PFL ENDEAVOR VARIABLE ANNUITY ACCOUNT /NEW/, 485BPOS, 1995-04-27

PFL ENDEAVOR VARIABLE ANNUITY ACCOUNT /NEW/
485BPOS, 1995-04-27

Previous: AMERICAN ADJUSTABLE RATE TERM TRUST INC 1995, N-30D, 1995-04-27

Next: AMERICAN CAPITAL GOVERNMENT TARGET SERIES, NSAR-A, 1995-04-27

<PAGE>

As filed with the Securities and Exchange Commission on April
27, 1995

Registration No. 33- 33085
811-06032
________________________________________________________________________________

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C 20549

________________________________________________________________________________
FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No.___

Post-Effective Amendment No. 10 X
---- -

and

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940

Amendment No. 17 X
---- -

PFL ENDEAVOR VARIABLE ANNUITY ACCOUNT
-------------------------------------
(Exact Name of Registrant)

PFL LIFE INSURANCE COMPANY
--------------------------
(Name of Depositor)

4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499
--------------------------------------------------
(Address of Depositor's Principal Executive Offices)

Depositor's Telephone Number, including Area Code

(319) 398-8511

Craig D. Vermie, Esquire
PFL Life Insurance Company
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499
(Name and Address of Agent for Service)

Copy to:

Frederick R. Bellamy, Esquire
Sutherland, Asbill & Brennan
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2404

1
<PAGE>

DECLARATION PURSUANT TO RULE 24f-2

Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the
Registrant declares that a notice pursuant to Rule 24f-2 for the year ended
December 31, 1994 was filed on February 27, 1995.

______________

It is proposed that this filing will become effective:

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

X on May 1, 1995 pursuant to paragraph (b) of Rule 485
-------
_______ 60 days after filing pursuant to paragraph (a) (i) of
Rule 485

_______ on __________ pursuant to paragraph (a)(i) of Rule 485

_______ 75 days after filing pursuant to paragraph (a)(ii)

_______ on __________ pursuant to paragraph (a)(ii) of Rule 485

If appropriate, check the following box:

this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

2
<PAGE>

CROSS REFERENCE SHEET
Pursuant to Rule 495

Showing Location in Part A (Prospectus) and
Part B (Statement of Additional Information)
of Registration Statement of Information Required by Form N-4
-------------------------------------------------------------

<TABLE>
<CAPTION>
PART A
------

Item of Form N-4 Prospectus Caption
- ---------------- ------------------
<S> <C>
1. Cover Page.................... Cover Page

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

3. Synopsis...................... Summary; Historical Performance
Data

4. Condensed Financial Information Financial Statements

5. General
(a) Depositor................. PFL Life Insurance Company
(b) Registrant................ The Mutual Fund Account
(c) Portfolio Company......... Underlying Funds
(d) Fund Prospectus........... Underlying Funds
(e) Voting Rights............. Voting Rights

6. Deductions and Expenses
(a) General................... Charges and Deductions
(b) Sales Load %.............. Contingent Deferred Sales Charge
(c) Special Purchase Plan..... N/A
(d) Commissions............... Distributor of the Policies
(e) Expenses - Registrant..... N/A
(f) Fund Expenses............. Expenses Including Investment
Advisory Fees
(g) Organizational Expenses... N/A

7. Policies
(a) Persons with Rights....... The Policy; Election of Annuity
Option; Determination of Annuity
Payments; Annuity Commencement
Date; Ownership of the Policy
Voting Rights
(b) (i) Allocation of Premium
Payments............ Allocation of Premiums
(ii) Transfers........... Transfers
(iii) Exchanges........... N/A
(c) Changes................... Addition, Deletion or
Substitution of Investments;
Election of Annuity Option;
Annuity Commencement Date;
Beneficiary; Ownership of the
Policy
</TABLE>

3
<PAGE>

<TABLE>
<S> <C>
(d) Inquiries................. Summary

8. Annuity Period................ Annuity Options

9. Death Benefit................. Death of Annuitant Prior to
Annuity Commencement Date

10. Purchase and Policy Values
(a) Purchases................. Policy Application and Issuance
of Policies; Premiums
(b) Valuation................. Policy Value; The Mutual Fund
Account Value
(c) Daily Calculation......... The Mutual Fund Account Value
(d) Underwriter............... Distributor of the Policies

