," "Standard & Poor's 500" and "500" are
trademarks of McGraw Hill, Inc. and have been licensed for use by The Prudential
Insurance Company of America and its affiliates and subsidiaries. The Series
Fund is not sponsored, endorsed, sold or promoted by S&P and S&P makes no
representation regarding the advisability of investing in the Series Fund.
Reference is made to the Statement of Additional Information which sets forth
certain additional disclaimers and limitations of liabilities on behalf of S&P.

The S&P 500 Index is a "weighted" index in which the weighting of each stock
depends on its relative total market value: its market price per share times the
number of shares outstanding. Because of this weighting, approximately 10% of
the S&P 500 Index's value is accounted for by the stocks of the five largest
companies by relative market value. As of December 31, 1994 those companies
were: General Electric Co., American Telephone and Telegraph Co., Exxon Corp.,
Coca-Cola Co., and Royal Dutch.

This portfolio will not be "managed" in the traditional sense of using economic,
financial or market analysis to determine the stocks to be purchased by the
portfolio. Rather, the portfolio manager will purchase stocks for the portfolio
in proportion to their weighting in the S&P 500 Index. Thus, adverse financial
performance by a company will not result in reduction or elimination of the
portfolio's holdings of its stock and, conversely, superior financial
performance by a company will not lead the portfolio to increase its holdings of
the company's stock. If a stock held by this portfolio is eliminated from the
S&P 500 Index, the portfolio will sell its holdings of the stock regardless of
the prospects of the company. Because the portfolio will not be "managed" in the
traditional sense, portfolio turnover is expected to be low and is generally not
expected to exceed 10% and brokerage commissions are also expected to be
correspondingly low.

The following table shows the performance of the S&P 500 Index for the 25 years
ending in 1994. The period covered by this table is one of generally rising
stock prices, and the performance of the S&P 500 Index in this period should not
be viewed as a representation of any future performance by that index. In
addition, the fees and costs involved in the operation of the Stock Index
Portfolio mean that the performance of a share of stock in the

<PAGE>

portfolio may not equal the performance of the S&P 500 Stock Index even if the
assets held by the portfolio do equal that performance.

*S&P 500 WITH DIVIDENDS REINVESTED
Annual Percentage Change

1970 +3.93 1983 +22.38
1971 +14.56 1984 +6.10
1972 +18.90 1985 +31.57
1973 -14.77 1986 +18.56
1974 -26.39 1987 +5.10
1975 +37.16 1988 +16.61
1976 +23.57 1989 +31.69
1977 -7.42 1990 -3.10
1978 +6.38 1991 +30.47
1979 +18.20 1992 +7.61
1980 +32.27 1993 +10.08
1981 -5.01 1994 +1.32
1982 +21.44

Source: Standard & Poor's Corporation. Percentage change calculated in
accordance with specifications of SEC release number IA-327.

In the seven full years since this portfolio was established its total return,
compared to that of the S&P 500 Index, was as follows:

Annual Percentage Change Total Return
S&P 500 with Stock Index Portfolio
Dividends Reinvested (after deduction of expenses)
1988 +16.61 +15.44
1989 +31.69 +30.93
1990 -3.10 -3.63
1991 +30.47 +29.72
1992 +7.61 +7.13
1993 +10.08 +9.66
1994 +1.32 +1.01

A fuller description of the policies followed by the Stock Index Fund is in the
Statement of Additional Information.

High Dividend Stock Portfolio. The objective of this portfolio is both current
income and capital appreciation through investment primarily in common stocks
and convertible securities that provide favorable prospects for investment
income returns above those of the Standard & Poor's 500 Stock Index or the NYSE
Composite Index.

The portfolio seeks to achieve this objective by following the policy of
investing in such securities, giving emphasis to earnings, balance sheet and
cash flow analysis, and the relationships that these factors have to the price
and return of a given security. Under normal circumstances, the portfolio
intends to invest at least 65% of its total assets in such securities.

The portfolio may invest the balance of its assets in other stocks, other
securities convertible into common stocks and in debt securities (including
money market instruments). The portfolio may under normal circumstances invest
up to 35% of its total assets in money market instruments of the type invested
in by the Money Market Portfolio and without limit when the portfolio's manager
believes market conditions warrant a temporary defensive posture or pending the
investment of proceeds from sales of the portfolio shares. In addition, up to
35% of the portfolio's total assets may be invested in other fixed-income
obligations. The portfolio anticipates that these will primarily be rated A or
better by Moody's or S&P. However, the portfolio may also invest in lower-rated
fixed-income securities, although it will not invest in securities rated lower
than CC or Ca by Moody's or S&P, respectively. The risks of medium to lower
rated securities, also known as high risk securities, are described above in
connection with the High Yield Bond Portfolio. A description of debt ratings is
in the Statement of Additional Information. The portfolio may also invest in
non-rated fixed-income securities which, in the opinion of the manager, are of a
quality comparable to rated securities in which the portfolio will invest.

<PAGE>

To the extent permitted by applicable insurance law, the portfolio may invest up
to 30% of its total assets in non-United States currency denominated debt and
equity securities of foreign and U.S. issuers. The particular risks of
investments in foreign securities are described under Foreign Securities on page
41.

In addition, the portfolio may (i) purchase and sell options on equity
securities, stock indices and foreign currencies (ii) purchase and sell stock
index and foreign currency futures contracts and options thereon; (iii) enter
into forward foreign currency exchange contracts; and (iv) purchase securities
on a when-issued or delayed delivery basis. These techniques are described
briefly under Options, Futures Contracts and Swaps on page 41, and in detail in
the Statement of Additional Information.

As a result of its investment policies, the portfolio's turnover rate may exceed
100%, although it is not expected to exceed 200%.

Warren Spitz, Managing Director, PIC, has been portfolio manager for the High
Dividend Stock Portfolio since 1988.

Common Stock Portfolio. The objective of this portfolio is to achieve capital
appreciation through investment primarily in common stocks of companies,
including major established corporations as well as smaller capitalization
companies, that appear to offer attractive prospects of price appreciation that
is superior to broadly-based stock indices. Current income, if any, is
incidental.

The portfolio seeks to achieve this objective by following the policy of
investing primarily in common stocks. It may also invest to a limited extent in
short, intermediate or long term debt, either convertible or nonconvertible into
common stock, as well as in nonconvertible preferred stock. The portfolio will
attempt to maintain a flexible approach to the selection of common stocks of
various types of companies whose valuations appear to offer opportunities for
above-average appreciation. Thus, the portfolio may invest in securities of
companies whose estimated growth in earnings exceeds that projected for the
market as a whole because of factors such as expanding market share, new
products or changes in market environment. Or it may invest in "undervalued"
securities which are often characterized by a lack of investor recognition of
the basic value of a company's assets. Securities of companies with sales and
earnings trends which are currently unfavorable but which are expected to
reverse may also be in the portfolio. The effort to achieve price appreciation
that is superior to broadly based stock indices necessarily involves accepting a
greater risk of declining values. During periods when stock prices decline
generally, it can be expected that the value of the portfolio will also decline.

To the extent permitted by applicable insurance law, this portfolio may invest
up to 30% of its total assets in nonUnited States currency denominated common
stock and fixed-income securities convertible into common stock of foreign and
U.S. issuers. The particular risks of investments in foreign securities are
described in further detail under Foreign Securities on page 41.

A portion of the portfolio may be invested in short-term debt obligations of the
kind held in the Money Market portfolio as described in the Statement of
Additional Information in order to make effective use of cash reserves pending
investment in common stocks.

Thomas Jackson, Managing Director, PIC, has been portfolio manager of the Common
Stock Portfolio since 1990. Prior to 1990, Mr. Jackson was Principal for Red Oak
Advisors.

Growth Stock Portfolio. The objective of the Growth Stock Portfolio is to
achieve long-term growth of capital through investment primarily in equity
securities of established companies with above-average growth prospects. Current
income, if any, is incidental.

In order to achieve this objective, the Growth Stock Portfolio will follow a
policy of selecting stocks on a companyby-company basis primarily through the
use of fundamental analysis. The portfolio manager will look for companies that
have demonstrated growth in earnings and sales, high returns on equity and
assets, or other strong financial characteristics, and in the opinion of the
portfolio manager, are attractively valued. These companies tend to have a
unique market niche, a strong new product profile or superior management. Under
normal market conditions, at least 65% of the value of the total assets of the
portfolio will be invested in common stocks and preferred stocks of companies
which exceed $1 billion in market capitalization.

The portfolio may invest up to 35% of its total assets in: (i) common stocks,
preferred stocks, and other equity-related securities of companies that are
undergoing changes in management or product and marketing dynamics which have
not yet been reflected in reported earnings but which are expected to impact
earnings in the intermediate term -- these securities often lack investor
recognition and are often favorably valued; (ii) other equity-related
securities; (iii) with respect to a maximum of 20% of its total assets, common
stocks, preferred stocks and

<PAGE>

other equity-related securities of Canadian issuers or American Depository
Receipts ("ADRs"); (iv) investment grade fixed income securities and
mortgage-backed securities, including lower rated securities [rated in the
fourth highest rating category by a rating service (i.e. Baa by Moody's Investor
Services or BBB by Standard & Poor's)] or, if not rated, determined by the
portfolio manager to be of comparable quality to securities so rated. A
description of debt ratings is contained in the Appendix to the statement of
additional information; and (v) obligations issued or guaranteed by the U.S.
Government, its agencies and instrumentalities.

In addition, the portfolio may: (i) purchase and sell options on equity
securities, stock indices, and foreign currencies; (ii) lend its portfolio
securities; (iii) purchase and sell stock index and foreign currency futures
contracts and options thereon; (iv) enter into forward foreign currency exchange
contracts; and (v) enter into repurchase agreements and purchase securities on a
when-issued or delayed delivery basis. These techniques are described on pages
41 through 42, and further information about some of them is included in the
Statement of Additional Information.

The effort to achieve superior investment returns necessarily involves a risk of
exposure to declining values. Securities in which the portfolio may primarily
invest have historically been more volatile than the Standard & Poor's 500
Composite Stock Price Index. Accordingly, during periods when stock prices
decline generally, it can be expected that the value of the portfolio will
decline more than the market indices.

David Poiesz, Director and Vice President of Jennison Associates Capital Corp.,
has been portfolio manager of the Growth Portfolio since its inception in 1995.
Mr. Poiesz joined Jennison Associates in 1983 as an equity research analyst and
has been an equity portfolio manager since 1991.

Small Capitalization Stock Portfolio. The objective of this portfolio is to
achieve long-term growth of capital through investment primarily in equity
securities of publicly-traded companies with small market capitalization.
Current income, if any, is incidental.

The portfolio seeks to achieve this objective by following the policy of
attempting to duplicate the price and yield performance of the Standard & Poor's
Small Capitalization Stock Index (the "S&P SmallCap 600 Index"), an index which
consists of six-hundred smaller capitalization domestic stocks chosen for market
size, liquidity, and industry group representation. It is a market weighted
index (stock price times shares outstanding), with each stock affecting the
index in proportion to its market value. Standard & Poor's Corporation is
responsible for selecting and maintaining the list of stocks to be included in
the index. Inclusion in the index in no way implies an opinion by Standard &
Poor's Corporation as to a stock's attractiveness as an investment. "Standard &
Poor's", "Standard & Poor's Small Capitalization Stock Index" and "Standard &
Poor's SmallCap 600" are trademarks of McGraw Hill. Inc. The Series Fund is not
sponsored, endorsed, sold or promoted by S&P and S&P makes no representation
regarding the advisability of investing in the Series Fund. Reference is made to
the statement of additional information which sets forth certain additional
disclaimers and limitations of liabilities on behalf of S&P.

Under normal circumstances, this portfolio intends to be invested in all or a
representative sample of the stocks in the S&P SmallCap 600 Index. The portfolio
may hold cash or its equivalent, these holdings may cause its performance to
differ from that of the S&P SmallCap 600 Index. The portfolio will attempt to
minimize any such differences in performance through transactions involving
stock index futures contracts, options on stock indices, and/or options on stock
index future contracts. These investment instruments are described under Options
on Stock Indices, Stock Index Futures Contracts, and Options on Futures
Contracts on pages 25 through 27.

In addition, the portfolio may: (i) purchase and sell options on equity
securities; (ii) lend its portfolio securities; and (iii) purchase securities on
a when-issued or delayed delivery basis. These techniques are described briefly
under Options, Futures Contracts and Swaps on page 41, and in detail in the
Statement of Additional Information.

The investment policies and techniques of the Small Capitalization Stock
Portfolio are not fundamental and may be changed without shareholder approval if
it is determined that alternative investment techniques would be more effective
in achieving the portfolio's objective.

Wai Chiang, Director of Portfolio Management, Prudential Diversified Investment
Strategies, has been portfolio manager for the Small Capitalization Stock
Portfolio since its inception in 1995. Mr. Chiang also manages the unregistered
separate accounts, Pridex and Pridex 500 for The Prudential. Mr. Chiang has been
employed by The Prudential as a portfolio manager since 1986.

Global Equity Portfolio. The objective of this portfolio is long-term growth of
capital through investment primarily in common stocks and common stock
equivalents (such as convertible debt securities) of foreign and domestic
issuers. Current income, if any, is incidental.

The portfolio is intended to provide investors with the opportunity to invest in
a portfolio of securities of companies located throughout the world. In making
the allocation of assets among the various countries and geographic regions, the
portfolio manager ordinarily considers such factors as prospects for relative
economic growth between foreign countries; expected levels of inflation and
interest rates; government policies influencing business

<PAGE>

conditions; the range of individual investment opportunities available to
international investors; and other pertinent financial, tax, social, political
and national factors--all in relation to the prevailing prices of the securities
in each country or region.

The portfolio is not required to maintain any particular geographic or currency
mix of its investments. The portfolio intends to maintain investments in at
least three countries (including the United States), but may, when market
conditions warrant, invest up to 35% of its assets in companies located in any
one country (other than the United States).

In analyzing companies for investment, the portfolio manager ordinarily looks
for one or more of the following characteristics: prospects for above-average
earnings growth per share; high return on invested capital; healthy balance
sheet; sound financial and accounting policies and overall financial strength;
strong competitive advantages; effective research and product development and
marketing; efficient service; pricing flexibility; strength of management; and
general operating characteristics which will enable the companies to compete
successfully in their marketplace--all in relation to the prevailing prices of
the securities of such companies.

Investing in securities of foreign companies and countries involves special
risks. See Foreign Securities on page 41.

When the portfolio manager believes market conditions dictate a temporary
defensive strategy, or during periods of structuring and restructuring the
portfolio, the portfolio may invest without limit in money market investments of
the kind in which the Money Market Portfolio invests, including repurchase
agreements.

In addition, the portfolio may (i) purchase and sell options on equity
securities, stock indices and foreign currencies; (ii) purchase and sell stock
index, interest rate and foreign currency futures contracts and options thereon;
(iii) enter into forward foreign currency exchange contracts; and (iv) purchase
securities on a when-issued or delayed delivery basis. These techniques are
described briefly under Options, Futures Contracts and Swaps on page 41, and in
detail in the Statement of Additional Information.

Daniel Duane, Managing Director, PIC, has been the portfolio manager of the
Global Equity Portfolio since 1990. Prior to 1990, Mr. Duane was the Senior
Portfolio Manager of the Global Equity Investments at First Investors Asset
Management.

Specialized Portfolios

Natural Resources Portfolio. The objective of this portfolio is long-term growth
of capital through investment primarily in common stocks and convertible
securities of "natural resource companies" (as defined below) and in securities
(typically debt securities and preferred stocks) the terms of which are related
to the market value of some natural resource ("asset-indexed securities"). Under
normal circumstances, the portfolio will invest at least 65% of its total assets
in such securities.

Companies that primarily own, explore, mine, process or otherwise develop
natural resources, or supply goods and services primarily to such companies,
will be considered "natural resource companies." Natural resources generally
include precious metals (e.g., gold, silver and platinum), hydrocarbons (e.g.,
coal, oil and natural gases), timber land, undeveloped real property and
agricultural commodities.

The value of equity securities of natural resource companies (including those
companies that are primarily involved in providing goods and services to natural
resource companies) will fluctuate pursuant to market conditions generally, as
well as to the market for the particular natural resource in which the issuer is
involved. The Prudential will seek securities that are attractively priced
relative to the intrinsic values of the relevant natural resource or that are of
companies which are positioned to benefit under existing or anticipated economic
conditions. Accordingly, the portfolio may shift its emphasis from one natural
resource industry to another depending upon prevailing trends or developments.
However, the portfolio will not invest 25% or more of its total assets in the
securities of companies in any one natural resource industry.

"Asset-indexed securities," in which the portfolio may also invest, are
securities whose principal amount, redemption terms or conversion terms are
related to the market price of a natural resource asset. The portfolio expects
to purchase asset-indexed securities which are rated, or are issued by issuers
that have outstanding obligations which are rated, at least BBB or Baa by S&P or
Moody's, respectively, or commercial paper rated at least A-2, or P-2 by S&P or
Moody's, respectively, or in unrated securities that The Prudential determines
to be of comparable quality. The portfolio reserves the right, however, to
invest in asset-indexed securities rated as low as CC or Ca by Moody's or S&P,
respectively, or in unrated securities of comparable quality, also known as high
risk securities. The portfolio may invest a small portion of its assets in other
stocks, other securities convertible into common stocks, fixed-income securities
that are primarily rated A or better by Moody's or S&P (including money market
instruments), and options on stocks and on natural resource-related stock
indices. A description of debt ratings is in the Statement of Additional
Information. The portfolio may under normal circumstances invest up to 35% of
its total assets in money market instruments of the type invested in by the
Money Market Portfolio

<PAGE>

and without limit when the portfolio manager believes market conditions warrant
a temporary defensive posture or during periods of structuring and restructuring
the portfolio.

The portfolio's turnover rate may exceed 100%, although it is not expected to
exceed 200%.

Leigh Goehring, Vice President, PIC, has been portfolio manager of the Natural
Resources Portfolio since 1992. Prior to 1992, Mr. Goehring was portfolio
manager of The Prudential-Bache Option Growth Fund.

Foreign Securities. The Global Equity Portfolio may invest up to 100% of its
total assets in common stock and convertible securities denominated in a foreign
currency and issued by foreign or domestic issuers. The Bond and High Yield Bond
Portfolios may each invest up to 20% of their assets in United States currency
denominated debt securities issued outside the United States by foreign or
domestic issuers. In addition, the bond components of the Conservatively Managed
Flexible and Aggressively Managed Flexible Portfolios may each invest up to 20%
of their assets in such securities. To the extent permitted by applicable
insurance law, the High Dividend Stock, Conservatively Managed Flexible and
Aggressively Managed Flexible Portfolios may invest up to 30% of their total
assets in debt and equity securities denominated in a foreign currency and
issued by foreign or domestic issuers. Further, to the extent permitted by
applicable insurance law, the Common Stock, Growth Stock, and Natural Resources
Portfolios may invest up to 30% of their assets in non-United States currency
denominated common stock and fixed income securities convertible into common
stock of foreign and domestic issuers. Securities issued outside the United
States and not publicly traded in the United States, as well as securities
denominated in a foreign currency are referred to collectively in this
prospectus as "foreign securities."

Foreign securities involve risks of political and economic instability in the
country of the issuer, the difficulty of predicting international trade
patterns, the possibility of imposition of exchange controls and, in the case of
securities not denominated in United States currency, the risk of currency
fluctuations. Such securities may be subject to greater fluctuations in price
than domestic securities. Under certain market conditions, foreign securities
may be less liquid than domestic securities. In addition, there may be less
publicly available information about a foreign company than about a domestic
company. Foreign companies generally are subject to uniform accounting,
auditing, and financial reporting standards comparable to those applicable to
domestic companies. There is generally less government regulation of securities
exchanges, brokers, and listed companies abroad than in the United States, and,
with respect to certain foreign countries, there is a possibility of
expropriation, confiscatory taxation or diplomatic developments which could
affect investment in those countries. If the security is denominated in foreign
currency, it may be affected by changes in currency rates and in exchange
control regulations, and costs may be incurred in connection with conversions
between currencies. Finally, in the event of a default of any foreign debt
obligations, it may be more difficult for a portfolio to obtain or to enforce a
judgment against the issuers of such securities. See Forward Foreign Currency
Exchange Contracts in the Statement of Additional Information.

Options, Futures Contracts and Swaps. The description of each portfolio's
investment policies also state whether they will invest in what are sometimes
called derivative securities. These include options (which may be to buy or sell
equity securities, debt securities, stock indices, foreign currencies and stock
index futures contracts); futures contracts on interest bearing securities,
stock and interest rate indices, and foreign currencies; and interest rate
swaps. These investments have not in the past represented more than a very minor
part of the investments of any portfolio but may increase in the future.

A call option gives the owner the right to buy and a put option the right to
sell a designated security or index at a predetermined price for a given period
of time. They will be used primarily to hedge or minimize fluctuations in the
principal value of a portfolio or to generate additional income. They involve
risks which differ, depending upon the particular option. But they often offer
an attractive alternative to the purchase or sale of the related security.

Futures contracts represent a contractual obligation to buy or sell a designated
security or index within a stated period. They can be used as a hedge against or
to minimize fluctuations of a portfolio or as an efficient way of establishing
certain positions more quickly than direct purchase of the securities. They can
also be used to speculate, but this will not be done by any of the portfolios.
They involve risks of various kinds, all of which could result in losses rather
than in achieving the intended objective of any particular purchase.

<PAGE>

Because options, futures and swaps are now used to such a limited extent, a full
description of these investments and the risks associated with them is in the
Statement of Additional Information.

Short Sales. The Bond, High Yield, Bond, Government Securities, Conservatively
Managed Flexible and Aggressively Managed Flexible Portfolios may sell
securities they do not own in anticipation of a decline in the market value of
those securities ("short sales"). The portfolio will incur a loss as a result of
the short sale if the price of the security increases between the date of the
short sale and the date on which the portfolio replaces the borrowed security.
The portfolio will realize a gain if the security declines in price between
those dates. This result is the opposite of what one would expect from a cash
purchase of a long position in a security. The amount of any gain will be
decreased, and the amount of any loss will be increased, by the amount of any
premium or interest paid in connection with the short sale.

Reverse Repurchase Agreements and Dollar Rolls. The Bond, High Yield Bond, and
Government Securities Portfolios, as well as the fixed income portions of the
Conservatively Managed Flexible and Aggressively Managed Flexible Portfolios,
may use reverse repurchase agreements and dollar rolls. The Money Market
Portfolio and the money market portion of any portfolio may use reverse
repurchase agreements. Reverse repurchase agreements involve the sale of
securities held by a portfolio with an agreement by the portfolio to repurchase
the same securities at an agreed upon price and date. During the reverse
repurchase period, the portfolio often continues to receive principal and
interest payments on the sold securities. The terms of each agreement reflect a
rate of interest for use of the funds for the period, and thus these agreements
have the characteristics of borrowing by the portfolio. Dollar rolls involve
sales by a portfolio of securities for delivery in the current month with a
simultaneous contract to repurchase substantially similar securities (same type
and coupon) from the same party at an agreed upon price and date. During the
roll period, the portfolio forgoes principal and interest paid on the
securities. A portfolio is compensated by the difference between the current
sales price and the forward price for the future purchase (often referred to as
the "drop") as well as by the interest earned on the cash proceeds of the
initial sale. A "covered roll" is a specific type of dollar roll for which there
is an offsetting cash position or a cash equivalent security position which
matures on or before the forward settlement date of the dollar roll transaction.
A portfolio will establish a segregated account with its custodian in which it
will maintain cash, U.S. Government securities or other liquid high-grade debt
obligations equal in value to its obligations in respect of reverse repurchase
agreements and dollar rolls. Reverse repurchase agreements and dollar rolls
involve the risk that the market value of the securities retained by the
portfolio may decline below the price of the securities the portfolio has sold
but is obligated to repurchase under the agreement. In the event the buyer of
securities under a reverse repurchase agreement or dollar roll files for
bankruptcy or becomes insolvent, the portfolio's use of the proceeds of the
agreement may be restricted pending a determination by the other party, or its
trustee or receiver, whether to enforce the portfolio's obligation to repurchase
the securities. The Bond, High Yield Bond, and Government Securities Portfolios,
as well as the fixed income portions of the Conservatively Managed Flexible and
Aggressively Managed Flexible Portfolios, will not obligate more than 30% of
their net assets in connection with reverse repurchase agreements and dollar
rolls. No other portfolio will obligate more than 10% of its net assets in
connection with reverse repurchase agreements.

There is a slight risk that the borrower may become insolvent, which might delay
carrying out a decision to sell the loaned security. This risk can be minimized
by careful selection of borrowers and requiring and monitoring the adequacy of
capital. No loans will be made to any broker affiliated with The Prudential.

INVESTMENT RESTRICTIONS APPLICABLE TO THE PORTFOLIOS

The Series Fund is subject to certain investment restrictions which are
fundamental to the operations of the Series Fund and may not be changed except
with the approval of a majority vote of the persons participating in the
affected portfolio.

The investments of the various portfolios are generally subject to certain
additional restrictions under state laws. In the event of future amendments to
the applicable New Jersey statutes, each portfolio will comply, without the
approval of the shareholders, with the statutory requirements as so modified.

A detailed discussion of investment restrictions applicable to the Series Fund
is in the Statement of Additional Information.

<PAGE>

INVESTMENT MANAGEMENT ARRANGEMENTS AND EXPENSES

The Series Fund has entered into an Investment Advisory Agreement with The
Prudential under which The Prudential will, subject to the direction of the
Board of Directors of the Series Fund, be responsible for the management of the
Series Fund, and provide investment advice and related services to each
portfolio. The Prudential manages the assets that it owns as well as those of
various separate accounts established by The Prudential and those held by other
investment companies for which it acts as investment advisor. Total assets under
management as of December 31, 1994 was $xxx billion, which includes $xxx billion
owned by The Prudential and approximately $xxx billion of external assets under
The Prudential's management.

Subject to The Prudential's supervision, substantially all of the investment
advisory services provided to the Series Fund by The Prudential are furnished,
with respect to 15 of the Series Fund's 16 portfolios, by its wholly-owned
subsidiary PIC, pursuant to the Service Agreement between The Prudential and
PIC. The Agreement provides that The Prudential will reimburse PIC for its costs
and expenses. The Conservatively Managed Flexible and Aggressively Managed
Flexible Portfolios are managed by Prudential Investment Advisors ("PIA") and
Prudential Diversified Investment Strategies ("PDI"), units of PIC, using a team
of portfolio managers under the supervision of Mark Stumpp, Managing Director,
PIC. Investment advisory services with respect to the Growth Stock Portfolio
provided by The Prudential are furnished by another wholly-owned subsidiary,
Jennison Associates Capital Corp. ("Jennison"), pursuant to an Investment
Subadvisory Agreement between The Prudential and Jennison. That Agreement
provides that a portion of the fee received by The Prudential for providing
investment advisory services to the Growth Stock Portfolio will be paid to
Jennison. PIC and Jennison are both registered as investment advisors under the
Investment Advisers Act of 1940.

Under the Investment Advisory Agreement, The Prudential receives an investment
management fee as compensation for its services to the Series Fund. The fee is a
daily charge, payable quarterly, equal to an annual percentage of the average
daily net assets of each individual portfolio. It is set forth on page 18.

For the year ended December 31, 1994, the Series Fund's total expenses were
0.xx% of the average net assets of all of the Series Fund's portfolios. The
investment management fee for that period constituted 0.xx% of the average net
assets. Further information about the investment management arrangements and the
expenses of the Series Fund is in the Statement of Additional Information.

