MERRILL LYNCH LIFE INSURANCE COMPANY, S-3, 2000-04-06

MERRILL LYNCH LIFE INSURANCE COMPANY
S-3, 2000-04-06

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 6, 2000

REGISTRATION NO. 333-

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM S-3

REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
------------------------

MERRILL LYNCH LIFE INSURANCE COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

ARKANSAS
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)

6312
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)

91-1325756
(I.R.S. EMPLOYER IDENTIFICATION NO.)

800 SCUDDERS MILL ROAD
PLAINSBORO, NEW JERSEY 08536
(609) 282-1429
(ADDRESS INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------

BARRY G. SKOLNICK, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
MERRILL LYNCH LIFE INSURANCE COMPANY
800 SCUDDERS MILL ROAD
PLAINSBORO, NEW JERSEY 08536
(609) 282-1429
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPY TO:
STEPHEN E. ROTH, ESQ.
KIMBERLY J. SMITH, ESQ.
SUTHERLAND ASBILL & BRENNAN LLP
1275 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, D.C. 20004

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]

Pursuant to Rule 429 under the Securities Act of 1933, the prospectus contained
herein also relates to Registration Statement No. 333-33863.

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SHARES TO BE AGGREGATE PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Modified Guaranteed Annuity Contracts and
Participating Interests Therein......... $100,000,000* ** $100,000,000*** $26,400***
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>

* Estimated solely for the purpose of determining the registration fee.

** The securities are not issued in predetermined amounts or units.

*** The amount previously registered in connection with File No. 333-33863 was
$66,014,500.

The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

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<PAGE> 2

PROSPECTUS

MAY 1, 2000

RATEMAX (SM)
MODIFIED GUARANTEED ANNUITY CONTRACT
ISSUED BY
MERRILL LYNCH LIFE INSURANCE COMPANY
Home Office: Little Rock, Arkansas 72201
Service Center: P.O. Box 44222, Jacksonville, Florida 32231-4222
4804 Deer Lake Drive East, Jacksonville, Florida 32246
Phone: (800) 535-5549
OFFERED THROUGH
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

This prospectus describes a modified guaranteed annuity contract issued by
Merrill Lynch Life Insurance Company.

An ANNUITY contract provides for a series of payments that are
made in regular intervals beginning on a specified date. A
MODIFIED GUARANTEED ANNUITY contract additionally provides that
fixed rates of interest will be credited to the contract for
specified periods of time (called guarantee periods). If you
make a withdrawal prior to the end of those periods, we will
adjust the value of your contract to reflect changes in market
interest rates.

To purchase a Contract, you must pay a single premium of at least $25,000. You
must then allocate your premium among one or more subaccounts, which grow at a
specified guaranteed rate of interest for the guarantee period. We currently
offer guarantee periods of three and five years.

PURCHASING THIS CONTRACT INVOLVES CERTAIN RISKS. WE WILL DEDUCT A WITHDRAWAL
CHARGE AND APPLY A MARKET VALUE ADJUSTMENT IF YOU MAKE A WITHDRAWAL OR ANNUITIZE
BEFORE THE END OF A GUARANTEE PERIOD. THE MARKET VALUE ADJUSTMENT MAY BE EITHER
POSITIVE OR NEGATIVE. ACCORDINGLY, THE VALUE OF YOUR CONTRACT COULD EITHER
INCREASE OR DECREASE AND YOU COULD LOSE A SUBSTANTIAL PORTION OF THE PREMIUM YOU
INVESTED. YOU SHOULD CAREFULLY CONSIDER YOUR INCOME NEEDS BEFORE PURCHASING A
CONTRACT.

WHEN YOU TAKE WITHDRAWALS FROM A SUBACCOUNT, A FEDERAL INCOME TAX IS IMPOSED ON
THE ENTIRE GAIN IN YOUR CONTRACT, NOT JUST THE GAIN FOR THAT SUBACCOUNT.
WITHDRAWALS BEFORE AGE 59 1/2 MAY ALSO INCUR A 10% FEDERAL PENALTY TAX.
CAREFULLY DISCUSS YOUR PERSONAL TAX SITUATION WITH YOUR ADVISORS BEFORE YOU
PURCHASE A CONTRACT.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION
NOR ANY STATE SECURITIES COMMISSION HAS APPROVED
OR DISAPPROVED OF THESE SECURITIES OR PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
<PAGE> 3

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
CAPSULE SUMMARY............................................. 3
DESCRIPTION OF THE CONTRACT................................. 5
THE CONTRACT........................................... 5
APPLICATION AND PREMIUM................................ 5
SUBACCOUNTS AND SUBACCOUNT VALUES...................... 5
Choices at the End of the Subaccount Guarantee
Period (the Renewal Date)......................... 5
How We Determine the Guaranteed Interest Rates for
Subaccounts....................................... 6
WITHDRAWALS............................................ 7
CHARGES................................................ 7
Withdrawal Charge................................. 7
Market Value Adjustment ("MVA")................... 8
Premium Taxes..................................... 10
DEATH BENEFIT PAYMENTS AND BENEFICIARIES............... 10
Beneficiaries..................................... 10
Death Before the Annuity Date..................... 10
Death After the Annuity Date...................... 10
ANNUITY PROVISIONS (ANNUITIZATION)..................... 11
OTHER PROVISIONS....................................... 13
Assignment........................................ 13
Notices and Elections............................. 13
Amendment of the Contract......................... 14
Free Look Right................................... 14
Guarantee of Contract............................. 14
DISTRIBUTION OF THE CONTRACTS............................... 14
FEDERAL INCOME TAXES........................................ 14
LEGAL PROCEEDINGS........................................... 18
LEGAL MATTERS............................................... 18
EXPERTS..................................................... 18
REGISTRATION STATEMENT...................................... 18
APPENDIX A.................................................. A-1
APPENDIX B.................................................. B-1
</TABLE>

2
<PAGE> 4

CAPSULE SUMMARY

THE CONTRACT

This prospectus describes an individual modified guaranteed annuity contract
issued by Merrill Lynch Life Insurance Company ("we" or "us").

APPLICATION

To purchase a Contract, you must provide certain information to a Merrill Lynch
Financial Consultant who will forward it to us. Alternatively, you may need to
complete and return a written application to our Service Center. We have the
right to reject any application.

PREMIUMS

We issue a Contract when we receive your premium payment. Generally, your single
premium must be at least $25,000. We may alter this minimum premium at various
times. You cannot make additional premium payments under the Contract.

SUBACCOUNTS

We maintain one or more subaccounts for the value of your Contract. Each
subaccount grows at a specified interest rate. We guarantee that we will credit
that interest rate for a specified period, called a Guarantee Period, that
corresponds to the subaccount. Currently, we offer Guarantee Periods of three
and five years. A one-year Guarantee Period is available at renewal only. You
must tell us how much of your premium payment you want us to put in each
subaccount. You must allocate at least $5,000 to each subaccount you choose. At
the end of the Guarantee Period (on the Renewal Date), you may transfer the
value of that subaccount to one or more new subaccounts.

CHARGES

WITHDRAWAL CHARGE

If you take a withdrawal from a subaccount before the end of its
Guarantee Period, we will deduct a withdrawal charge generally equal to
six percent of the amount withdrawn. We do not deduct a withdrawal charge
on death benefits. We also currently do not deduct a withdrawal charge
when we begin to make annuity payments.

MARKET VALUE ADJUSTMENT ("MVA")

If you take a withdrawal from a subaccount before the end of its
Guarantee Period, we will apply an MVA. We also apply an MVA at the time
we begin to make annuity payments if any subaccount has not reached the
end of its Guarantee Period. The MVA may be positive or negative and can
affect the value of your Contract. Generally, if current market interest
rates are higher than market interest rates at issue or renewal, the MVA
will be negative. If current market interest rates are lower than market
interest rates at issue or renewal, the MVA will be positive.

For death benefit payments, we only credit a positive MVA; we do not
deduct any negative MVA.

PREMIUM TAXES

We deduct any applicable state or local premium taxes when you annuitize.
Premium tax rates vary from jurisdiction to jurisdiction and currently
range from zero to 5%. In those jurisdictions that do not allow an
insurance company to reduce its current taxable premium income by the
amount of any withdrawal, surrender, or death benefit paid, we will also
deduct a charge for these taxes on any withdrawal, surrender, or death
benefit payment.

ANNUITY PAYMENTS

The annuity date is the day we begin to make payments under the Contract to the
annuitant. The annuity option determines the method and frequency under which we
make these payments. If your Contract is issued as part of a qualified
retirement plan, the annuity date is the date the annuitant reaches age 70 1/2.
If
3
<PAGE> 5

your Contract is nonqualified, it is the annuitant's 85th birthday. Your annuity
option at issue is a life annuity with payments guaranteed for 10 years.
However, you may change your annuity date and/or annuity option at any time
before we begin to make annuity payments. You cannot make full or partial
withdrawals or change your annuity option after we begin to make annuity
payments.

PAYMENT ON DEATH ("DEATH BENEFIT")

BEFORE THE ANNUITY DATE

If you die before the annuity date, we will pay the beneficiary the value
of the Contract plus any positive MVA as of the date of payment.

AFTER THE ANNUITY DATE

If an annuitant (other than you) dies after the annuity date, we will
make any remaining guaranteed annuity payments to you unless you request
that we pay you the present value of those payments in a lump sum. If you
die after the annuity date, we will make any remaining guaranteed annuity
payments to the beneficiary unless the beneficiary asks us to pay the
present value of those payments in a lump sum.

WITHDRAWALS

You may take withdrawals any time before we begin to make annuity payments.
Withdrawals are subject to tax and if taken prior to age 59 1/2 may also be
subject to a penalty tax. Certain CHARGES and required minimums apply to
withdrawals.

FREE LOOK

When you receive your Contract, you should review it carefully to make sure it
is what you intended to purchase. You may return the Contract for a premium
refund within ten days after you receive it. Some jurisdictions allow a longer
period to return the Contract. To receive a premium refund, you must return the
Contract to our Service Center or to your Merrill Lynch Financial Consultant.

MERRILL LYNCH LIFE INSURANCE COMPANY

We issue the Contract. Our home office is in Little Rock, Arkansas. Our Service
Center's address and phone number are P.O. Box 44222, Jacksonville, Florida
32231-4222, (800) 535-5549.

You should address all communications concerning your Contract to our Service
Center.

4
<PAGE> 6

DESCRIPTION OF THE CONTRACT

THE CONTRACT

The Contract is a single premium, individual modified guaranteed annuity
contract. The Contract states your rights and benefits as the owner. We may
issue the Contract in connection with either qualified or nonqualified plans.
Qualified plans include Individual Retirement Annuities or Individual Retirement
Accounts ("IRAs") and Simplified Employee Pensions ("SEPs").

The tax advantages typically provided by an annuity are already available with
tax-qualified plans, including IRAs and Roth IRAs. You should carefully consider
the advantages and disadvantages of owning an annuity in a tax-qualified plan,
including the costs and benefits of the Contract (including the annuity income
benefits), before you purchase the Contract in a tax-qualified plan.

APPLICATION AND PREMIUM

You can purchase a Contract by providing certain information to a Merrill Lynch
Financial Consultant who will then forward the information to us. After we issue
the Contract, you will need to confirm in writing the information you provided.
In certain situations, such as when the Contract you purchase will replace
another contract, we may require that you complete and send a written
application to our Service Center. We can reject any application.

We will issue a Contract to you in exchange for a premium payment of at least
$25,000. The maximum premium you can pay without our consent is $500,000. You
must send the premium to our Service Center. You cannot make additional premium
payments under the Contract.

SUBACCOUNTS AND SUBACCOUNT VALUES

Your Contract consists of one or more subaccounts. You must tell us how to
distribute your premium payment among these subaccounts. The minimum amount you
can put in a subaccount is $5,000.

Each subaccount grows at a specified guaranteed rate of interest. The initial
rates that will apply to your subaccounts are those in effect on the day we
receive your premium. We guarantee that we will credit the specified interest
rate to the subaccount for the designated number of years you select, called the
Guarantee Period. Currently, we offer two Guarantee Periods -- three years and
five years. A one-year Guarantee Period is also available, but only at renewal.
We can change the number of Guarantee Periods that we offer at any time.