1 Redemptions
(a) By Owners................. Surrenders
By Annuitant.............. N/A
(b) Texas ORP................. Restrictions Under the Texas
Optional Retirement Program
(c) Check Delay............... Payment not Honored by Bank
(d) Lapse..................... N/A
(e) Free Look................. Summary

12. Taxes.......................... Certain Federal Income Tax
Consequences

13. Legal Proceedings.............. Legal Proceedings

14. Table of Contents for the
Statement of Statement of Additional
Additional Information Information

<CAPTION>
PART B
------

Item of Form N-4 Statement of Additional
- ---------------- Information Caption
-------------------
<S> <C>
15. Cover Page..................... Cover Page

16 Table of Contents.............. Table of Contents

17. General Information
and History.................... (Prospectus) PFL Life Insurance
Company

18. Services.......................
(a) Fees and Expenses
of Registrant............. N/A
(b) Management Policies....... N/A
(c) Custodian................. Custody of Assets
Independent
Auditors.................. Independent Auditors
(d) Assets of Registrant...... Custody of Assets
</TABLE>

4
<PAGE>

PROSPECTUS May 1, 1995
- ----------
THE ENDEAVOR VARIABLE ANNUITY

Issued Through

PFL ENDEAVOR VARIABLE ANNUITY ACCOUNT

PFL LIFE INSURANCE COMPANY

This Prospectus describes the Endeavor Variable Annuity (the "Policy"), a
Flexible Premium Variable Annuity offered by PFL Life Insurance Company. The
Policy is designed to aid in long-term financial planning and provides for the
accumulation of capital by individuals on a tax-deferred basis for retirement
or other long-term purposes. The Policy may be purchased with a minimum initial
Premium Payment of $5,000 if the Policy is purchased on a non-tax qualified
basis ("Nonqualified Policy") or $1,000 if the Policy is purchased and used in
connection with a plan qualifying for favorable income tax treatment
("Qualified Policy") ($50 if the Policy is purchased and used in connection
with a Tax Deferred 403(b) Annuity). An Owner generally may make additional
Premium Payments of at least $500 each (or $50 for a Policy used in connection
with a Tax Deferred 403(b) Annuity) at any time before the Annuity Commencement
Date.

The Owner may allocate Premium Payments to one or more Subaccounts of the PFL
Endeavor Variable Annuity Account (the "Mutual Fund Account"), to a Fixed
Account which guarantees a minimum fixed return, or to a combination of these
(the Fixed Account and the Subaccounts of the Mutual Fund Account are the
"Investment Options" available under the Policies). The Mutual Fund Account
currently has nine different Subaccounts (the "Subaccounts"). Assets of each
Subaccount are invested in a corresponding Portfolio of a mutual fund, the WRL
Growth Portfolio of the WRL Series Fund, Inc., managed by Janus Capital
Corporation, and the Endeavor Series Trust (the "Underlying Funds"). The
Underlying Funds currently consist of nine Portfolios: the WRL Growth
Portfolio, managed by Janus Capital Corporation; the Managed Asset Allocation
Portfolio; the Money Market Portfolio; the T. Rowe Price International Stock
Portfolio; the Quest for Value Equity Portfolio; the Quest for Value Small Cap
Portfolio; the U.S. Government Securities Portfolio; the T. Rowe Price Equity
Income Portfolio; and the T. Rowe Price Growth Stock Portfolio. The Underlying
Funds are described in separate prospectuses that accompany this Prospectus.

THE POLICY IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR ENDORSED BY, ANY
BANK OR DEPOSITORY INSTITUTION, AND THE POLICY IS NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, OR ANY OTHER AGENCY, AND INVOLVES
INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.

THIS PROSPECTUS MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS FOR THE
ENDEAVOR SERIES TRUST AND FOR THE WRL GROWTH PORTFOLIO OF THE WRL SERIES FUND,
INC. CERTAIN PORTFOLIOS MAY NOT BE AVAILABLE IN ALL STATES.

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

EVA595
<PAGE>

The Policy Value will vary in accordance with the investment performance of
the Subaccounts selected by the Owner. Therefore, the Owner bears the entire
investment risk under this Policy for all amounts allocated to the Mutual Fund
Account. Amounts allocated to the Fixed Account are guaranteed by PFL Life
Insurance Company ("PFL") and will earn a specified rate of interest declared
periodically.