Portfolio Brokerage and Related Practices. The Prudential is responsible for
decisions to buy and sell securities for the portfolios, the selection of
brokers and dealers to effect the transactions, and the negotiation of brokerage
commissions, if any. Fixed income securities, as well as equity securities
traded in the over-the-counter market, are generally traded on a "net" basis
with dealers acting as principals for their own accounts without a stated
commission, although the price of the security usually includes a profit to the
dealer.

An affiliated broker may be employed to execute brokerage transactions on behalf
of the portfolios, as long as the commissions are reasonable and fair compared
to the commissions received by other brokers in connection with comparable
transactions involving similar securities being purchased or sold on a
securities exchange during a comparable period of time. The Series Fund may not
engage in any transactions in which The Prudential or its affiliates, including
The Prudential Securities Incorporated, acts as principal, including
over-the-counter purchases and negotiated trades in which such a party acts as a
principal. Additional information about portfolio brokerage and related
transactions is in the Statement of Additional Information.

STATE REGULATION

The Prudential is subject to regulation and supervision by the Department of
Insurance of the State of New Jersey, which periodically examines its operations
and financial condition. It is also subject to the insurance laws and
regulations of all jurisdictions in which it is authorized to do business.

The Prudential is required to submit annual statements of its operations,
including financial statements, to the insurance departments of the various
jurisdictions in which it does business to determine solvency and compliance
with local insurance laws and regulations.

In addition to the annual statements referred to above, The Prudential is
required to file with New Jersey and other jurisdictions a separate statement
with respect to the operations of all its variable contract accounts, in a form
promulgated by the National Association of Insurance Commissioners.

EXPERTS

The financial statements included in this prospectus have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports
appearing herein, and are included in reliance upon the reports of such firm
given

<PAGE>

upon their authority as experts in accounting and auditing. Deloitte &
Touche LLP's principal business address is Two Hilton Court, Parsippany, New
Jersey 07054-0319. Actuarial matters included in this prospectus have been
examined by Nancy D. Davis, FSA, MAAA, whose opinion is filed as an exhibit to
the registration statement.

LITIGATION

No litigation is pending that would have a material effect upon the Account or
the Series Fund.

EXPANDED TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION

Included in the registration statements for the Contracts and the Series Fund is
a Statement of Additional Information which is available without charge by
writing to The Prudential at Prudential Plaza, Newark, New Jersey 07102-3777.
The following table of contents of that Statement provides a brief summary of
what is included in each section.

I. MORE DETAILED INFORMATION ABOUT THE CONTRACT.

Sales Load Upon Surrender. A description is given of exactly how The
Prudential determines the amount of the part of the sales load that is
imposed only upon surrenders or withdrawals during the first 10 Contract
years.

Reduction of Charges for Concurrent Sales to Several Individuals. Where the
Contract is sold at the same time to several individuals who are members of
an associated class and The Prudential's expenses will be reduced, some of
the charges under those Contracts may be reduced.

Sales to Persons 14 Years of Age or Younger. The face amount will increase,
on the insured's 21st birthday, to 150% of the initial face amount. The
application of some of the other Contract provisions may be affected.

Paying Premiums by Payroll Deduction. Your employer may pay monthly
premiums for you with deductions from your salary.

Unisex Premiums and Benefits. In some states and under certain
circumstances, premiums and benefits will not vary with the sex of the
insured.

How the Death Benefit Will Vary. A description is given of exactly how the
death benefit may increase to satisfy Internal Revenue Code requirements.

Withdrawal of Excess Cash Surrender Value. If the Contract Fund value is
high enough you may be able to withdraw part of the cash surrender value
while keeping the Contract in effect. There will be a transaction charge.
For Form A Contracts there will be a surrender charge. The death benefit
will change. There may be tax consequences. You should consult your
Prudential representative to discuss whether a withdrawal or a loan is
preferable.

Increases in Face Amount. If you wish to increase the amount of your
insurance, it may be preferable to increase the amount of this Contract
rather than to buy another Contract. Conditions will apply, and there will
be changes in the premiums and charges. Other provisions of your Contract
will be affected.

Decreases in Face Amount. In addition to effecting a partial surrender of
the Contract, you may, within limits, reduce the Contract's face amount
without withdrawing any cash. This reduces the amount at risk and the
monthly mortality charge. There could be tax consequences. Your Prudential
representative should first be consulted.

Tax Treatment of Contract Benefits. A fuller account is provided of how
Contract owners may be affected by federal income taxes.

Sale of the Contract and Sales Commissions. The Contract is sold primarily
by agents of The Prudential who are also registered representatives of one
of its subsidiaries, Pruco Securities Corporation, a broker and dealer
registered under the Securities and Exchange Act of 1934. Generally,
selling agents receive a commission of 50% of the Scheduled Premium in the
first year, 10% for the next three years and smaller commissions
thereafter.

Tax-Qualified Pension Plans. Certain restrictions apply if the Contract is
purchased to fund, in part, a tax-advantaged pension plan.

Other Standard Contract Provisions. The Contract contains several
provisions commonly included in all life insurance policies. They include
provisions relating to beneficiaries, misstatement of age or sex, suicide,
assignment, incontestability, and settlement options.

<PAGE>

Exchange of Fixed-Dollar Contract to Variable Contract. Owners of an
existing Prudential fixed-dollar life insurance contract may be able to
exchange it for a Contract upon favorable terms.

II. INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS.

General
Convertible Securities
Warrants
Options and Futures
When-Issued and Delayed Delivery Securities
Short Sales
Short Sales Against the Box
Interest Rate Swaps
Loans of Portfolio Securities
Illiquid Securities
Forward Foreign Currency Exchange Contracts
Further Information About the Policies of the
Stock Index Portfolio
Further Information About the Zero Coupon
Bond Portfolios

A more detailed description is given of these investments and the
policies of these portfolios.

III. INVESTMENT RESTRICTIONS.

There are many restrictions upon the investments the portfolios may make
and the practices in which they may engage; these are fundamental,
meaning they may not be changed without Contract owner approval.

IV. INVESTMENT MANAGEMENT ARRANGEMENTS AND EXPENSES.

A fuller description than that in the prospectus is given.

V. PORTFOLIO TRANSACTIONS AND BROKERAGE.

A description is given of how securities transactions are effected and
how The Prudential selects the brokers.

VI. DETERMINATION OF NET ASSET VALUE.

A full description is given of how the daily net asset value of each
portfolio is determined.

VII. SECURITIES IN WHICH THE MONEY MARKET PORTFOLIO MAY CURRENTLY INVEST.

A full description is given.

VIII. DEBT RATINGS.

A description is given of how Moody's Investors Services, Inc. and
Standard & Poor's Corporation describe the creditworthiness of debt
securities.

IX. POSSIBLE REPLACEMENT OF THE SERIES FUND.

Although it is most unlikely, it is conceivable that The Prudential might
wish to replace the Series Fund portfolios with other investment options.
SEC approval will be needed.

X. OTHER INFORMATION CONCERNING THE SERIES FUND.

Incorporation and Authorized Stock
Dividends, Distributions and Taxes
Custodian and Transfer Agent
Experts
Licenses

More detail is provided about these matters.

XI. DIRECTORS AND OFFICERS OF THE PRUDENTIAL AND MANAGEMENT OF THE SERIES
FUND.

The names and recent affiliations of The Prudential's directors and
executive officers are given. The same information is given for the
Series Fund.

XII. FINANCIAL STATEMENTS OF THE PRUDENTIAL SERIES FUND, INC.

XIII. THE PRUDENTIAL SERIES FUND, INC. SCHEDULE OF INVESTMENTS.

<PAGE>

ADDITIONAL INFORMATION

A registration statement has been filed with the SEC under the Securities Act of
1933, relating to the offering described in this prospectus. This prospectus and
the Statement of Additional Information do not include all of the information
set forth in the registration statement. Certain portions have been omitted
pursuant to the rules and regulations of the SEC. The omitted information may,
however, be obtained from the SEC's principal office in Washington, D.C., upon
payment of a prescribed fee.

Further information may also be obtained from The Prudential. Its address and
telephone number are on the cover of this prospectus.

FINANCIAL STATEMENTS

The financial statements of the Account should be distinguished from the
consolidated financial statements of The Prudential, which should be considered
only as bearing upon the ability of The Prudential to meet its obligations under
the Contracts. The financial statements of the Series Fund are in the Statement
of Additional Information.

<PAGE>

FINANCIAL STATEMENTS OF THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT

and

CONSOLIDATED FINANCIAL STATEMENTS OF THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA AND SUBSIDIARIES

To be filed Pursuant to Rule 485(b)

<PAGE>

PART IB

INFORMATION IN STATEMENT OF ADDITIONAL INFORMATION

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION
May 1, 1995

THE PRUDENTIAL
VARIABLE APPRECIABLE ACCOUNT

Variable
APPRECIABLE
LIFE(R)___________________
INSURANCE CONTRACTS

PROVIDING FOR THE INVESTMENT
OF ASSETS IN THE
INVESTMENT PORTFOLIOS OF

THE PRUDENTIAL SERIES
FUND, INC.

The Prudential Insurance Company of America offers two forms of variable life
insurance contracts under the name Variable Appreciable Life(R) Insurance*. The
first form provides a death benefit that generally remains fixed in an amount
chosen by the purchaser and cash surrender values that vary daily. The second
form also provides cash surrender values that vary daily but the death benefit
will also vary daily. Under both forms of contract, the death benefit will never
be less than the "face amount" of insurance chosen by the purchaser. There is no
guaranteed minimum cash surrender value.

The assets held for the purpose of paying benefits under these contracts can be
invested in one or more of fourteen subaccounts of The Prudential Variable
Appreciable Account. The assets invested in each subaccount are in turn invested
in a corresponding portfolio of The Prudential Series Fund, Inc., a diversified,
open-end management investment company (commonly known as a mutual fund) that is
intended to provide a range of investment alternatives to variable contract
owners. Each portfolio is, for investment purposes, in effect a separate fund.
The sixteen Series Fund portfolios are: the Money Market Portfolio, the Bond
Portfolio, the Government Securities Portfolio, the three Zero Coupon Bond
Portfolios with different liquidation dates -- 1995 (not available for
investment after November 14, 1995), 2000, and 2005, the Conservatively Managed
Flexible Portfolio, the Aggressively Managed Flexible Portfolio, the High Yield
Bond Portfolio, the Stock Index Portfolio, the High Dividend Stock Portfolio,
the Common Stock Portfolio, the Growth Stock Portfolio, the Small Capitalization
Stock Portfolio, the Global Equity Portfolio, and the Natural Resources
Portfolio. A separate class of capital stock is issued for each portfolio.
Shares of the Series Fund are currently sold only to separate accounts of The
Prudential and certain other insurers to fund the benefits under variable life
insurance and variable annuity contracts issued by those companies.

The Variable Appreciable Life(R) Insurance Contract owner may also choose to
invest in a fixed-rate option or in The Prudential Variable Contract Real
Property Account, which is described in a separate prospectus attached to the
prospectus of The Prudential Variable Appreciable Account.

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

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE READ
IN CONJUNCTION WITH THE PROSPECTUS OF THE PRUDENTIAL VARIABLE APPRECIABLE
ACCOUNT DATED MAY 1, 1995, WHICH IS AVAILABLE WITHOUT CHARGE UPON WRITTEN
REQUEST TO THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, PRUDENTIAL PLAZA,
NEWARK, NEW JERSEY 07102-3777 OR BY TELEPHONING (800) 437-4016 Ext. 46.

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

The Prudential Insurance Company of America
The Prudential Series Fund, Inc.
Prudential Plaza
Newark, New Jersey 07102-3777
Telephone: (800) 437-4016 Ext. 46

*Appreciable Life is a registered mark of The Prudential.
PVAL-SAI Ed 5-95
Catalog No. 640466W

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION
CONTENTS
Page

MORE DETAILED INFORMATION ABOUT THE CONTRACT ............................... 1
Sales Load Upon Surrender ................................................ 1
Reduction of Charges for Concurrent Sales to Several Individuals ......... 1
Sales to Persons 14 Years of Age or Younger .............................. 1
Paying Premiums by Payroll Deduction ..................................... 1
Unisex Premiums and Benefits ............................................. 2
How the Death Benefit Will Vary .......................................... 2
Withdrawal of Excess Cash Surrender Value ................................ 3
Increases in Face Amount ................................................. 3
Decreases in Face Amount ................................................. 5
Tax Treatment of Contract Benefits ....................................... 5
Sale of the Contract and Sales Commissions ............................... 7
Tax-Qualified Pension Plans .............................................. 7
Other Standard Contract Provisions ....................................... 8
Exchange of Fixed-Dollar Contract to Variable Contract ................... 8

INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS ....................... 8
General .................................................................. 8
Convertible Securities ................................................... 9
Warrants ................................................................. 9
Options and Futures ...................................................... 9
When-Issued and Delayed Delivery Securities .............................. 16
Short Sales .............................................................. 16
Short Sales Against the Box .............................................. 16
Interest Rate Swaps ...................................................... 17
Loans of Portfolio Securities ............................................ 17
Illiquid Securities ...................................................... 17
Forward Foreign Currency Exchange Contracts .............................. 18
Further Information About the Policies of the Stock Index Portfolio ...... 19
Further Information About the Zero Coupon Bond Portfolios ................ 20

INVESTMENT RESTRICTIONS .................................................... 21

INVESTMENT MANAGEMENT ARRANGEMENTS AND EXPENSES ............................ 24

PORTFOLIO TRANSACTIONS AND BROKERAGE ....................................... 25

DETERMINATION OF NET ASSET VALUE ........................................... 26

SECURITIES IN WHICH THE MONEY MARKET PORTFOLIO MAY CURRENTLY INVEST ........ 28

DEBT RATINGS ............................................................... 30

POSSIBLE REPLACEMENT OF THE SERIES FUND .................................... 32

OTHER INFORMATION CONCERNING THE SERIES FUND ............................... 32
Incorporation and Authorized Stock ....................................... 32
Dividends, Distributions and Taxes ....................................... 32
Custodian and Transfer Agent ............................................. 32
Experts .................................................................. 33
Licenses ................................................................. 33

DIRECTORS AND OFFICERS OF THE PRUDENTIAL AND MANAGEMENT OF THE SERIES FUND . 33

FINANCIAL STATEMENTS OF THE PRUDENTIAL SERIES FUND, INC .................... A1

THE PRUDENTIAL SERIES FUND, INC. SCHEDULE OF INVESTMENTS .................. B1

<PAGE>

MORE DETAILED INFORMATION ABOUT THE CONTRACT

Sales Load Upon Surrender. A contingent deferred sales load is assessed if the
Contract lapses or is surrendered during the first 10 Contract years, or if a
withdrawal is made under a Form A Contract during that 10 year period. No such
charge is applicable to the death benefit, no matter when that may become
payable. Subject to the additional limitations described below, for Contracts
that lapse or are surrendered during the first 5 Contract years the charge will
be equal to 50% of the first year's primary annual premium. In the next 5
Contract years that percentage is reduced uniformly on a daily basis until it
reaches zero on the tenth Contract anniversary. Thus, for Contracts surrendered
at the end of the sixth year, the maximum deferred sales charge will be 40% of
the first year's primary annual premium, for Contracts surrendered at the end of
year 7, the maximum deferred sales charge will be 30% of the first year's
primary annual premium, and so forth.

The contingent deferred sales load is also subject to a further limit at older
issue ages (approximately above age 67) in order to comply with certain
requirements of state law. Specifically, the contingent deferred sales load for
such insureds is no more than $32.50 per $1,000 of face amount.

The sales load is subject to a further important limitation that may,
particularly for Contracts that lapse or are surrendered within the first 5 or 6
years, result in a lower contingent deferred sales load than that described
above. (This limitation might also, under unusual circumstances, apply to reduce
the monthly sales load deductions described in the prospectus in item (c) under
Monthly Deductions from Contract Fund.) The limitation is applied in order to
conform with the requirements of the Investment Company Act of 1940 and
regulations adopted thereunder, which limit the amount of non-refundable sales
load that may be charged on contracts within the first 2 years.

The limitation is as follows: (Every Contract has associated with it a Guideline
Annual Premium ("GAP"), which is an amount, generally larger than the gross
annual scheduled premium for the Contract, determined actuarially in accordance
with a definition set forth in a regulation of the Securities and Exchange
Commission ("SEC").) The maximum aggregate sales load that The Prudential will
charge (that is, the sum of the monthly sales load deduction and the contingent
deferred sales charge) will not be more than 30% of the premiums actually paid
until those premiums total one GAP plus no more than 9% of the next premiums
paid until total premiums are equal to 5 GAPS, plus no more than 6% of all
subsequent premiums. If the sales charges described above would at any time
exceed this maximum amount then the charge, to the extent of any excess, will
not be made.

Reduction of Charges for Concurrent Sales to Several Individuals. The Prudential
may reduce the sales charges and/or other charges on individual Contracts sold
to members of a class of associated individuals, or to a trustee, employer or
other entity representing such a class, where it is expected that such multiple
sales will result in savings of sales or administrative expenses. The Prudential
determines both the eligibility for such reduced charges, as well as the amount
of such reductions, by considering the following factors: (1) the number of
individuals; (2) the total amount of premium payments expected to be received
from these Contracts; (3) the nature of the association between these
individuals, and the expected persistency of the individual Contracts; (4) the
purpose for which the individual Contracts are purchased and whether that
purpose makes it likely that expenses will be reduced; and (5) any other
circumstances which The Prudential believes to be relevant in determining
whether reduced sales or administrative expenses may be expected. Some of the
reductions in charges for these sales may be contractually guaranteed; other
reductions may be withdrawn or modified by The Prudential on a uniform basis.
The Prudential's reductions in charges for these sales will not be unfairly
discriminatory to the interests of any individual Contract owners.

Sales to Persons 14 Years of Age or Younger. Both Form A and Form B Contracts
covering insureds of 14 years of age or less contain a special provision
providing that the face amount of insurance will automatically be increased on
the Contract anniversary after the insured's 21st birthday to 150% of the
initial face amount, so long as the Contract is not then in default. The death
benefit will also usually increase, at the same time, by the same dollar amount.
In certain circumstances, however, it may increase by a smaller amount. See How
a Contract's Death Benefit Will Vary in the prospectus. This increase in death
benefit will also generally increase the net amount at risk under the Contract,
thus increasing the mortality charge deducted each month from amounts invested
under the Contract. See item (b) under Monthly Deductions from Contract Fund in
the prospectus. The automatic increase in the face amount of insurance may
affect future premium payments if the Contract owner wants to avoid the Contract
being classified as a Modified Endowment Contract. A Contract owner should
consult his or her Prudential representative before making unscheduled premium
payments.

Paying Premiums by Payroll Deduction. In addition to the annual, semi-annual,
quarterly and monthly premium payment modes, a payroll budget method of paying
premiums may also be available under certain Contracts. The employer generally
deducts the necessary amounts from employee paychecks and sends premium payments
to The Prudential monthly. Some Contracts sold using the payroll budget method
may be eligible for a guaranteed issue program under which the initial minimum
death benefit is $25,000 and the Contracts are based on unisex mortality

<PAGE>

tables. Any Prudential representative authorized to sell this Contract can
provide further details concerning the payroll budget method of paying premiums.

Unisex Premiums and Benefits. The Contract generally employs mortality tables
that distinguish between males and females. Thus, premiums and benefits under
Contracts issued on males and females of the same age will generally differ.
However, in those states that have adopted regulations prohibiting sex-distinct
insurance rates, premiums and cost of insurance charges will be based on a
blended unisex rate whether the insured is male or female. In addition,
employers and employee organizations considering purchase of a Contract should
consult their legal advisors to determine whether purchase of a Contract based
on sex-distinct actuarial tables is consistent with Title VII of the Civil
Rights Act of 1964 or other applicable law. The Prudential may offer the
Contract with unisex mortality rates to such prospective purchasers.

How the Death Benefit Will Vary. As noted above, there are two Forms of the
Contract, Form A and Form B. The death benefit under a Form B Contract varies
with investment performance while the death benefit under a Form A Contract does
not, unless it must be increased to satisfy tax requirements.

Under a Form A Contract, the guaranteed minimum death benefit is equal to the
face amount of insurance. (However, should the death benefit become payable
while a Contract loan is outstanding, the debt will be deducted from the death
benefit.) If the Contract is kept in force for several years and if investment
performance is reasonably favorable, the Contract Fund value may grow to the
point where it is necessary to increase the death benefit in order to ensure
that the Contract will satisfy the Internal Revenue Code's definition of life
insurance. Thus, the death benefit under a Form A Contract will always be the
greater of (1) the guaranteed minimum death benefit; and (2) the Contract Fund
divided by the "net single premium" per $1 of death benefit at the insured's
attained age on that date. The latter provision ensures that the Contract will
always have a death benefit large enough to be treated as life insurance for tax
purposes under current law. The net single premium is used only in the
calculation of the death benefit, not for premium payment purposes. The
following is a table of illustrative net single premiums for $1 of death benefit
under Contracts issued on insureds in the preferred rating class.

- --------------------------------------------------------------------------------
Increase in Insurance
Male Net Single Amount Per $1
Attained Age Premium Increase in Contract Fund
- --------------------------------------------------------------------------------
5 .09151 $10.93
25 .17000 $ 5.88
35 .23700 $ 4.22
55 .45209 $ 2.21
65 .59468 $ 1.68
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Increase in Insurance
Female Net Single Amount Per $1
Attained Age Premium Increase in Contract Fund
- --------------------------------------------------------------------------------
5 .07919 $12.63
25 .15112 $ 6.62
35 .21127 $ 4.73
55 .40090 $ 2.49
65 .53639 $ 1.00
- --------------------------------------------------------------------------------

Whenever the death benefit is determined in this way, The Prudential reserves
the right to refuse to accept further premium payments, although in practice the
payment of the lesser of 2 years' scheduled premiums or the average of all
premiums paid over the last 5 years will generally be allowed.

Under a Form B Contract, the death benefit will vary with investment experience.
Assuming no withdrawals, the death benefit will be equal to the face amount of
insurance plus the amount (if any) by which the Contract Fund value exceeds the
applicable "Tabular Contract Fund value" for the Contract (subject to an
exception described below under which the death benefit is higher). Each
Contract contains a table that sets forth the Tabular Contract Fund value as of
the end of each of the first 20 years of the Contract. Tabular Contract Fund
values between Contract anniversaries are determined by interpolation. The
"Tabular Contract Fund value" for each Contract year is an amount that is
slightly less than the Contract Fund value that would result as of the end of
such year if only scheduled premiums were paid, they were paid when due, the
selected investment options earned a net return at a uniform rate of 4% per
year, full mortality charges based upon the 1980 CSO Table were deducted,
maximum sales load and expense charges were deducted, and there was no Contract
debt.

<PAGE>

Thus, under a Form B Contract with no withdrawals, the death benefit will equal
the face amount if the Contract Fund equals the Tabular Contract Fund value. If,
due to investment results greater than a net return of 4%, or to payment of
greater than scheduled premiums, or to smaller than maximum charges, the
Contract Fund value is a given amount greater than the Tabular Contract Fund
value, the death benefit will be the face amount plus that excess amount. If,
due to investment results less favorable than a net return of 4%, the Contract
Fund value is less than the tabular Contract Fund value, the death benefit will
not fall below the initial face amount stated in the Contract; however, this
unfavorable investment experience must first be offset by favorable performance
or additional payments that bring the Contract Fund up to the tabular level
before favorable investment results or additional payments will increase the
death benefit. Again, the death benefit will reflect a deduction for the amount
of any Contract debt. See Contract Loans in the prospectus.

As is the case under a Form A Contract, the Contract Fund of a Form B Contract
could grow to the point where it is necessary to increase the death benefit by a
greater amount in order to ensure that the Contract will satisfy the Internal
Revenue Code's definition of life insurance. Thus, the death benefit under a
Form B Contract will always be the greatest of (1) the face amount plus the
Contract Fund minus the tabular Contract Fund value; (2) the guaranteed minimum
death benefit; and (3) the Contract Fund divided by the net single premium per
$1 of death benefit at the insured's attained age on that date.

A Contract owner may also increase or decrease the face amount of his or her
Contract, subject to certain conditions. See Increase in Face Amount and
Decrease in Face Amount, below.

Withdrawal of Excess Cash Surrender Value. Under certain circumstances, a
Contract owner may withdraw a portion of the Contract's cash surrender value
without surrendering the Contract in whole or in part. The amount that a
Contract owner may withdraw is limited by the requirement that the Contract Fund
after withdrawal must not be less than the tabular Contract Fund value. (A Table
of Tabular Contract Fund Values is included in the Contract; the values increase
with each year the Contract remains in force.) But because the Contract Fund may
be made up in part by an outstanding Contract loan, there is a further
limitation that the amount withdrawn may not be larger than an amount sufficient
to reduce the cash surrender value to zero. The amount withdrawn must be at
least $2,000 under a Form A Contract (in which the death benefit is generally
equal to the face-amount of insurance) and at least $500 under a Form B Contract
(in which the death benefit varies daily). An owner may make no more than four
such withdrawals in each Contract year, and there is an administrative
processing fee for each withdrawal equal to the lesser of $15 or 2% of the
amount withdrawn. An amount withdrawn may not be repaid except as a scheduled or
unscheduled premium subject to the applicable charges. Upon request, The
Prudential will tell a Contract owner how much he or she may withdraw.
Withdrawal of part of the cash surrender value may have tax consequences. See
Tax Treatment of Contract Benefits, page 5. A temporary need for funds may also
be met by making a loan and you should consult your Prudential representative
about how best to meet your needs.

Under a Form A Contract, the face amount of insurance is reduced by not more
than the amount of the withdrawal. No partial withdrawal will be permitted under
a Form A Contract if it would result in a new face amount of less than the
minimum face amount applicable to the insured's Contract. See Requirements for
Issuance of a Contract in the prospectus. It is important to note, however, that
if the face amount is decreased at any time during the first 7 Contract years,
there is a danger that the Contract might be classified as a Modified Endowment
Contract. See Tax Treatment of Contract Benefits, page 5. Before making any
withdrawal which causes a decrease in face amount, a Contract owner should
consult with his or her Prudential representative. Also, if a withdrawal under a
Form A Contract is made before the end of the tenth year, the Contract Fund may
be reduced not only by the amount withdrawn but also by a proportionate amount
of any surrender charges that would be made if the Contract were surrendered.
The proportion is based on the percentage reduction in face amount. Form A
Contract owners who make a partial withdrawal will be sent replacement Contract
pages showing the new face amount, scheduled premiums, maximum surrender
charges, tabular values, and monthly deductions.

Under a Form B Contract, the cash surrender value and Contract Fund value are
reduced by the amount of the withdrawal, and the death benefit is accordingly
reduced. Neither the face amount of insurance nor the amount of scheduled
premiums will be changed due to a withdrawal of excess cash surrender value
under a Form B Contract. No surrender charges will be assessed upon a withdrawal
under a Form B Contract.

Withdrawal of part of the cash surrender value increases the risk that the
Contract Fund may be insufficient to provide for benefits under the Contract. If
such a withdrawal is followed by unfavorable investment experience, the Contract
may lapse even if scheduled premiums continue to be paid when due. This is
because, for purposes of determining whether a lapse has occurred, The
Prudential treats withdrawals as a return of premium.