The end of the Guarantee Period for a particular subaccount is its "Renewal
Date." You cannot change the Guarantee Period or make a transfer to different
subaccount before the Renewal Date.

We credit the guaranteed interest rate for a subaccount daily (except on
February 29th). The Subaccount Value initially equals the amount of premium that
you allocate to or the amount you reinvest in a subaccount. The Subaccount Value
will then vary depending on the interest credited to that subaccount, any Market
Value Adjustment applied (see MVA), and any withdrawals and Withdrawal Charges
(see WITHDRAWALS). The sum of all the Subaccount Values is your Contract Value.
We will compound interest earned on each Contract anniversary.

The following is an example of how you can allocate a $25,000 single premium on
May 1, 2000 among two subaccounts, and shows Subaccount Values as of each
Renewal Date assuming no withdrawals.

<TABLE>
<CAPTION>
SUBACCOUNT SUBACCOUNT VALUE
AMOUNT ALLOCATED INTEREST RATE GUARANTEE PERIOD RENEWAL DATE AS OF RENEWAL DATE
<S> <C> <C> <C> <C>
$15,000 5.85% Three Years May 1, 2003 $17,789.50
$10,000 6.00% Five Years May 1, 2005 $13,382.26
</TABLE>

CHOICES AT THE END OF THE SUBACCOUNT GUARANTEE PERIOD (THE RENEWAL DATE)

We will send you a notice at least 45 days, but not more than 60 days,
before a subaccount's Renewal Date. Currently, you may notify us no later
than five business days after the Renewal

5
<PAGE> 7

Date that you wish to transfer the Subaccount Value to one or more new
subaccounts. You can choose any of the Guarantee Periods offered on the
Renewal Date, but cannot choose one that will extend beyond the annuity
date. You must transfer at least $5,000 to any one subaccount or the
entire Subaccount Value if less than $5,000. The transfer takes effect as
of the Renewal Date. The interest rate(s) for the Guarantee Period(s) you
choose will be those in effect for renewals on the Renewal Date. The
interest rates for renewals may not be the same as the interest rates for
subaccounts of new Contracts having the same Guarantee Period.

If we do not receive timely transfer instructions, we will transfer that
Subaccount Value to the one year subaccount. If your Contract's annuity
date is less than one year from the Renewal Date, you can only choose a
new subaccount with a one-year Guarantee Period. You may change your
annuity date so that the Guarantee Period of the new subaccount will end
on or before the annuity date.

HOW WE DETERMINE THE GUARANTEED INTEREST RATES FOR SUBACCOUNTS

We have no specific formula for setting the guaranteed interest rates.
Rates will be influenced by, but not necessarily coincide with, interest
rates available on fixed income investments which we may acquire with the
amounts we receive as premiums. You have no direct or indirect interest
in the investments we make with the premiums. We will invest these
amounts primarily in investment-grade fixed income securities, including:

- securities issued by the United States Government or its agencies or
instrumentalities, which may or may not be guaranteed by the United
States Government;

- debt securities that have an investment grade, when we buy them, within
the four highest grades assigned by Moody's Investor Services, Inc.
(Aaa, Aa, A or Baa), Standard & Poor's Corporation (AAA, AA, A or BBB)
or any other nationally recognized rating service;

- mortgage-backed securities collateralized by real estate mortgage
loans, or securities collateralized by other assets, that are insured
or guaranteed by the Federal Home Loan Mortgage Association, the
Federal National Mortgage Association or the Government National
Mortgage Association, or that have an investment grade, when we buy
them, within the four highest grades described above;

- other debt instruments;

- commercial paper; and

- cash or cash equivalents.

We will also consider other factors in determining the guaranteed rates,
including regulatory and tax requirements, sales commissions and
administrative expenses incurred by us, general economic trends and
competitive factors. WE WILL MAKE THE FINAL DETERMINATION OF THE
GUARANTEED RATES WE DECLARE. WE CANNOT PREDICT OR GUARANTEE THE FUTURE
LEVEL OF THESE INTEREST RATES.

6
<PAGE> 8

WITHDRAWALS

You can make a withdrawal of all or part of the Net Contract Value or Net
Subaccount Value any time before the earlier of the annuity date or your death.
The following applies:

1. We must receive a written request from you at our Service Center
(unless you have submitted a telephone authorization form -- see
NOTICES AND ELECTIONS).

2. You must return your Contract to us if you want to make a full
withdrawal.

3. You must specify the subaccounts from which you want to make a
withdrawal. If you do not specify, we will deduct the withdrawal
from the subaccount with the shortest period of time remaining in
its guarantee period until that subaccount is empty; from the
subaccount with the next shortest period of time remaining in its
guarantee period until that subaccount is empty; and so forth,
continuing until the amount of the withdrawal has been reached.

NET SUBACCOUNT VALUE equals the Subaccount Value after adjustment for
any MVA and withdrawal charge that would be applied on a full withdrawal,
annuitization or the payment of death benefits on the death of the participant
or annuitant prior to the annuity date.

NET CONTRACT VALUE equals the sum of all Net Subaccount Values.

4. The minimum partial withdrawal you can make from a subaccount is
$500, but any remaining Net Subaccount Value must be at least $5,000.
You can withdraw any Subaccount Value that is less than $500 but you
cannot leave any remaining amount in that subaccount.

5. The remaining Contract Value after a partial withdrawal must be at
least $15,000.

WITHDRAWALS ARE SUBJECT TO INCOME TAXES. IF YOU MAKE A WITHDRAWAL BEFORE AGE
59 1/2, YOU MAY ALSO HAVE TO PAY A 10% FEDERAL PENALTY TAX. If you take a
partial withdrawal, we will pay you the amount you request. We then deduct any
Withdrawal Charge directly from and apply any MVA to the subaccount from which
you make the withdrawal (see WITHDRAWAL CHARGE and MVA for more details on how
charges are applied to withdrawals). If you withdraw an entire Subaccount Value,
we adjust the amount we pay you for any applicable Withdrawal Charge and MVA.
You may thus receive less than you request.

Under qualified plans, withdrawals may be permitted only under the circumstances
specified in the plan, the consent of your spouse may be required, and under
Tax-Sheltered Annuities and certain Section 401 plans, withdrawals attributable
to contributions made under a salary reduction agreement may be made only after
you reach age 59 1/2 and in other limited circumstances.

See Appendix A and Appendix B for examples showing the effect of the withdrawal
charge and MVA on the amount of withdrawals.

CHARGES

We impose two types of charges: a Withdrawal Charge and a Market Value
Adjustment. We may also deduct any applicable premium taxes.

WITHDRAWAL CHARGE

We will deduct a Withdrawal Charge if you make a withdrawal from a
subaccount before the end of its Guarantee Period. We will not deduct a
Withdrawal Charge for withdrawals made at the end of the Guarantee Period
(on the Renewal Date). To avoid the Withdrawal Charge, we must receive
your written instructions to take a withdrawal from a subaccount(s) no
later than five business days after the Renewal Date. If we receive your
written instructions within this time period, we will process the
withdrawal effective as of the Renewal Date and we will not deduct a
Withdrawal Charge.

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<PAGE> 9

The Withdrawal Charge equals six percent of the amount withdrawn (in the
case of partial withdrawals) or Net Subaccount Value (in the case of full
withdrawals). For partial withdrawals, we deduct the Withdrawal Charge
from the amount remaining in the subaccount. For full withdrawals, we
deduct the Withdrawal Charge from the amount sent to you. SEE APPENDIX B
FOR EXAMPLES SHOWING THE EFFECT OF THE WITHDRAWAL CHARGE ON THE AMOUNT OF
WITHDRAWALS.

Currently, we impose no Withdrawal Charge at annuitization. However, we
reserve the right to do so in the future if a Renewal Date falls after
the annuity date. There is no Withdrawal Charge on death benefits.

For full withdrawals, we deduct the
Withdrawal Charge from the proceeds
of the withdrawal.

Withdrawal Charge = Net Subaccount
Value X 0.06

For partial withdrawals, we deduct
a Withdrawal Charge directly from
the subaccount.

Withdrawal Charge = Amount Withdrawn
X 0.06

MARKET VALUE ADJUSTMENT ("MVA")

We impose an MVA in three circumstances:

1. WITHDRAWALS FROM A SUBACCOUNT BEFORE THE END OF ITS GUARANTEE PERIOD:
We will not apply an MVA to withdrawals made at the end of a
Guarantee Period if we receive your withdrawal instructions by the
fifth business day after the Renewal Date. All such withdrawals take
effect as of the Renewal Date.

2. ANNUITIZATION: If the annuity date (the date we begin making annuity
payments) precedes the end of a Guarantee Period, we apply an MVA on
the annuity date. We apply the MVA before the amount of any annuity
payments is calculated.

3. DEATH BENEFIT PAYMENTS: We apply any net positive MVA to payments
made at the time of your death prior to the annuity date. If the net
MVA is negative, however, we will not deduct it.

NET MVA refers to the sum of the MVAs on all subaccounts, some of which
may be positive and some of which may be negative. If the sum is positive, it
is referred to as a NET POSITIVE MVA.

The MVA will depend on the relationship, at the time it is applied,
between:

(i) the MVA interest rate established at issue or renewal for the
subaccount from which a withdrawal or payment is being made; and

(ii) the MVA interest rate in effect for a time period equal to the
remainder of the Guarantee Period of the subaccount from which the
withdrawal or payment is being made.

AS A GENERAL RULE, IF INTEREST RATES GO UP, THE MVA WILL DECREASE YOUR
CONTRACT VALUE; IF INTEREST RATES GO DOWN, THE MVA WILL INCREASE YOUR
CONTRACT VALUE.

We determine the MVA based on the following formula:

1 + B n/365 ]
A X [ 1- ( ------- )
1 + C

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<PAGE> 10

<TABLE>
<C> <C> <S>
Where "A" is (i) the amount withdrawn in the case of partial withdrawals; or
(ii) the Net Subaccount Value in the case of full withdrawals,
annuitizations or payments at death;
</TABLE>

<TABLE>
<C> <C> <S>
----------------------------------------------------------------------------------------------
NET SUBACCOUNT VALUE =

Subaccount Value
----------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S> <C> <C> <C> <C> <C>
1 + Current MVA Interest Rate n/365
0.06 + ( ----------------------------------------- )
1 + MVA Interest Rate at Issue or Renewal
</TABLE>

<TABLE>
<C> <C> <S>
Where "n" is the number of days remaining in the Guarantee
Period of the subaccount, but not less than 365.
----------------------------------------------------------------------------------------------
</TABLE>

"B" is the current MVA interest rate for a subaccount with a Guarantee
Period in years equal to "n"/365;

"C" is the MVA interest rate for the subaccount from which the withdrawal
is made; and

"n" is the number of days remaining in the Guarantee Period of the
subaccount(s) we are adjusting.

If the remaining period of time in the Guarantee Period is not a
whole number of years, we base the MVA interest rate for "B" on
the MVA interest rates currently in effect for the Guarantee
Periods nearest the remaining period of time. We make this
determination by straight-line interpolation, except where the
remaining period of time is less than one year, in which case we
use the current MVA interest rate for a one-year Guarantee Period.
</TABLE>

MVA Interest Rates. We use MVA interest rates, not your guaranteed
interest rates, to determine the MVA. When the Contract is issued and at
each subaccount renewal, we will send you a notice specifying the MVA
interest rate for each subaccount. As is the case for guaranteed interest
rates, we have sole discretion to declare MVA interest rates. We cannot
predict or guarantee the level of future MVA interest rates. They may
differ from guaranteed interest rates declared at the same time for
Guarantee Periods of the same length. We determine MVA interest rates
based on rates on Treasury bonds with lengths matched to our
asset-liability matching program with respect to our obligations under
the Contracts. In general, our use of MVA interest rates to calculate any
MVA is intended to prevent certain factors not related to market interest
rates per se (such as changes in mortality assumptions, or the use of
increased current rates for competitive or other non-market related
factors) from affecting the size or direction of any MVA.

You bear the investment risk that the MVA interest rates in effect at the
time you make a withdrawal from a subaccount or the time we start making
annuity payments may be higher than the MVA interest rate of the
subaccount to which the MVA is applied. As a result, your Contract Value
may go down substantially.