The Policies provide for monthly annuity payments to be made by PFL for the
life of the Annuitant or for some other period, beginning on the Annuity
Commencement Date selected by the Owner. Prior to the Annuity Commencement
Date, the Owner can transfer amounts among the Investment Options, that is,
between the Fixed Account or Subaccounts of the Mutual Fund Account (some
prohibitions and restrictions apply, especially on transfers out of the Fixed
Account). The Owner can also elect to surrender all or any portion of the Cash
Value in exchange for a cash withdrawal payment from PFL; however, withdrawals
may be taxable, subject to a Contingent Deferred Sales Charge and/or a tax
penalty, and withdrawals from the Fixed Account may be delayed.

This Prospectus sets forth the information that a prospective investor should
consider before investing in a Policy. A Statement of Additional Information
about the Policy and the Mutual Fund Account, which has the same date as this
Prospectus, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. The Statement of Additional Information dated
May 1, 1995 is available at no cost to any person requesting a copy by writing
PFL at the Administrative and Service Office or by calling 1-800-525-6205. The
table of contents of the Statement of Additional Information is included at the
end of this Prospectus.

This Prospectus and the Statement of Additional Information generally
describe only the Policies and the Mutual Fund Account, except when the Fixed
Account is specifically mentioned.

Administrative and Service Office:
Financial Markets Division--Variable Annuity Dept.
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499

Please Read This Prospectus Carefully And Retain it For Future Reference.

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO DEALER, SALESPERSON OR OTHER PERSON
IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.

Quest for Value is a service mark of Oppenheimer Capital.

- 2 -
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
DEFINITIONS................................................................ 4
SUMMARY.................................................................... 7
CONDENSED FINANCIAL INFORMATION............................................ 16
FINANCIAL STATEMENTS....................................................... 17
HISTORICAL PERFORMANCE DATA................................................ 17
Standardized Performance Data............................................ 17
WRL Growth Subaccount.................................................... 19
Other Subaccounts........................................................ 19
T. Rowe Price Equity Income Subaccount and
T. Rowe Price Growth Subaccount........................................ 20
T. Rowe Price International Stock Subaccount............................. 20
Non-Standardized Performance Data........................................ 21
PUBLISHED RATINGS.......................................................... 22
PFL LIFE INSURANCE COMPANY................................................. 22
THE ENDEAVOR ACCOUNTS...................................................... 23
The Mutual Fund Account.................................................. 23
The Fixed Account........................................................ 27
Transfers................................................................ 28
Telephone Transactions................................................... 29
Dollar Cost Averaging.................................................... 29
THE POLICY................................................................. 30
Policy Application and Issuance of Policies.............................. 30
Premium Payments......................................................... 31
Policy Value............................................................. 32
Non-participating Policy................................................. 33
DISTRIBUTIONS UNDER THE POLICY............................................. 33
Surrenders............................................................... 33
Systematic Withdrawal Plan............................................... 34
Annuity Payments......................................................... 35
Annuity Commencement Date.............................................. 35
Election of Payment Option............................................. 35
Premium Tax............................................................ 36
Supplementary Policy................................................... 36
Annuity Payment Options.................................................. 36
Death Benefit............................................................ 39
Death of Annuitant Prior to Annuity Commencement Date.................. 39
Death of Annuitant On or After Annuity Commencement Date............... 41
Beneficiary............................................................ 41
Death of Owner........................................................... 42
Restrictions Under the Texas Optional Retirement Program................. 42
Restrictions Under Section 403(b) Plans.................................. 42
CHARGES AND DEDUCTIONS..................................................... 42
Contingent Deferred Sales Charge......................................... 43
Mortality and Expense Risk Charge........................................ 44
Administrative Charges................................................... 44
Premium Taxes............................................................ 45
Federal, State and Local Taxes........................................... 45
Transfer Charge.......................................................... 45
Other Expenses Including Investment Advisory Fees........................ 46
Employee and Agent Purchases............................................. 46
CERTAIN FEDERAL INCOME TAX CONSEQUENCES.................................... 46
Tax Status of the Policy................................................. 47
Taxation of Annuities.................................................... 47
DISTRIBUTOR OF THE POLICIES................................................ 52
VOTING RIGHTS.............................................................. 52
LEGAL PROCEEDINGS.......................................................... 53
STATEMENT OF ADDITIONAL INFORMATION........................................ 54
</TABLE>

- 3 -
<PAGE>

DEFINITIONS

Accumulation Unit--An accounting unit of measure used in calculating the
Policy Value.