Increases in Face Amount. An owner who wishes to increase the amount of his or
her insurance may do so by increasing the face amount of the Contract (which is
also the guaranteed minimum death benefit), subject to state approval and
underwriting requirements determined by The Prudential. An increase in face
amount is in many ways similar to the purchase of a second Contract, but it
differs in the following respects: the minimum permissible

<PAGE>

increase is $25,000, while the minimum for a new Contract is $60,000; monthly
fees are lower because only a single $3 per month administrative charge is made
rather than two; a combined premium payment results in deduction of a single $2
per premium processing charge while separate premium payments for separate
Contracts would involve two charges; the monthly expense charge of $0.03 per
$1,000 of face amount may be lower if the increase is to a face amount greater
than $100,000; and the Contract will lapse as a unit, unlike the case if two
separate Contracts are purchased. These differences aside, the decision to
increase face amount is comparable to the purchase of a second Contract in that
it involves a commitment to higher scheduled premiums in exchange for greater
insurance benefits.

A Contract owner may elect to increase the face amount of his or her Contract no
earlier than the first anniversary of the Contract. The following conditions
must be met: (1) the owner must ask for the increase in writing on an
appropriate form; (2) the amount of the increase in face amount must be at least
$25,000; (3) the insured must supply evidence of insurability for the increase
satisfactory to The Prudential; (4) if The Prudential requests, the owner must
send in the Contract to be suitably endorsed; (5) the Contract must not be in
default on the date the increase takes effect; (6) the owner must pay an
appropriate premium at the time of the increase; (7) The Prudential has the
right to deny more than one increase in a Contract year; and (8) if The
Prudential has, between the Contract Date and the date that any requested
increase in face amount will take effect, changed any of the bases on which
benefits and charges are calculated under newly issued Contracts, The Prudential
has the right to deny the increase. An increase in face amount resulting in a
total face amount under the Contract of at least $100,000 may, subject to strict
underwriting requirements, render the Contract eligible for a Select Rating.

Upon an increase in face amount, The Prudential will recompute the Contract's
scheduled premiums, contingent deferred sales and administrative charges,
tabular values, and monthly deductions from the Contract Fund. The Contract
owner has a choice, limited only by applicable state law, as to whether the
recomputation will be made as of the prior or next Contract anniversary. There
will be a payment required on the date of increase; the amount of the payment
will depend, in part, on which Contract anniversary the Contract owner selects
for the recomputation. The Prudential will tell the owner the amount of the
required payment. If should also be noted that an increase in face amount may
impact the status of the Contract as a Modified Endowment Contract. See Tax
Treatment of Contract Benefits, page 5. Therefore, before increasing the face
amount, a Contract owner should consult with his or her Prudential
representative.

The effective date of the increase in the amount of insurance will be determined
by the same rules that apply when a new Contract is purchased. Generally
speaking, an increase will take effect on the latest of the date the owner
applies for it, the date satisfactory evidence of insurability is provided to
The Prudential or the date designated by the Contract owner, provided the
necessary payment is made on or before that date.

The Prudential will supply the Contract owner with pages which show the
increased face amount, the effective date of the increase, and the recomputed
items described two paragraphs above. The pages will also describe how the
increase in face amount affects the various provisions of the Contract,
including a statement that, for the amount of the increase in face amount, the
period stated in the Incontestability and Suicide provisions (see Other Standard
Contract Provisions, below on page 8) will run from the effective date of the
increase.

For the purpose of determining the sales load that will be charged after the
increase and upon any subsequent lapse or surrender, the Contract is treated as
if there were two separate Contracts, a "base Contract" representing the
Contract before the increase and an "incremental Contract" representing the
increase viewed as a separate Contract. At the time of the increase, a certain
portion of the Contract Fund is allocated to the incremental Contract as a
prepayment of premiums for purposes of the sales load limit. That portion is
equal to the Guideline Annual Premium ("GAP") of the incremental Contract
divided by the GAP of the entire Contract after the increase. Premium payments
made after the increase are also allocated between the base Contract and the
incremental Contract for purposes of the sales load limit. A portion of each
premium payment after the increase is allocated to the increase based on the GAP
for the incremental Contract divided by the GAP for the entire Contract. A
monthly deduction equal to 0.5% of the primary annual premium for each part of
the Contract (i.e., the base and incremental Contracts, respectively) will be
made until each part of the Contract has been in force for 5 years, although The
Prudential reserves the right to continue to make this deduction thereafter.
Similarly, the amount, if any, of sales charges upon lapse or surrender and the
application of the overall limitation upon sales load, as described above in
Sales Load Upon Surrender, page 1, will be determined as explained in that
section as if there were two Contracts rather than one. Moreover, the contingent
deferred administrative charge is also determined as if there were two separate
Contracts. Thus, an owner considering an increase in face amount should be aware
that such an increase will entail charges, including periodic sales load
deductions and contingent deferred sales and administrative charges, comparable
to the purchase of a new Contract.

Each Contract owner who elects to increase the face amount of his or her
Contract will be granted a "free-look" right which will apply only to the
increase in face amount, not the entire Contract. The right is comparable to
the right afforded to a purchaser of a new Contract. See Short-Term
Cancellation Right or "Free Look" in the

<PAGE>

prospectus. The "free-look" right would have to be exercised no later than 45
days after execution of the application for the increase or, if later, within 10
days after either receipt of the Contract as increased or receipt of the
withdrawal right notice by the owner. Upon exercise of the "free-look" right,
the owner will receive a refund in the amount of the aggregate premiums paid
since the increase was requested and attributable to the increase, not the base
Contract, as determined pursuant to the proportional premium allocation rule
described above. There will be no adjustment for investment experience. All
charges deducted after the increase will be reduced to what they would have been
had no increase been effected. A Contract owner may transfer the total amount
attributable to the increase in face amount from the subaccounts or the Real
Property Account to the fixed-rate option at any time within 2 years after the
increase in face amount.

Decreases in Face Amount. A Contract owner may effect a partial surrender of a
Contract (see Surrender of a Contract in the prospectus) or a partial withdrawal
of excess cash surrender value (see Withdrawal of Excess Cash Surrender Value
above). A Contract owner also has the additional option of decreasing the face
amount (which is also the guaranteed minimum death benefit) of his or her
Contract without withdrawing any such surrender value. Contract owners who
conclude that, because of changed circumstances, the amount of insurance is
greater than needed will thus be able to decrease their amount of insurance
protection, and the monthly deductions for the cost of insurance, without
decreasing their current cash surrender value. The cash surrender value of the
Contract on the date of the decrease will not change, except that an
administrative processing fee of $15 may be deducted from that value (unless
that fee is separately paid at the time the decrease in face amount is
requested). The Contract's Contract Fund value, however, will be reduced by
deduction of a proportionate part of the then applicable contingent deferred
sales and administrative charges, if any. Scheduled premiums for the Contract
will also be proportionately reduced. The Contracts of owners who exercise the
right to reduce face amount will be amended to show the new face amount, tabular
values, scheduled premiums, monthly charges, and, if applicable, the remaining
contingent deferred sales and administrative charges.

No decreases in face amount will be permitted in the first Contract year. The
minimum permissible decrease is $10,000. No decrease will be permitted that
causes the face amount of the Contract to drop below the minimum face amount
applicable to the insured's Contract. See Requirements for Issuance of a
Contract in the prospectus. No reduction will be permitted to the extent that it
would cause the Contract to fail to qualify as "life insurance" for purposes of
Section 7702 of the Internal Revenue Code. If the face amount of a Contract in
force on a Select Rating basis is reduced below $100,000, it is no longer
eligible for the Select Rating. A decrease in face amount will be effected as of
the Monthly date immediately preceding receipt of a proper request to decrease
face amount. Monthly charges previously deducted on that date and attributed to
the decreased portion of the face amount will be credited to the Contract Fund
as of that date.

It is important to note, however, that if the face amount is decreased at any
time during the first 7 Contract years, there is a danger the Contract might be
classified as a Modified Endowment Contract. See Tax Treatment of Contract
Benefits, page 5. Before requesting any decreases in face amount, a Contract
owner should consult his or her Prudential representative.

Tax Treatment of Contract Benefits. Each prospective purchaser is urged to
consult a qualified tax advisor. The following discussion is not intended as tax
advice, and it is not a complete statement of what the effect of federal income
taxes will be under all circumstances. Rather, it provides information about how
The Prudential believes the tax laws apply in the most commonly occurring
circumstances. There is no guarantee, however, that the current federal income
tax laws and regulations or interpretations will not change.

Treatment as Life Insurance. The Contract will be treated as "life insurance" as
long as it satisfies certain definitional tests set forth in Section 7702 of the
Internal Revenue Code (the "Code") and as long as the underlying investments for
the Contract satisfy diversification requirements set forth in Treasury
Regulations issued pursuant to Section 817(h) of the Code.

These diversification requirements must ordinarily be met within 1 year after
Contract owner funds are first allocated to the particular portfolio of the
Series Fund, and within 30 days after the end of each calendar quarter
thereafter. Each portfolio must meet one of two alternative tests. Under the
first test, no more than 55% of the portfolio's assets can be invested in any
one investment; no more than 70% of the assets can be invested in any two
investments; no more than 80% can be invested in any three investments; and no
more than 90% can be invested in any four investments. Under the second test,
the portfolio must meet the tax law diversification requirements for a regulated
investment company and no more than 55% of the value of the portfolio's assets
can be invested in cash, cash items, Government securities, and securities of
other regulated investment companies. A third test is available for portfolios
that underlie only variable life insurance contracts, such as the Zero Coupon
Bond Portfolios. Under this test, such portfolios can be invested without limit
in Treasury securities and, where the portfolio is invested in part in Treasury
securities, the percentages of the first test are revised and applied to the
portion of the portfolio not invested in Treasury securities.

<PAGE>

For purposes of determining whether a variable account is adequately
diversified, each United States Government agency or instrumentality is treated
as a separate issuer. Compliance with diversification requirements will
generally limit the amount of assets that may be invested in federally insured
certificates of deposit and all types of securities issued or guaranteed by each
United States Government agency or instrumentality.

The Prudential believes that it has taken adequate steps to cause the Contract
to be treated as life insurance for tax purposes. This means that (1) except as
noted below, the Contract owner should not be taxed on any part of the Contract
Fund, including additions attributable to interest, dividends or appreciation;
and (2) the death benefit should be excludible from the gross income of the
beneficiary under section 101(a) of the Code.

However, Section 7702 of the Code, which defines life insurance for tax
purposes, gives the Secretary of the Treasury authority to prescribe regulations
to carry out the purposes of the Section. In this regard, proposed regulations
governing mortality charges were issued in 1991 and proposed regulations under
Sections 101, 7707, and 7702A governing the treatment of life insurance policies
that provide accelerated death benefits were issued in 1992. None of these
proposed regulations has yet been finalized. Additional regulations under
Section 7702 may also be promulgated in the future. Moreover, in connection with
the issuance of temporary regulations under Section 817(h), the Treasury
Department announced that such regulations do not provide guidance concerning
the extent to which Contract owners may direct their investments to particular
divisions of a separate account. Such guidance will be included in regulations
or rulings under Section 817(d) relating to the definition of a variable
contract.

The Prudential intends to comply with final regulations issued under sections
7702 and 817. Therefore, it reserves the right to make such changes as it deems
necessary to assure that the Contract continues to qualify as life insurance for
tax purposes. Any such changes will apply uniformly to affected participants and
will be made only after advance written notice to affected Contract owners.

Pre-Death Distributions. The taxation of pre-death distributions depends on
whether the Contract is classified as a Modified Endowment Contract. The
following discussion first deals with distributions under Contracts not so
classified, and then with Modified Endowment Contracts.

1. A surrender or lapse of the Contract may have tax consequences. Upon
surrender, the owner will not be taxed on the cash surrender value except
for the amount, if any, that exceeds the gross premiums paid less the
untaxed portion of any prior withdrawals. The amount of any unpaid Contract
debt will, upon surrender or lapse, be added to the cash surrender value
and treated, for this purpose, as if it had been received. Any loss
incurred upon surrender is generally not deductible. The tax consequences
of a surrender may differ if the proceeds are received under any income
payment settlement option.

A withdrawal generally is not taxable unless it exceeds total premiums paid
to the date of withdrawal less the untaxed portion of any prior
withdrawals. However, under certain limited circumstances, in the first 15
Contract years all or a portion of a withdrawal or partial surrender may be
taxable if the Contract Fund exceeds the total premiums paid less the
untaxed portion of any prior withdrawals, even if total withdrawals do not
exceed total premiums paid to date.

Extra premiums for optional benefits and riders generally do not count in
computing the gross premiums paid, which in turn determines the extent to
which a withdrawal might be taxed.

Loans received under the Contract will ordinarily be treated as
indebtedness of the owner and will not be considered to be distributions
subject to tax.

2. Some of the above rules are changed if the Contract is classified as a
Modified Endowment Contract under section 7702A of the Code. It is possible
for the Contract to be classified as a Modified Endowment Contract under at
least two circumstances: premiums substantially in excess of scheduled
premiums are paid; or a decrease in the face amount of insurance is made
(or a rider removed) during the first 7 Contract years. Moreover, the
addition of a rider or the increase in the face amount of insurance after
the Contract Date may have an impact on the Contract's status as a Modified
Endowment Contract. Contract owners contemplating any of these steps should
first consult a qualified tax advisor and their Prudential representative.

If the Contract is classified as a Modified Endowment Contract, then
pre-death distributions, including loans and withdrawals, are includible in
income to the extent that the Contract Fund prior to surrender charges
exceeds the gross premiums paid for the Contract increased by the amount of
any loans previously includible in income and reduced by any untaxed
amounts previously received other than the amount of any loans excludible
from income. These rules may also apply to pre-death distributions,
including loans, made during the 2 year period prior to the Contract
becoming a Modified Endowment Contract.

In addition, pre-death distributions from such Contracts (including full
surrenders) will be subject to a penalty of 10 per cent of the amount
includible in income unless the amount is distributed on or after age

<PAGE>

59 1/2, on account of the taxpayer's disability or as a life annuity. It is
presently unclear how the penalty tax provisions apply to Contracts owned
by nonnatural persons such as corporations.

Under certain circumstances, Modified Endowment Contracts issued during any
calendar year will be treated as a single contract for purposes of applying
the above rules.

Withholding. The taxable portion of any amounts received under the Contract will
be subject to withholding to meet federal income tax obligations. If the
Contract owner fails to elect that no taxes be withheld, The Prudential will
withhold from each payment the appropriate percentage of the taxable portion of
the payment. The Prudential will provide the Contract owner with forms and
instructions concerning the right to elect that no taxes be withheld from the
taxable portion of any payment. All recipients may be subject to penalties under
the estimated tax payment rules if withholding and estimated tax payments are
not sufficient. Contract owners who do not provide a social security number or
other taxpayer identification number will not be permitted to elect out of
withholding.

Other Tax Considerations. Transfer of the Contract to a new owner or assignment
of the Contract may have tax consequences depending on the circumstances. In the
case of a transfer of the Contract for a valuable consideration, the death
benefit may be subject to federal income taxes under section 101(a)(2) of the
Code. In addition, a transfer of the Contract to or the designation of a
beneficiary who is either 37 1/2 years younger than the Contract owner or a
grandchild of the Contract owner may have Generation Skipping Transfer tax
consequences under Section 2601 of the Code.

In certain circumstances, deductions for interest paid or accrued on Contract
debt or on other loans that are incurred or continued to purchase or carry the
Contract may be denied under section 163 of the Code as personal interest or
under section 264 of the Code. Contract owners should consult a tax advisor
regarding the application of these provisions to their circumstances.

Business-owned life insurance is subject to additional rules. Section 264(a)(1)
of the Code generally precludes business Contract owners from deducting premium
payments. Under section 264(a)(4) of the Code, a deduction is not allowed for
any interest paid or accrued on any Contract debt on an insurance policy to the
extent the indebtedness exceeds $50,000 per officer, employee or financially
interested person. The Code also imposes an indirect tax upon additions to the
Contract Fund or the receipt of death benefits under business-owned life
insurance policies under certain circumstances by way of the corporate
alternative minimum tax.

The individual situation of each Contract owner or beneficiary will determine
the federal estate taxes and the state and local estate, inheritance and other
taxes due if the owner or insured dies.

Sale of the Contract and Sales Commissions. Pruco Securities Corporation
("Prusec"), an indirect wholly-owned subsidiary of The Prudential, acts as the
principal underwriter of the Contract. Prusec, organized in 1971 under New
Jersey law, is registered as a broker and dealer under the Securities Exchange
Act of 1934 and is a member of the National Association of Securities Dealers,
Inc. Prusec's principal business address is 1111 Durham Avenue, South
Plainfield, New Jersey 07080. The Contract is sold by registered representatives
of Prusec who are also authorized by state insurance departments to do so. The
Contract may also be sold through other broker-dealers authorized by Prusec and
applicable law to do so. Registered representatives of such other broker-dealers
may be paid on a different basis than described below. Where the insured is less
than 60 years of age, the representative will generally receive a commission of
no more than 50% of the scheduled premiums for the first year, no more than 12%
of the scheduled premiums for the second, third, and fourth years, no more than
3% of the scheduled premiums for the fifth through tenth years, and no more than
2% of the scheduled premiums thereafter. For insureds over 59 years of age, the
commission will be lower. The representative may be required to return all or
part of the first year commission if the Contract is not continued through the
second year. Representatives with less than 3 years of service may be paid on a
different basis. Representatives who meet certain productivity, profitability,
and persistency standards with regard to the sale of the Contract will be
eligible for additional compensation.

Sales expenses in any year are not equal to the deduction for sales load in that
year. The Prudential expects to recover its total sales expenses over the
periods the Contracts are in effect. To the extent that the sales charges are
insufficient to cover total sales expenses, the sales expenses will be recovered
from The Prudential's surplus, which may include amounts derived from the
mortality and expense risk charge and the guaranteed minimum death benefit risk
charge described in the prospectus under Daily Deduction from the Contract Fund,
and item (d) under Monthly Deductions from Contract Fund.

Tax-Qualified Pension Plans. The Contracts may be acquired in connection with
the funding of retirement plans satisfying the qualification requirements of
Section 401 of the Internal Revenue Code. Such Contracts may be issued with a
minimum face amount of $10,000, and increases and decreases in face amount may
be effected in minimum increments of $10,000. The monthly charge for anticipated
mortality costs and the scheduled premiums under such Contracts will be the same
for male and female insureds of a particular age and underwriting

<PAGE>

classification. Illustrations reflecting such premiums and charges will be given
to purchasers of Contracts issued in connection with qualified plans. Only
certain of the riders normally available with the Contracts are available to
Contracts issued in connection with qualified plans. See Riders in the
prospectus. Moreover, fixed reduced paid-up insurance and payment of the cash
surrender value are the only options on lapse available to Contracts issued in
connection with qualified plans. See Lapse and Reinstatement in the prospectus.
Finally, Contracts issued in connection with qualified plans may not invest in
the Real Property Account.

Prior to purchase of a Contract in connection with a qualified plan, the
provisions of the Code relating to such plans and life insurance thereunder
should be examined.

Other Standard Contract Provisions.

Beneficiary. The beneficiary is designated and named in the application by the
Contract owner. Thereafter, the owner may change the beneficiary, provided it is
in accordance with the terms of the Contract. Should the insured die with no
surviving beneficiary, the insured's estate will become the beneficiary.

Incontestability. After the Contract has been in force during the insured's
lifetime for 2 years from the Contract Date or, with respect to any change in
the Contract that requires The Prudential's approval and could increase its
liability, after the change has been in effect during the insured's lifetime for
2 years from the effective date of the change, The Prudential will not contest
its liability under the Contract in accordance with its terms.

Misstatement of Age or Sex. If the insured's stated age or sex (except where
unisex rates apply) or both are incorrect in the Contract, The Prudential will
adjust the death benefits payable, as required by law, to reflect the correct
age and sex. Any death benefit will be based on what the most recent charge for
mortality would have provided at the correct age and sex.

Suicide Exclusion. Generally, if the insured, whether sane or insane, dies by
suicide within 2 years from the Contract Date, The Prudential will pay no more
under the Contract than the sum of the premiums paid.

If the insured, whether sane or insane, dies by suicide within 2 years from the
effective date of an increase in the face amount of insurance, The Prudential
will pay, with respect to the amount of the increase, no more than the sum of
the scheduled premiums attributable to the increase.

Assignment. This Contract may not be assigned if such assignment would violate
any federal, state, or local law or regulation. The Contract may not be assigned
to an employee benefit plan without The Prudential's consent. The Prudential
assumes no responsibility for the validity or sufficiency of any assignment, and
it will not be obligated to comply with any assignment unless it has received a
copy at one of its Home Offices.

Settlement Options. The Contract grants to most owners, or to the beneficiary, a
variety of optional ways of receiving Contract proceeds, other than in a lump
sum. Any Prudential representative authorized to sell this Contract can explain
these options upon request.

Exchange of Fixed-Dollar Contract to Variable Contract. The Prudential may, on a
non-discriminatory basis, permit the owner of an Appreciable Life insurance
policy issued by The Prudential (an Appreciable Life policy is a general
account, universal life type policy with guaranteed minimum values) to exchange
his or her policy for a comparable Variable Appreciable Life Contract with the
same Contract Date, scheduled premiums, and Contract fund. No charge will be
made for the exchange. There is no new "free look" right when an Appreciable
Life insurance policy owner elects to exchange his or her policy for a
comparable Variable Appreciable Life Contract.

Although The Prudential does not give tax advice, The Prudential does believe,
based on its understanding of federal income tax laws as currently interpreted,
that the original date exchange of an Appreciable Life Contract should be
considered to be a tax-free exchange under the Internal Revenue Code of 1986 as
amended. It should be noted, however, that the exchange of an Appreciable Life
Contract for a Variable Appreciable Life Contract may impact the status of the
Contract as Modified Endowment Contract. See Tax Treatment of Contract Benefits,
page 5. A contract owner should consult with his or her tax advisor and
Prudential representative before making an exchange.

INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS

General. The Prudential Series Fund, Inc. (the "Series Fund") has sixteen
separate portfolios available to Contract owners: the Money Market Portfolio,
the Bond Portfolio, the Government Securities Portfolio, the three Zero Coupon
Bond Portfolios with different liquidation dates -- 1995 (not available for
investment after November 14, 1995), 2000, and 2005, the Conservatively Managed
Flexible Portfolio, the Aggressively Managed Flexible Portfolio, the High Yield
Bond Portfolio, the Stock Index Portfolio, the High Dividend Stock Portfolio,
the Common Stock Portfolio, the Growth Stock Portfolio, the Small Capitalization
Stock Portfolio, the Global Equity Portfolio, and the Natural Resources
Portfolio. The portfolios are managed by The Prudential Insurance Company of
America ("The Prudential"), see Investment Management Arrangements and Expenses,
page 24.

<PAGE>

Each of the portfolios seeks to achieve a different investment objective.
Accordingly, each portfolio can be expected to have different investment results
and to be subject to different financial and market risks. Financial risk refers
to the ability of an issuer of a debt security to pay principal and interest and
to the earnings stability and overall financial soundness of an issuer of an
equity security. Market risk refers to the degree to which the price of a
security will react to changes in conditions in securities markets in general,
and with particular reference to debt securities, to changes in the overall
level of interest rates.

The investment objectives of the Series Fund's portfolios can be found under
Investment Objectives and Policies of the Portfolios in the prospectus. The
policies employed to manage the Zero Coupon Bond Portfolios are also discussed
in greater detail in Further Information About the Zero Coupon Bond Portfolios,
page 20.

Convertible Securities. The Conservatively Managed Flexible, Aggressively
Managed Flexible, High Dividend Stock, Common Stock, Growth Stock, Small
Capitalization Stock, Global Equity, and Natural Resources Portfolios may invest
in convertible securities and such securities may constitute a major part of the
holdings of the High Dividend Stock, Natural Resources and Global Equity
Portfolios. A convertible security is a fixed-income security (a bond or
preferred stock) which may be converted at a stated price within a specified
period of time into a certain quantity of the common stock of the same or a
different issuer. Convertible securities are senior to common stocks in a
corporation's capital structure, but are usually subordinated to similar
nonconvertible securities. While providing a fixed income stream (generally
higher in yield than the income derivable from a common stock but lower than
that afforded by a similar nonconvertible security), a convertible security also
affords an investor the opportunity, through its conversion feature, to
participate in capital appreciation attendant upon a market price advance in the
convertible security's underlying common stock. The price of a convertible
security tends to increase as the market value of the underlying stock rises,
whereas it tends to decrease as the market value of the underlying stock
declines. While no securities investment is without risk, investments in
convertible securities generally entail less risk than investments in the common
stock of the same issuer.

Warrants. The Conservatively Managed Flexible, Aggressively Managed Flexible,
High Dividend Stock, Common Stock, Growth Stock, Small Capitalization Stock,
Global Equity, and Natural Resources Portfolios may invest in warrants on common
stocks. Warrants are options to buy a number of shares of stock at a
predetermined price during a specified period. The risk associated with the
purchase of a warrant is that the purchase price will be lost if the market
price of the stock does not reach a level that justifies the exercise or sale of
the warrant before it expires. From time to time, the Bond and the High Yield
Bond Portfolios may invest in debt securities that are offered together with
warrants, but only when the debt security meets the portfolio's investment
criteria and the value of the warrant is relatively very small. If the warrant
later becomes valuable, it will ordinarily be sold rather than be exercised.

Options and Futures

Options on Equity Securities. The Conservatively Managed Flexible,
Aggressively Managed Flexible, High Dividend Stock, Common Stock, Growth
Stock, Small Capitalization Stock, Global Equity, and Natural Resources
Portfolios may purchase and write (i.e., sell) put and call options on equity
securities that are traded on securities exchanges or that are listed on the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
or that result from privately negotiated transactions with broker-dealers ("OTC
options"). A call option is a short-term contract pursuant to which the
purchaser or holder, in return for a premium paid, has the right to buy the
equity security underlying the option at a specified exercise price at any time
during the term of the option. The writer of the call option, who receives the
premium, has the obligation, upon exercise of the option, to deliver the
underlying equity security against payment of the exercise price. A put option
is a similar contract which gives the purchaser or holder, in return for a
premium, the right to sell the underlying equity security at a specified price
during the term of the option. The writer of the put, who receives the premium,
has the obligation to buy the underlying security at the exercise price upon
exercise by the holder of the put.

A portfolio will write only "covered" options on stocks. A call option is
covered if: (1) the portfolio owns the security underlying the option; or (2)
the portfolio has an absolute and immediate right to acquire that security
without additional cash consideration (or for additional cash consideration held
in a segregated account by its custodian) upon conversion or exchange of other
securities it holds; or (3) the portfolio holds on a share-for-share basis a
call on the same security as the call written where the exercise price of the
call held is equal to or less than the exercise price of the call written or
greater than the exercise price of the call written if the difference is
maintained by the portfolio in cash, Treasury bills or other high grade
short-term debt obligations in a segregated account with its custodian. A put
option is covered if: (1) the portfolio deposits and maintains with its
custodian in a segregated account cash, U.S. Government securities or other
liquid high-grade debt obligations having a value equal to or greater than the
exercise price of the option; or (2) the portfolio holds on a share-for-share
basis a put on the same security as the put written where the exercise price of
the put held is equal to or greater than the exercise price of the put written
or less than the exercise price if the difference is maintained by the portfolio
in cash, Treasury bills or other high grade short-term debt obligations in a
segregated account with its custodian.