NEITHER THE GUARANTEED INTEREST RATE FOR THE SUBACCOUNT FROM WHICH YOU
WITHDRAW OR WE MAKE A PAYMENT, NOR ANY GUARANTEED INTEREST RATE IN EFFECT
AT THE TIME YOU WITHDRAW OR WE MAKE A PAYMENT, IS USED TO DETERMINE THE
MVA.

Appendix A contains more information about how the MVA works, including
examples showing the application of the MVA in the context of full
withdrawals from a hypothetical subaccount.

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PREMIUM TAXES

We deduct any applicable premium taxes when you annuitize. State and
local jurisdictions impose premium taxes that currently range from 0% to
5% depending on the tax treatment of the Contract. If a jurisdiction does
not allow us to reduce our current taxable premium income by the amount
of withdrawals, surrenders, or death benefit payments, we also deduct a
charge for premium taxes when we make those payments.

DEATH BENEFIT PAYMENTS AND BENEFICIARIES

We will pay a death benefit to the beneficiary after we receive satisfactory
proof of your death. Satisfactory proof may include a certified copy of a death
certificate, beneficiary claim statement, and any other documents we may
require.

BENEFICIARIES

When you apply for the Contract, you select one or more beneficiaries to
receive the death benefit upon your death. The beneficiary has no
ownership rights under the Contract. You can designate a beneficiary as
revocable or irrevocable. If you name a revocable beneficiary, you can
change that beneficiary at any time before your death. If you designate
an irrevocable beneficiary, that beneficiary must approve any later
change of beneficiary in writing.

If the beneficiary dies before you and no new or contingent beneficiary
is named, we pay the death benefit to your estate. The estate or heirs of
a beneficiary who dies before you have no rights under the Contract.

DEATH BEFORE THE ANNUITY DATE

If you die before the annuity date, we will pay the death benefit to the
beneficiary. The death benefit equals the sum of each Subaccount Value
plus any net positive MVA as of the date of payment. No Withdrawal Charge
applies to the death benefit. If the beneficiary does not select an
annuity option within 60 days following receipt of proof of death, we
reserve the right to automatically pay the death benefit in a lump sum.
(The annuity option may, however, be restricted by federal tax law.)

Your beneficiary may select an annuity option under which payments begin
within one year of your death, but do not extend beyond the beneficiary's
life expectancy. For IRAs and SEPs, any annuity option chosen by a
beneficiary must meet the requirements of the Internal Revenue Code
("IRC"). We will pay this death benefit within five years of your death.

If an annuitant (other than you) dies before the annuity date, you may
name a new annuitant. If you do not name a new annuitant, you are deemed
to be the new annuitant. If any owner of a Non-Qualified Contract is not
an individual, we treat the death of the annuitant as the death of the
owner and we pay the death benefit to the beneficiary.

If there is more than one owner under the same Contract, we pay the death
benefit to the beneficiary when the first owner dies. If a surviving
spouse is also the beneficiary, he or she can choose to become the new
owner and continue the Contract with the same rights and benefits as the
deceased owner had before death. The surviving spouse will then be the
owner and the beneficiary, until a new beneficiary is named. No death
benefit is paid until the new owner (your surviving spouse) dies.

DEATH AFTER THE ANNUITY DATE

make any remaining guaranteed annuity payments to the beneficiary unless
the beneficiary asks us to pay the present value of those payments in a
lump sum. We calculate present values at the interest rate that was used
to calculate the amount of the initial annuity payment.

ANNUITY PROVISIONS (ANNUITIZATION)

We start making annuity payments to you on the annuity date designated in your
Contract. In calculating annuity payments, we apply an MVA to any subaccount
that has a Renewal Date after the annuity date. We also deduct any applicable
premium taxes (see Premium Taxes). Currently, we do not impose a Withdrawal
Charge upon annuitization. We have the right to do so in the future, however, if
the annuity date precedes the end of a Guarantee Period.

In this section, Net Contract Value means the Contract Value plus or minus the
MVA and minus premium taxes.

Net Contract Value = Contract Value +/- MVA - premium taxes

We calculate annuity payments by applying the Net Contract Value to the annuity
option you choose using our annuity rates in effect at that time. These rates
will not be lower than the minimum guaranteed annuity rates shown in the
applicable annuity table in your Contract.

The annuity tables in your Contract show the minimum guaranteed amount of each
monthly annuity payment for each $1,000 applied according to the age and sex of
the annuitant on the annuity date. We based these tables on the 1983 Table "a"
projected forward to 1995 for Individual Annuity Valuation with current
mortality adjustments and interest at three percent. When required by state law,
we will use annuity tables that do not differentiate by sex.

The Contract contains a formula for adjusting the age of the annuitant based on
the annuity date to determine minimum monthly annuity payments. We did not make
an age adjustment if the annuity date was prior to the year 2000.

An age adjustment results in a reduction in the minimum monthly annuity payments
that we would otherwise make. Therefore, if the rates we use are the minimum
rates shown in the annuity tables in the Contract, you may want to select an
annuity date that immediately precedes the date on which an age adjustment would
occur. For example, the annuity payment rates in the tables for an annuitant
with an annuity date in the year 2010 are the same as those for an annuity date
twelve months earlier. This is so even though the annuitant is one year older,
because the new decade results in the annuitant's age being reduced by an
additional year. Current annuity rates, unlike the guaranteed rates, do not
involve any age adjustment.

We will send annuity payments to the annuitant monthly unless you choose to have
payments made less frequently or you choose the Qualified Plan Option. Each
annuity payment must be at least $50. We may change the frequency of the annuity
payments so that each is at least $50. If the Net Contract Value is less than
$5,000 on the annuity date, we may pay that amount to the annuitant in a lump
sum.

ANNUITY DATE

We start making payments to the annuitant on the annuity date. The
annuity date can be any day of a calendar month. It cannot be later than
the annuitant's 85th birthday. If your Contract is issued as part of a
qualified retirement plan, the annuity date may not be later than April 1
of the calendar year after the calendar year in which the annuitant
reaches age 70 1/2. At issue, if your Contract is Non-Qualified, the
annuity date is the annuitant's 85th birthday. If your Contract is

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<PAGE> 13

Qualified, the annuity date is the date the annuitant attains age 70 1/2.
HOWEVER, YOU CAN CHANGE THE ANNUITY DATE BY NOTIFYING OUR SERVICE CENTER
AT ANY TIME BEFORE WE START MAKING THE ANNUITY PAYMENTS.

ANNUITANT

You select the annuitant. You may later change the annuitant from the
person you originally selected (unless the owner is not an individual).
Annuity payments are based on the annuitant's age and sex. We may require
proof of the age, sex or survival of the annuitant.

If you give us incorrect age and sex information about the annuitant, we
will adjust the amount of the annuity payments to reflect the correct age
and sex. If previous payments were overpaid, we will deduct the overpaid
amount from the next payments until we fully recover it. If previous
payments were underpaid, we will add the owed amount to the next payment.
On overpayments or underpayments we will either charge or pay you
interest at the rate of four percent.

ANNUITY OPTIONS

At issue, your annuity option is a Life Annuity with Payments Guaranteed
for 10 Years. However, you may change your annuity option to any one of
the following annuity options. With our prior consent, you may choose
another method of payment not listed here. Once you begin to receive
annuity payments, you cannot change the annuity option, payment amount or
the payment period.

1. Payments of a Fixed Amount: You choose the amount of each annuity
payment. We will make equal payments of the amount chosen until the
Net Contract Value and the interest accrued on it are gone. The
period for these payments cannot be less than five years.

2. Payments for a Fixed Period: You choose a time period (at least five
years) during which the annuitant will receive annuity payments.

3. *Life Annuity: We will make payments for as long as the annuitant
lives. Payments will stop at the last payment due before the death of
the annuitant. We apply the Net Contract Value to determine the
amount of the annuity payments based on the annuitant's age, sex and
life expectancy.

4. Life Annuity with Payments Guaranteed for 10 or 20 Years: We will
make payments for the guaranteed period chosen (10 or 20 years) and
as long thereafter as the annuitant lives.

5. Life Annuity with Guaranteed Return of Net Contract Value: We will
make annuity payments until the total of the annuity payments equals
the Net Contract Value applied to this option, and as long thereafter
as the annuitant lives.

6. *Joint and Survivor Life Annuity: We make payments for as long as
either the annuitant or designated second person lives. We apply the
Net Contract Value based on the annuitant's and other person's ages,
sex and life expectancies to determine the amount of the annuity
payments.

7. Qualified Plan Option: This option is only available under qualified
contracts. Payments may be based on:

(a) the life expectancy of the annuitant,

*CAUTION: THESE OPTIONS ARE "PURE" LIFE ANNUITIES. THEREFORE, IT IS
POSSIBLE FOR THE PAYEE TO RECEIVE ONLY ONE ANNUITY IF THE PERSON (OR
PERSONS) ON WHOSE LIFE (LIVES) PAYMENT IS BASED DIES AFTER ONLY ONE
PAYMENT OR TO RECEIVE ONLY TWO ANNUITY PAYMENTS IF THAT PERSON (THOSE
PERSONS) DIES AFTER ONLY TWO PAYMENTS, ETC. CAREFULLY CONSIDER YOUR
NEEDS BEFORE YOU CHOOSE THIS OPTION.

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<PAGE> 14

(b) the joint life expectancy of the annuitant and his or her spouse,
or

Payments will be made annually. Each payment equals the Net Contract
Value on the first day of the calendar year divided by applicable
current life expectancy based on Internal Revenue Service regulations.
We make each subsequent payment on the anniversary of the annuity
date. We credit interest at our then current rate for this option. The
rate will not be less than three percent. On the death of the
measuring life or lives, we will pay any unpaid Net Contract Value to
the beneficiary in a lump sum.

CHANGE OF ANNUITY DATE, ANNUITANT OR ANNUITY OPTION

To change the annuity date, the annuitant, and/or the annuity option, we
must receive your written instructions at our Service Center before the
existing annuity date. You can also make annuity date and annuity option
changes by telephone if you have submitted a proper telephone
authorization form. See NOTICES AND ELECTIONS.

Changes of the annuity date are subject to federal tax restrictions.

OTHER PROVISIONS

ASSIGNMENT

You may assign your rights under a Contract to a creditor as security for
a debt. Any irrevocable beneficiary must consent to such an assignment.
This does not change the ownership of your Contract. The rights of the
creditor take precedence over the rights of a beneficiary. No amounts
payable under the Contract to a payee other than you may be assigned by
that payee, nor will they be subject to the claims of creditors or to
legal process, except to the extent permitted by law.

An assignment may have federal income tax consequences. If the Contract
is issued pursuant to a qualified plan, you cannot assign, pledge, or
transfer your rights under the Contract, unless permitted by law.

NOTICES AND ELECTIONS

You must send any change requests, notices, and/or choices for your
Contract to our Service Center. These requests must be in writing and
signed (unless you have submitted a telephone authorization form as
discussed below). We give effect to any request regarding notices,
changes, or choices relating to beneficiaries, ownership and the
annuitant as of the date you sign the request, unless we already acted in
reliance on your prior status before receiving the notice. Changes
relating to the annuity date will take effect as of the date received,
unless we have already acted in reliance on the prior status.

If you have submitted a telephone authorization form, you may make the
following choices via telephone:

1. subaccount selections at the end of a Guarantee Period;

2. subaccounts from which you wish to make partial withdrawals;

3. annuity date changes; and

4. annuity option changes.

We will use reasonable procedures to confirm that a telephone request is
proper. These procedures may include tape recording of telephone calls
and obtaining appropriate identification before acting on any telephone
request. We are not liable if we act on a request that we reasonably
believe is proper.

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<PAGE> 15

AMENDMENT OF THE CONTRACT

We may amend any Contract at any time if necessary to comply with
applicable law, regulation or ruling issued by a government agency or
court.

FREE LOOK RIGHT

You should carefully review your Contract when you receive it to make
sure it is what you intended to buy. You may return the Contract for a
refund of your premium within ten days after you receive it. Some
jurisdictions allow a longer time to return the Contract. You must return
the Contract to either our Service Center or your Merrill Lynch Financial
Consultant within the "free look" period to receive a refund. We will
then deem your Contract void from the beginning. If you cancel your
Contract, you cannot submit another application for at least 90 days.

GUARANTEE OF CONTRACT

Neither the federal government nor its instrumentalities guarantee the
Contract. We back the guarantees in the Contract.