Administrative and Service Office--Financial Markets Division--Variable
Annuity Dept., 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499.

Annuitant--The person entitled to receive Annuity Payments after the Annuity
Commencement Date and during whose life any Annuity Payments involving life
contingencies will continue.

Annuity Commencement Date--The date upon which Annuity Payments are to
commence.

Annuity Payment Option or Payment Option--A method of receiving a stream of
Annuity Payments.

Annuity Purchase Value--An amount equal to the Policy Value for the Valuation
Period which ends immediately preceding the Annuity Commencement Date reduced
by any applicable premium or similar taxes.

Annuity Unit--An accounting unit of measure used in the calculation of the
amount of the second and each subsequent Variable Annuity Payment.

Beneficiary--Before the Annuity Commencement Date, the person to whom the
death proceeds will be paid if the Annuitant, who is also the Owner, dies.
After the Annuity Commencement Date, the person to whom payments will be made
if the Annuitant dies. In the event the Annuitant, who is not the Owner, dies
prior to the Annuity Commencement Date, the Owner will become the Annuitant
unless the Owner specifically requests on the application or in writing that
the death benefit be paid upon the Annuitant's death and PFL agrees to such an
election.

Business Day--A day when the New York Stock Exchange is open for business and
that is a regular business day of the Endeavor Administrative and Service
Office.

Cash Value--The Policy Value less the Contingent Deferred Sales Charge, if
any, and less any applicable premium taxes.

Code--The Internal Revenue Code of 1986, as amended.

Current Interest Guarantee--PFL's guarantee to pay a declared Current
Interest Rate on amounts under a Policy allocated to the Fixed Account. A
particular Current Interest Guarantee will be in effect for at least one year.

- 4 -
<PAGE>

Current Interest Guarantee Period--The period during which a Current Interest
Guarantee is in effect.

Current Interest Rate--The interest rate currently guaranteed to be paid on
amounts under a Policy allocated to the Fixed Account. This interest rate will
always equal or exceed a minimum of 4%.

Date of Issue--The date the Policy is issued, as shown on the Policy Schedule
Page.

Due Proof of Death--A certified copy of a death certificate, a certified copy
of a decree of a court of competent jurisdiction as to the finding of death, a
written statement by the attending physician, or any other proof satisfactory
to PFL will constitute Due Proof of Death.

Fixed Account--All of the assets of PFL that are not in separate accounts.

Fixed Annuity Payments--Payments made pursuant to an Annuity Payment Option
which do not fluctuate in amount.

Investment Options--The Fixed Account and any of the Subaccounts of the
Mutual Fund Account.

Mutual Fund Account--The PFL Endeavor Variable Annuity Account, a separate
account established and registered as a unit investment trust under the
Investment Company Act of 1940 to which Premium Payments under the Policies may
be allocated and which invests in the WRL Growth Portfolio of the WRL Series
Fund, Inc., managed by Janus Capital Corporation, and the Endeavor Series
Trust.

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

PFL--PFL Life Insurance Company, the issuer of the Policies.

Policy--One of the variable annuity policies offered by this Prospectus.

Policy Anniversary--Each anniversary of the Date of Issue.

Policy Owner or Owner--The person who may exercise all rights and privileges
under the Policy. The Policy Owner during the lifetime of the Annuitant and
prior to the Annuity Commencement Date is the person designated as the Policy
Owner in the application or a Successor Owner; the Policy Owner on and after
the Annuity Commencement Date is the Annuitant; and the Policy Owner after the
death of the Annuitant, who is also the Owner (unless the Owner has elected in
writing that the death benefit be paid upon the Annuitant's death and PFL
agrees to such an election) is the Beneficiary.

Policy Value--The sum of the value of all Accumulation Units credited to a
Policy for any particular Valuation Period in the Mutual Fund Account, plus the
value in the Fixed Account.

- 5 -
<PAGE>

Policy Year--A Policy Year begins on the Date of Issue and each anniversary
of the Date of Issue.