<PAGE>

The Conservatively Managed Flexible, Aggressively Managed Flexible, High
Dividend Stock, Common Stock, Growth Stock, Small Capitalization Stock, Global
Equity, and Natural Resources Portfolios may also purchase "protective puts"
(i.e., put options acquired for the purpose of protecting a portfolio security
from a decline in market value). In exchange for the premium paid for the put
option, the portfolio acquires the right to sell the underlying security at the
exercise price of the put regardless of the extent to which the underlying
security declines in value. The loss to the portfolio is limited to the premium
paid for, and transaction costs in connection with, the put plus the initial
excess, if any, of the market price of the underlying security over the exercise
price. However, if the market price of the security underlying the put rises,
the profit the portfolio realizes on the sale of the security will be reduced by
the premium paid for the put option less any amount (net of transaction costs)
for which the put may be sold. Similar principles apply to the purchase of puts
on debt securities and stock indices, as described below under Options on Debt
Securities and Options on Stock Indices.

These portfolios may purchase call options for hedging and investment purposes.
No portfolio intends to invest more than 5% of its net assets at any one time in
the purchase of call options on stocks. These portfolios may also purchase
putable and callable equity securities, which are securities coupled with a put
or a call option provided by the issuer.

If the writer of an exchange-traded option wishes to terminate the obligation,
he or she may effect a "closing purchase transaction" by buying an option of the
same series as the option previously written. Similarly, the holder of an
exchange-traded option may liquidate his or her position by exercise of the
option or by effecting a "closing sale transaction" by selling an option of the
same series as the option previously purchased. A portfolio will realize a
profit from a closing transaction if the price of the transaction is less than
the premium received from writing the option or is more than the premium paid to
purchase the option. Because increases in the market price of a call option will
generally reflect increases in the market price of the underlying security, any
loss resulting from a closing purchase transaction with respect to a call option
is likely to be offset in whole or in part by appreciation of the underlying
equity security owned by the portfolio. Unlike exchange-traded options, OTC
options generally do not have a continuous liquid market. Consequently, the
portfolio will generally be able to realize the value of an OTC option it has
purchased only by exercising it or reselling it to the dealer who issued it.
Similarly, when the portfolio writes an OTC option, it generally will be able to
close out the OTC option prior to its expiration only by entering into a closing
purchase transaction with the dealer to which the portfolio originally wrote the
OTC option. There is, in general, no guarantee that closing purchase or closing
sale transactions can be effected.

A portfolio's use of options on equity securities is subject to certain special
risks, in addition to the risk that the market value of the security will move
adversely to the portfolio's option position. An option position may be closed
out only on an exchange, board of trade or other trading facility which provides
a secondary market for an option of the same series. Although a portfolio will
generally purchase or write only those options for which there appears to be an
active secondary market, there is no assurance that a liquid secondary market on
an exchange will exist for any particular option, or at any particular time, and
for some options no secondary market on an exchange or otherwise may exist. In
such event it might not be possible to effect closing transactions in particular
options, with the result that the portfolio would have to exercise its options
in order to realize any profit and would incur brokerage commissions upon the
exercise of such options and upon the subsequent disposition of underlying
securities acquired through the exercise of call options or upon the purchase of
underlying securities for the exercise of put options. If a portfolio as a
covered call option writer is unable to effect a closing purchase transaction in
a secondary market, it will not be able to sell the underlying security until
the option expires or it delivers the underlying security upon exercise.

Reasons for the absence of a liquid secondary market on an exchange include the
following: (i) there may be insufficient trading interest in certain options;
(ii) restrictions may be imposed by an exchange on opening transactions or
closing transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options or underlying securities; (iv) unusual or unforeseen circumstances may
interrupt normal operations on an exchange; (v) the facilities of an exchange or
a clearing corporation may not at all times be adequate to handle current
trading volume; or (vi) one or more exchanges could, for economic or other
reasons, decide or be compelled at some future date to discontinue the trading
of options (or a particular class or series of options), in which event the
secondary market on that exchange (or in the class or series of options) would
cease to exist, although outstanding options on that exchange that had been
issued by a clearing corporation as a result of trades on that exchange would
continue to be exercisable in accordance with their terms. There is no assurance
that higher than anticipated trading activity or other unforeseen events might
not, at times, render certain of the facilities of any of the clearing
corporations inadequate, which might cause an exchange to institute special
procedures that might interfere with the timely execution of customers' orders.

The purchase and sale of OTC options will also be subject to certain risks.
Unlike exchange-traded options, OTC options generally do not have a continuous
liquid market. Consequently, a portfolio will generally be able to realize the
value of an OTC option it has purchased only by exercising it or reselling it to
the dealer who issued it. Similarly, when a portfolio writes an OTC option, it
generally will be able to close out the OTC option prior to its

<PAGE>

expiration only by entering into a closing purchase transaction with the dealer
to which the portfolio originally wrote the OTC option. While the portfolios
will seek to enter into OTC options only with dealers who agree to and which are
expected to be able to be capable of entering into closing transactions with the
portfolio, there can be no assurance that the portfolio will be able to
liquidate an OTC option at a favorable price at any time prior to expiration. In
the event of insolvency of the other party, the portfolio may be unable to
liquidate an OTC option. The Prudential monitors the creditworthiness of dealers
with whom the Series Fund enters into OTC option transactions under the general
supervision of the Series Fund's Board of Directors.

Options on Debt Securities. The Bond, Government Securities, Conservatively
Managed Flexible, Aggressively Managed Flexible, and High Yield Bond Portfolios
may purchase and write (i.e., sell) put and call options on debt securities
(including U.S. Government debt securities) that are traded on U.S. securities
exchanges or that result from privately negotiated transactions with primary
U.S. Government securities dealers recognized by the Federal Reserve Bank of New
York ("over-the-counter" or "OTC" options). Options on debt are similar to
options on stock, except that the option holder has the right to take or make
delivery of a debt security, rather than stock.

A portfolio will write only "covered" options. Options on debt securities are
covered in the same manner as options on stocks, discussed above, except that,
in the case of call options on U.S. Treasury Bills, the portfolio might own U.S.
Treasury Bills of a different series from those underlying the call option, but
with a principal amount and value corresponding to the option contract amount
and a maturity date no later than that of the securities deliverable under the
call option. The principal reason for a portfolio to write an option on one or
more of its securities is to realize through the receipt of the premiums paid by
the purchaser of the option a greater current return than would be realized on
the underlying security alone. Calls on debt securities will not be written
when, in the opinion of The Prudential, interest rates are likely to decline
significantly, because under those circumstances the premium received by writing
the call likely would not fully offset the foregone appreciation in the value of
the underlying security.

These portfolios may also write straddles (i.e., a combination of a call and a
put written on the same security at the same strike price where the same issue
of the security is considered "cover" for both the put and the call). In such
cases, the portfolio will also segregate or deposit for the benefit of the
portfolio's broker cash or liquid high-grade debt obligations equivalent to the
amount, if any, by which the put is "in the money." It is contemplated that each
portfolio's use of straddles will be limited to 5% of the portfolio's net assets
(meaning that the securities used for cover or segregated as described above
will not exceed 5% of the portfolio's net assets at the time the straddle is
written). The writing of a call and a put on the same security at the same
strike price where the call and the put are covered by different securities is
not considered a straddle for purposes of this limit.

These portfolios may purchase "protective puts" in an effort to protect the
value of a security that it owns against a substantial decline in market value.
Protective puts are described above in Options on Equity Securities, page 9. A
portfolio may wish to protect certain portfolio securities against a decline in
market value at a time when put options on those particular securities are not
available for purchase. A portfolio may therefore purchase a put option on
securities other than those it wishes to protect even though it does not hold
such other securities in its portfolio. While changes in the value of the put
option should generally offset changes in the value of the securities being
hedged, the correlation between the two values may not be as close in these
transactions as in transactions in which the portfolio purchases a put option on
an underlying security it owns.

These portfolios may also purchase call options on debt securities for hedging
or investment purposes. No portfolio currently intends to invest more than 5% of
its net assets at any one time in the purchase of call options on debt
securities. A portfolio may also purchase putable and callable debt securities,
which are securities coupled with a put or call option provided by the issuer.

If the writer of an exchange-traded option wishes to terminate the obligation,
he or she may effect a "closing purchase transaction" or a "closing sale
transaction" in a manner similar to that discussed above in connection with
options on equity securities.

The staff of the Securities and Exchange Commission has taken the position that
purchased OTC options and the assets used as "cover" for written OTC options are
illiquid for purposes of a portfolio's 15% limitation on investment in illiquid
securities. However, pursuant to the terms of certain no-action letters issued
by the staff, the securities used as cover for written OTC options may be
considered liquid provided that the portfolio sells OTC options only to
qualified dealers who agree that the portfolio may repurchase any OTC option it
writes for a maximum price to be calculated by a predetermined formula. In such
cases, the OTC option would be considered illiquid only to the extent that the
maximum repurchase price under the formula exceeds the intrinsic value of the
option.

The use of debt options is subject to the same risks described above in
connection with stock options.

<PAGE>

Options on Stock Indices. The Conservatively Managed Flexible, Aggressively
Managed Flexible, High Dividend Stock, Common Stock, Growth Stock, Global
Equity, and Natural Resources Portfolios may purchase and sell put and call
options on stock indices traded on securities exchanges or listed on NASDAQ or
that result from privately negotiated transactions with broker-dealers ("OTC
options"). The Stock Index and Small Capitalization Stock Portfolios may utilize
options on stock indices by constructing "put/call" combinations that are
functionally comparable to a long stock index futures position as described
below under Additional Information Regarding the Use of Options and Futures
Contracts by the Stock Index Portfolio. Options on stock indices are similar to
options on stock except that rather than the right to take or make delivery of
stock at a specified price, an option on a stock index gives the holder the
right to receive, upon exercise of the option, an amount of cash if the closing
level of the stock index upon which the option is based is greater than, in the
case of a call, or less than, in the case of a put, the exercise price of the
option. This amount of cash is equal to such difference between the closing
price of the index and the exercise price of the option expressed in dollars
times a specified multiple (the "multiplier"). The writer of the option is
obligated, in return for the premium received, to make delivery of this amount.
Unlike stock options, all settlements are in cash, and gain or loss depends on
price movements in the stock market generally (or in a particular industry or
segment of the market) rather than price movements in individual stocks.

The multiplier for an index option performs a function similar to the unit of
trading for a stock option. It determines the total dollar value per Contract of
each point in the difference between the exercise price of an option and the
current level of the underlying index. A multiplier of 100 means that a
one-point difference will yield $100. Options on different indices may have
different multipliers.

These portfolios may purchase put and call options for hedging and investment
purposes. No portfolio intends to invest more than 5% of its net assets at any
one time in the purchase of puts and calls on stock indices. A portfolio may
effect closing sale and purchase transactions involving options on stock
indices, as described above in connection with stock options.

A portfolio will write only "covered" options on stock indices. A call option is
covered if the portfolio holds a portfolio of stocks at least equal to the
value of the index times the multiplier times the number of contracts. When a
portfolio writes a call option on a broadly based stock market index, the
portfolio will segregate or put into escrow with its custodian or pledge to a
broker as collateral for the option, cash, cash equivalents or "qualified
securities" (defined below) with a market value at the time the option is
written of not less than 100% of the current index value times the multiplier
times the number of contracts. If a portfolio has written an option on an
industry or market segment index, it will segregate or put into escrow with its
custodian or pledge to a broker as collateral for the option at least five
"qualified securities," all of which are stocks of issuers in such industry or
market segment, with a market value at the time the option is written of not
less than 100% of the current index value times the multiplier times the number
of contracts. Such stocks will include stocks which represent at least 50% of
the weighting of the industry or market segment index and will represent at
least 50% of the portfolio's holdings in that industry or market segment. No
individual security will represent more than 15% of the amount so segregated,
pledged or escrowed in the case of broadly based stock market index options or
25% of such amount in the case of industry or market segment index options. If
at the close of business on any day the market value of such qualified
securities so segregated, escrowed or pledged falls below 100% of the current
index value times the multiplier times the number of contracts, the portfolio
will so segregate, escrow or pledge an amount in cash, Treasury bills or other
high-grade short-term obligations equal in value to the difference. In addition,
when a portfolio writes a call on an index which is in-the-money at the time the
call is written, the portfolio will segregate with its custodian or pledge to
the broker as collateral, cash or U.S. Government or other high-grade short-term
debt obligations equal in value to the amount by which the call is in-the-money
times the multiplier times the number of contracts. Any amount segregated
pursuant to the foregoing sentence may be applied to the portfolio's obligation
to segregate additional amounts in the event that the market value of the
qualified securities falls below 100% of the current index value times the
multiplier times the number of contracts. A "qualified security" is an equity
security which is listed on a securities exchange or NASDAQ against which the
portfolio has not written a stock call option and which has not been hedged by
the portfolio by the sale of stock index futures. However, if the portfolio
holds a call on the same index as the call written where the exercise price of
the call held is equal to or less than the exercise price of the call written or
greater than the exercise price of the call written if the difference is
maintained by the portfolio in cash, Treasury bills or other high-grade
short-term obligations in a segregated account with its custodian, it will not
be subject to the requirement described in this paragraph.

A put option is covered if: (1) the portfolio holds in a segregated account
cash, Treasury bills or other high-grade short-term debt obligations of a value
equal to the strike price times the multiplier times the number of contracts; or
(2) the portfolio holds a put on the same index as the put written where the
strike price of the put held is equal to or greater than the strike price of the
put written or less than the strike price of the put written if the difference
is maintained by the portfolio in cash, Treasury bills or other high-grade
short-term debt obligations in a segregated account with its custodian. In
instances involving the purchase of futures contracts by a portfolio, an amount
of cash and cash equivalents, equal to the market value of the futures
contracts, will be deposited in a segregated

<PAGE>

account with the portfolio's custodian and/or in a margin account with a broker
to collateralize the position and thereby ensure that the use of such futures is
unleveraged.

The purchase and sale of options on stock indices will be subject to the risks
described above under Options on Equity Securities. In addition, the distinctive
characteristics of options on indices create certain risks that are not present
with stock options. Index prices may be distorted if trading of certain stocks
included in the index is interrupted. Trading in the index options also may be
interrupted in certain circumstances, such as if trading were halted in a
substantial number of stocks included in the index. If this occurred, a
portfolio would not be able to close out options which it had purchased or
written and, if restrictions on exercise were imposed, might be unable to
exercise an option it holds, which could result in substantial losses to the
portfolio. It is the policy of the portfolios to purchase or write options only
on stock indices which include a number of stocks sufficient to minimize the
likelihood of a trading halt in options on the index.

The ability to establish and close out positions on such options will be subject
to the development and maintenance of a liquid secondary market. A portfolio
will not purchase or sell any index option contract unless and until, in its
manager's opinion, the market for such options has developed sufficiently that
the risk in connection with such transactions is no greater than the risk in
connection with options on stocks.

There are certain special risks associated with writing calls on stock indices.
Because exercises of index options are settled in cash, a call writer such as a
portfolio cannot determine the amount of its settlement obligations in advance
and, unlike call writing on specific stocks, cannot precisely provide in advance
for, or cover, its potential settlement obligations by acquiring and holding the
underlying securities. The portfolios, however, will follow the "cover"
procedures described above.

Price movements in a portfolio's equity security portfolio probably will not
correlate precisely with movements in the level of the index and, therefore, in
writing a call on a stock index a portfolio bears the risk that the price of the
securities held by the portfolio may not increase as much as the index. In such
event, the portfolio would bear a loss on the call which is not completely
offset by movement in the price of the portfolio's equity securities. It is also
possible that the index may rise when the portfolio's securities do not rise in
value. If this occurred, the portfolio would experience a loss on the call which
is not offset by an increase in the value of its securities portfolio and might
also experience a loss in its securities portfolio. However, because the value
of a diversified securities portfolio will, over time, tend to move in the same
direction as the market, movements in the value of a portfolio's securities in
the opposite direction as the market would be likely to occur for only a short
period or to a small degree.

When a portfolio has written a call, there is also a risk that the market may
decline between the time the portfolio has a call exercised against it, at a
price which is fixed as of the closing level of the index on the date of the
exercise, and the time the portfolio is able to sell stocks in its portfolio. As
with stock options, a portfolio will not learn that an index option has been
exercised until the day following the exercise date but, unlike a call on stock
where the portfolio would be able to deliver the underlying securities in
settlement, the portfolio may have to sell part of its stock portfolio in order
to make settlement in cash, and the price of such stocks might decline before
they can be sold. This timing risk makes certain strategies involving more than
one option substantially more risky with options in stock indices than with
stock options. For example, even if an index call which a portfolio has written
is "covered" by an index call held by the portfolio with the same strike price,
the portfolio will bear the risk that the level of the index may decline between
the close of trading on the date the exercise notice is filed with the clearing
corporation and the close of trading on the date the portfolio exercises the
call it holds or the time the portfolio sells the call, which in either case
would occur no earlier than the day following the day the exercise notice was
filed.

There are also certain special risks involved in purchasing put and call options
on stock indices. If a portfolio holds an index option and exercises it before
final determination of the closing index value for that day, it runs the risk
that the level of the underlying index may change before closing. If such a
change causes the exercised option to fall out-of-the-money, the portfolio will
be required to pay the difference between the closing index value and the
exercise price of the option (times the applicable multiplier) to the assigned
writer. Although the portfolio may be able to minimize the risk by withholding
exercise instructions until just before the daily cutoff time or by selling
rather than exercising an option when the index level is close to the exercise
price, it may not be possible to eliminate this risk entirely because the cutoff
times for index options may be earlier than those fixed for other types of
options and may occur before definitive closing index values are announced.

Options on Foreign Currencies. The Conservatively Managed Flexible, Aggressively
Managed Flexible, High Dividend Stock, Common Stock, Growth Stock, Global
Equity, and Natural Resources Portfolios may purchase and write put and call
options on foreign currencies traded on U.S. or foreign securities exchanges or
boards of trade for hedging purposes in a manner similar to that in which
forward foreign currency exchange contracts (see Forward Foreign Currency
Exchange Contracts, page 18) and futures contracts on foreign currencies
(discussed

<PAGE>

under Futures Contracts, page 14) will be employed. Options on foreign
currencies are similar to options on stock, except that the option holder has
the right to take or make delivery of a specified amount of foreign currency,
rather than stock.

A portfolio may purchase and write options to hedge the portfolio's securities
denominated in foreign currencies. If there is a decline in the dollar value of
a foreign currency in which the portfolio's securities are denominated, the
dollar value of such securities will decline even though the foreign currency
value remains the same. To hedge against the decline of the foreign currency, a
portfolio may purchase put options on such foreign currency. If the value of the
foreign currency declines, the gain realized on the put option would offset, in
whole or in part, the adverse effect such decline would have on the value of the
portfolio's securities. Alternatively, a portfolio may write a call option on
the foreign currency. If the foreign currency declines, the option would not be
exercised and the decline in the value of the portfolio securities denominated
in such foreign currency would be offset in part by the premium the portfolio
received for the option.

If, on the other hand, the portfolio manager anticipates purchasing a foreign
security and also anticipates a rise in such foreign currency (thereby
increasing the cost of such security), the portfolio may purchase call options
on the foreign currency. The purchase of such options could offset, at least
partially, the effects of the adverse movements of the exchange rates.
Alternatively, a portfolio could write a put option on the currency and, if the
exchange rates move as anticipated, the option would expire unexercised.

A portfolio's successful use of currency exchange options on foreign currencies
depends upon the manager's ability to predict the direction of the currency
exchange markets and political conditions, which requires different skills and
techniques than predicting changes in the securities markets generally. For
instance, if the currency being hedged has moved in a favorable direction, the
corresponding appreciation of the portfolio's securities denominated in such
currency would be partially offset by the premiums paid on the options. Further,
if the currency exchange rate does not change, the portfolio net income would be
less than if the portfolio had not hedged since there are costs associated with
options.

The use of these options is subject to various additional risks. The correlation
between movements in the price of options and the price of the currencies being
hedged is imperfect. The use of these instruments will hedge only the currency
risks associated with investments in foreign securities, not market risks. The
portfolio's ability to establish and maintain positions will depend on market
liquidity. The ability of the portfolio to close out an option depends upon a
liquid secondary market. There is no assurance that liquid secondary markets
will exist for any particular option at any particular time.

Because there are two currencies involved, developments in either or both
countries can affect the values of options on foreign currencies. In addition,
the quantities of currency underlying option contracts represent odd lots in a
market dominated by transactions between banks; this can mean extra transaction
costs upon exercise. Option markets may be closed while round-the-clock
interbank currency markets are open, and this can create price and rate
discrepancies.

Futures Contracts. The Conservatively Managed Flexible, Aggressively Managed
Flexible, Stock Index, High Dividend Stock, Common Stock, Growth Stock, Small
Capitalization Stock, Global Equity, and Natural Resources Portfolios may, to
the extent permitted by applicable regulations, attempt to reduce the risk of
investment in equity securities by hedging a portion of their equity portfolios
through the use of stock index futures contracts. A stock index futures contract
is an agreement in which the seller of the contract agrees to deliver to the
buyer an amount of cash equal to a specific dollar amount times the difference
between the value of a specific stock index at the close of the last trading day
of the contract and the price at which the agreement is made. No physical
delivery of the underlying stocks in the index is made.

The Bond, High Yield Bond, Government Securities, Conservatively Managed
Flexible, Aggressively Managed Flexible, and Global Equity Portfolios may, to
the extent permitted by applicable regulations, purchase and sell for hedging
purpose futures contracts on interest-bearing securities (such as U.S. Treasury
bonds and notes) or interest rate indices (referred to collectively as "interest
rate futures contracts").

The Conservatively Managed Flexible, Aggressively Managed Flexible, High
Dividend Stock, Common Stock, Growth Stock, Global Equity, and Natural Resources
Portfolios may, to the extent permitted by applicable regulations, purchase and
sell futures contracts on foreign currencies or groups of foreign currencies for
hedging purposes.

When the futures contract is entered into, each party deposits with a broker or
in a segregated custodial account approximately 5% of the contract amount,
called the "initial margin." Subsequent payments to and from the broker, called
the "variation margin," will be made on a daily basis as the underlying
security, index or rate fluctuates making the long and short positions in the
futures contracts more or less valuable, a process known as "marking to the
market." The Board of Directors currently intends to limit futures trading so
that a portfolio will

<PAGE>

not enter into futures contracts or related options if the aggregate initial
margins and premiums exceed 5% of the fair market value of its assets, after
taking into account unrealized profits and unrealized losses on any such
contracts and options.

A portfolio's successful use of futures contracts depends upon the investment
manager's ability to predict the direction of the relevant market. The
correlation between movement in the price of the futures contract and the price
of the securities or currencies being hedged is imperfect. The ability of a
portfolio to close out a futures position depends on a liquid secondary market.
There is no assurance that liquid secondary markets will exist for any
particular futures contract at any particular time.

There are several additional risks associated with a portfolio's use of futures
contracts for hedging purposes. One such risk arises because of imperfect
correlation between movements in the price of the futures contract and the price
of the securities or currency that are the subject of the hedge. In the case of
futures contracts on stock or interest rate indices, the correlation between the
price of the futures contract and movements in the index might not be perfect.
To compensate for differences in historical volatility, a portfolio could
purchase or sell future contracts with a greater or lesser value than the
securities or currency it wished to hedge or purchase. In addition, temporary
price distortions in the futures market could be caused by a variety of factors.
Further, the ability of a portfolio to close out a futures position depends on a
liquid secondary market. There is no assurance that a liquid secondary market on
an exchange will exist for any particular futures contract at any particular
time. Further, each portfolio's successful use of futures contracts is to some
extent dependent on the ability of the portfolio manager to predict correctly
movements in the direction of the market, interest rates and/or currency
exchange rates.

In addition, the hours of trading of futures contracts may not conform to the
hours during which the portfolio may trade the underlying securities and/or
currency. To the extent that the futures markets close before the securities or
currency markets, significant price and rate movements can take place in the
securities and/or currency markets that cannot be reflected in the futures
markets.

Additional Information Regarding the Use of Options and Futures Contracts by the
Stock Index Portfolio. As explained in the prospectus, the Stock Index Portfolio
seeks to duplicate the performance of the S&P 500 Index and the Small
Capitalization Stock Portfolio seeks to duplicate the performance of the S&P
SmallCap 600 Index. The portfolios will be as fully invested in the S&P Indices
stocks as is feasible in light of cash flow patterns and the cash requirements
for efficiently investing in a unit of the basket of stocks comprising the S&P
500 and S&P SmallCap 600 Indices, respectively. When the portfolios do have
short-term investments, they may purchase stock index futures contracts in an
effort to have the portfolio better mimic the performance of a fully invested
portfolio. When a portfolio purchases stock index futures contracts, an amount
of cash and cash equivalents, equal to the market value of the futures
contracts, will be deposited in a segregated account with the portfolio's
custodian and/or in a margin account with a broker to collateralize the position
and thereby ensure that the use of futures is unleveraged. As with the other
portfolios, the Board of Directors currently intends to limit futures trading so
that the Stock Index and Small Capitalization Stock Portfolios will not enter
into futures contracts or related options if the aggregate initial margins and
premiums exceed 5% of the fair market value of its assets, after taking into
account unrealized profits and unrealized losses on any such contracts and
options.

As an alternative to the purchase of a stock index futures contract, the
portfolio may construct synthetic positions involving options on stock indices
and options on stock index futures that are equivalent to such a long futures
position. In particular, the portfolio may utilize "put/call combinations" as
synthetic long stock index futures positions. A put/call combination is the
simultaneous purchase of a call and the sale of a put with the same strike price
and maturity. It is equivalent to a forward position and, if settled every day,
is equivalent to a long futures position. When constructing put/call
combinations, the portfolio will segregate cash or cash equivalents in a
segregated account equal to the market value of the portfolio's forward position
to collateralize the position and ensure that it is unleveraged.

Options on Futures Contracts. To the extent permitted by applicable insurance
law and federal regulations, the Conservatively Managed Flexible, Aggressively
Managed Flexible, Stock Index, High Dividend Stock, Common Stock, Growth Stock,
Small Capitalization Stock, Global Equity and Natural Resources, Portfolios may
enter into certain transactions involving options on stock index futures
contracts, and the Bond, Government Securities, Conservatively Managed Flexible,
Aggressively Managed Flexible, High Yield Bond, and Global Equity Portfolios may
enter into certain transactions involving options on interest rate futures
contracts; and the Conservatively Managed Flexible, Aggressively Managed
Flexible, High Dividend Stock, Common Stock, Growth Stock, Global Equity, and
Natural Resources Portfolios may enter into certain transactions involving
options on foreign currency futures contracts. An option on a futures contract
gives the purchaser or holder the right, but not the obligation, to assume a
position in a futures contract (a long position if the option is a call and a
short position if the option is a put) at a specified price at any time during
the option exercise period. The writer of the option is required upon exercise
to assume an offsetting futures position (a short position if the option is a
call and a long position if the option is a put). Upon exercise of the option,
the assumption of offsetting futures positions by the writer and

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holder of the option will be accomplished by delivery of the accumulated balance
in the writer's futures margin account which represents the amount by which the
market price of the futures contract, at exercise, exceeds, in the case of a
call, or is less than, in the case of a put, the exercise price of the option on
the futures contract. As an alternative to exercise, the holder or writer of an
option may terminate a position by selling or purchasing an option of the same
series. There is no guarantee that such closing transactions can be effected. As
noted above, the Stock Index and Small Capitalization Stock Portfolios intend to
utilize options on stock index futures contracts by constructing "put/call"
combinations that are economically comparable to a long stock index futures
position. The other portfolios intend to utilize options on futures contracts
for the same purposes that they use the underlying futures contracts.