DISTRIBUTION OF THE CONTRACTS

Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") is the principal
underwriter of the Contract. MLPF&S was organized in 1958 under the laws of the
state of Delaware. It is registered as a broker-dealer under the Securities
Exchange Act of 1934. It is a member of the National Association of Securities
Dealers, Inc. ("NASD"). The principal business address for MLPF&S is World
Financial Center, 250 Vesey Street, New York, New York 10281.

Registered representatives (Financial Consultants) of MLPF&S sell these
contracts. These Financial Consultants are also licensed through various Merrill
Lynch Life Agencies (MLLA) as our insurance agents. We have entered into a
distribution agreement with MLPF&S and companion sales agreements with MLLA.
These agreements allow Financial Consultants to sell Contracts and receive
compensation. The maximum commission MLLA pays to the Financial Consultant is
1.3% of each premium. The maximum compensation MLLA pays to the Financial
Consultant for each renewal is 0.26% of the Subaccount Value that is reinvested,
payable annually.

The maximum commission we will pay to the applicable insurance agency to pay
commissions to Financial Consultants is 2.5% of each premium. The maximum
compensation we will pay to the applicable insurance agency to pay compensation
to Financial Consultants for renewals is 0.4% of the Subaccount Value that is
reinvested, payable annually. We may pay compensation in the form of non-cash
compensation, consistent with applicable regulatory requirements.

MLPF&S may arrange for sales of the Contract by other broker-dealers who are
registered under the Securities Exchange Act of 1934 and are members of the
NASD.

FEDERAL INCOME TAXES

The following summary discussion is based on our understanding of current
federal income tax law as the Internal Revenue Service (IRS) now interprets it.
We can't guarantee that the law or the IRS's interpretation won't change. It
does not purport to be complete or to cover all tax situations. This discussion
is not intended as tax advice. Counsel or other tax advisors should be consulted
for further information.

We haven't considered any applicable federal gift, estate or any state or other
tax laws. Of course, your own tax status or that of your beneficiary can affect
the tax consequences of ownership or receipt of distributions.

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<PAGE> 16

When you invest in an annuity contract, you usually do not pay taxes on your
earnings until you withdraw the money--generally for retirement purposes. If you
invest in an annuity as part of a IRA, SEP or Roth IRA program, your contract is
called a Qualified Contract. If your annuity is independent of any formal
retirement or pension plan, it is termed a Non-Qualified Contract. The tax rules
applicable to Qualified Contracts vary according to the type of retirement plan
and the terms and conditions of the plan. The ultimate effect of federal income
taxes on the amounts held under an annuity contract, on annuity payments, and on
the economic benefit to the owner, the annuitant or the beneficiary depends on
the type of retirement plan, on the tax status of the individual concerned and
on our tax status.

TAX STATUS OF THE CONTRACTS

REQUIRED DISTRIBUTIONS

In order to be treated as an annuity contract for Federal income tax
purposes, Section 72(s) of the IRC requires any Non-Qualified Contract to
contain certain provisions specifying how a participant's interest in the
Contract will be distributed in the event of your death. Specifically,
Section 72(s) requires that (a) if any owner dies on or after the annuity
starting date, but prior to the time the entire interest in the contract
has been distributed, the entire interest in the contract will be
distributed at least as rapidly as under the method of distribution being
used as of the date of such owner's death; and (b) if any owner dies
prior to the annuity starting date, the entire interest in the contract
will be distributed within five years after the date of such owner's
death. These requirements will be considered satisfied as to any portion
of an owner's interest which is payable to or for the benefit of a
designated beneficiary and which is distributed over the life of such
designated beneficiary or over a period not extending beyond the life
expectancy of that beneficiary, provided that such distributions begin
within one year of the owner's death. The designated beneficiary refers
to a natural person designated by the owner as a beneficiary and to whom
ownership of the contract passes by reason of death. However, if the
designated beneficiary is the surviving spouse of the deceased owner, the
contract may be continued with the surviving spouse as the new owner.

Non-Qualified Contracts contain provisions that are intended to comply
with these requirements, although no regulations interpreting these
requirements have yet been issued. We intend to review such provisions
and modify them, if necessary, to assure that they comply with the
applicable requirements when such requirements are clarified by
regulation or otherwise.

Other required distribution rules may apply to Qualified Contracts.

TAXATION OF ANNUITIES

IN GENERAL

IRC Section 72 governs annuity taxation generally. We believe that an
owner who is a natural person usually won't be taxed on increases in the
value of a contract until there is a distribution (i.e., the owner
withdraws all or part of the accumulation or takes annuity payments).
Assigning, pledging, or agreeing to assign or pledge any part of the
accumulation usually will be considered a distribution. Withdrawals of
accumulated earnings are taxable as ordinary income. Generally under the
IRC, withdrawals are first allocated to earnings.

An owner of any annuity contract who is not a natural person generally
must include in income any increase in the excess of the accumulation
over the "investment in the contract" during the taxable year. There are
some exceptions to this rule and a prospective owner that is not a
natural person may wish to discuss them with a competent tax advisor.

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<PAGE> 17

The following discussion applies generally to contracts owned by a
natural person.

PARTIAL WITHDRAWALS AND SURRENDERS

When a withdrawal from a Non-Qualified Contract occurs, the amount
received generally will be treated as ordinary income subject to tax up
to an amount equal to the excess (if any) of the Contract Value
immediately before the distribution over the investment in the contract
(generally, the premiums or other consideration paid for the Contract,
reduced by any amount previously distributed from the Contract that was
not subject to tax) at that time. The Contract Value immediately before a
withdrawal may have to be increased by any net positive MVA which results
from a withdrawal.

YOU SHOULD NOTE THAT THIS IS AN INTEGRATED ANNUITY CONTRACT FOR IRC
PURPOSES. THEREFORE, WHEN WE DETERMINE THE EXTENT TO WHICH A WITHDRAWAL
FROM ONE SUBACCOUNT IS TAXABLE, WE WILL USE THE CONTRACT VALUE AND
"INVESTMENT IN THE CONTRACT" FOR THE ENTIRE CONTRACT AND NOT JUST OF THE
SUBACCOUNT FROM WHICH THE WITHDRAWAL IS MADE.

If you withdraw your entire accumulation under a contract, you will be
taxed only on the part that exceeds your investment in the contact.

ANNUITY PAYMENTS

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

TAXATION OF DEATH BENEFIT PROCEEDS

Amounts may be paid from a contract because an owner, the annuitant or
the co-annuitant has died. If the payments are made in a lump sum,
they're taxed the same way a full withdrawal from the contract is taxed.
If they are distributed as annuity payments, they're taxed as annuity
payments.

PENALTY TAX ON SOME WITHDRAWALS

You may have to pay a penalty tax (10% of the amount treated as taxable income)
on some withdrawals. However, there is usually no penalty on distributions:

1. on or after you reach age 59 1/2;

2. after you die (or after the annuitant dies, if the owner isn't an
individual);

3. on account of becoming disabled; or

4. that are part of a series of substantially equal periodic (at least
annual) payments for your life (or life expectancy) or the joint
lives (or life expectancies) of you and your beneficiary.

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

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<PAGE> 18

TRANSFERS, ASSIGNMENTS, OR EXCHANGES OF A CONTRACT

Transferring or assigning ownership of the contract, designating an annuitant,
payee or other beneficiary who is not also the owner, or exchanging a contract
can have other tax consequences that we don't discuss here. If you're thinking
about any of those transactions, contact a tax advisor.

WITHHOLDING

Annuity distributions usually are subject to withholding for the recipient's
federal income tax liability at rates that vary according to the type of
distribution and the recipient's tax status. However, recipients can usually
choose not to have tax withheld from distributions.

MULTIPLE CONTRACTS

All non-qualified deferred annuity contracts that we (or our affiliates) issue
to the same owner during any calendar year are treated as one annuity contract
for purposes of determining the amount includible in such owner's income when a
taxable distribution occurs. This could affect when income is taxable and how
much is subject to tax and the 10% penalty discussed above.

POSSIBLE CHANGES IN TAXATION

Although the likelihood of legislative change is uncertain, there is always the
possibility that the tax treatment of the contracts could change by legislation
or other means. It is also possible that any change could be retroactive (that
is, effective prior to the date of the change). A tax adviser should be
consulted with respect to legislative developments and their effect on the
contract.

TAXATION OF QUALIFIED CONTRACTS

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

INDIVIDUAL RETIREMENT ACCOUNTS (IRAS)

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

SIMPLIFIED EMPLOYEE PENSION (SEP) IRAS

SEP IRAs may be established by employers under Section 408(k) of the IRC
to provide IRA contributions on behalf of their employees. In addition to
all of the general rules of the IRC governing IRAs, such plans are
subject to certain requirements regarding participation and amounts of
contributions.

ROTH IRAS

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<PAGE> 19

IRA. A rollover from or conversion of an IRA to a Roth IRA is generally
subject to tax and other special rules apply. You may wish to consult a
tax adviser before combining any converted amounts with any other Roth
IRA contributions, including any other conversion amounts from other tax
years. Distributions from a Roth IRA generally are not taxed, except
that, once aggregate distributions exceed contributions to the Roth IRA,
income tax and a 10% penalty tax may apply to distributions made (1)
before age 59 1/2 (subject to certain exceptions) or (2) during the five
taxable years starting with the year in which the first contribution is
made to any Roth IRA. A 10% penalty tax may apply to amounts attributable
to a conversion from an IRA if they are distributed during the five
taxable years beginning with the year in which the conversion was made.

OTHER TAX ISSUES

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

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

LEGAL PROCEEDINGS

We are not aware of any material pending litigation against us or involving our
property. We are also not aware of any legal proceedings contemplated by any
governmental authorities against us.

LEGAL MATTERS

Barry G. Skolnick, our Senior Vice President and General Counsel, has approved
our organization, our authority to issue the Contracts, and the validity of the
Contract form. Sutherland Asbill & Brennan LLP of Washington, D.C. provided
advice on certain matters relating to federal securities laws.

EXPERTS

Deloitte & Touche LLP, independent auditors, audited our financial statements
that are incorporated by reference into this Prospectus. The financial
statements are as of December 31, 1999 and 1998, and for each of the three years
in the period ended December 31, 1999, as stated in their auditors' report in
the statements. We have incorporated our financial statements 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 World
Financial Center, New York, New York 10281-1433. Other financial statements
incorporated by reference into this Prospectus are unaudited.

REGISTRATION STATEMENT

We have filed a registration statement with the Securities and Exchange
Commission under the Securities Act of 1933 that relates to the Contract. This
Prospectus does not contain all of the information in the registration
statement, as permitted by Securities and Exchange Commission regulations. You
can obtain the omitted information from the Securities and Exchange Commission's
principal office in Washington, D.C., upon payment of a prescribed fee.

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<PAGE> 20

APPENDIX A
MARKET VALUE ADJUSTMENT (MVA) ILLUSTRATIONS

A. DISCUSSION

Relationship Between MVA Interest Rates. The MVA may result in either an
increase or decrease in Subaccount Value. It depends on the relationship, when
we apply the MVA, of:

(i) the MVA interest rate declared at issue or renewal for the
subaccount from which a withdrawal or payment is being made, and

(ii) the current MVA interest rate in effect for the period equal to the
remaining Guarantee Period of the subaccount from which the
withdrawal or payment is being made.

If (i) above is less than (ii), the MVA will result in a decrease in Subaccount
Value. If (i) is more than (ii), the MVA will result in an increase in
Subaccount Value. NEITHER THE GUARANTEED INTEREST RATE FOR THE SUBACCOUNT FROM
WHICH A WITHDRAWAL OR PAYMENT IS BEING MADE, NOR ANY GUARANTEED INTEREST RATE IN
EFFECT AT THE TIME OF WITHDRAWAL OR PAYMENT, IS USED TO DETERMINE THE MVA.

Remaining Period of Time in a Guarantee Period. To determine (ii) above, if the
remaining period of time in the Guarantee Period is a whole number of years, we
use the current MVA interest rate in effect for that time period. If the
remaining period of time in the Guarantee Period is not a whole number of years,
the current MVA interest rate is derived by straight line interpolation (see
below). If the remaining period of time is less than one year, we use the
current MVA interest rate in effect for a one-year Guarantee Period.

For example, if the remaining period is 4.75 years, the interpolated MVA
interest rate will be equal to the sum of one-fourth of the four-year rate and
three-fourths of the five-year rate. If the current four-year MVA interest rate
is 6.00% and the current five-year MVA interest rate is 5.95%, the interpolated
rate is 5.96% (6.00% times 0.25 plus 5.95% times 0.75).

B. MARKET VALUE ADJUSTMENT FORMULA

As discussed in the prospectus, the MVA is determined by the following formula:

Where:

<TABLE>
<C> <C> <S>
"n" is the remaining number of days in the guaranteed period of the
Subaccount from which the withdrawal is made or to which the MVA
is applied;

"A" is (i) the amount withdrawn, if a partial withdrawal; or
(ii) the Net Subaccount Value, if a full withdrawal, a death
benefit payment, or annuitization;

the MVA interest rate in effect at the time we apply the MVA for a
"B" is subaccount with a Guarantee Period for a length of years
represented by "n/365," whether or not those lengths are currently
offered under the Contract ("n/365" is determined as described
above if "n/365" is not a whole number); and

"C" is the MVA interest rate in effect for the subaccount on the issue
date or the last renewal date.
</TABLE>

A-1
<PAGE> 21

C. EXAMPLES

1. MVA Interest Rates Increase. Assume a $10,000 partial withdrawal is made
from a subaccount with a five-year Guarantee Period with three years (1,095
days) remaining in its Guarantee Period. Assume an MVA interest rate at
issue of 5.95%. Assume that the MVA interest rate currently in effect (at
the time of the withdrawal) for a three-year Guarantee Period is 7.95%.
Based on these assumptions, we would assign the following values to the MVA
formula described above:

Using these assigned values, the MVA would equal -$577.06 (as calculated
below). Since the MVA is negative, it is subtracted from the remaining
Subaccount Value, together with any applicable withdrawal charge.

2. MVA Interest Rates Decrease. Using the same facts as the example above,
assume instead that the MVA interest rate currently in effect (at the time
of the withdrawal) for a three-year Guarantee Period is 3.95%. Based on this
assumption, the following values would apply to the formula:

Using these values, the MVA would equal +$555.68 (as calculated below). Since
the MVA is positive, it is added to the remaining Subaccount Value. However,
we apply any applicable withdrawal charge to the Subaccount Value.

D. IMPACT ON CONTRACT VALUE

The tables below show the impact of the MVA and withdrawal charge on a single
premium of $25,000, assuming a full withdrawal at the end of each year shown.

Table 1 assumes:

(i) the premium is allocated to a subaccount with a five-year Guarantee
Period;

(ii) with a guaranteed interest rate of 6.00%; and

(iii) an MVA interest rate at issue of 5.95%.

Table 2 assumes:

(i) premium is allocated to a subaccount with a three-year Guarantee
Period;

(ii) with a guaranteed interest rate of 5.85%; and

(iii) an MVA interest rate at issue of 6.00%.

The MVAs are based on interpolated current MVA interest rates ("B" in the MVA
formula) of 3.95%, 5.95%, and 7.95% in the five-year Guarantee Period table (see
Table 1 below) and 4.00%, 6.00%, and 8.00% in the three-year Guarantee Period
table (see Table 2 below). The Net Subaccount Values shown in the tables are the
maximum amounts available as withdrawals. Although the withdrawal charge is in
each case a fixed percentage of the amount withdrawn, the actual amount of the
withdrawal charge that would apply for full withdrawals at the end of each year
would vary as a result of the MVA, which is imposed before the withdrawal charge
on full withdrawals. Values in the tables are rounded to the nearest dollar. As
a result, the figures under the Net Subaccount Value columns may not precisely
equal amounts set forth in the Subaccount Value, plus the MVA, less the
withdrawal charge columns.

A-2
<PAGE> 22

TABLE 1

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
ASSUMED GUARANTEED INTEREST RATE = 6.00%
ASSUMED ISSUE MVA INTEREST RATE = 5.95%
-----------------------------------------------------------------------------------------------------------
MARKET VALUE ADJUSTMENTS, WITHDRAWAL CHARGES AND NET SUBACCOUNT VALUE BASED ON
INTERPOLATED CURRENT MVA INTEREST RATES OF:
-----------------------------------------------------------------------------------------------------------
3.95% 5.95% 7.95%
- -----------------------------------------------------------------------------------------------------------------------------------
MARKET NET MARKET NET MARKET NET
END OF SUB- VALUE WITH- SUB- VALUE WITH- SUB- VALUE WITH- SUB-
CERTIFICATE ACCOUNT ADJUST- DRAWAL ACCOUNT ADJUST- DRAWAL ACCOUNT ADJUST- DRAWAL ACCOUNT
YEAR VALUE MENT CHARGE VALUE MENT CHARGE VALUE MENT CHARGE VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 26,500 1,971 1,612 26,860 -0- 1,500 25,000 (1,809) 1,398 23,293
2 28,090 1,554 1,678 27,966 -0- 1,590 26,500 (1,450) 1,508 25,132
3 29,775 1,089 1,747 29,117 -0- 1,685 28,090 (1,033) 1,627 27,115
4 31,562 572 1,819 30,315 -0- 1,787 29,775 (552) 1,755 29,254
5 33,456 -0- -0- 33,456 -0- -0- 33,456 -0- -0- 33,456
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

TABLE 2

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
ASSUMED GUARANTEED INTEREST RATE = 5.85%
ASSUMED ISSUE MVA INTEREST RATE = 6.00%
-----------------------------------------------------------------------------------------------------------
MARKET VALUE ADJUSTMENTS, WITHDRAWAL CHARGES AND NET SUBACCOUNT VALUE BASED ON
INTERPOLATED CURRENT INTEREST RATES OF:
-----------------------------------------------------------------------------------------------------------
4.00% 6.00% 8.00%
- -----------------------------------------------------------------------------------------------------------------------------------
MARKET NET MARKET NET MARKET NET
END OF SUB- VALUE WITH- SUB- VALUE WITH- SUB- VALUE WITH- SUB-
CERTIFICATE ACCOUNT ADJUST- DRAWAL ACCOUNT ADJUST- DRAWAL ACCOUNT ADJUST- DRAWAL ACCOUNT
YEAR VALUE MENT CHARGE VALUE MENT CHARGE VALUE MENT CHARGE VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 26,463 967 1,553 25,877 -0- 1,498 24,965 (918) 1,446 24,099
2 28,011 508 1,614 26,904 -0- 1,586 26,425 (490) 1,558 25,963
3 29,649 -0- -0- 29,649 -0- -0- 29,649 -0- -0- 29,649
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The formulas used in determining the amounts shown in the above tables are as
follows:

(1) Net Subaccount Value = Subaccount Value
--------------------------------------------------------------
1 + Current MVA Interest Rate n/365
( ----------------------------------------- )
0.06 + 1 + MVA Interest Rate at Issue or Renewal
</TABLE>

Where "n" is the number of days remaining in the guaranteed period of the
subaccount, but not less than 365.

(2) Withdrawal Charge = Net Subaccount Value X 0.06

<TABLE>
<S> <C>
1 + Current MVA Interest Rate n/365
(3) MVA = Net Subaccount Value X [ 1 - ( ------------------------------------------ ) ]
1 + MVA Interest Rate at Issue or Renewal
</TABLE>

Where "n" is the number of days remaining in the Guarantee Period of the
subaccount, but not less than 365.

A-3
<PAGE> 23

APPENDIX B
EXAMPLES OF WITHDRAWAL CHARGE CALCULATION

These two examples assume you paid a single premium of $25,000. You allocated it
to a subaccount with a five-year Guarantee Period with a guaranteed interest
rate of 6.00% and an MVA interest rate at issue of 5.95%.

Example 1 assumes a partial withdrawal of $5,000 at the end of the third
Contract year. Example 2 assumes a full withdrawal at the end of the third
Contract year. Assume the MVA interest rate at the time of the withdrawal for a
subaccount with the appropriate duration ("B" in the MVA formula) is 7.95% in
both examples.

EXAMPLE 1: PARTIAL WITHDRAWAL

Because of interest earned at the guaranteed rate of 6.00%, at the end of the
third Contract year, the Subaccount Value will be equal to $29,775.40. For a
$5,000 partial withdrawal, the withdrawal charge equals the withdrawal charge
rate multiplied by the partial withdrawal amount:

0.06 X $5,000 = $300

We deduct the $300 withdrawal charge from the remaining Subaccount Value. In
addition to a withdrawal charge, we deduct an MVA of $190.55. Thus, after the
partial withdrawal, the remaining Subaccount Value would be $24,284.85
($29,775.40 - $5,000 - $300 - $190.55). We would send you $5,000. For more
information on the MVA, see Appendix A.

EXAMPLE 2: FULL WITHDRAWAL

As before, because of interest earned at the guaranteed rate of 6.00%, at the
end of the third Contract year, the Subaccount Value equals $29,775.40. To
determine the withdrawal charge on a full withdrawal of Subaccount Value, we
must first calculate the Net Subaccount Value. In this example, the Net
Subaccount Value equals:

<TABLE>
<S> <C>
Subaccount Value 29,775.40
- ------------------------------------------------------- = ------------------------------- = $27,115.13
1 + Current MVA Interest Rate n/365 2
------------------------------ 1 + .0795
0.06 + ( 1 + MVA Interest Rate at Issue ) 0.06 + ( --------- )
or Renewal 1 + .0595
</TABLE>

The withdrawal charge equals the withdrawal charge rate multiplied by the Net
Subaccount Value:

0.06 X $27,115.13 = $1,626.91

On a full withdrawal, we deduct the withdrawal charge from the amount withdrawn.
In addition to a withdrawal charge, we deduct an MVA of $1,033.36 from the
withdrawn amount. Thus, we would pay you the Net Subaccount Value of $27,115.13
on a full withdrawal ($29,775.40 - $1,626.91 - $1,033.36). For more information
on the MVA, see Appendix A.

B-1
<PAGE> 24

REPORTS TO CONTRACT OWNERS. At least once each year prior to the annuity date,
we will send you a report outlining your Contract Value, Subaccount Values,
Guarantee Periods, Withdrawal Charges and MVAs, if any, applied during the year.
The report will not include financial statements.

DOCUMENTS INCORPORATED BY REFERENCE. Merrill Lynch Life Insurance Company's
Annual Report on Form 10-K for the year ended December 31, 1999 is incorporated
herein by reference. This prospectus also incorporates by reference all
documents or reports we file pursuant to Section 13(a), 13(c), 14, or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") after the
date of this prospectus and prior to the termination of this offering. Such
documents or reports will be a part of this prospectus from the date such
documents are filed.

- -------------------------------------------------------------------------------
REQUESTING DOCUMENTS. You may request a free copy of any or all of the
information incorporated by reference into the prospectus (other than
exhibits not specifically incorporated by reference into the text of such
documents). Please direct any oral or written requests for such documents
to our Service Center at:

P.O. BOX 44222
JACKSONVILLE, FLORIDA 32231-4222
TELEPHONE: 1-800-535-5549 (TOLL FREE)
- -------------------------------------------------------------------------------

PUBLIC INFORMATION. We file our Exchange Act documents and reports, including
our annual and quarterly reports on Form 10-K and Form 10-Q, electronically
pursuant to EDGAR under CIK No. 0000845091. The Securities and Exchange
Commission ("SEC") maintains a web site that contains reports, proxy and
information statements, and other information regarding registrants that file
electronically with the SEC. The address of the site is http://www.sec.gov.

You can also review and copy any materials filed with the SEC at its Public
Reference Room at 450 Fifth Street, N.W., Washington D.C., 20549. You may obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330.
<PAGE> 25

PROSPECTUS

MAY 1, 2000

This prospectus describes a modified guaranteed annuity contract issued by
Merrill Lynch Life Insurance Company in Texas only.