Options on futures contracts are subject to risks similar to those described
above with respect to option on securities, options on stock indices, and
futures contracts. These risks include the risk that the portfolio manager may
not correctly predict changes in the market, the risk of imperfect correlation
between the option and the securities being hedged, and the risk that there
might not be a liquid secondary market for the option. There is also the risk of
imperfect correlation between the option and the underlying futures contract. If
there were no liquid secondary market for a particular option on a futures
contract, the portfolio might have to exercise an option it held in order to
realize any profit and might continue to be obligated under an option it had
written until the option expired or was exercised. If the portfolio were unable
to close out an option it had written on a futures contract, it would continue
to be required to maintain initial margin and make variation margin payments
with respect to the option position until the option expired or was exercised
against the portfolio.

When-Issued and Delayed Delivery Securities. From time to time, in the
ordinary course of business, the Bond, Government Securities, Conservatively
Managed Flexible, Aggressively Managed Flexible, High Yield Bond, High
Dividend Stock, Common Stock, Growth Stock, Small Capitalization Stock, Global
Equity and Natural Resources Portfolios may purchase equity securities on a
when-issued or delayed delivery basis, that is, delivery and payment can take
place a month or more after the date of the transaction. Each of these
portfolios will limit such purchases to those in which the date for delivery and
payment falls within 120 days of the date of the commitment. A portfolio will
make commitments for such when-issued transactions only with the intention of
actually acquiring the securities. A portfolio's custodian will maintain, in a
separate account, cash, U.S. Government securities or other high grade debt
obligations having a value equal to or greater than such commitments. If a
portfolio chooses to dispose of the right to acquire a when-issued security
prior to its acquisition, it could, as with the disposition of any other
portfolio security, incur a gain or loss due to market fluctuations.

In addition, the Money Market Portfolio and short-term portions of the other
portfolios may purchase money market securities on a when-issued or delayed
delivery basis on the terms set forth under item 6 in Securities In Which the
Money Market Portfolio May Currently Invest, page 28.

Short Sales. The Bond, Government Securities, Conservatively Managed Flexible,
Aggressively Managed Flexible and High Yield Bond Portfolios may sell securities
they do not own in anticipation of a decline in the market value of those
securities ("short sales"). To complete such a transaction, the portfolio will
borrow the security to make delivery to the buyer. The portfolio is then
obligated to replace the security borrowed by purchasing it at the market price
at the time of replacement. The price at such time may be more or less than the
price at which the security was sold by the portfolio. Until the security is
replaced, the portfolio is required to pay to the lender any interest which
accrues during the period of the loan. To borrow the security the portfolio may
be required to pay a premium which would increase the cost of the security sold.
The proceeds of the short sale will be retained by the broker to the extent
necessary to meet margin requirements until the short position is closed out.
Until the portfolio replaces the borrowed security, it will (a) maintain in a
segregated account cash or U.S. Government securities at such a level that the
amount deposited in the account plus the amount deposited with the broker as
collateral will equal the current market value of the security sold short and
will not be less than the market value of the security at the time it was sold
short or (b) otherwise cover its short position.

The portfolio will incur a loss as a result of the short sale if the price of
the security increases between the date of the short sale and the date on which
the portfolio replaces the borrowed security. The portfolio will realize a gain
if the security declines in price between those dates. This result is the
opposite of what one would expect from a cash purchase of a long position in a
security. The amount of any gain will be decreased, and the amount of any loss
will be increased, by the amount of any premium or interest paid in connection
with the short sale. No more than 25% of any portfolio's net assets will be,
when added together: (i) deposited as collateral for the obligation to replace
securities borrowed to effect short sales and (ii) allocated to segregated
accounts in connection with short sales.

Short Sales Against the Box. All portfolios (other than the Money Market and
Zero Coupon Bond Portfolios) may make short sales of securities or maintain a
short position, provided that at all times when a short position is open the
portfolio owns an equal amount of such securities or securities convertible into
or exchangeable, with or without payment of any further consideration, for an
equal amount of the securities of the same issuer as the

<PAGE>

securities sold short (a "short sale against the box"); provided, that if
further consideration is required in connection with the conversion or exchange,
cash or U.S. Government securities in an amount equal to such consideration must
be put in a segregated account.

Interest Rate Swaps. The Bond, Government Securities, and High Yield Bond
Portfolios and the fixed income portions of the Conservatively Managed Flexible
and Aggressively Managed Flexible Portfolios may use interest rate swaps to
increase or decrease a portfolio's exposure to long- or short-term interest
rates. No portfolio currently intends to invest more than 5% of its net assets
at any one time in interest rate swaps.

Interest rate swaps, in their most basic form, involve the exchange by a
portfolio with another party of their respective commitments to pay or receive
interest. For example, a portfolio might exchange its right to receive certain
floating rate payments in exchange for another party's right to receive fixed
rate payments. Interest rate swaps can take a variety of other forms, such as
agreements to pay the net differences between two different indices or rates,
even if the parties do not own the underlying instruments. Despite their
differences in form, the function of interest rate swaps is generally the same--
to increase or decrease a portfolio's exposure to long- or short-term interest
rates. For example, a portfolio may enter into a swap transaction to preserve a
return or spread on a particular investment or a portion of its portfolio or to
protect against any increase in the price of securities the portfolio
anticipates purchasing at a later date.

The use of swap agreements is subject to certain risks. As with options and
futures, if the investment manager's prediction of interest rate movements is
incorrect, the portfolio's total return will be less than if the portfolio had
not used swaps. In addition, if the counterparty's creditworthiness declines,
the value of the swap would likely decline. Moreover, there is no guarantee that
a portfolio could eliminate its exposure under an outstanding swap agreement by
entering into an offsetting swap agreement with the same or another party.

A portfolio will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If a portfolio
enters into a swap agreement on a net basis, it will segregate assets with a
daily value at least equal to the excess, if any, of the portfolio's accrued
obligations under the swap agreement over the accrued amount the portfolio is
entitled to receive under the agreement. If a portfolio enters into a swap
agreement on other than a net basis, it will segregate assets with a value equal
to the full amount of the portfolio's accrued obligations under the agreement.

Loans of Portfolio Securities. All of the portfolios except the Money Market
Portfolio may from time to time lend the securities they hold to broker-dealers,
provided that such loans are made pursuant to written agreements and are
continuously secured by collateral in the form of cash, U.S. Government
securities or irrevocable standby letters of credit in an amount equal to at
least the market value at all times of the loaned securities plus the accrued
interest and dividends. During the time securities are on loan, the portfolio
will continue to receive the interest and dividends or amounts equivalent
thereto on the loaned securities while receiving a fee from the borrower or
earning interest on the investment of the cash collateral. The right to
terminate the loan will be given to either party subject to appropriate notice.
Upon termination of the loan, the borrower will return to the lender securities
identical to the loaned securities. The portfolio will not have the right to
vote securities on loan, but would terminate the loan and retain the right to
vote if that were considered important with respect to the investment.

The primary risk in lending securities is that the borrower may become insolvent
on a day on which the loaned security is rapidly advancing in price. In such
event, if the borrower fails to return the loaned securities, the existing
collateral might be insufficient to purchase back the full amount of the
security loaned, and the borrower would be unable to furnish additional
collateral. The borrower would be liable for any shortage; but the portfolio
would be an unsecured creditor with respect to such shortage and might not be
able to recover all or any of it. However, this risk may be minimized by a
careful selection of borrowers and securities to be lent and by monitoring
collateral.

No portfolio will lend securities to broker-dealers affiliated with The
Prudential, including Prudential Securities Incorporated. This will not affect a
portfolio's ability to maximize its securities lending opportunities.

Illiquid Securities. Each portfolio, other than the Money Market Portfolio, may
invest up to 15% of its net assets in illiquid securities. The Money Market
Portfolio may invest up to 10% of its net assets in illiquid securities.
Illiquid securities are those which may not be sold in the ordinary course of
business within seven days at approximately the value at which the portfolio has
valued them. Variable and floating rate instruments that cannot be disposed of
within seven days and repurchase agreements with a maturity of greater than
seven days are considered illiquid.

The portfolios may purchase securities which are not registered under the
Securities Act of 1933 but which can be sold to qualified institutional buyers
in accordance with Rule 144A under that Act. Any such security will not be
considered illiquid so long as it is determined by the adviser, acting under
guidelines approved and monitored by the Board of Directors, that an adequate
trading market exists for that security. In making that determination, the
adviser will consider, among other relevant factors: (1) the frequency of trades
and quotes for the security; (2)

<PAGE>

the number of dealers willing to purchase or sell the security and the number of
other potential purchasers; (3) dealer undertakings to make a market in the
security; and (4) the nature of the security and the nature of the marketplace
trades. A portfolio's treatment of Rule 144A securities as liquid could have the
effect of increasing the level of portfolio illiquidity to the extent that
qualified institutional buyers become, for a time, uninterested in purchasing
these securities. In addition, the adviser, acting under guidelines approved and
monitored by the Board of Directors, may conditionally determine, for purposed
of the 15% test, that certain commercial paper issued in reliance on the
exemption from registration in Section 4(2) of the Securities Act of 1933 will
not be considered illiquid, whether or not it may be resold under Rule 144A. To
make that determination, the following conditions must be met: (1) the security
must not be traded flat or in default as to principal or interest; (2) the
security must be rated in one of the two highest rating categories by at least
two nationally recognized statistical rating organizations ("NRSROs"), or if
only one NRSRO rates the security, by that NRSRO; if the security is unrated,
the adviser must determine that the security is of equivalent quality; and (3)
the adviser must consider the trading market for the specific security, taking
into account all relevant factors. The adviser will continue to monitor the
liquidity of any Rule 144A security or any Section 4(2) commercial paper which
has been determined to be liquid and, if a security is no longer liquid because
of changed conditions, the holdings of illiquid securities will be reviewed to
determine if any steps are required to assure that the 15% test continues to be
satisfied.

Forward Foreign Currency Exchange Contracts. To the extent permitted by
applicable insurance law, the Conservatively Managed Flexible, Aggressively
Managed Flexible, High Dividend Stock, Common Stock, Growth Stock, Global
Equity, and Natural Resources Portfolios may purchase securities denominated in
foreign currencies. To address the currency fluctuation risk that such
investments entail, these portfolios may enter into forward foreign currency
exchange contracts in several circumstances. When a portfolio enters into a
contract for the purchase or sale of a security denominated in a foreign
currency, or when a portfolio anticipates the receipt in a foreign currency of
dividends or interest payments on a security which it holds, the portfolio may
desire to "lock-in" the U.S. dollar price of the security or the U.S. dollar
equivalent of such dividend or interest payment, as the case may be. By entering
into a forward contract for a fixed amount of dollars, for the purchase or sale
of the amount of foreign currency involved in the underlying transactions, the
portfolio will be able to protect itself against a possible loss resulting from
an adverse change in the relationship between the U.S. dollar and the subject
foreign currency during the period between the date on which the security is
purchased or sold, or on which the dividend or interest payment is declared, and
the date on which such payments are made or received.

Additionally, when a portfolio's manager believes that the currency of a
particular foreign country may suffer a substantial decline against the U.S.
dollar, the portfolio may enter into a forward contract for a fixed amount of
dollars, to sell the amount of foreign currency approximating the value of some
or all of the portfolio securities denominated in such foreign currency. The
precise matching of the forward contract amounts and the value of the securities
involved will not generally be possible since the future value of securities in
foreign currencies will change as a consequence of market movements in the value
of those securities between the date on which the forward contract is entered
into and the date it matures. The projection of short-term currency market
movement is extremely difficult, and the successful execution of a short-term
hedging strategy is highly uncertain. The portfolios will not enter into such
forward contracts or maintain a net exposure to such contracts where the
consummation of the contracts would obligate a portfolio to deliver an amount of
foreign currency in excess of the value of the securities or other assets
denominated in that currency held by the portfolio. Under normal circumstances,
consideration of the prospect for currency parities will be incorporated into
the long-term investment decisions made with regard to overall diversification
strategies. However, the portfolios believe that it is important to have the
flexibility to enter into such forward contracts when it is determined that the
best interests of the portfolios will thereby be served. A portfolio's custodian
will place cash or liquid high-grade equity or debt securities into a segregated
account of the portfolio in an amount equal to the value of the portfolio's
total assets committed to the consummation of forward foreign currency exchange
contracts. If the value of the securities placed in the segregated account
declines, additional cash or securities will be placed in the account on a daily
basis so that the value of the account will equal the amount of the portfolio's
commitments with respect to such contracts.

The portfolios generally will not enter into a forward contract with a term of
greater than 1 year. At the maturity of a forward contract, a portfolio may
either sell the portfolio security and make delivery of the foreign currency or
it may retain the security and terminate its contractual obligation to deliver
the foreign currency by purchasing an "offsetting" contract with the same
currency trader obligating it to purchase, on the same maturity date, the same
amount of the foreign currency.

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

<PAGE>

If a portfolio retains the portfolio security and engages in an offsetting
transaction, the portfolio will incur a gain or a loss (as described below) to
the extent that there has been movement in forward contract prices. Should
forward prices decline during the period between the portfolio's entering into a
forward contract for the sale of a foreign currency and the date it enters into
an offsetting contract for the purchase of the foreign currency, the portfolio
will realize a gain to the extent that the price of the currency it has agreed
to sell exceeds the price of the currency it has agreed to purchase. Should
forward prices increase, the portfolio will suffer a loss to the extent that the
price of the currency it has agreed to purchase exceeds the price of the
currency it has agreed to sell.

The portfolios' dealing in forward foreign currency exchange contracts will be
limited to the transactions described above. Of course, the portfolios are not
required to enter into such transactions with regard to their foreign
currency-denominated securities. It also should be realized that this method of
protecting the value of the portfolio securities against a decline in the value
of a currency does not eliminate fluctuations in the underlying prices of the
securities which are unrelated to exchange rates. Additionally, although such
contracts tend to minimize the risk of loss due to a decline in the value of the
hedge currency, at the same time they tend to limit any potential gain which
might result should the value of such currency increase.

Although the portfolios value their assets daily in terms of U.S. dollars, they
do not intend physically to convert their holdings of foreign currencies into
U.S. dollars on a daily basis. They will do so from time to time, and investors
should be aware of the costs of currency conversion. Although foreign exchange
dealers do not charge a fee for conversion, they do realize a profit based on
the difference (the "spread") between the prices at which they are buying and
selling various currencies. Thus, a dealer may offer to sell a foreign currency
to a portfolio at one rate, while offering a lesser rate of exchange should the
portfolio desire to resell that currency to the dealer.

The High Yield Bond Portfolio may also invest up to 10% of its total assets in
foreign currency denominated debt securities of foreign or domestic issuers;
however, the portfolio will not engage in such investment activity unless it has
been first authorized to do so by the Series Fund's Board of Directors. If the
portfolio does engage in such investment activity, it may also enter into
forward foreign currency exchange contracts.

Further Information About the Policies of the Stock Index Portfolio. Under
normal circumstances, the Stock Index Portfolio generally intends to purchase
all 500 stocks represented in the S&P 500 Index and to invest its assets as
fully in those stocks (in proportion to their weighting in the index) as is
feasible in light of cash flows into and out of the portfolio. In order to
reduce transaction costs, a weighted investment in the 500 stocks comprising the
S&P 500 Index is most efficiently made in relatively large amounts. Prior to the
commencement of the public offering of this portfolio's shares, The Prudential
purchased $25,000,000 worth of shares of this portfolio in order to permit the
portfolio to make an initial investment in the 500 stocks (in proportion to
their weighting in the S&P 500 index). As additional cash is received from the
purchase of shares in the portfolio, it may be held temporarily in short-term,
high quality investments of the sort in which the Money Market Portfolio
invests, until the portfolio has a sufficient amount of assets in such
investments to make an efficient weighted investment in the 500 stocks
comprising the S&P 500 Index. If net cash outflows from the portfolio are
anticipated, the portfolio may sell stocks (in proportion to their weighting in
the S&P 500 Index) in amounts in excess of those needed to satisfy the cash
outflows and hold the balance of the proceeds in short-term investments if such
a transaction appears, taking into account transaction costs, to be more
efficient than selling only the amount of stocks needed to meet the cash
requirements. The portfolio will not, however, increase its holdings of cash in
anticipation of any decline in the value of the S&P 500 Index or of the stock
markets generally. The portfolio will instead remain as fully invested in the
S&P 500 Index stocks as feasible in light of its cash flow patterns during
periods of market declines as well as advances, and investors in the portfolio
thus run the risk of remaining fully invested in common stocks during a period
of general decline in the stock markets.

Tracking accuracy is measured by the difference between total return for the S&P
Index with dividends reinvested and total return for the portfolio with
dividends reinvested before deductions of portfolio fees and expenses. Tracking
accuracy is monitored by the portfolio manager on a daily basis. All tracking
accuracy deviations are reviewed to determine the effectiveness of investment
policies and techniques.

If the portfolio does hold short-term investments as a result of the patterns of
cash flows to and from the portfolio, such holdings may cause its performance to
differ from that of the S&P 500 Index. The portfolio will attempt to minimize
any such difference in performance through transactions involving stock index
futures contracts, options on stock indices, and/or options on stock index
future contracts. These derivative investment instruments are described above
under Options on Stock Indices, Stock Index Futures Contracts, and Options on
Futures Contracts on pages 12 through 15. The portfolio will not use such
instruments for speculative purposes or to hedge against any decline in the
value of the stocks held in the portfolio, but instead will employ them only as
a temporary substitute for investment of cash holdings directly in the 500
stocks when the portfolio's cash holdings are too small to make such an
investment in an efficient manner.

For example, if the portfolio's cash reserves are insufficient to invest
efficiently in another unit of the basket of stocks comprising the S&P 500
Index, the portfolio may purchase S&P 500 futures contracts to hedge against a

<PAGE>

rise in the value of the stocks the portfolio intends to acquire. In its attempt
to minimize any difference in performance between the portfolio and the S&P 500
Index, the portfolio currently intends to engage in transactions involving the
S&P 500 Index futures contracts; the NYSE Composite Index futures contracts;
options on the S&P 500 Index, the S&P 100 Index, and the NYSE Composite Index;
and options on the S&P 500 Index futures contracts and the NYSE Composite Index
futures contracts. There can be no assurance that the portfolio's attempt to
minimize such performance difference through the use of any of these instruments
will succeed. See Additional Information Regarding the Use of Options and
Futures Contracts by the Stock Index and Small Capitalization Stock Portfolios,
page 15, for a more detailed discussion of the manner in which the portfolio
will employ these instruments, and Options on Stock Indices, page 12, for a
description of other risks involved in the use of such instruments.

The above described investment policies and techniques of the Stock Index
portfolio are non-fundamental and may be changed without shareholder approval if
it is determined that alternative investment techniques would be more effective
in achieving the portfolio's objective.

Further Information About the Zero Coupon Bond Portfolios. As stated in the
prospectus, the objective of Zero Coupon Portfolios 1995 (not available for
investment after November 14, 1995), 2000, and 2005 is to achieve the highest
predictable compounded investment return for a specified period of time,
consistent with the safety of invested capital. This discussion provides a more
detailed explanation of the investment policies that will be employed to manage
these portfolios.

If each Zero Coupon Bond Portfolio held only stripped securities that were
obligations of the United States Government, maturing on the liquidation date,
the compounded yield of the portfolio from the date of initial investment until
the liquidation date could be calculated arithmetically to a high degree of
accuracy. By: (i) including stripped corporate obligations and interest bearing
debt securities; (ii) including securities with maturity dates within 2 years of
the liquidation date; and (iii) more actively managing the portfolio, the
accuracy of the predicted yield is reduced somewhat with the objective of
achieving an increased yield. The reduction in accuracy is kept to an acceptably
small amount, however, by an investment technique known as "immunization." By
purchasing securities with maturity dates or with interest payment dates prior
to the liquidation date, a risk is incurred that the payments received will not
be able to be reinvested at interest rates as high as or higher than the yield
initially predicted. This is known as "reinvestment risk." By including
securities with maturity dates after the liquidation date, a risk is incurred
that, because interest rates have increased, the market value of such securities
will be lower than had been anticipated. This is known as "market risk." It is
also possible, conversely, that payments received prior to the liquidation date
can be reinvested at higher rates than the predicted yield and that the value of
unmatured securities on the liquidation date will be greater than anticipated.
Reinvestment risk and market risk are thus reciprocal in that any change in the
general level of interest rates has an opposite effect on the two classes of
securities described above.

The portfolios' investment advisor (The Prudential) seeks to balance these risks
by making use of the concept of "duration." A bond's duration is the average
weighted period of time until receipt of all scheduled cash payments under the
bond (whether principal or interest), where the weights are the present value of
the amounts to be received on each payment date. Unlike the concept of a bond's
"term to maturity," therefore, duration takes into account both the amount and
timing of a bond's interest payments, in addition to its maturity date and yield
to maturity. The duration of a zero coupon bond is the product of the face
amount of the bond and the time until maturity. As applied to a portfolio of
bonds, a portfolio's "duration" is the average weighted period of time until
receipt of all scheduled payments, whether principal or interest, from all bonds
in the portfolio.

When a portfolio's duration is equal to the length of time remaining until its
liquidation date, fluctuations in the amount of income accumulated by the
portfolio through reinvestment of coupon or principal payments received prior to
the liquidation date (i.e., fluctuations caused by reinvestment risk) will, over
the period ending on the liquidation date, be approximately equal in magnitude
to, but opposite in direction from, fluctuations in the market value on the
liquidation date of the portfolio's unmatured bonds (i.e., fluctuations caused
by market risk). By maintaining each portfolio's duration within 1 year of the
length of time remaining until its liquidation date, The Prudential believes
that each portfolio's value on its liquidation date, and hence an investor's
compounded investment return to that date, will largely be immunized against
changes in the general level of interest rates. The success of this technique
could be affected, however, by such factors as changes in the relationship
between long-term and short-term interest rates and changes in the difference
between the yield on corporate and Treasury securities.

The Prudential will also calculate a projected yield for each Zero Coupon Bond
Portfolio. At the beginning of each week, after the net asset value of each Zero
Coupon Bond Portfolio has been determined, The Prudential will calculate the
compounded annual yield that will result if all securities in the portfolio are
held until the liquidation date or, if earlier, until their maturity dates (with
the proceeds reinvested until the liquidation date). This is the predicted yield
for that date. It can also be expressed as the amount to which a premium of
$10,000 is predicted

<PAGE>

to grow by the portfolio's liquidation date. Both of these numbers will be
furnished upon request. Unless there is a significant change in the general
level of interest rates -- in which case a recalculation will be made -- the
predicted yield is not likely to vary materially over the course of each week.

As stated in the prospectus, as much as 30% of each portfolio's assets may be
invested in zero coupon debt securities issued by United States corporations or
in high grade interest bearing debt securities, provided that no more than 20%
of the assets of the portfolio may be invested in interest bearing securities.
The extent to which the portfolio invests in interest bearing securities, up to
those limits, may rise as the portfolio moves closer to its liquidation date
since both reinvestment risk and market risk become smaller as the period to the
liquidation date decreases.

INVESTMENT RESTRICTIONS

Set forth below are certain investment restrictions applicable to the
portfolios. Restrictions 1, 3, 5, and 8-11 are fundamental and may not be
changed without shareholder approval as required by the 1940 Act. Restrictions
2, 4, 6, 7, and 12 are not fundamental and may be changed by the Board of
Directors without shareholder approval.

None of the portfolios will:

1. Buy or sell real estate and mortgages, although the portfolios may buy and
sell securities that are secured by real estate and securities of real
estate investment trusts and of other issuers that engage in real estate
operation. Buy or sell commodities or commodities contracts, except that
the Diversified Stock, Balanced, and Specialized Portfolios may purchase
and sell stock index futures contracts and related options; the Fixed
Income Portfolios (other than the Money Market and Zero Coupon Bond
Portfolios), the Global Equity Portfolio, and the Balanced Portfolios may
purchase and sell interest rate futures contracts and related options; and
all portfolios (other than the Money Market, Government Securities and Zero
Coupon Bond, and Small Capitalization Stock Portfolios) may purchase and
sell foreign currency futures contracts and related options and forward
foreign currency exchange contracts.

2. Except as part of a merger, consolidation, acquisition or reorganization,
invest more than 5% of the value of its total assets in the securities of
any one investment company or more than 10% of the value of its total
assets, in the aggregate, in the securities of two or more investment
companies, or acquire more than 3% of the total outstanding voting
securities of any one investment company.

3. Acquire securities for the purpose of exercising control or management of
any company except in connection with a merger, consolidation, acquisition
or reorganization.

4. Make short sales of securities or maintain a short position, except that
the Bond, High Yield Bond, Government Securities, Conservatively Managed
Flexible and Aggressively Managed Flexible Portfolios may sell securities
short up to 25% of their net assets and except that the portfolios (other
than the Money Market and Zero Coupon Bond Portfolios) may make short sales
against the box. Collateral arrangements entered into with respect to
options, futures contracts and forward contracts are not deemed to be short
sales. Collateral arrangements entered into with respect to interest rate
swap agreements are not deemed to be short sales.

5. Purchase securities on margin or otherwise borrow money or issue senior
securities except that the Bond, High Yield Bond and Government Securities
Portfolios, as well as the fixed income portions of the Balanced
Portfolios, may enter into reverse repurchase agreements, dollar rolls and
may purchase securities on a when-issued and delayed delivery basis; except
that the Money Market Portfolio and the money market portion of any
portfolio may enter into reverse repurchase agreements and may purchase
securities on a when-issued and delayed delivery basis; and except that the
Common Stock, Growth Stock, Small Capitalization Stock, High Dividend
Stock, Natural Resources, Global Equity, Aggressively Managed Flexible and
Conservatively Managed Flexible Portfolios may purchase securities on a
when-issued or a delayed delivery basis. The Series Fund may also obtain
such short-term credit as it needs for the clearance of securities
transactions and may borrow from a bank for the account of any portfolio as
a temporary measure to facilitate redemptions (but not for leveraging or
investment) or to exercise an option, an amount that does not exceed 5% of
the value of the portfolio's total assets (including the amount owed as a
result of the borrowing) at the time the borrowing is made. Interest paid
on borrowings will not be available for investment. Collateral arrangements
with respect to futures contracts and options thereon and forward foreign
currency exchange contracts (as permitted by restriction no. 1) are not
deemed to be the issuance of a senior security or the purchase of a
security on margin. Collateral arrangements with respect to the writing of
the following options by the following portfolios are not deemed to be the
issuance of a senior security or the purchase of a security on margin:
Diversified Stock and Specialized Portfolios other than the Stock Index
Portfolio (options on equity securities, stock indices, foreign currencies)
and the Small Capitalization Stock Portfolio (options on equity securities,
stock indices); Balanced Portfolios (options on debt securities, equity
securities, stock indices,

<PAGE>

foreign currencies); Bond and High Yield Bond Portfolios (options on debt
securities, foreign currencies); Government Securities Portfolio (options
on debt securities). Collateral arrangements entered into by the Fixed
Income Portfolios (other than the Money Market and Zero Coupon Bond
Portfolios) and the Balanced Portfolios with respect to interest rate swap
agreements are not deemed to be the issuance of a senior security or the
purchase of a security on margin.

6. Enter into reverse repurchase agreements if, as a result, the portfolio's
obligations with respect to reverse repurchase agreements would exceed 10%
of the portfolio's net assets (defined to mean total assets at market value
less liabilities other than reverse repurchase agreements); except that the
Bond, High Yield Bond, and Government Securities Portfolios, as well as the
fixed income portions of the Conservatively Managed Flexible and
Aggressively Managed Flexible Portfolios, may enter into reverse repurchase
agreements and dollar rolls provided that the portfolio's obligations with
respect to those instruments do not exceed 30% of the portfolio's net
assets (defined to mean total assets at market value less liabilities other
than reverse repurchase agreements and dollar rolls).

7. Pledge or mortgage assets, except that no more than 10% of the value of any
portfolio may be pledged (taken at the time the pledge is made) to secure
authorized borrowing and except that a portfolio may enter into reverse
repurchase agreements. Collateral arrangements entered into with respect to
futures and forward contracts and the writing of options are not deemed to
be the pledge of assets. Collateral arrangements entered into with respect
to interest rate swap agreements are not deemed to be the pledge of assets.

8. Lend money, except that loans of up to 10% of the value of each portfolio
may be made through the purchase of privately placed bonds, debentures,
notes, and other evidences of indebtedness of a character customarily
acquired by institutional investors that may or may not be convertible into
stock or accompanied by warrants or rights to acquire stock. Repurchase
agreements and the purchase of publicly traded debt obligations are not
considered to be "loans" for this purpose and may be entered into or
purchased by a portfolio in accordance with its investment objectives and
policies.

9. Underwrite the securities of other issuers, except where the Series Fund
may be deemed to be an underwriter for purposes of certain federal
securities laws in connection with the disposition of portfolio securities
and with loans that a portfolio may make pursuant to item 8 above.

10. Make an investment unless, when considering all its other investments, 75%
of the value of a portfolio's assets would consist of cash, cash items,
obligations of the United States Government, its agencies or
instrumentalities, and other securities. For purposes of this restriction,
"other securities" are limited for each issuer to not more than 5% of the
value of a portfolio's assets and to not more than 10% of the issuer's
outstanding voting securities held by the Series Fund as a whole. Some
uncertainty exists as to whether certain of the types of bank obligations
in which a portfolio may invest, such as certificates of deposit and
bankers' acceptances, should be classified as "cash items" rather than
"other securities" for purposes of this restriction, which is a
diversification requirement under the 1940 Act. Interpreting most bank
obligations as "other securities" limits the amount a portfolio may invest
in the obligations of any one bank to 5% of its total assets. If there is
an authoritative decision that any of these obligations are not
"securities" for purposes of this diversification test, this limitation
would not apply to the purchase of such obligations.

11. Purchase securities of a company in any industry if, as a result of the
purchase, a portfolio's holdings of securities issued by companies in that
industry would exceed 25% of the value of the portfolio, except that this
restriction does not apply to purchases of obligations issued or guaranteed
by the U.S. Government, its agencies and instrumentalities or issued by
domestic banks. For purposes of this restriction, neither finance companies
as a group nor utility companies as a group are considered to be a single
industry and will be grouped instead according to their services; for
example, gas, electric, and telephone utilities will each be considered a
separate industry. For purposes of this exception, domestic banks shall
include all banks which are organized under the laws of the United States
or a state (as defined in the 1940 Act), U.S. branches of foreign banks
that are subject to the same regulations as U.S. banks and foreign branches
of domestic banks (as permitted by the SEC).

12. Invest more than 15% of its net assets in illiquid securities or invest
more than 10% of its net assets in the securities of unseasoned issuers.
(The Money Market Portfolio will not invest more than 10% of its net assets
in illiquid securities.) For purposes of this restriction, (a) illiquid
securities are those deemed illiquid pursuant to SEC regulations and
guidelines, as they may be revised from time to time: and (b) unseasoned
issuers are issuers (other than U.S. Government agencies or
instrumentalities) having a record, together with predecessors, of less
than 3 years' continuous operation.

The Natural Resources Portfolio will generally invest a substantial majority of
its total assets in securities of natural resource companies. With respect to
item 11 above, as it relates to the Natural Resources Portfolio, the following
categories will be considered separate and distinct industries: integrated
oil/domestic, integrated oil/international,

<PAGE>

crude oil production, natural gas production, gas pipeline, oil service, coal,
forest products, paper, foods (including corn and wheat), tobacco, fertilizers,
aluminum, copper, iron and steel, all other basic metals (e.g., nickel, lead),
gold, silver, platinum, mining finance, plantations (e.g., edible oils), mineral
sands, and diversified resources. A company will be deemed to be in a particular
industry if the majority of its revenues is derived from or the majority of its
assets is dedicated to one of the categories described in the preceding
sentence. The Board of Directors of the Series Fund will review these industry
classifications from time to time to determine whether they are reasonable under
the circumstances and may change such classifications, without shareholder
approval, to the extent necessary.

Certain additional non-fundamental investment policies are applicable only to
the Money Market Portfolio. That portfolio will not:

1. Invest in oil and gas interests, common stock, preferred stock, warrants or
other equity securities.

2. Write or purchase any put or call option or combination of them, except
that it may purchase putable securities.

3. Invest in any security with a remaining maturity in excess of 13 months,
except that securities held pursuant to repurchase agreements may have a
remaining maturity of more than 13 months.

Certain additional non-fundamental investment policies are applicable only to
the High Yield Bond Portfolio. That portfolio will not:

1. Invest in any non-fixed income equity securities, including warrants,
except when attached to or included in a unit with fixed income securities,
but not including preferred stock.

2. Invest more than 20% of the market or other fair value of its total assets
in United States currency denominated issues of foreign governments and
other foreign issuers; or invest more than 10% of the market or other fair
value of its total assets in securities which are payable in currencies
other than United States dollars. The portfolio will not engage in
investment activity in non-U.S. dollar denominated issues without first
obtaining authorization to do so from the Series Fund's Board of Directors.
See INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS, page 8.

The investments of the various portfolios are generally subject to certain
additional restrictions under the laws of the State of New Jersey. In the event
of future amendments to the applicable New Jersey statutes, each portfolio will
comply, without the approval of the shareholders, with the statutory
requirements as so modified. The pertinent provisions of New Jersey law as they
stand are, in summary form, as follows:

1. An Account may not purchase any evidence of indebtedness issued, assumed or
guaranteed by any institution created or existing under the laws of the
U.S., any U.S. state or territory, District of Columbia, Puerto Rico,
Canada or any Canadian province, if such evidence of indebtedness is in
default as to interest. "Institution" includes any corporation, joint stock
association, business trust, business joint venture, business partnership,
savings and loan association, credit union or other mutual savings
institution.

2. The stock of a corporation may not be purchased unless: (i) the corporation
has paid a cash dividend on the class of stock during each of the past 5
years preceding the time of purchase; or (ii) during the 5-year period the
corporation had aggregate earnings available for dividends on such class of
stock sufficient to pay average dividends of 4% per annum computed upon the
par value of such stock or upon stated value if the stock has no par value.
This limitation does not apply to any class of stock which is preferred as
to dividends over a class of stock whose purchase is not prohibited.

3. Any common stock purchased must be: (i) listed or admitted to trading on a
securities exchange in the United States or Canada; or (ii) included in the
National Association of Securities Dealers' national price listings of
"over-the-counter" securities; or (iii) determined by the Commissioner of
Insurance of New Jersey to be publicly held and traded and have market
quotations available.

4. Any security of a corporation may not be purchased if after the purchase
more than 10% of the market value of the assets of a portfolio would be
invested in the securities of such corporation.

As a result of these currently applicable requirements of New Jersey law, which
impose substantial limitations on the ability of the Series Fund to invest in
the stock of companies whose securities are not publicly traded or who have not
recorded a 5-year history of dividend payments or earnings sufficient to support
such payments, the portfolios will not generally hold the stock of newly
organized corporations. Nonetheless, an investment not otherwise eligible under
items 1 or 2 above may be made if, after giving effect to the investment, the
total cost of all such non-eligible investments does not exceed 5% of the
aggregate market value of the assets of the portfolio.

<PAGE>

Investment limitations also arise under the insurance laws and regulations of
Arizona and may arise under the laws and regulations of other states. Although
compliance with the requirements of New Jersey law set forth above will
ordinarily result in compliance with any applicable laws of other states, under
some circumstances the laws of other states could impose additional restrictions
on the portfolios. For example, the Series Fund will generally invest no more
than 10% of its assets in the obligations of banks of the foreign countries
described in item 2 of SECURITIES IN WHICH THE MONEY MARKET PORTFOLIO MAY
CURRENTLY INVEST, page 28.

Current federal income tax laws require that the assets of each portfolio be
adequately diversified so that The Prudential and other insurers with separate
accounts which invest in the Series Fund and not the Contract owners, are
considered the owners of assets held in the Account for federal income tax
purposes. See Tax Treatment of Contract Benefits, page 5. The Prudential intends
to maintain the assets of each portfolio pursuant to those diversification
requirements.

INVESTMENT MANAGEMENT ARRANGEMENTS AND EXPENSES

The Series Fund and The Prudential have entered into an Investment Advisory
Agreement under which The Prudential will, subject to the direction of the Board
of Directors of the Series Fund, be responsible for the management of the Series
Fund, and provide investment advice and related services to each portfolio. As
noted in the prospectus, The Prudential has also entered into a Service
Agreement with its wholly-owned subsidiary, The Prudential Investment
Corporation ("PIC"), which provides that PIC will furnish to The Prudential such
services as The Prudential may require in connection with The Prudential's
performance of its obligations under the Investment Advisory Agreement. In
addition, The Prudential has entered into a Subadvisory Agreement with its
wholly-owned subsidiary Jennison Associates Capital Corp. ("Jennison") under
which Jennison furnishes investment advisory services in connection with the
management of the Growth Stock Portfolio.

The investment management fee for the Stock Index Portfolio is equal to an
annual rate of 0.35% of the average daily net assets of the portfolio. For the
Money Market, Bond, Government Securities, High Dividend Stock, and Zero Coupon
Bond and Small Capitalization Stock Portfolios, that fee is equal to an annual
rate of 0.4% of the average daily net assets of each of the portfolios. For the
Common Stock and Natural Resources Portfolios, the fee is equal to an annual
rate of 0.45% of the average daily net assets of each of the portfolios. The fee
for the Conservatively Managed Flexible and High Yield Bond Portfolios is equal
to an annual rate of 0.55% of the average daily net assets of each of the
portfolios. For the Aggressively Managed Flexible and Growth Stock Portfolios,
the fee is equal to an annual rate of 0.6% of the average daily net assets of
the portfolio. The fee for the Global Equity Portfolio is equal to an annual
rate of 0.75% of the average daily net assets of the portfolio. The Prudential
reimburses PIC for the costs and expenses it incurs under the Service Agreement.
The Prudential pays Jennison a portion of the fee it receives for providing
investment advisory services to the Growth Stock Portfolio.

The Investment Advisory Agreement requires The Prudential to pay for maintaining
any Prudential staff and personnel who perform clerical, accounting,
administrative, and similar services for the Series Fund, other than investor
services and any daily Series Fund accounting services. It also requires The
Prudential to pay for the equipment, office space and related facilities
necessary to perform these services and the fees or salaries of all officers and
directors of the Series Fund who are affiliated persons of The Prudential or any
subsidiary of The Prudential.

Each portfolio pays all other expenses incurred in its individual operation and
also pays a portion of the Series Fund's general administrative expenses
allocated on the basis of the asset size of the respective portfolios. Expenses
that will be borne directly by the portfolios include redemption expenses,
expenses of portfolio transactions, shareholder servicing costs, interest,
certain taxes, charges of the Custodian and Transfer Agent, and other expenses
attributable to a particular portfolio. Expenses that will be allocated among
all portfolios include legal expenses, state franchise taxes, auditing services,
costs of printing proxies, costs of stock certificates, Securities and Exchange
Commission fees, accounting costs, the fees and expenses of directors of the
Series Fund who are not affiliated persons of The Prudential or any subsidiary
of The Prudential, and other expenses properly payable by the entire Series
Fund. If the Series Fund is sued, litigation costs may be directly applicable to
one or more portfolios or allocated on the basis of the size of the respective
portfolios, depending upon the nature of the lawsuit. The Series Fund's Board of
Directors has determined that this is an appropriate method of allocating
expenses.

Under the Investment Advisory Agreement, The Prudential has agreed to refund to
a portfolio (except the Global Equity Portfolio) the portion of the investment
management fee for that portfolio equal to the amount that the aggregate annual
ordinary operating expenses of that portfolio (excluding interest, taxes, and
brokerage fees and

<PAGE>

commissions but including investment management fees) exceeds 0.75% of the
portfolio's average daily net assets. There is no expense limitation or
reimbursement provision for the Global Equity Portfolio.

The Investment Advisory Agreement with The Prudential was most recently approved
by the Series Fund's Board of Directors, including a majority of the Directors
who are not interested persons of The Prudential, on February __, 1995 with
respect to all portfolios. The Investment Advisory Agreement was most recently
approved by the shareholders in accordance with instructions from Contract
owners at their 1989 annual meeting with respect to all portfolios except the
Growth Stock and Small Capitalization Stock Portfolios. A Supplemental Advisory
Agreement regarding the Growth Stock and Small Capitalization Stock Portfolios
was approved by the Series Fund Board of Directors on December 20, 1994 and by
the sole shareholder of the Growth Stock and Small Capitalization Stock
Portfolios on April __, 1995. The Investment Advisory and Supplemental
Investment Advisory Agreements will continue in effect if approved annually by:
(1) a majority of the non-interested persons of the Series Fund's Board of
Directors; and (2) by a majority of the entire Board of Directors or by a
majority vote of the shareholders of each portfolio. The required shareholder
approval of the Agreements shall be effective with respect to any portfolio if a
majority of the voting shares of that portfolio vote to approve the Agreements,
even if the Agreements are not approved by a majority of the voting shares of
any other portfolio or by a majority of the voting shares of the entire Series
Fund. The Agreements provide that they may not be assigned by The Prudential and
that they may be terminated upon 60 days notice by the Series Fund's Board of
Directors or by a majority vote of its shareholders. The Prudential may
terminate the Agreements upon 90 days notice.

The Service Agreement between The Prudential and PIC was most recently ratified
by shareholders of the Series Fund at their 1989 annual meeting with respect to
all portfolios except for the Growth Stock and Small Capitalization Stock
Portfolios, which had not yet been established. The Service Agreement with
respect to those portfolios and the Investment Subadvisory Agreement with
Jennison were ratified by the sole shareholder of those portfolios on April __,
1995. The Service Agreement between The Prudential and PIC will continue in
effect as to the Series Fund for a period of more than 2 years from its
execution, only so long as such continuance is specifically approved at least
annually in the same manner as the Investment Advisory Agreement between The
Prudential and the Series Fund. The Service Agreement may be terminated by
either party upon not less than 30 days prior written notice to the other party,
will terminate automatically in the event of its assignment, and will terminate
automatically as to the Series Fund in the event of the assignment or
termination of the Investment Advisory Agreement between The Prudential and the
Series Fund. The Prudential is not relieved of its responsibility for all
investment advisory services under the Investment Advisory Agreement.

The Prudential also serves as the investment advisor to several other investment
companies. When investment opportunities arise that may be appropriate for more
than one entity for which The Prudential serves as investment advisor, The
Prudential will not favor one over another and may allocate investments among
them in an impartial manner believed to be equitable to each entity involved.
The allocations will be based on each entity's investment objectives and its
current cash and investment positions. Because the various entities for which
The Prudential acts as investor advisor have different investment objectives and
positions, The Prudential may from time to time buy a particular security for
one or more such entities while at the same time it sells such securities for
another.

PORTFOLIO TRANSACTIONS AND BROKERAGE

The Prudential is responsible for decisions to buy and sell securities, options
on securities and indices, and futures and related options for the Series Fund.
The Prudential is also responsible for the selection of brokers, dealers, and
futures commission merchants to effect the transactions and the negotiation of
brokerage commissions, if any. Broker-dealers may receive brokerage commissions
on Series Fund portfolio transactions, including options and the purchase and
sale of underlying securities upon the exercise of options. Orders may be
directed to any broker or futures commission merchant including, to the extent
and in the manner permitted by applicable law, Prudential Securities
Incorporated, an indirect wholly-owned subsidiary of The Prudential.

Bonds, including convertible bonds, and equity securities traded in the
over-the-counter market are generally traded on a "net" basis with dealers
acting as principal for their own accounts without a stated commission, although
the price of the security usually includes a profit to the dealer. In
under-written offerings, securities are purchased at a fixed price which
includes an amount of compensation to the underwriter, generally referred to as
the underwriter's concession or discount. On occasion, certain money market
instruments and U.S. Government agency securities may be purchased directly from
the issuer, in which case no commissions or discounts are paid. The Series Fund
will not deal with Prudential Securities Incorporated in any transaction in
which Prudential Securities Incorporated acts as principal. Thus, it will not
deal with Prudential Securities Incorporated if execution involves Prudential
Securities Incorporated's acting as principal with respect to any part of the
Series Fund's order.

Portfolio securities may not be purchased from any underwriting or selling
syndicate of which Prudential Securities Incorporated, during the existence of
the syndicate, is a principal underwriter (as defined in the 1940 Act) except

<PAGE>

in accordance with rules of the Securities and Exchange Commission. This
limitation, in the opinion of the Series Fund, will not significantly affect the
portfolios' current ability to pursue their respective investment objectives.
However, in the future it is possible that the Series Fund may under other
circumstances be at a disadvantage because of this limitation in comparison to
other funds not subject to such a limitation.

In placing orders for portfolio securities of the Series Fund, The Prudential is
required to give primary consideration to obtaining the most favorable price and
efficient execution. Within the framework of this policy, The Prudential will
consider the research and investment services provided by brokers, dealers or
futures commission merchants who effect or are parties to portfolio transactions
of the Series Fund, The Prudential or The Prudential's other clients. Such
research and investment services are those which brokerage houses customarily
provide to institutional investors and include statistical and economic data and
research reports on particular companies and industries. Such services are used
by The Prudential in connection with all of its investment activities, and some
of such services obtained in connection with the execution of transactions for
the Series Fund may be used in managing other investment accounts. Con-versely,
brokers, dealers or futures commission merchants furnishing such services may be
selected for the execution of transactions for such other accounts, and the
services furnished by such brokers, dealers or futures commission merchants may
be used by The Prudential in providing investment management for the Series
Fund. Commission rates are established pursuant to negotiations with the broker,
dealer or futures commission merchant based on the quality and quantity of
execution services provided by the broker in the light of generally prevailing
rates. The Prudential's policy is to pay higher commissions to brokers, other
than Prudential Securities Incorporated, for particular transactions than might
be charged if a different broker had been selected on occasions when, in The
Prudential's opinion, this policy furthers the objective of obtaining best price
and execution. The Prudential's present policy is not to permit higher
commissions to be paid on Series Fund transactions in order to secure research,
statistical, and investment services from brokers. The Prudential might in the
future authorize the payment of such higher commissions but only with the prior
concurrence of the Board of Directors of the Series Fund, if it is determined
that the higher commissions are necessary in order to secure desired research
and are reasonable in relation to all the services that the broker provides.

Subject to the above considerations, Prudential Securities Incorporated may act
as a securities broker or futures commission merchant for the Series Fund. In
order for Prudential Securities Incorporated to effect any portfolio
transactions for the Series Fund, the commissions received by Prudential
Securities Incorporated must be reasonable and fair compared to the commissions
received by other brokers in connection with comparable transactions involving
similar securities being purchased or sold on a securities exchange during a
comparable period of time. This standard would allow Prudential Securities
Incorporated to receive no more than the remuneration that would be expected to
be received by an unaffiliated broker or futures commission merchant in a
commensurate arm's- length transaction. Furthermore, the Board of Directors of
the Series Fund, including a majority of the non-interested directors, has
adopted procedures which are reasonably designed to provide that any
commissions, fees or other remuneration paid to Prudential Securities
Incorporated are consistent with the foregoing standard. In accordance with Rule
11a2-2(T) under the Securities Exchange Act of 1934, Prudential Securities
Incorporated may not retain compensation for effecting transactions on a
securities exchange for the Series Fund unless the Series Fund has expressly
authorized the retention of such compensation in a written contract executed by
the Series Fund and Prudential Securities Incorporated. Rule 11a2-2(T) provides
that Prudential Securities Incorporated must furnish to the Series Fund at least
annually a statement setting forth the total amount of all compensation retained
by Prudential Securities Incorporated from transactions effected for the Series
Fund during the applicable period. Brokerage and futures transactions with
Prudential Securities Incorporated are also subject to such fiduciary standards
as may be imposed by applicable law.

For the years 1994, 1993, and 1992, the Series Fund paid a total of $x,xxx,xxx,
$9,492,283, and $5,802,658, respectively, in brokerage commissions. Of those
amounts, $xxx,xxx, $977,695, and $873,920, for 1994, 1993, and 1992,
respectively, was paid out to Prudential Securities Incorporated. For 1994, the
commissions paid to this affiliated broker constituted xx.x% of the total
commissions paid by the Series Fund for that year. Transactions through this
affiliated broker accounted for x.x% of the aggregate dollar amount of
transactions for the Series Fund involving the payment of commissions.

DETERMINATION OF NET ASSET VALUE

Shares in the Series Fund are currently offered continuously, without sales
charge, at prices equal to the respective net asset values of the portfolios,
only to separate accounts to fund benefits payable under the Contracts described
in the variable life insurance and variable annuity prospectuses. The Series
Fund may at some later date also offer its shares to other separate accounts of
The Prudential or other insurers. The Prudential acts as principal underwriter
to the Series Fund. As such, The Prudential receives no underwriting
compensation from the Series Fund.

<PAGE>

As noted in the prospectus, the net asset value of the shares of each portfolio
is determined once daily on each day the New York Stock Exchange ("NYSE") is
open for business. The NYSE is open for business Monday through Friday except
for the days on which the following holidays are observed: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day.

In determining the net asset value of the Bond, High Yield Bond, and Government
Securities Portfolios, securities (other than debt obligations with remaining
maturities of less than 60 days, which are valued at amortized cost) will be
valued utilizing an independent pricing service to determine valuations for
normal institutional size trading units of securities. The pricing service
considers such factors as security prices, yields, maturities, call features,
ratings, and developments relating to specific securities in arriving at
securities valuations.

The net asset value of shares of the Money Market Portfolio will normally remain
at $10 per share, because the net investment income of this portfolio (including
realized and unrealized gains and losses on portfolio holdings) will be declared
as a dividend each time the portfolio's net income is determined. See Dividends,
Distributions and Taxes, page 32. If in the view of the Board of Directors of
the Series Fund it is inadvisable to continue to maintain the net asset value of
the Money Market Portfolio at $10 per share, the Board reserves the right to
alter the procedure. The Series Fund will notify Contract owners of any such
alteration.

All short-term debt obligations in the Money Market Portfolio of 13 months'
maturity or less are valued on an amortized cost basis. This means that each
obligation will be valued initially at its purchase price and thereafter by
amortizing any discount or premium uniformly to maturity, regardless of the
impact of fluctuating interest rates on the market value of the obligation. This
highly practical method of valuation is in widespread use and almost always
results in a value that is extremely close to the actual market value. In order
to continue to utilize the amortized cost method of valuation, the Money Market
Portfolio may not purchase any security with a remaining maturity of more than
13 months and must maintain a dollar-weighted average portfolio maturity of 90
days or less. In the event of sizeable changes in interest rates, however, the
value determined by this method may be higher or lower than the price that would
be received if the obligation were sold. The Series Fund's Board of Directors
has established procedures to determine whether, on these occasions, if any
should occur, the deviation might be enough to affect the value of shares in the
Money Market Portfolio by more than 1/2 of one percent, and, if it does, an
appropriate adjustment will be made in the value of the obligations. The
portfolio may only be invested in securities of high quality as described in
detail below in SECURITIES IN WHICH THE MONEY MARKET PORTFOLIO MAY CURRENTLY
INVEST.

The net asset value of the Stock Index, High Dividend Stock, Common Stock,
Growth Stock, Small Capitalization Stock, Global Equity, and Natural Resources
Portfolios will be determined in the following manner. Any security for which
the primary market is on an exchange is generally valued at the last sale price
on such exchange as of the close of the NYSE (which is currently 4:00 p.m. New
York City time) or, in the absence of recorded sales, at the mean between the
most recently quoted bid and asked prices. NASDAQ National Market System equity
securities are valued at the last sale price or, if there was no sale on such
day, at the mean between the most recently quoted bid and asked prices. Other
over-the-counter equity securities are valued at the mean between the most
recently quoted bid and asked prices. Convertible debt securities that are
actively traded in the over-the- counter market, including listed securities for
which the primary market is believed to be over-the-counter, are valued at the
mean between the most recently quoted bid and asked prices. Corporate bonds
(other than convertible debt securities) and Government bonds held by the High
Dividend Stock and Natural Resources Portfolios are valued on the same basis as
securities in the Bond and High Yield Bond Portfolios, as described above.
Short-term debt instruments which mature in less than 60 days are valued at
amortized cost. For valuation purposes, quotations of foreign securities in a
foreign currency are converted to U.S. dollar equivalents.

Generally, trading in foreign securities, as well as corporate bonds, U.S.
Government securities, and money market instruments, is substantially completed
each day at various times prior to the close of the NYSE. The values of any such
securities are determined as of such times for purposes of computing a
portfolio's net asset value. Foreign currency exchange rates are also generally
determined prior to the close of the NYSE. If an extraordinary event occurs
after the close of an exchange on which that security is traded, the security
will be valued at fair value as determined in good faith by the applicable
portfolio manager under procedures established by and under the general
supervision of the Series Fund's Board of Directors.

In determining the net asset value of each of the Balanced Portfolios, the
method of valuation of a security depends on the type of investment involved.
Intermediate or long-term fixed income securities are valued in the same way as
such securities are valued in the Bond Portfolio, and common stocks and
convertible debt securities are valued in the same way as such securities are
valued in the Common Stock Portfolio. Short-term debt obligations with a
maturity of 12 months or less are valued on an amortized cost basis in
accordance with an order obtained from the Securities and Exchange Commission.
Each Balanced Portfolio must maintain a dollar-weighted average maturity for its
short-term debt obligations of 120 days or less. As discussed above in
connection with the Money Market Portfolio, the values determined by the
amortized cost method may deviate from market value under certain

<PAGE>

circumstances. The Series Fund's Board of Directors has established procedures
to monitor whether any material deviation occurs and, if so, will promptly
consider what action, if any, should be initiated to prevent unfair results to
Contract owners. The short-term portion of these portfolios may be invested only
in high quality instruments, as described below in SECURITIES IN WHICH THE MONEY
MARKET PORTFOLIO MAY CURRENTLY INVEST.

In determining the net asset value of the shares of the Zero Coupon Bond
Portfolios 1995, 2000, and 2005, securities (other than debt obligations with
maturities of less than 60 days, which are valued at amortized cost) will be
valued utilizing an independent pricing service to determine valuations for
normal institutional size trading units of securities. The pricing service
considers such factors as security prices, yields, maturities, call features,
ratings, and developments relating to specific securities in arriving at
securities valuations.

With respect to all the portfolios which utilize such investments, options on
stock and stock indices traded on national securities exchanges are valued at
the average of the quoted bid and asked prices as of the close of the respective
exchange (which is currently 4:10 p.m. New York City time). Futures contracts
are marked to market daily, and options thereon are valued at their last sale
price, as of the close of the applicable commodities exchanges (which is
currently 4:15 p.m. New York City time).