To purchase a Contract, you must pay a single premium of at least $25,000. You
must then allocate your premium among one or more subaccounts, which grow at a
specified guaranteed rate of interest, which will not be less than 3%, for the
guarantee period. We currently offer guarantee periods of three and five years.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
CAPSULE SUMMARY............................................. 3
DESCRIPTION OF THE CONTRACT................................. 5
THE CONTRACT........................................... 5
APPLICATION AND PREMIUM................................ 5
SUBACCOUNTS AND SUBACCOUNT VALUES...................... 5
Choices at the End of the Subaccount Guarantee
Period (the Renewal Date)......................... 5
How We Determine the Guaranteed Interest Rates for
Subaccounts....................................... 6
WITHDRAWALS............................................ 7
CHARGES................................................ 7
Withdrawal Charge................................. 7
Market Value Adjustment ("MVA")................... 8
Premium Taxes..................................... 10
DEATH BENEFIT PAYMENTS AND BENEFICIARIES............... 10
Beneficiaries..................................... 10
Death Before the Annuity Date..................... 10
Death After the Annuity Date...................... 10
ANNUITY PROVISIONS (ANNUITIZATION)..................... 11
OTHER PROVISIONS....................................... 13
Assignment........................................ 13
Notices and Elections............................. 13
Amendment of the Contract......................... 13
Free Look Right................................... 13
Guarantee of Contract............................. 14
DISTRIBUTION OF THE CONTRACTS............................... 14
FEDERAL INCOME TAXES........................................ 14
LEGAL PROCEEDINGS........................................... 17
LEGAL MATTERS............................................... 17
EXPERTS..................................................... 18
REGISTRATION STATEMENT...................................... 18
APPENDIX A.................................................. A-1
APPENDIX B.................................................. B-1
</TABLE>

2
<PAGE> 27

CAPSULE SUMMARY

THE CONTRACT

This prospectus describes an individual modified guaranteed annuity contract
issued by Merrill Lynch Life Insurance Company ("we" or "us").

APPLICATION

PREMIUMS

SUBACCOUNTS

We maintain one or more subaccounts for the value of your Contract. Each
subaccount grows at a specified interest rate which will not be less than 3%. We
guarantee that we will credit that interest rate for a specified period, called
a Guarantee Period, that corresponds to the subaccount. Currently, we offer
Guarantee Periods of three and five years. A one-year Guarantee Period is
available at renewal only. You must tell us how much of your premium payment you
want us to put in each subaccount. You must allocate at least $5,000 to each
subaccount you choose. At the end of the Guarantee Period (on the Renewal Date),
you may transfer the value of that subaccount to one or more new subaccounts.

CHARGES

WITHDRAWAL CHARGE

MARKET VALUE ADJUSTMENT ("MVA")

For death benefit payments, we only credit a positive MVA; we do not
deduct any negative MVA.

PREMIUM TAXES

ANNUITY PAYMENTS

your Contract is nonqualified, it is the annuitant's 85th birthday. Your annuity
option at issue is a life annuity with payments guaranteed for 10 years.
However, you may change your annuity date and/or annuity option at any time
before we begin to make annuity payments. You cannot change the annuity date or
the annuity option, or make full or partial withdrawals, after we begin to make
annuity payments.

PAYMENT ON DEATH ("DEATH BENEFIT")

BEFORE THE ANNUITY DATE

If you die before the annuity date, we will pay the beneficiary the value
of the Contract plus any positive MVA as of the date of payment.

AFTER THE ANNUITY DATE

WITHDRAWALS

FREE LOOK

MERRILL LYNCH LIFE INSURANCE COMPANY

We issue the Contract. Our home office is in Little Rock, Arkansas. Our Service
Center's address and phone number are P.O. Box 44222, Jacksonville, Florida
32231-4222, (800) 535-5549.

You should address all communications concerning your Contract to our Service
Center.

4
<PAGE> 29

DESCRIPTION OF THE CONTRACT

THE CONTRACT

APPLICATION AND PREMIUM

SUBACCOUNTS AND SUBACCOUNT VALUES

Your Contract consists of one or more subaccounts. You must tell us how to
distribute your premium payment among these subaccounts. The minimum amount you
can put in a subaccount is $5,000.

Each subaccount grows at a specified guaranteed rate of interest, which will not
be less than 3% per year. The initial rates that will apply to your subaccounts
are those in effect on the day we receive your premium. We guarantee that we
will credit the specified interest rate to the subaccount for the designated
number of years you select, called the Guarantee Period. Currently, we offer two
Guarantee Periods -- three years and five years. A one-year Guarantee Period is
also available, but only at renewal. We can change the number of Guarantee
Periods that we offer at any time.

The end of the Guarantee Period for a particular subaccount is its "Renewal
Date." You cannot change the Guarantee Period or make a transfer to a different
subaccount before the Renewal Date.

The following is an example of how you can allocate a $25,000 single premium on
May 1, 2000 among two subaccounts, and shows Subaccount Values as of each
Renewal Date assuming no withdrawals.

SUBACCOUNT SUBACCOUNT VALUE
AMOUNT ALLOCATED INTEREST RATE GUARANTEE PERIOD RENEWAL DATE AS OF RENEWAL DATE
<S> <C> <C> <C> <C>
$15,000 5.85% Three Years May 1, 2003 $17,789.50
$10,000 6.00% Five Years May 1, 2005 $13,382.26
</TABLE>

CHOICES AT THE END OF THE SUBACCOUNT GUARANTEE PERIOD (THE RENEWAL DATE)

We will send you a notice at least 45 days, but not more than 60 days,
before a subaccount's Renewal Date. Currently, you may notify us no later
than five business days after the Renewal Date that you wish to transfer
the Subaccount Value to one or more new subaccounts. You can

5
<PAGE> 30

choose any of the Guarantee Periods offered on the Renewal Date, but
cannot choose one that will extend beyond the annuity date. You must
transfer at least $5,000 to any one subaccount or the entire Subaccount
Value if less than $5,000. The transfer takes effect as of the Renewal
Date. The interest rate(s) for the Guarantee Period(s) you choose will be
those in effect for renewals on the Renewal Date. The interest rates for
renewals may not be the same as the interest rates for subaccounts of new
Contracts having the same Guarantee Period.

HOW WE DETERMINE THE GUARANTEED INTEREST RATES FOR SUBACCOUNTS

We have no specific formula for setting the guaranteed interest rates.
However, no subaccount will ever have a guaranteed interest rate of less
than 3% per year.

Rates will be influenced by, but not necessarily coincide with, interest
rates available on fixed income investments which we may acquire with the
amounts we receive as premiums. You have no direct or indirect interest
in the investments we make with the premiums. We will invest these
amounts primarily in investment-grade fixed income securities, including:

- securities issued by the United States Government or its agencies or
instrumentalities, which may or may not be guaranteed by the United
States Government;

- other debt instruments;

- commercial paper; and

- cash or cash equivalents.

6
<PAGE> 31

WITHDRAWALS

You can make a withdrawal of all or part of the Net Contract Value or Net
Subaccount Value any time before the earlier of the annuity date or your death.
The following applies:

1. We must receive a written request from you at our Service Center
(unless you have submitted a telephone authorization form -- see
NOTICES AND ELECTIONS).

2. You must return your Contract to us if you want to make a full
withdrawal.

NET SUBACCOUNT VALUE equals the Subaccount Value after adjustment for any MVA
and withdrawal charge that would be applied on a full withdrawal, annuitization
or the payment of death benefits on the death of the participant or annuitant
prior to the annuity date.

NET CONTRACT VALUE equals the sum of all Net Subaccount Values.

5. The remaining Contract Value after a partial withdrawal must be at
least $15,000.

See Appendix A and Appendix B for examples showing the effect of the withdrawal
charge and MVA on the amount of withdrawals.

CHARGES

We impose two types of charges: a Withdrawal Charge and a Market Value
Adjustment. We may also deduct any applicable premium taxes.

WITHDRAWAL CHARGE

7
<PAGE> 32

For full withdrawals, we deduct the
Withdrawal Charge from the proceeds
of the withdrawal.

Withdrawal Charge = Net Subaccount
Value X 0.06

For partial withdrawals, we deduct
a Withdrawal Charge directly from
the subaccount.

Withdrawal Charge = Amount Withdrawn
X 0.06

MARKET VALUE ADJUSTMENT ("MVA")

We impose an MVA in three circumstances:

3. DEATH BENEFIT PAYMENTS: We apply any net positive MVA to payments
made at the time of your death prior to the annuity date. If the net
MVA is negative, however, we will not deduct it.

NET MVA refers to the sum of the MVAs on all subaccounts, some of which may be
positive and some of which may be negative. If the sum is positive, it is
referred to as a NET POSITIVE MVA.

The MVA will depend on the relationship, at the time it is applied,
between:

(i) the MVA interest rate established at issue or renewal for the
subaccount from which a withdrawal or payment is being made; and

(ii) the MVA interest rate in effect for a time period equal to the
remainder of the Guarantee Period of the subaccount from which the
withdrawal or payment is being made.

AS A GENERAL RULE, IF INTEREST RATES GO UP, THE MVA WILL DECREASE YOUR
CONTRACT VALUE; IF INTEREST RATES GO DOWN, THE MVA WILL INCREASE YOUR
CONTRACT VALUE.

We determine the MVA based on the following formula:

1 + B n/365
A X [ 1- ( ------- ) ]
1 + C

8
<PAGE> 33

<TABLE>
<C> <C> <S>
-------------------------------------------------------------------------------------------

NET SUBACCOUNT VALUE =

Subaccount Value
-----------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S> <C> <C> <C> <C> <C>
1 + Current MVA Interest Rate n/365
0.06 + ( ----------------------------------------- )
1 + MVA Interest Rate at Issue or Renewal
</TABLE>

"B" is the current MVA interest rate for a subaccount with a Guarantee
Period in years equal to "n"/365;

"C" is the MVA interest rate for the subaccount from which the withdrawal
is made; and

"n" is the number of days remaining in the Guarantee Period of the
subaccount(s) we are adjusting.

Appendix A contains more information about how the MVA works, including
examples showing the application of the MVA in the context of full
withdrawals from a hypothetical subaccount.

9
<PAGE> 34

PREMIUM TAXES

DEATH BENEFIT PAYMENTS AND BENEFICIARIES

BENEFICIARIES

DEATH BEFORE THE ANNUITY DATE

DEATH AFTER THE ANNUITY DATE

If the annuitant (other than you) dies after the annuity date, we make
any remaining guaranteed annuity payments to you unless you request that
we pay you the present value of those payments in a lump sum. If you or
any other owner under the same Contract dies after the annuity date, we
make any remaining guaranteed annuity payments to the beneficiary unless
the beneficiary asks us to pay the present value of those payments in a
lump sum. We calculate present values at the interest rate that was used
to calculate the amount of the initial annuity payment.
10
<PAGE> 35

ANNUITY PROVISIONS (ANNUITIZATION)

In this section, Net Contract Value means the Contract Value plus or minus the
MVA and minus premium taxes.

Net Contract Value = Contract Value +/- MVA - premium taxes

ANNUITY DATE

11
<PAGE> 36

ANNUITANT

ANNUITY OPTIONS

2. Payments for a Fixed Period: You choose a time period (at least five
years) during which the annuitant will receive annuity payments.

4. Life Annuity with Payments Guaranteed for 10 or 20 Years: We will
make payments for the guaranteed period chosen (10 or 20 years) and
as long thereafter as the annuitant lives.

7. Qualified Plan Option: This option is only available under qualified
contracts. Payments may be based on:

(a) the life expectancy of the annuitant,

(b) the joint life expectancy of the annuitant and his or her spouse,
or

*CAUTION: THESE OPTIONS ARE "PURE" LIFE ANNUITIES. THEREFORE, IT IS
POSSIBLE FOR THE PAYEE TO RECEIVE ONLY ONE ANNUITY PAYMENT IF THE
PERSON (OR PERSONS) ON WHOSE LIFE (LIVES) PAYMENT IS BASED DIES AFTER
ONLY ONE PAYMENT OR TO RECEIVE ONLY TWO ANNUITY PAYMENTS IF THAT
PERSON (THOSE PERSONS) DIES AFTER ONLY TWO PAYMENTS, ETC. CAREFULLY
CONSIDER YOUR NEEDS BEFORE YOU CHOOSE THIS OPTION.

12
<PAGE> 37

CHANGE OF ANNUITY DATE, ANNUITANT OR ANNUITY OPTION

Changes of the annuity date are subject to federal tax restrictions.

OTHER PROVISIONS

ASSIGNMENT

NOTICES AND ELECTIONS

If you have submitted a telephone authorization form, you may make the
following choices via telephone:

1. subaccount selections at the end of a Guarantee Period;

2. subaccounts from which you wish to make partial withdrawals;

3. annuity date changes; and

4. annuity option changes.