Securities or assets for which market quotations are not readily available will
be valued at fair value as determined by The Prudential under the direction of
the Board of Directors of the Series Fund.

SECURITIES IN WHICH THE MONEY MARKET PORTFOLIO MAY CURRENTLY INVEST

The Money Market Portfolio, and the other portfolios to the extent their
investment policies so provide, may invest in the following liquid, short-term,
debt securities regularly bought and sold by financial institutions:

1. U.S. Treasury Bills and other obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. These are debt securities
(including bills, certificates of indebtedness, notes, and bonds) issued or
guaranteed by the U.S. Treasury or by an agency or instrumentality of the U.S.
Government that is established under the authority of an act of Congress.
Although all obligations of agencies and instrumentalities are not direct
obligations of the U.S. Treasury, payment of the interest and principal on them
is generally backed directly or indirectly by the U.S. Government. This support
can range from the backing of the full faith and credit of the United States, to
U.S. Treasury guarantees or to the backing solely of the issuing instrumentality
itself. Securities which are not backed by the full faith and credit of the
United States include but are not limited to obligations of the Tennessee Valley
Authority, the Federal National Mortgage Association, the Federal Home Loan
Mortgage Corporation, and the United States Postal Service, each of which has
the right to borrow from the U.S. Treasury to meet its obligations, and
obligations of the Federal Farm Credit System and the Federal Home Loan Banks,
the obligations of which may only be satisfied by the individual credit of the
issuing agency. Obligations of the Government National Mortgage Association, the
Farmers Home Administration, and the Export-Import Bank are examples of
securities that are backed by the full faith and credit of the United States.

2. Obligations (including certificates of deposit, bankers' acceptances, and
time deposits) of domestic banks, foreign branches of U.S. banks, U.S. branches
of foreign banks, and foreign offices of foreign banks provided that such bank
has, at the time of the portfolio's investment, total assets of at least $1
billion or the equivalent. Obligations of any savings and loan association or
savings bank organized under the laws of the United States or any state thereof,
provided that such association or savings bank has, at the time of the
portfolio's investment, total assets of at least $1 billion. The term
"certificates of deposit" includes both Eurodollar certificates of deposit,
which are traded in the over-the-counter market, and Eurodollar time deposits,
for which there is generally not a market. "Eurodollars" are dollars deposited
in banks outside the United States. An investment in Eurodollar instruments
involves risks that are different in some respects from an investment in debt
obligations of domestic issuers, including future political and economic
developments such as possible expropriation or confiscatory taxation that might
adversely affect the payment of principal and interest on the Eurodollar
instruments.

"Certificates of deposit" are certificates evidencing the indebtedness of a
commercial bank to repay funds deposited with it for a definite period of time
(usually from 14 days to 1 year). "Bankers' acceptances" are credit instruments
evidencing the obligation of a bank to pay a draft which has been drawn on it by
a customer. These instruments reflect the obligation both of the bank and of the
drawer to pay the face amount of the instrument upon maturity. "Time deposits"
are non-negotiable deposits in a bank for a fixed period of time.

3. Commercial paper, variable amount demand master notes, bills, notes and other
obligations issued by a U.S. company, a foreign company or a foreign government,
its agencies, instrumentalities or political subdivisions, denominated in U.S.
dollars, and, at the date of investment, rated at least A or A-2 by Standard &
Poor's Corporation ("S&P"), A or Prime-2 by Moody's Investors Service
("Moody's") or, if not rated, issued by an entity having an outstanding
unsecured debt issue rated at least A or A-2 by S&P or A or Prime-2 by Moody's.
For a description of corporate bond ratings, see DEBT RATINGS, page 30. If such
obligations are guaranteed or

<PAGE>

supported by a letter of credit issued by a bank, such bank (including a foreign
bank) must meet the requirements set forth in paragraph 2 above. If such
obligations are guaranteed or insured by an insurance company or other non-bank
entity, such insurance company or other non-bank entity must represent a credit
of high quality, as determined by the Series Fund's investment adviser (which as
noted above is currently The Prudential) under the supervision of the Series
Fund's Board of Directors.

As stated above in paragraphs 2 and 3, the Money Market Portfolio and short-term
portions of the other portfolios may contain obligations of foreign branches of
domestic banks and domestic branches of foreign banks, as well as commercial
paper, bills, notes, and other obligations issued in the United States by
foreign issuers, including foreign governments, their agencies, and
instrumentalities. This involves certain additional risks. These risks include
future political and economic developments in the country of the issuer, the
possible imposition of withholding taxes on interest income payable on such
obligations held by the Series Fund, the possible seizure or nationalization of
foreign deposits, and the possible establishment of exchange controls or other
foreign governmental laws or restrictions which might affect adversely the
payment of principal and interest on such obligations held by the Series Fund.
In addition, there may be less publicly available information about a foreign
issuer than about a domestic one, and foreign issuers may not be subject to the
same accounting, auditing and financial recordkeeping standards and requirements
as domestics issuers. Securities issued by foreign issuers may be subject to
greater fluctuations in price than securities issued by U.S. entities. Finally,
in the event of default with respect to any such foreign debt obligations, it
may be more difficult for the Series Fund to obtain or to enforce a judgment
against the issuers of such securities.

4. Repurchase Agreements. When the Money Market Portfolio purchases money market
securities of the types described above, it may on occasion enter into a
repurchase agreement with the seller wherein the seller and the buyer agree at
the time of sale to repurchase of the security at a mutually agreed upon time
and price. The period of maturity is usually quite short, possibly overnight or
a few days, although it may extend over a number of months. The resale price is
in excess of the purchase price, reflecting an agreed-upon market rate effective
for the period of time the portfolio's money is invested in the security, and is
not related to the coupon rate of the purchased security. Repurchase agreements
may be considered loans of money to the seller of the underlying security, which
are collateralized by the securities underlying the repurchase agreement. The
Series Fund will not enter into repurchase agreements unless the agreement is
"fully collateralized" (i.e., the value of the securities is, and during the
entire term of the agreement remains, at least equal to the amount of the 'loan'
including accrued interest). The Series Fund will take possession of the
securities underlying the agreement and will value them daily to assure that
this condition is met. The Series Fund has adopted standards for the parties
with whom it will enter into repurchase agreements which it believes are
reasonably designed to assure that such a party presents no serious risk of
becoming involved in bankruptcy proceedings within the time frame contemplated
by the repurchase agreement. In the event that a seller defaults on a repurchase
agreement, the Series Fund may incur a loss in the market value of the
collateral, as well as disposition costs; and, if a party with whom the Series
Fund had entered into a repurchase agreement becomes involved in bankruptcy
proceedings, the Series Fund's ability to realize on the collateral may be
limited or delayed and a loss may be incurred if the collateral securing the
repurchase agreement declines in value during the bankruptcy proceedings.

The Series Fund will not enter into repurchase agreements with The Prudential or
its affiliates, including Prudential Securities Incorporated. This will not
affect the Series Fund's ability to maximize its opportunities to engage in
repurchase agreements.

5. Reverse Repurchase Agreements. The Money Market Portfolio may use reverse
repurchase agreements, which are described under Reverse Repurchase Agreements
and Dollar Rolls in the prospectus. No portfolio may obligate more than 10% of
its net assets in connection with reverse repurchase agreements, except that the
Bond, High Yield Bond, and Government Securities Portfolios, as well as the
fixed income portions of the Conservatively Managed Flexible and Aggressively
Managed Flexible Portfolios, may obligate up to 30% of their net assets in
connection with reverse repurchase agreements and dollar rolls.

6. When-Issued and Delayed Delivery Securities. From time to time, in the
ordinary course of business, the Money Market Portfolio may purchase securities
on a when-issued or delayed delivery basis (i.e., delivery and payment can take
place a month or more after the date of the transaction). The purchase price and
the interest rate payable on the securities are fixed on the transaction date.
The securities so purchased are subject to market fluctuation, and no interest
accrues to the portfolio until delivery and payment take place. At the time the
portfolio makes the commitment to purchase securities on a when-issued or
delayed delivery basis, it will record the transaction and thereafter reflect
the value, each day, of such securities in determining its net asset value. The
portfolio will make commitments for when-issued transactions only with the
intention of actually acquiring the securities and, to facilitate such
acquisitions, the Series Fund's custodian bank will maintain in a separate
account securities of the portfolio having a value equal to or greater than such
commitments. On delivery dates for such transactions, the portfolio will meet
its obligations from maturities or sales of the securities held in the separate
account and/or from

<PAGE>

then available cash flow. If the portfolio chooses to dispose of the right to
acquire a when-issued security prior to its acquisition, it could, as with the
disposition of any other obligation, incur a gain or loss due to market
fluctuation. No when-issued commitments will be made if, as a result, more than
15% of the portfolio's net assets would be so committed.

The Board of Directors of the Series Fund has adopted policies for the Money
Market Portfolio to conform to amendments of an SEC rule applicable to money
market funds, like the portfolio. These policies do not apply to any other
portfolio. The policies are as follows: (1) The portfolio will not invest more
than 5% of its assets in the securities of any one issuer (except U.S.
Government securities); however, the portfolio may exceed the 5% limit with
respect to a single security rated in the highest rating category for up to
three business days after the purchase thereof; (2) To be eligible for
investment, a security must be a United States dollar-denominated instrument
that the Series Fund's Board has determined to present minimal credit risks and
must be rated in one of the two highest rating categories by at least two
nationally recognized statistical rating organizations ("NRSROs") assigning a
rating to the security or issue, or if only one NRSRO has assigned a rating,
that NRSRO. An unrated security must be deemed to be of comparable quality as
determined by the Series Fund's Board. In other words, the portfolio will invest
in only first tier or second tier securities. First tier securities are
securities which are rated by at least two NRSROs, or by the only NRSRO that has
rated the security, in the highest short-term rating category, or unrated
securities of comparable quality as determined by the Series Fund's Board.
Second tier securities are eligible securities that are not first tier
securities; (3) The portfolio will not invest more than 5% of its total assets
in second tier securities; (4) The portfolio may not invest more than 1% of its
assets in second tier securities of any one issuer; (5) In the event a first
tier security held by the portfolio is downgraded and becomes a second tier
security, or in the case of an unrated security the Series Fund's Board
determines it is no longer of comparable quality to a first tier security, or in
the event The Prudential becomes aware that an NRSRO has rated a second tier
security or an unrated portfolio security below its second highest rating, the
Board will reassess promptly whether the security presents minimal credit risks
and shall cause the portfolio to take such action as the Board determines is in
the best interests of the portfolio and its shareholders; (6) In the event of a
default or if because of a rating downgrade a security held in the portfolio is
no longer an eligible investment, the portfolio will sell the security as soon
as practicable unless the Series Fund's Board makes a specific finding that such
action would not be in the best interest of the portfolio; and (7) The
portfolio's dollar-weighted average maturity will be no more than 90 days. The
Series Fund's Board of Directors has adopted written procedures delegating to
the investment advisor under certain guidelines the responsibility to make
several of the above-described determinations, including certain credit quality
determinations.

DEBT RATINGS

Moody's Investors Services, Inc. describes its categories of corporate debt
securities and its "Prime-1" and "Prime-2" commercial paper as follows:

Bonds:

Aaa - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.

Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not as large as in Aaa securities or fluctuation
of protective elements may be of greater amplitude or there may be other
elements present which make the long term risks appear somewhat larger than
in Aaa securities.

A - Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may
be present which suggest a susceptibility to impairment sometime in the
future.

Baa - Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.

Ba - Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby

<PAGE>

not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.

B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.

Caa - Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.

Ca - Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.

Commercial paper:

o Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics:

-- Leading market positions in well-established industries.

-- High rates of return of funds employed.

-- Conservative capitalization structures with moderate reliance on debt
and ample asset protection.

-- Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.

-- Well established access to a range of financial markets and assured
sources of alternate liquidity.

o Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

Standard & Poor's Corporation describes its grades of corporate debt securities
and its "A" commercial paper as follows:

Bonds:

AAA Bonds rated AAA are highest grade obligations. They possess the
ultimate degree of protection as to principal and interest.
Marketwise they move with interest rates, and hence provide the
maximum safety on all counts.

AA Bonds rated AA also qualify as high grade obligations, and in the
majority of instances differ from AAA issues only in small degree.
Here, too, prices move with the long term money market.

A Bonds rated A are regarded as upper medium grade. They have
considerable investment strength but are not entirely free from
adverse effects of changes in economic and trade conditions.
Interest and principal are regarded as safe. They are predominately
reflect money rates in their market behavior, but to some extent,
also economic conditions.

BBB Bonds rated BBB, or medium grade, are borderline between definitely
sound obligations and those where the speculative element begins to
predominate. These bonds have adequate asset coverage and normally
are protected by satisfactory earnings. Their susceptibility to
changing conditions, particularly to depressions, necessitates
constant watching. Marketwise, the bonds are more responsive to
business and trade conditions than to interest rates. This group is
the lowest which qualifies for commercial bank investment.

BB-B-CCC-CC Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of
the obligations. BB indicates the lowest degree of speculation and
CC the highest degree of speculation. While such bonds will likely
have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to
adverse conditions.

Commercial paper:

Commercial paper rated A by Standard & Poor's Corporation has the following
characteristics: Liquidity ratios are better than the industry average. Long
term senior debt rating is "A" or better. In some cases BBB credits may be
acceptable. The issuer has access to at least two additional channels of
borrowings. Basic earnings and cash flow have an upward trend with allowances
made for unusual circumstances. Typically, the issuer's industry is well
established, the issuer has a strong position within its industry and the
reliability and quality of management is unquestioned. Issuers rated A are
further referred to by use of numbers 1, 2 and 3 to denote relative strength
within this classification.

<PAGE>

POSSIBLE REPLACEMENT OF THE SERIES FUND

Although The Prudential believes it to be unlikely, it is possible that in the
judgment of its management, one or more of the portfolios of the Series Fund may
become unsuitable for investment by Contract owners because of investment policy
changes, tax law changes, or the unavailability of shares for investment. In
that event, The Prudential may seek to substitute the shares of another
portfolio or of an entirely different mutual fund. Before this can be done, the
approval of the SEC, and possibly one or more state insurance departments, will
be required. Contract owners will be notified of such substitution.

In addition, although it is highly unlikely, it is conceivable that in the
future it may become disadvantageous for both variable life insurance and
variable annuity contract separate accounts to invest in the same underlying
mutual fund. Although neither the companies which invest in the Series Fund nor
the Series Fund currently foresees any such disadvantage, the Series Fund's
Board of Directors intends to monitor events in order to identify any material
conflict between variable life insurance and variable annuity contract owners
and to determine what action, if any, should be taken in response thereto.
Material conflicts could result from such things as: (1) changes in state
insurance law; (2) changes in federal income tax law; (3) changes in the
investment management of any portfolio of the Series Fund; or (4) difference
between voting instructions given by variable life insurance and variable
annuity contract owners. The Prudential will bear the expense, if it does become
necessary, of remedying any material conflict including establishing a new
underlying investment company and segregating the assets held under variable
life insurance and variable annuity contracts.

OTHER INFORMATION CONCERNING THE SERIES FUND

Incorporation and Authorized Stock. The Series Fund was incorporated under
Maryland law on November 15, 1982. The authorized Capital Stock of the Series
Fund consists of 2 billion shares, par value $0.01 per share. The shares of
Capital Stock are divided into sixteen classes: Money Market Portfolio Capital
Stock (200 million shares), Bond Portfolio Capital Stock (200 million shares),
Government Securities Portfolio Capital Stock (100 million shares), Zero Coupon
Bond Portfolio 1995 Capital Stock (25 million shares), Zero Coupon Bond
Portfolio 2000 Capital Stock (25 million shares), Zero Coupon Bond Portfolio
2005 Capital Stock (50 million shares), Conservatively Managed Flexible
Portfolio Capital Stock (300 million shares), Aggressively Managed Flexible
Portfolio Capital Stock (300 million shares), High Yield Bond Portfolio Capital
Stock (100 million shares), Stock Index Portfolio Capital Stock (100 million
shares), High Dividend Stock Portfolio Capital Stock (100 million shares),
Common Stock Portfolio Capital Stock (200 million shares), Growth Stock
Portfolio Capital Stock (50 million shares), Small Capitalization Stock
Portfolio Capital Stock (50 million shares), Global Equity Portfolio Capital
Stock (100 million shares), Natural Resources Portfolio Capital Stock (100
million shares). The shares of each portfolio, when issued, will be fully paid
and non-assessable, will have no conversion, exchange or similar rights, and
will be freely transferable. Each share of stock will have a pro rata interest
in the assets of the portfolio to which the stock of that class relates and will
have no interest in the assets of any other portfolio.

Dividends, Distributions and Taxes. The Series Fund is qualified as a regulated
investment company under Section 851 of the Internal Revenue Code and
distributes substantially all of each portfolio's net investment income and
realized gains from securities transactions to the respective subaccounts, which
immediately reinvest it. For each taxable year in which it and each of its
portfolios so qualify, the Series Fund will not be subject to tax on net
investment income and realized gains from securities transactions distributed to
shareholders.

Custodian and Transfer Agent. Chemical Bank, 4 New York Plaza, New York, N.Y.
10004, is the custodian of the assets held by all the portfolios, except the
Global Equity Portfolio, and is authorized to use the facilities of the
Depository Trust Company and the facilities of the book-entry system of the
Federal Reserve Bank with respect to securities held by these portfolios.
Chemical Bank is also authorized to use the facilities of the Mortgage Backed
Security Clearing Corporation (a subsidiary of the Midwest Stock Exchange) with
respect to mortgage-backed securities held by any of these portfolios. Chemical
Bank maintains certain financial and accounting books and records pursuant to an
agreement with the Series Fund. Brown Brothers Harriman & Co. ("Brown
Brothers"), 40 Water Street, Boston, MA 02109, is the custodian of the assets of
the Global Equity Portfolio. Brown Brothers employs subcustodians, who were
approved by the directors of the Series Fund in accordance with regulations of
the Securities and Exchange Commission, for the purpose of providing custodial
service for the Global Equity Portfolio's foreign assets held outside the United
States. Morgan Guaranty Trust Company, 60 Wall Street, New York, NY 10260 is the
custodian of the assets held in connection with repurchase agreements entered
into by the portfolios and is authorized to use the facilities of the book-entry
system of the Federal Reserve Bank. The directors of the Series Fund monitor the
activities of the custodians and the subcustodians.

The Prudential is the transfer agent and dividend-disbursing agent for the
Series Fund. The Prudential as transfer agent issues and redeems shares of the
Series Fund and maintains records of ownership for the shareholders.

<PAGE>

Experts. The financial statements of the Series Fund included in this statement
of additional information and the FINANCIAL HIGHLIGHTS included in the
prospectus have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report appearing herein and are included in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing. Deloitte & Touche LLP's principal business address is Two Hilton
Court, Parsippany, NJ 07054-0319.

Licenses. As part of the Investment Advisory Agreement, The Prudential has
granted the Series Fund a royalty- free, non-exclusive license to use the words
"The Prudential" and its registered service mark of a rock representing the Rock
of Gibraltar. However, The Prudential may terminate this license if The
Prudential or a company controlled by it ceases to be the Series Fund's
investment advisor. The Prudential may also terminate the license for any other
reason upon 60 days written notice; but, in this event, the Investment Advisory
Agreement shall also terminate 120 days following receipt by the Series Fund of
such notice, unless a majority of the outstanding voting securities of the
Series Fund vote to continue the Agreement notwithstanding termination of the
license.

The Series Fund is not sponsored, endorsed, sold or promoted by Standard &
Poor's ("S&P"). S&P makes no representation or warranty, express or implied, to
Contract owners or any member of the public regarding the advisability of
investing in securities generally or in the Series Fund particularly or the
ability of the S&P 500 Index or the S&P SmallCap 600 Index to track general
stock market performance. S&P's only relationship to the Series Fund is the
licensing of certain trademarks and trade names of S&P and the S&P 500 Index.
The S&P 500 Index and the S&P SmallCap 600 Index are determined, composed and
calculated by S&P without regard to the Series Fund, the Stock Index Portfolio
or the Small Capitalization Stock Portfolio. S&P has no obligation to take the
needs of the Series Fund or the Contract owners into consideration in
determining, composing or calculating the S&P 500 Index or the S&P SmallCap 600
Index. S&P is not responsible for and has not participated in the determination
of the prices and amount of the Series Fund shares or the timing of the issuance
or sale of those shares or in the determination or calculation of the equation
by which the shares are to be converted into cash. S&P has no obligation or
liability in connection with the administration, marketing or trading of the
Series Fund Shares.

S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500
INDEX, THE S&P SMALLCAP 600 INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL
HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES
NO WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY SERIES FUND,
CONTRACT OWNERS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500
INDEX, THE S&P SMALLCAP 600 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO
EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
S&P 500 INDEX, THE S&P SMALLCAP 600 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY
SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS),
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

DIRECTORS AND OFFICERS OF THE PRUDENTIAL AND MANAGEMENT OF THE SERIES FUND

DIRECTORS AND OFFICERS OF THE PRUDENTIAL

The directors and certain officers of The Prudential, listed with their
principal occupations during the past 5 years, are shown below.

DIRECTORS OF THE PRUDENTIAL

JAMES G. AFFLECK, Director.--Director and Former Chairman of the Board,
American Cyanamid Co. Address: P.O. Box 477, East Dorset, VT 05253.

FRANKLIN E. AGNEW. Director. -- Business Consultant and former Senior Vice
President of H.J. Heinz. Address: One Mellon Bank Center, Suite 2120,
Pittsburgh, PA 15219.

ROBERT A. BECK, Director.-- Chairman Emeritus of The Prudential. Address:
Prudential Plaza, Newark, NJ 07102- 3777.

FREDERIC K. BECKER, Director. -- President of Wilentz, Goldman, and Spitzer
(law firm). Address: 90 Woodbridge Center Drive, Woodbridge, NJ 07095.

WILLIAM W. BOESCHENSTEIN, Director.--Director, Owens-Corning Fiberglas
Corporation. Address: Fiberglas Tower, Toledo, OH 43659.

LISLE C. CARTER, JR., Director.--Former Senior Vice President and General
Counsel, United Way of America. Address: 1307 Fourth Street, S.W.,
Washington, DC 20024.

<PAGE>

JAMES G. CULLEN, Director.--President, Bell Atlantic Corporation since 1993;
Prior to 1993: President, New Jersey Bell. Address: 1301 North Court House
Road, 11th floor, Alexandria, VA 22201.

CAROLYNE K. DAVIS, Director.--Health Care Advisor, Ernst & Young. Address:
1200 Nineteenth Street, N.W., 4th floor, Washington, DC 20024.

ROGER A. ENRICO, Director.--Vice Chairman, Pepsi Co. Inc. since 1993; 1991 to
1993: Chairman and Chief Executive Officer, Pepsi Co. Worldwide Foods; Prior
to 1991: President and Chief Executive Officer, Pepsi Co. Worldwide Beverages.
Address: 7701 Legacy Drive, Plano, TX 75024.

WILLIAM H. GRAY, III, Director.--President and Chief Executive Officer, United
Negro College Fund, Inc. since 1991; Prior to 1991: United States
Representative for Pennsylvania's 2nd District. Address: 500 East 62nd
Street, New York, NY 10021.

JON F. HANSON, Director.--Chairman, Hampshire Management Co. Address: 235
Moore Street, Suite 200, Hackensack, NJ 07601.

CONSTANCE J. HORNER, Director.--Guest Scholar, The Brookings Institution since
1993; 1991 to 1993: Assistant to the President and Director of Presidential
Personnel, U.S. Government; Prior to 1991: Deputy Secretary, Department of
Health and Human Services. Address: 1775 Massachusetts Avenue, N.W.,
Washington, DC 20036- 2188.

ALLEN F. JACOBSON, Director.--Former Chairman and Chief Executive Officer,
Minnesota Mining & Manufacturing Co. Address: 30 Seventh Street East, St.
Paul, MN 55101-4901.

GARNETT L. KEITH, JR., Director and Vice Chairman.--Vice Chairman of The
Prudential. Address: Prudential Plaza, Newark, NJ 07102-3777.

BURTON G. MALKIEL, Director.--Chemical Bank Chairman's Professor of Economics,
Princeton University. Address: Princeton University, Department of Economics,
110 Fisher Hall, Prospect Avenue, Princeton, NJ 08544- 1021.

JOHN R. OPEL, Director.--Chairman of the Executive Committee, International
Business Machines Corporation. Address: 590 Madison Avenue, New York, NY
10022.

DONALD E. PROCKNOW, Director.--Former Vice Chairman and Chief Operating
Officer, AT&T Technologies, Inc. Address: 18 Saw Mill Road, Saddle River, NJ
07458.

ARTHUR F. RYAN, Chairman of the Board, President, and Chief Executive Officer.
- --Chairman of the Board, President, and Chief Executive Officer, The
Prudential since 1994; Prior to 1994, President and Chief Operating Officer,
Chase Manhattan Corporation. Address: 751 Broad Street, Newark, NJ
07102-3777.

RICHARD M. THOMSON, Director.--Chairman of the Board and Chief Executive
Officer, The Toronto-Dominion Bank. Address: P.O. Box 1, Toronto-Dominion
Centre, Toronto, Ontario, M5K 1A2, Canada.

P. ROY VAGELOS, M.D., Director.--Chairman, President and Chief Executive
Officer, Merck & Co., Inc. Address: 126 East Lincoln Avenue, Rahway, NJ
07065.

STANLEY C. VAN NESS, Director.--Attorney, Picco Mack Herbert Kennedy Jaffe
Perrella and Yoskin (law firm). Address: One State Street Square, Suite 1000,
Trenton, NJ 08607-1388.

PAUL A. VOLCKER, Director.--Chairman, James D. Wolfensohn, Inc. Address: 599
Lexington Avenue, New York, NY 10022.

JOSEPH H. WILLIAMS, Director.--Chairman of the Board, The Williams Companies
since 1994; Prior to 1994: Chairman and Chief Executive Officer, The Williams
Companies. Address: P.O. Box 2400, Tulsa, OK 74102.

OTHER EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS

DOROTHY K. LIGHT, Vice President and Secretary.--Vice President and Secretary
of The Prudential.

EUGENE M. O'HARA, Senior Vice President and Comptroller.--Senior Vice
President and Comptroller of The Prudential.

MARTIN PFINSGRAFF, Vice President and Treasurer.--Vice President and Treasurer
of The Prudential since 1991; Appointed to the Board of Directors of The
Prudential in 1994. Senior Vice President, Mellon Bank.

<PAGE>

MANAGEMENT OF THE SERIES FUND

The names of all directors and officers of the Series Fund and the principal
occupation of each during the last 5 years are shown below. Unless otherwise
stated, the address of each director and officer is Prudential Plaza, Newark,
New Jersey 07102-3777.

ROBERT P. HILL*, Chairman of the Board--Executive Vice President of The
Prudential.

E. MICHAEL CAULFIELD*, President and Director--President of Prudential
Preferred Financial Services since 1993; prior to 1993: President of
Prudential Property and Casualty Insurance.

SAUL K. FENSTER, Director--President of New Jersey Institute of Technology.
Address: 323 Martin Luther King Boulevard, Newark, New Jersey 07102.

W. SCOTT McDONALD, JR., Director--Executive Vice President of Fairleigh
Dickinson University since 1991: Prior to 1991: Executive Vice President of
Drew University. Address: 23 Forest Road, Madison, New Jersey 07940.