AMENDMENT OF THE CONTRACT

We may amend any Contract at any time if necessary to comply with
applicable law, regulation or ruling issued by a government agency or
court.

FREE LOOK RIGHT

13
<PAGE> 38

GUARANTEE OF CONTRACT

Neither the federal government nor its instrumentalities guarantee the
Contract. We back the guarantees in the Contract.

DISTRIBUTION OF THE CONTRACTS

MLPF&S may arrange for sales of the Contract by other broker-dealers who are
registered under the Securities Exchange Act of 1934 and are members of the
NASD.

FEDERAL INCOME TAXES

When you invest in an annuity contract, you usually do not pay taxes on your
earnings until you withdraw the money--generally for retirement purposes. If you
invest in an annuity as part of a IRA, SEP or Roth IRA program, your contract is
called a QUALIFIED Contract. If your annuity is independent of any formal
retirement or pension plan, it is termed a NON-QUALIFIED Contract. The tax rules
applicable to Qualified Contracts vary according to the type of retirement plan
and the terms and conditions of the plan. The ultimate effect of federal income
taxes on the amounts held under an annuity contract, on annuity payments, and on
the economic benefit to the owner, the annuitant or the beneficiary depends on
the type of retirement plan, on the tax status of the individual concerned and
on our tax status.

TAX STATUS OF THE CONTRACTS

REQUIRED DISTRIBUTIONS

14
<PAGE> 39

the time the entire interest in the contract has been distributed, the
entire interest in the contract will be distributed at least as rapidly
as under the method of distribution being used as of the date of such
owner's death; and (b) if any owner dies prior to the annuity starting
date, the entire interest in the contract will be distributed within five
years after the date of such owner's death. These requirements will be
considered satisfied as to any portion of an owner's interest which is
payable to or for the benefit of a designated beneficiary and which is
distributed over the life of such designated beneficiary or over a period
not extending beyond the life expectancy of that beneficiary, provided
that such distributions begin within one year of the owner's death. The
designated beneficiary refers to a natural person designated by the owner
as a beneficiary and to whom ownership of the contract passes by reason
of death. However, if the designated beneficiary is the surviving spouse
of the deceased owner, the contract may be continued with the surviving
spouse as the new owner.

Other required distribution rules may apply to Qualified Contracts.

TAXATION OF ANNUITIES

IN GENERAL

The following discussion applies generally to contracts owned by a
natural person.

PARTIAL WITHDRAWALS AND SURRENDERS

If you withdraw your entire accumulation under a contract, you will be
taxed only on the part that exceeds your investment in the contact.

ANNUITY PAYMENTS

Although tax consequences may vary depending on the annuity option
elected under an annuity contract, a portion of each annuity payment is
generally not taxed and the remainder is taxed as

15
<PAGE> 40

ordinary income. The non-taxable portion of an annuity payment is
generally determined in a manner that is designed to allow you to recover
your investment in the contract ratably on a tax-free basis over the
expected stream of annuity payments, as determined when annuity payments
start. Once your investment in the contract has been fully recovered,
however, the full amount of each annuity payment is subject to tax as
ordinary income. For a contract issued as a Qualified Contract, your
investment in the Contract may be zero.

TAXATION OF DEATH BENEFIT PROCEEDS

PENALTY TAX ON SOME WITHDRAWALS

You may have to pay a penalty tax (10% of the amount treated as taxable income)
on some withdrawals. However, there is usually no penalty on distributions:

1. on or after you reach age 59 1/2;

2. after you die (or after the annuitant dies, if the owner isn't an
individual);

3. on account of becoming disabled; or

4. that are part of a series of substantially equal periodic (at least
annual) payments for your life (or life expectancy) or the joint
lives (or life expectancies) of you and your beneficiary.

TRANSFERS, ASSIGNMENTS, OR EXCHANGES OF A CONTRACT

WITHHOLDING

MULTIPLE CONTRACTS

POSSIBLE CHANGES IN TAXATION

TAXATION OF QUALIFIED CONTRACTS

16
<PAGE> 41

result if you do not ensure that contributions, distributions and other
transactions with respect to the contract comply with the law.

INDIVIDUAL RETIREMENT ACCOUNTS (IRAS)

SIMPLIFIED EMPLOYEE PENSION (SEP) IRAS

ROTH IRAS

A Contract is available for purchase by an individual who has separately
established a Roth IRA custodial account with Merrill Lynch, Pierce,
Fenner & Smith Incorporated. Roth IRAs, as described in Section 408A of
the IRC, permit certain eligible individuals to make non-deductible
contributions to a Roth IRA in cash or as a rollover or transfer from
another Roth IRA or other IRA. A rollover from or conversion of an IRA to
a Roth IRA is generally subject to tax and other special rules apply. You
may wish to consult a tax adviser before combining any converted amounts
with any other Roth IRA contributions, including any other conversion
amounts from other tax years. Distributions from a Roth IRA generally are
not taxed, except that, once aggregate distributions exceed contributions
to the Roth IRA, income tax and a 10% penalty tax may apply to
distributions made (1) before age 59 1/2 (subject to certain exceptions)
or (2) during the five taxable years starting with the year in which the
first contribution is made to any Roth IRA. A 10% penalty tax may apply
to amounts attributable to a conversion from an IRA if they are
distributed during the five taxable years beginning with the year in
which the conversion was made.

OTHER TAX ISSUES

LEGAL PROCEEDINGS

We are not aware of any material pending litigation against us or involving our
property. We are also not aware of any legal proceedings contemplated by any
governmental authorities against us.

LEGAL MATTERS

17
<PAGE> 42

EXPERTS

REGISTRATION STATEMENT

18
<PAGE> 43

APPENDIX A
MARKET VALUE ADJUSTMENT (MVA) ILLUSTRATIONS

A. DISCUSSION

Relationship Between MVA Interest Rates. The MVA may result in either an
increase or decrease in Subaccount Value. It depends on the relationship, when
we apply the MVA, of:

(i) the MVA interest rate declared at issue or renewal for the
subaccount from which a withdrawal or payment is being made, and

(ii) the current MVA interest rate in effect for the period equal to the
remaining Guarantee Period of the subaccount from which the
withdrawal or payment is being made.

B. MARKET VALUE ADJUSTMENT FORMULA

As discussed in the prospectus, the MVA is determined by the following formula:

1 + B n/365
A X [ 1- ( ------- ) ]
1 + C

Where:

<TABLE>
<C> <C> <S>
"n" is the remaining number of days in the guaranteed period of the
Subaccount from which the withdrawal is made or to which the MVA
is applied;

"A" is (i) the amount withdrawn, if a partial withdrawal; or
(ii) the Net Subaccount Value, if a full withdrawal, a death
benefit payment, or annuitization;

"B" is the MVA interest rate in effect at the time we apply the MVA for a
subaccount with a Guarantee Period for a length of years
represented by "n/365," whether or not those lengths are currently
offered under the Contract ("n/365" is determined as described
above if "n/365" is not a whole number); and

"C" is the MVA interest rate in effect for the subaccount on the issue
date or the last renewal date.
</TABLE>

A-1
<PAGE> 44

C. EXAMPLES

D. IMPACT ON CONTRACT VALUE

The tables below show the impact of the MVA and withdrawal charge on a single
premium of $25,000, assuming a full withdrawal at the end of each year shown.

Table 1 assumes:

(i) the premium is allocated to a subaccount with a five-year Guarantee
Period;

(ii) with a guaranteed interest rate of 6.00%; and

(iii) an MVA interest rate at issue of 5.95%.

Table 2 assumes:

(i) premium is allocated to a subaccount with a three-year Guarantee
Period;

(ii) with a guaranteed interest rate of 5.85%; and

(iii) an MVA interest rate at issue of 6.00%.

A-2
<PAGE> 45

TABLE 1

TABLE 2

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
ASSUMED GUARANTEED INTEREST RATE = 5.85%
ASSUMED ISSUE MVA INTEREST RATE = 6.00%
-----------------------------------------------------------------------------------------------------------
MARKET VALUE ADJUSTMENTS, WITHDRAWAL CHARGES AND NET SUBACCOUNT VALUE BASED ON
INTERPOLATED CURRENT INTEREST RATES OF:
-----------------------------------------------------------------------------------------------------------
4.00% 6.00% 8.00%
- -----------------------------------------------------------------------------------------------------------------------------------
MARKET NET MARKET NET MARKET NET
END OF SUB- VALUE WITH- SUB- VALUE WITH- SUB- VALUE WITH- SUB-
CERTIFICATE ACCOUNT ADJUST- DRAWAL ACCOUNT ADJUST- DRAWAL ACCOUNT ADJUST- DRAWAL ACCOUNT
YEAR VALUE MENT CHARGE VALUE MENT CHARGE VALUE MENT CHARGE VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 26,463 967 1,553 25,877 -0- 1,498 24,965 (918) 1,446 24,099
2 28,011 508 1,614 26,904 -0- 1,586 26,425 (490) 1,558 25,963
3 29,649 -0- -0- 29,649 -0- -0- 29,649 -0- -0- 29,649
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The formulas used in determining the amounts shown in the above tables are as
follows:

(1) Net Subaccount Value = Subaccount Value
--------------------------------------------------------------
1 + Current MVA Interest Rate n/365
0.06 + ( ----------------------------------------- )
1 + MVA Interest Rate at Issue or Renewal
</TABLE>

Where "n" is the number of days remaining in the guaranteed period of the
subaccount, but not less than 365.

(2) Withdrawal Charge = Net Subaccount Value X 0.06

<TABLE>

<S> <C>
1 + Current MVA Interest Rate n/365
(3) MVA = Net Subaccount Value X [ 1 - ( ------------------------------------------ ) ]
1 + MVA Interest Rate at Issue or Renewal
</TABLE>

Where "n" is the number of days remaining in the Guarantee Period of the
subaccount, but not less than 365.

A-3
<PAGE> 46

APPENDIX B
EXAMPLES OF WITHDRAWAL CHARGE CALCULATION

EXAMPLE 1: PARTIAL WITHDRAWAL

0.06 X $5,000 = $300

EXAMPLE 2: FULL WITHDRAWAL

The withdrawal charge equals the withdrawal charge rate multiplied by the Net
Subaccount Value:

0.06 X $27,115.13 = $1,626.91

B-1
<PAGE> 47

P.O. BOX 44222
JACKSONVILLE, FLORIDA 32231-4222
TELEPHONE: 1-800-535-5549 (TOLL FREE)
- -------------------------------------------------------------------------------

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Not Applicable.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The following provisions regarding the Indemnification of Directors and Officers
of the Registrant are applicable:

AMENDED AND RESTATED BY-LAWS OF MERRILL LYNCH LIFE INSURANCE COMPANY, ARTICLE VI

Sections 1, 2, 3 and 4 -- Indemnification of Directors, Officers, Employees and
Incorporators

Section 1. Actions Other Than by or in the Right of the Corporation. The
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the Corporation) by reason of the fact that he
is or was a director, officer or employee of the Corporation, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.

Section 2. Actions by or in the Right of the Corporation. The Corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of the fact that
he is or was a director, officer or employee of the Corporation, against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the Corporation unless and only to the extent that
the Court of Chancery or the Court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other Court shall deem proper.

Section 3. Right to Indemnification. To the extent that a director, officer or
employee of the Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in Sections 1 and 2 of
this Article, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.

Section 4. Determination of Right to Indemnification. Any indemnification
under Sections 1 and 2 of this Article (unless ordered by a Court) shall be made
by the Corporation only as authorized in the specific case upon a determination
that indemnification of the director, officer, or employee is proper in the
circumstances because he has met the applicable standard of conduct set forth in
Sections 1 and 2 of this Article. Such determination shall be made (i) by the
board of directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (ii) if such a quorum is
not obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (iii) by the
stockholders.

II-1
<PAGE> 49

BY-LAWS OF MERRILL LYNCH & CO., INC.

Section 2 -- Indemnification by Corporation

Any persons serving as an officer, director or trustee of a corporation, trust,
or other enterprise, including the Registrant, at the request of Merrill Lynch
are entitled to indemnification from Merrill Lynch, to the fullest extent
authorized or permitted by law, for liabilities with respect to actions taken or
omitted by such persons in any capacity in which such persons serve Merrill
Lynch or such other corporation, trust, or other enterprise. Any action
initiated by any such person for which indemnification is provided shall be
approved by the Board of Directors of Merrill Lynch prior to such initiation.