JOSEPH WEBER, Director--Vice President, Interclass (international corporate
learning). Address: 37 Beachmont Terrace, North Caldwell, New Jersey 07006.

MENDEL A. MELZER, Vice President--Senior Vice President and Chief Financial
Officer of Prudential Preferred Financial Services since 1993; 1991 to 1993:
Managing Director, The Prudential Investment Corporation; Prior to 1991:
Senior Vice President, Prudential Capital Corporation.

STEPHEN P. TOOLEY, Comptroller--Vice President and Comptroller of Prudential
Insurance and Financial Services since 1993; Prior to 1993: Director, Financial
Analysis of The Prudential.

THOMAS C. CASTANO, Secretary and Treasurer--Assistant General Counsel of The
Prudential since 1993; Prior to 1993: Assistant General Counsel of Pruco Life
Insurance Company.

No director or officer of the Series Fund who is also an officer, director or
employee of The Prudential or its affiliates is entitled to any remuneration
from the Series Fund for services as one of its directors or officers. Each
director of the Series Fund who is not an interested person of the Series Fund
will receive a fee of $2,000 per year plus $200 per portfolio for each meeting
of the Board attended and will be reimbursed for all expenses incurred in
connection with attendance at meetings.

*These members of the Board are interested persons of The Prudential, its
affiliates or the Series Fund as defined in the 1940 Act. Certain actions of the
Board, including the annual continuance of the Investment Advisory Agreement
between the Series Fund and The Prudential, must be approved by a majority of
the members of the Board who are not interested persons of The Prudential, its
affiliates or the Series Fund. Mr. Hill and Mr. Caulfield, two of the five
members of the Board, are interested persons of The Prudential and the Series
Fund, as that term is defined in the 1940 Act, because they are officers and/or
affiliated persons of The Prudential, the investment advisor to the Series Fund.
Messrs. Fenster, McDonald, and Weber are not interested persons of The
Prudential, its affiliates or the Series Fund. However, Mr. Fenster is President
of the New Jersey Institute of Technology. The Prudential has issued a group
annuity contract to the Institute and provides group life and group health
insurance to its employees.

<PAGE>

FINANCIAL STATEMENTS OF THE PRUDENTIAL SERIES FUND, INC.

THE PRUDENTIAL SERIES FUND, INC. SCHEDULE OF INVESTMENTS

To be filed Pursuant to Rule 485(b)

<PAGE>

PART II

OTHER INFORMATION

<PAGE>

UNDERTAKING TO FILE REPORTS

Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned Registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents, and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
in that section.

UNDERTAKING WITH RESPECT TO INDEMNIFICATION

The Prudential Directors' and Officers' Liability and Corporation Reimbursement
Program, purchased by The Prudential from National Union Fire Insurance Company
of Pittsburgh, PA, Federal Insurance Company (Chubb), Corporate Officers &
Directors Assurance Ltd., Aetna Casualty & Surety Company, XL Insurance Company,
Ltd., and A.C.E. Insurance Company, Ltd. provides coverage for "Loss" (as
defined in the policies) arising from any claim or claims by reason of any
breach of duty, neglect, error, misstatement, misleading statement, omission or
act done by persons while acting in their capacity as directors or officers of
The Prudential, any of its subsidiaries, or certain investment companies
affiliated with The Prudential, or any matter claimed against such persons
solely by reason of their being such a director or officer. The coverage is
provided to The Prudential to the extent that The Prudential, its subsidiaries,
including its investment company subsidiaries shall be required or permitted
according to applicable law, common or statutory, or under their respective
charters or by-laws, to indemnify directors or officers for Loss arising from
the above-described matters. Coverage is also provided to the individual
directors or officers for such Loss, for which they shall not be indemnified.
Loss essentially is the legal liability on claims against a director or officer,
including damages, judgments, settlements, costs, charges and expenses
(excluding salaries of officers or employees) incurred in the defense of
actions, suits or proceedings and appeals therefrom. Loss does not include fines
or penalties imposed by law, exemplary damages, or other matters which may be
deemed uninsurable under the law pursuant to which the policies are construed.

There are a number of exclusions from coverage. Among the matters excluded are
Losses arising as the result of (1) claims brought about or contributed to by
the criminal or deliberate fraudulent acts of a director or officer, and (2)
claims for an accounting of profits in fact made from the purchase or sale by a
director or officer of any securities of the insured corporations within the
meaning of Section 16(b) of the Securities Exchange Act of 1934 and amendments
thereto or similar provisions of any state statutory law.

The limit of coverage under the Program for both individual and corporate
reimbursement coverage is $100,000,000, except as it relates to coverage for
fiduciary liability of directors and officers relating to Prudential employee
benefit plans, for which the limit of coverage is $80,000,000. The retention for
corporate reimbursement coverage is $5,000,000 per loss.

As noted above, coverage is provided to the extent permitted or required by
applicable law or corporate charters and by-laws. The relevant provisions of New
Jersey law, New Jersey being the state of organization of The Prudential, can be
found in Section 14A:3-5 of the New Jersey Statutes Annotated. The text of The
Prudential's by-law 27, which relates to indemnification of officers and
directors, is incorporated by reference to Exhibit 1.A.(6)(b) to this
Registration Statement.

Insofar as indemnification for liabilities 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.

II-1

<PAGE>

CONTENTS OF REGISTRATION STATEMENT

This Registration Statement comprises the following papers and documents:

The facing sheet.

Cross-reference to items required by Form N-8B-2.

The prospectus consisting of 50 pages.

The statement of additional information consisting of 38 pages.

The undertaking to file reports.

The undertaking with respect to indemnification.

The signatures.

Written consents of the following persons:

None.

The following exhibits:

1. The following exhibits correspond to those required by paragraph A of the
instructions as to exhibits in Form N-8B-2:

A. (1) Resolution of Board of Directors of The Prudential Insurance Company
of America establishing The Prudential Variable Appreciable Account.
(Note 4)
(2) Not Applicable.
(3) Distributing Contracts:
(a) Distribution Agreement between Pruco Securities Corporation and
The Prudential Insurance Company of America. (Note 9)
(b) Proposed form of Agreement between Pruco Securities Corporation
and independent brokers with respect to the Sale of the
Contracts. (Note 4)
(c) Schedules of Sales Commissions. (Note 3)
(4) Not Applicable.
(5) Variable Appreciable Life Insurance Contracts: (Note 2)
(a) With fixed death benefit for use in New Jersey and domicile
approval states.
(b) With variable death benefit for use in New Jersey and domicile
approval states.
(c) With fixed death benefit for use in non-domicile approval
states.
(d) With variable death benefit for use in non-domicile approval
states.
(6) (a) Charter of The Prudential Insurance Company of America, as
amended February 26, 1988. (Note 7)
(b) By-laws of The Prudential Insurance Company of America, as
amended November 14, 1989. (Note 9)
(7) Not Applicable.
(8) Not Applicable.
(9) Not Applicable.
(10) (a) Application Form for Variable Appreciable Life Insurance
Contract. (Note 3)
(b) Supplement to the Application for Variable Appreciable Life
Insurance Contract. (Note 3)
(11) Form of Notice of Withdrawal Right. (Note 2)
(12) Memorandum describing The Prudential's issuance, transfer, and
redemption procedures for the Contracts pursuant to Rule
6e-3(T)(b)(12)(iii) and method of computing adjustments in payments
and cash surrender values upon conversion to fixed-benefit policies
pursuant to Rule 6e-3(T)(b)(13)(v)(B). (Note 3)
(13) Available Contract Riders and Endorsements:
(a) Rider for Insured's Waiver of Premium Benefit. (Note 3)
(b) Rider for Applicant's Waiver of Premium Benefit. (Note 3)
(c) Rider for Insured's Accidental Death Benefit. (Note 3)
(d) Rider for Level Term Insurance Benefit on Life of Insured.
(Note 3)
II-2

<PAGE>

(e) Rider for Decreasing Term Insurance Benefit on Life of Insured.
(Note 3)
(f) Rider for Interim Term Insurance Benefit. (Note 3)
(g) Rider for Option to Purchase Additional Insurance on Life of
Insured. (Note 3)
(h) Rider for Decreasing Term Insurance Benefit on Life of Insured
Spouse. (Note 3)
(i) Rider for Level Term Insurance Benefit on Dependent Children.
(Note 3)
(j) Rider for Level Term Insurance Benefit on Dependent
Children--from Term Conversions. (Note 3)
(k) Rider for Level Term Insurance Benefit on Dependent
Children--from Term Conversions or Attained Age Change. (Note 3)
(l) Endorsement defining Insured Spouse. (Note 3)
(m) Rider covering lack of Evidence of Insurability on a Child.
(Note 3)
(n) Rider modifying Waiver of Premium Benefit. (Note 3)
(o) Rider to terminate a Supplementary Benefit. (Note 3)
(p) Rider providing for election of Variable Reduced Paid-up
Insurance. (Note 3)
(q) Rider to provide for exclusion of Aviation Risk. (Note 3)
(r) Rider to provide for exclusion of Military Aviation Risk.
(Note 3)
(s) Rider to provide for exclusion for War Risk. (Note 3)
(t) Rider to provide for Reduced Paid-up Insurance. (Note 3)
(u) Rider providing for Option to Exchange Policy. (Note 3)
(v) Endorsement defining Ownership and Control of the Contract.
(Note 3)
(w) Rider providing for Modification of Incontestability and Suicide
Provisions. (Note 3)
(x) Endorsement issued in connection with Non-Smoker Qualified
Contracts. (Note 3)
(y) Endorsement issued in connection with Smoker Qualified
Contracts. (Note 3)
(z) Home Office Endorsement. (Note 3)
(aa) Endorsement showing Basis of Computation for Non-Smoker
Contracts. (Note 3)
(bb) Endorsement showing Basis of Computation for Smoker Contracts.
(Note 3)
(cc) Rider for Term Insurance Benefit on Life of Insured--Decreasing
Amount After Three Years. (Note 3)
(dd) Rider for Renewable Term Insurance Benefit on Life of Insured.
(Note 3)
(ee) Rider for Level Term Insurance Benefit on Life of Insured
Spouse. (Note 2)
(ff) Living Needs Benefit Rider
(i) for use in Florida. (Note 10)
(ii) for use in all approved jurisdictions except Florida and
New York. (Note 10)
(iii) for use in New York. (Note 15)
(gg) Rider for Renewable Term Insurance Benefit on Life of Insured
Spouse. (Note 12)
(hh) Rider for Level Term Insurance Benefit on Life of
Insured--Premium Increases Annually. (Note 12)
(ii) Rider for Term Insurance Benefit on Life of Insured--Decreasing
Amount. (Note 14)
(jj) Rider for a Level Premium Option. (Note 15)
(kk) Payment of Unscheduled Premium Benefit (Note 16)
(ll) Rider for Scheduled Term Insurance Benefit on Life of Insured.
(Note 16)

(mm) Endorsement altering the Assignment provision. (Note 1)

2. See Exhibit 1.A.(5).

3. Opinion and Consent of ___________________ as to the legality of the
securities being registered. (Note 18)

4. None.

5. Not Applicable.

6. Opinion and Consent of Nancy D. Davis, FSA, MAAA, as to actuarial matters
pertaining to the securities being registered. (Note 18)

7. The Prudential's representations regarding mortality and expense risks and
sales loads. (Note 2)

8. Indemnification Agreement. (Note 15)

II-3

<PAGE>

9. Powers of Attorney.

(a) J. Affleck, R. Beck, W. Boeschenstein
L. Carter, Jr., J. Cullen, C. Davis
R. Enrico, W. Gray, III, J. Hanson,
C. Horner, A. Jacobson,
G. Keith, Jr., B. Malkiel,
E. O'Hara, J. Opel, D. Procknow,
R. Thomson, P. Vagelos, S. Van Ness
P. Volker, J. Williams (Note 17)

(b) F. Agnew, F. Becker, A. Ryan (Note 1)

(Note 1) Filed herewith.
(Note 2) Incorporated by reference to Pre-Effective Amendment No. 1 to this
Registration Statement, filed June 15, 1988.
(Note 3) Incorporated by reference to Registrant's Form S-6, filed February
4, 1988.
(Note 4) Incorporated by reference to Form S-6, Registration No. 33-20000,
filed February 4, 1988, on behalf of The Prudential Variable Life
Insurance Account.
(Note 5) Incorporated by reference to Form N-8B-2, File Number 2-80897,
filed December 15, 1982, on behalf of The Prudential Individual
Variable Contract Account.
(Note 6) Incorporated by reference to Post-Effective Amendment No. 1 to
this Registration Statement, filed September 1, 1988.
(Note 7) Incorporated by reference to Post-Effective Amendment No. 2 to
this Registration Statement, filed March 2, 1989.
(Note 8) Incorporated by reference to Post-Effective Amendment No. 3 to
this Registration Statement, filed April 28, 1989.
(Note 9) Incorporated by reference to Post-Effective Amendment No. 4 to
this Registration Statement, filed March 2, 1990.
(Note 10) Incorporated by reference to Post-Effective Amendment No. 5 to
this Registration Statement, filed March 30, 1990.
(Note 11) Incorporated by reference to Post-Effective Amendment No. 22 to
Form S-1, Registration No. 2-56179, filed April 27, 1989, on behalf
of The Prudential Insurance Company of America Variable Contract
Account--Investment Fund.
(Note 12) Incorporated by reference to Post-Effective Amendment No. 6 to
this Registration Statement, filed March 1, 1991.
(Note 13) Incorporated by reference to Post-Effective Amendment No. 8 to
this Registration Statement, filed December 30, 1991.
(Note 14) Incorporated by reference to Post-Effective Amendment No. 9 to
this Registration Statement, filed March 12, 1992.
(Note 15) Incorporated by reference to Post-Effective Amendment No. 11 to
this Registration Statement, filed April 8, 1993.
(Note 16) Incorporated by reference to Post-Effective Amendment No. 12 to
this Registration Statement, filed March 2, 1994.

(Note 17) Incorporated by reference to Post-Effective Amendment No. 13 to
this Registration Statement, filed April 26, 1994.
(Note 18) To be filed by Post-Effective Amendment.

II-4

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant, The
Prudential Variable Appreciable Account, has duly caused this Post-Effective
Amendment No. 14 to the Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized, and its seal hereunto affixed and
attested, all in the city of Newark and the State of New Jersey, on this 30th
day of January, 1995.

(Seal)The Prudential Variable Appreciable Account
(Registrant)

By: The Prudential Insurance Company of America
(Depositor)

Attest:/s/ Thomas C. Castano By:/s/ Esther H. Milnes
Thomas C. Castano Esther H. Milnes
Assistant Secretary President

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 14 to the Registration Statement has been signed below by the
following persons in the capacities indicated on this 30th day of January, 1995.

Signature and Title

/s/ *
- -------------------------------------------
Arthur F. Ryan
Chairman of the Board, Chairman and Chief
Executive Officer

/s/ *
- -------------------------------------------
Garnett L. Keith
Vice Chairman and Director

/s/ * *By: /s/ Thomas C. Castano
- ------------------------------------------- ------------------------
Eugene M. O'Hara . Thomas C. Castano
Senior Vice President and Comptroller and (Attorney-in-Fact)
Chief Executive Officer

/s/ *
- -------------------------------------------
James G. Affleck
Director

/s/ *
- -------------------------------------------
Franklin A. Agnew
Director

/s/ *
- -------------------------------------------
Robert A. Beck
Director

/s/ *
- -------------------------------------------
Frederic K. Becker
Director

/s/ *
- -------------------------------------------
William W. Boeschenstein
Director

/s/ *
- -------------------------------------------
Lisle C. Carter, Jr.
Director

II-5

<PAGE>

/s/ *
- -------------------------------------------
James G. Cullen
Director

/s/ *
- -------------------------------------------
Carolyne K. Davis
Director

/s/ *
- -------------------------------------------
Roger A. Enrico
Director

/s/ * *By: /s/ Thomas C. Castano
- ------------------------------------------- ------------------------
William H. Gray, III Thomas C. Castano
Director (Attorney-in-Fact)

/s/ *
- -------------------------------------------
Jon F. Hanson
Director

/s/ *
- -------------------------------------------
Constance J. Horner
Director

/s/ *
- -------------------------------------------
Allen F. Jacobson
Director

/s/ *
- -------------------------------------------
Burton G. Malkiel
Director

/s/ *
- -------------------------------------------
John R. Opel
Director

/s/ *
- -------------------------------------------
Donald E. Procknow
Director

/s/ *
- -------------------------------------------
Richard M. Thompson
Director

/s/ *
- -------------------------------------------
P. Roy Vagelos, M.D.
Director

/s/ *
- -------------------------------------------
Stanley C. Van Ness
Director

/s/ *
- -------------------------------------------
Paul A. Volcker
Director

/s/ *
- -------------------------------------------
Joseph H. Williams
Director

II-6

<PAGE>

EXHIBIT INDEX

1.A.(13)(mm) Endorsement altering the Assignment provision Page II-8
9(b) Powers of Attorney:
F. Agnew, F. Becker, A. Ryan Page II-9

II-7

Exhibit 1.A.(13)(mm)

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

ENDORSEMENTS

(Only we can endorse this contract.)

ALTERATION OF TEXT

The provision of this contract entitled "Assignment" is replaced
at issue by the following:

Assignment We will not be deemed to know of an assignment unless we receive
it, or a copy of it, at our Home Office. We are not obliged to
see that an assignment is valid or sufficient. This contract may
not be assigned to any employee benefit plan or program without
our consent. This contract may not be assigned if such assignment
would violate any federal, state, or local law or regulation
prohibiting sex distinct rates for insurance.

The Prudential Insurance Company of America,

By Dorothy K. Light
Secretary

- --------------
ORD 89224-94
- --------------

II-8

Exhibit 9(b)

POWER OF ATTORNEY

Know all men by these present:

That I, Mr. Frederic K. Becker , of Short Hills, New Jersey , a member of
the Board of Directors of The Prudential Insurance company of America, do hereby
make, constitute and appoint as my true and lawful attorneys in fact DOROTHY K.
LIGHT, THERESA B. BAKER, ROSANNE J. BARUH, THOMAS C. CASTANO, MARY L. CAVANAUGH,
JOHN P. GUALTIERI, JR., TIMOTHY P. HARRIS, COLLEEN P. KELLY, CHRISTINE PHAM
JACKEL, BERNARD V. PETERSON, MICHELE RANGE, ANDREW M. SHAINBERG and GEORGE S.
SHIVELY or any of them severally for me and in my name, place and stead to sign,
where applicable: Annual Reports on Form 10-K, registration statements on the
appropriate forms prescribed by the Securities and Exchange Commission, and any
other periodic documents and reports required under the Investment Company Act
of 1940, the Securities Act of 1933 and all amendments thereto executed on
behalf of The Prudential Insurance Company of America and filed with the
Securities and Exchange Commission for the following:

The Prudential Variable Contract Account-2 and group variable annuity
contracts, to extent they represent participating interest in said Account;

The Prudential Variable Contract Account-10 and group annuity contracts, to
extent they represent participating interests in said Account;

The Prudential Variable Contract Account-11 and group annuity contracts, to
extent they represent participating interests in said Account;

The Prudential Variable Contract Account-24 and group annuity contracts, to
extent they represent participating interests in said Account;

The Prudential Variable contract Real Property Account and individual
variable life insurance and annuity contracts, to the extent they represent
participating interest in said Account;

Prudential's Investment Plan Account and Systematic Investment Plan
Contracts, to the extent they represent participating interests in said
Account, and shares of the Common Stock of Prudential's Gibraltar Fund;

Prudential's Annuity Plan Account and Variable Annuity Contracts, to the
extent they represent participating interests in said Account, and shares
of the Common Stock of Prudential's Gibraltar Fund;

Prudential's Annuity Plan Account-2 and Variable Annuity Contracts, to the
extent they represent participating interests in said Account, and shares
of the Common Stock of Prudential's Gibraltar Fund;

II-9

<PAGE>

- 2 -

Group variable retirement annuity contracts, to the extent they represent
participating interest in Prudential's Variable Contract Account--
Investment Fund;

The Prudential Individual Variable Contract Account and Individual Variable
Annuity Contracts, to the extent they represent participating interests in
said Account;

The Prudential Qualified Individual Variable Contract Account and
Individual Variable Annuity Contracts, to the extent they represent
participating interests in said Account;

The Prudential Variable Appreciable Account and Variable Appreciable Life
Insurance Contracts, to the extent they represent participating interests
in said Account; and

The Prudential Variable Life Insurance Account and Variable Life Insurance
Contracts, to the extent they represent participating interests in said
Account.

IN WITNESS WHEREOF, I have hereunto set my hand this 12th day of July, 1994.

/s/ Frederic K. Becker
---------------------
Signature
FREDERIC K. BECKER

State of NEW JERSEY )
) SS
County of MIDDLESEX )

On this 12th day of July, 1994 , before me personally appeared Frederic K.
Becker, to me known to me to be the person mentioned and described in and who
executed the foregoing instrument and duly acknowledged to me that (s)he
executed the same.

My commission expires:

/s/ Doreen Marino
---------------------
Notary Public
DOREEN MARINO
A Notary Public of New Jersey
My Commission Expires March 17, 1998

II-10

<PAGE>

POWER OF ATTORNEY

Know all men by these present:

That I, Mr. Arthur F. Ryan, of New York, New York, a member of the Board
of Directors of The Prudential Insurance company of America, do hereby make,
constitute and appoint as my true and lawful attorneys in fact DOROTHY K. LIGHT,
THERESA B. BAKER, ROSANNE J. BARUH, THOMAS C. CASTANO, MARY L. CAVANAUGH, JOHN
P. GUALTIERI, JR., TIMOTHY P. HARRIS, COLLEEN P. KELLY, CHRISTINE PHAM JACKEL,
BERNARD V. PETERSON, MICHELE RANGE, ANDREW M. SHAINBERG and GEORGE S. SHIVELY or
any of them severally for me and in my name, place and stead to sign, where
applicable: Annual Reports on Form 10-K, registration statements on the
appropriate forms prescribed by the Securities and Exchange Commission, and any
other periodic documents and reports required under the Investment Company Act
of 1940, the Securities Act of 1933 and all amendments thereto executed on
behalf of The Prudential Insurance Company of America and filed with the
Securities and Exchange Commission for the following:

The Prudential Variable Contract Account-2 and group variable annuity
contracts, to extent they represent participating interest in said Account;

The Prudential Variable Contract Account-10 and group annuity contracts, to
extent they represent participating interests in said Account;

The Prudential Variable Contract Account-11 and group annuity contracts, to
extent they represent participating interests in said Account;

The Prudential Variable Contract Account-24 and group annuity contracts, to
extent they represent participating interests in said Account;

The Prudential Variable contract Real Property Account and individual
variable life insurance and annuity contracts, to the extent they represent
participating interest in said Account;

Prudential's Annuity Plan Account and Variable Annuity Contracts, to the
extent they represent participating interests in said Account, and shares
of the Common Stock of Prudential's Gibraltar Fund;

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<PAGE>

- 2 -

Group variable retirement annuity contracts, to the extent they represent
participating interest in Prudential's Variable Contract Account--
Investment Fund;

The Prudential Individual Variable Contract Account and Individual Variable
Annuity Contracts, to the extent they represent participating interests in
said Account;

The Prudential Qualified Individual Variable Contract Account and
Individual Variable Annuity Contracts, to the extent they represent
participating interests in said Account;

The Prudential Variable Appreciable Account and Variable Appreciable Life
Insurance Contracts, to the extent they represent participating interests
in said Account; and

The Prudential Variable Life Insurance Account and Variable Life Insurance
Contracts, to the extent they represent participating interests in said
Account.

IN WITNESS WHEREOF, I have hereunto set my hand this 12th day of January,
1995.

/s/ Arthur F. Ryan
---------------------
Signature
ARTHUR F. RYAN
State of NEW JERSEY )
) SS
County of ESSEX )

On this 12th day of January, 1995, before me personally appeared Arthur
F. Ryan, to me known to me to be the person mentioned and described in and who
executed the foregoing instrument and duly acknowledged to me that (s)he
executed the same.

My commission expires:

/s/ Margaret D. McQuade
---------------------
Notary Public
MARGARET D. McQUADE
A Notary Public of New Jersey
My Commission Expires December 24, 1995

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<PAGE>

POWER OF ATTORNEY

Know all men by these present:

That I, Mr. Franklin E. Agnew, of Pittsburg, Pennsylvania, a member of
the Board of Directors of The Prudential Insurance company of America, do hereby
make, constitute and appoint as my true and lawful attorneys in fact DOROTHY K.
LIGHT, THERESA B. BAKER, ROSANNE J. BARUH, THOMAS C. CASTANO, MARY L. CAVANAUGH,
JOHN P. GUALTIERI, JR., TIMOTHY P. HARRIS, COLLEEN P. KELLY, CHRISTINE PHAM
JACKEL, BERNARD V. PETERSON, MICHELE RANGE, ANDREW M. SHAINBERG and GEORGE S.
SHIVELY or any of them severally for me and in my name, place and stead to sign,
where applicable: Annual Reports on Form 10-K, registration statements on the
appropriate forms prescribed by the Securities and Exchange Commission, and any
other periodic documents and reports required under the Investment Company Act
of 1940, the Securities Act of 1933 and all amendments thereto executed on
behalf of The Prudential Insurance Company of America and filed with the
Securities and Exchange Commission for the following:

The Prudential Variable Contract Account-2 and group variable annuity
contracts, to extent they represent participating interest in said Account;

The Prudential Variable Contract Account-10 and group annuity contracts, to
extent they represent participating interests in said Account;

The Prudential Variable Contract Account-11 and group annuity contracts, to
extent they represent participating interests in said Account;

The Prudential Variable Contract Account-24 and group annuity contracts, to
extent they represent participating interests in said Account;

The Prudential Variable contract Real Property Account and individual
variable life insurance and annuity contracts, to the extent they represent
participating interest in said Account;

Prudential's Annuity Plan Account and Variable Annuity Contracts, to the
extent they represent participating interests in said Account, and shares
of the Common Stock of Prudential's Gibraltar Fund;

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<PAGE>

- 2 -

Group variable retirement annuity contracts, to the extent they represent
participating interest in Prudential's Variable Contract Account--
Investment Fund;

The Prudential Individual Variable Contract Account and Individual Variable
Annuity Contracts, to the extent they represent participating interests in
said Account;

The Prudential Qualified Individual Variable Contract Account and
Individual Variable Annuity Contracts, to the extent they represent
participating interests in said Account;

The Prudential Variable Appreciable Account and Variable Appreciable Life
Insurance Contracts, to the extent they represent participating interests
in said Account; and

The Prudential Variable Life Insurance Account and Variable Life Insurance
Contracts, to the extent they represent participating interests in said
Account.

IN WITNESS WHEREOF, I have hereunto set my hand this 13th day of July,
1994.

/s/ Franklin E. Agnew
---------------------
Signature
FRANKLIN E. AGNEW

State of PENNSYLVANIA )
) SS
County of ALLEGHENY )

On this 13th day of July, 1994, before me personally appeared Franklin E.
Agnew, to me known to me to be the person mentioned and described in and who
executed the foregoing instrument and duly acknowledged to me that (s)he
executed the same.

My commission expires:

/s/ Karen M. Jenkins
---------------------
Notary Public
KAREN M. JENKINS, Notary Public
Pittsburgh, Allegheny County
My Commission Expires July 19, 1997
Member, Pennsylvania Association of Notaries

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