DIRECTORS' AND OFFICERS' INSURANCE

Merrill Lynch has purchased from Corporate Officers' and Directors' Assurance
Company directors' and officers' liability insurance policies which cover, in
addition to the indemnification described above, liabilities for which
indemnification is not provided under the By-Laws. The Company will pay an
allocable portion of the insurance premium paid by Merrill Lynch with respect to
such insurance policy.

ARKANSAS BUSINESS CORPORATION LAW

In addition, Section 4-26-814 of the Arkansas Business Corporation Law generally
provides that a corporation has the power to indemnify a director or officer of
the corporation, or a person serving at the request of the corporation as a
director or officer of another corporation or other enterprise against any
judgments, amounts paid in settlement, and reasonably incurred expenses in a
civil or criminal action or proceeding if the director or officer acted in good
faith in a manner he or she reasonably believed to be in or not opposed to the
best interests of the corporation (or, in the case of a criminal action or
proceeding, if he or she in addition had no reasonable cause to believe that his
or her conduct was unlawful).

SECURITIES AND EXCHANGE COMMISSION POSITION ON INDEMNIFICATION

Insofar as indemnification for liabilities arising under the Securities Act of
1993 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 final adjudication of
such issue.

ITEM 16. EXHIBITS

<TABLE>
<C> <S>
1(a) Form of Underwriting Agreement Between Merrill Lynch Life
Insurance Company and Merrill Lynch, Pierce, Fenner & Smith
Incorporated (Incorporated by Reference to Registrant's
Pre-Effective Amendment No. 1 to Form S-3 Registration No.
333-33863, Filed October 31, 1997.)
2(a) Merrill Lynch Life Insurance Company Board of Directors
Resolution in Connection With the Merger Between Merrill
Lynch Life Insurance Company and Tandem Insurance Group,
Inc. (Incorporated by Reference to Registrant's
Post-Effective Amendment No. 4 to Form S-1 Registration No.
33-26322, Filed September 5, 1991.)
2(b) Plan and Agreement of Merger Between Merrill Lynch Life
Insurance Company and Tandem Insurance Group, Inc.
(Incorporated by Reference to Registrant's Post-Effective
Amendment No. 4 to Form S-1 Registration No. 33-26322, Filed
September 5, 1991.)
</TABLE>

II-2
<PAGE> 50
<TABLE>
<C> <S>
3(a) Articles of Incorporation of Merrill Lynch Life Insurance
Company (Incorporated by Reference to Merrill Lynch Life
Variable Annuity Separate Account A's Post-Effective
Amendment No. 10 to Form N-4, Registration No. 33-43773,
Filed December 10, 1996.)
3(b) By-Laws of Merrill Lynch Life Insurance Company
(Incorporated by Reference to Merrill Lynch Life Variable
Annuity Separate Account A's Post-Effective Amendment No. 10
to Form N-4, Registration No 33-43773, Filed December 10,
1996.)
3(c) Articles of Amendment, Restatement and Redomestication of
the Articles of Incorporation of Merrill Lynch Life
Insurance Company (Incorporated by Reference to Registrant's
Form S-1 Registration No. 33-46827, Filed March 30, 1992.)
3(d) Amended and Restated By-laws of Merrill Lynch Life Insurance
ompany (Incorporated by Reference to Registrant's Form S-1
Registration No. 33-46827, Filed March 30, 1992.)
4(a) Modified Guaranteed Annuity Contract. (Incorporated by
Reference to Registrant's Form S-3 Registration No.
333-33863, Filed August 18, 1997.)
4(b) Individual Retirement Annuity Endorsement. (Incorporated by
Reference to Registrant's Pre-Effective Amendment No. 1 to
Form S-3 Registration No. 333-33863, Filed October 31,
1997.)
4(c) Qualified Plan Endorsement. (Incorporated by Reference to
Registrant's Pre-Effective Amendment No. 1 to Form S-3
Registration No. 333-33863, Filed October 31, 1997.)
4(d) Application for Modified Guaranteed Annuity Contract
(Incorporated by Reference to Registrant's Form S-3
Registration No. 333-33863, Filed August 18, 1997.)
5 Opinion of Barry G. Skolnick, Esq. and Consent to its use as
to the legality of the securities being registered.
10(a) Management Services Agreement Between Merrill Lynch Life
Insurance Company and Family Life Insurance Company
(Incorporated by Reference to Registrant's Form S-1
Registration No. 33-26322, Filed January 3, 1989.)
10(b) General Agency Agreement Between Merrill Lynch Life
Insurance Company and Merrill Lynch Life Agency, Inc.
(Incorporated by Reference to Registrant's Pre-Effective
Amendment No. 1 to Form S-1 Registration No. 33-26322, Filed
February 23, 1989.)
10(c) Amended Service Agreement Between Merrill Lynch Life
Insurance Company and Merrill Lynch Insurance Group, Inc.
(Incorporated by Reference to Registrant's Post-Effective
Amendment No. 1 to Form S-1 Registration No. 33-60290, Filed
March 31, 1994.)
10(d) Indemnity Reinsurance Agreement Between Merrill Lynch Life
Insura nce Company and Family Life Insurance Group
(Incorporated by Reference to Registrant's Post-Effective
Amendment No. 2 to Form S-1 Registration No. 33-26322, Filed
March 13, 1991.)
10(e) Amendment No. 1 to Indemnity Reinsurance Agreement Between
Merrill Lynch Life Insurance Company and Family Life
Insurance Group (Incorporated by Reference to Registrant's
Post-Effective Amendment No. 3 to Form S-1 Registration No.
33-26322, Filed April 24, 1991.)
10(f) Assumption Reinsurance Agreement Between Merrill Lynch Life
Insurance Company, Tandem Insurance Group, Inc. and Royal
Tandem Life Insurance Company and Family Life Insurance
Company (Incorporated by Reference to Registrant's
Post-Effective Amendment No. 4 to Form S-1 Registration No.
33-26322, Filed September 5, 1991.)
10(g) Amended General Agency Agreement Between Merrill Lynch Life
Insurance Company and Merrill Lynch Life Agency Inc.
(Incorporated by Reference to Registrant's Form S-1
Registration No. 33-46827, Filed March 30, 1992.)
10(h) Indemnity Agreement Between Merrill Lynch Life Insurance
Company and Merrill Lynch Life Agency Inc. (Incorporated by
Reference to Registrant's Form S-1 Registration No.
33-46827, Filed March 30, 1992.)
10(i) Management Agreement Between Merrill Lynch Life Insurance
Company and Merrill Lynch Asset Management, Inc.
(Incorporated by Reference to Registrant's Form S-1
Registration No. 33-46827, Filed March 30, 1992.)
</TABLE>

II-3
<PAGE> 51

<TABLE>
<C> <S>
10(j) Form of General Agent Compensation Schedule Addendum to the
General Agency Agreement Between Merrill Lynch Life
Insurance Company and Merrill Lynch Life Agency Inc.
(Incorporated by Reference to Registrant's Pre-Effective
Amendment No. 1 to Form S-3 Registration No. 333-33863,
Filed October 31, 1997.)
23(a) Written Consent of Sutherland Asbill & Brennan LLP.
23(b) Written Consent of Deloitte & Touche LLP, independent
auditors.
24(a) Power of Attorney from Joseph E. Crowne. (Incorporated by
Reference to Registrant's Form S-1 Registration No.
33-58303, Filed March 29, 1995.)
24(b) Power of Attorney from David M. Dunford. (Incorporated by
Reference to Registrant's Form S-1 Registration No.
33-58303, Filed March 29, 1995.)
24(c) Power of Attorney from Barry G. Skolnick. (Incorporated by
Reference to Registrant's Form S-1 Registration No.
33-58303, Filed March 29, 1995.)
24(d) Power of Attorney from Anthony J. Vespa. (Incorporated by
Reference to Registrant's Form S-1 Registration No.
33-58303, Filed March 29, 1995.)
24(e) Power of Attorney from Gail R. Farkas. (Incorporated by
Reference to Registrant's Form S-1 Registration No.
33-58303, Filed March 26, 1996.)
</TABLE>

ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-4
<PAGE> 52

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Plainsboro, State of New Jersey, on this 5th day of
April, 2000.

ATTEST: MERRILL LYNCH LIFE
INSURANCE COMPANY

/s/ EDWARD W. DIFFIN, JR. By: /s/ BARRY G. SKOLNICK
- --------------------------------- -----------------------------
Edward W. Diffin, Jr. Barry G. Skolnick
Vice President Senior Vice President

Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities indicated
on this 5th day of April, 2000.

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>

* Chairman of the Board, President, and Chief
- ----------------------------------------------- Executive Officer
Anthony J. Vespa

* Director, Senior Vice President, Chief
- ----------------------------------------------- Financial Officer, Chief Actuary, and Treasurer
Joseph E. Crowne, Jr.

* Director, Senior Vice President, and Chief
- ----------------------------------------------- Investment Officer
David M. Dunford

* Director and Senior Vice President
- -----------------------------------------------
Gail R. Farkas

*By: /s/ BARRY G. SKOLNICK In his own capacity as Director, Senior Vice
- ----------------------------------------------- President, General Counsel and Attorney-in-
Barry G. Skolnick Fact

</TABLE>
<PAGE> 53

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
- ------- ----------- ----
<C> <S> <C>
5 Opinion of Barry G. Skolnick, Esq. and Consent to its use as
to the legality of the securities being registered
23(a) Written Consent of Sutherland Asbill & Brennan LLP
23(b) Written Consent of Deloitte & Touche LLP, independent
auditors
</TABLE>

<PAGE> 1

EXHIBIT 5

[MERRILL LYNCH LIFE INSURANCE COMPANY LETTERHEAD]

April 5, 2000

Board of Directors
Merrill Lynch Life Insurance Company
425 West Capitol Avenue, Suite 1800
Little Rock, Arkansas 72201

Ladies and Gentlemen:

In my capacity as General Counsel of Merrill Lynch Life Insurance Company (the
"Company"), I have supervised the preparation of the registration statement on
Form S-3 for the RateMax modified guaranteed annuity contract (the "Contract")
to be filed by the Company with the Securities and Exchange Commission under the
Securities Act of 1933.

I am of the following opinion:

(1) The Company was organized in accordance with the laws of the State
of Washington and redomesticated in accordance with the laws of the
State of Arkansas and is a duly authorized stock life insurance
company under the laws of Arkansas and the laws of those states in
which the Company is admitted to do business;

(2) The Company is authorized to issue the Contracts in those states in
which it is admitted and upon compliance with applicable local law;
and

(3) The Contracts, when issued in accordance with a prospectus contained
in the aforesaid registration statement and upon compliance with
applicable local law, will be legal and binding obligations of the
Company in accordance with their terms.

In arriving at the foregoing opinion, I have made such examination of law and
examined such records and other documents as in my judgment are necessary or
appropriate.

I hereby consent to the filing of this opinion as an exhibit to the aforesaid
registration statement and to the reference to me under the caption "Legal
Matters" in each prospectus contained in said registration statement.

Sincerely,

/s/ Barry G. Skolnick

Barry G. Skolnick
Senior Vice President and
General Counsel

<PAGE> 1

EXHIBIT 23(a)

[SUTHERLAND ASBILL & BRENNAN LLP LETTERHEAD]

CONSENT OF SUTHERLAND ASBILL & BRENNAN LLP

We consent to the reference to our firm under the heading "Legal Matters" in the
Prospectuses filed as part of the Registration Statement on Form S-3 for certain
modified guaranteed annuity contracts issued by Merrill Lynch Life Insurance
Company. In giving this consent, we do not admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act of 1933.

SUTHERLAND ASBILL & BRENNAN LLP

By: /s/ KIMBERLY J. SMITH

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

Kimberly J. Smith

Washington, D.C.

April 5, 2000

<PAGE> 1

EXHIBIT 23(b)

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of Merrill Lynch Life
Insurance Company on Form S-3 of our report dated February 28, 2000,
incorporated by reference in the Prospectuses, which is a part of such
Registration Statement, and to the reference to us under the heading "Experts"
in such Prospectuses.

/s/ Deloitte & Touche LLP

New York, New York
April 5, 2000