Premium Payment--An amount paid to PFL by the Policy Owner or on the Policy
Owner's behalf as consideration for the benefits provided by the Policy.

Qualified Policy--A Policy that has received favorable tax treatment under
Section 401, 403, 408, 457 or any other similar provision of the Code.

Subaccount--A segregated account within the Mutual Fund Account which invests
in a specified Portfolio of the Underlying Funds.

Successor Policy Owner--A person appointed by the Policy Owner to succeed to
ownership of the Policy in the event of the death of the Policy Owner who is
not the Annuitant before the Annuity Commencement Date.

Underlying Funds--The WRL Growth Portfolio of the WRL Series Fund, Inc.,
managed by Janus Capital Corporation, and the Endeavor Series Trust.

Valuation Period--The period of time from one determination of Accumulation
Unit and Annuity Unit values to the next subsequent determination of values.
Such determination shall be made on each Business Day.

Variable Annuity Payments--Payments made pursuant to an Annuity Payment
Option which fluctuate as to dollar amount or payment term in relation to the
investment performance of the specified Subaccounts within the Mutual Fund
Account.

Written Notice or Request--Written notice, signed by the Policy Owner, that
gives PFL the information it requires and is received at the Administrative and
Service Office.

- 6 -
<PAGE>

THE ENDEAVOR VARIABLE ANNUITY

SUMMARY

THE POLICY

The Endeavor Variable Annuity is a Flexible Premium Variable Annuity which
can be purchased on a non- tax qualified basis ("Nonqualified Policy") or with
the proceeds from certain plans qualifying for favorable federal income tax
treatment ("Qualified Policy"). The Owner allocates the Premium Payments among
the two Endeavor Accounts of PFL Life Insurance Company ("PFL"): the PFL
Endeavor Variable Annuity Account (the "Mutual Fund Account") and the Fixed
Account.

THE ACCOUNTS

The Mutual Fund Account. The Mutual Fund Account is a separate account of
PFL, which invests exclusively in shares of the eight portfolios of the
Endeavor Series Trust and the WRL Growth Portfolio of the WRL Series Fund, Inc.
(collectively, the "Underlying Funds"). The Endeavor Series Trust is a mutual
fund managed by Endeavor Investment Advisers, a general partnership between
Endeavor Management Co. and AUSA Financial Markets, Inc., which contracts with
TCW Funds Management, Inc. (a subsidiary of The TCW Group, Inc.), T. Rowe Price
Associates, Inc., Quest for Value Advisors (a subsidiary of Oppenheimer
Capital), The Boston Company Asset Management, Inc. (an indirect wholly-owned
subsidiary of Mellon Bank Corporation), and Rowe Price-Fleming International,
Inc. for investment advisory services. The WRL Growth Portfolio, managed by
Janus Capital Corporation, is a portfolio within the WRL Series Fund, Inc.
which is a mutual fund whose investment adviser is Western Reserve Life
Assurance Co. of Ohio ("Western Reserve"), an affiliate of PFL. Western Reserve
contracts with Janus Capital Corporation as a sub-adviser to the WRL Growth
Portfolio for investment advisory services. The Underlying Funds currently have
nine Portfolios: the WRL Growth Portfolio, managed by Janus Capital
Corporation; the Managed Asset Allocation Portfolio; the Money Market
Portfolio; the T. Rowe Price International Stock Portfolio (formerly the Global
Growth Portfolio); the Quest for Value Equity Portfolio; the Quest for Value
Small Cap Portfolio; the U.S. Government Securities Portfolio; the T. Rowe
Price Equity Income Portfolio; and the T. Rowe Price Growth Stock Portfolio.
Each of the nine Subaccounts of the Mutual Fund Account invests solely in a
corresponding Portfolio of the Underlying Funds. Because Policy Values may
depend on the investment experience of the selected Subaccounts, the Owner
bears the entire investment risk with respect to Premium Payments allocated to,
and amounts transferred to, the Mutual Fund Account. (See "The Mutual Fund
Account," p. 23.)

The Fixed Account. The Fixed Account guarantees safety of principal and a
minimum 4% return on Premium Payments allocated to,

- 7 -
<PAGE>

and amounts transferred to, the Fixed Account. PFL may, in its sole discretion,
declare a higher Current Interest Rate. A Current Interest Rate is guaranteed
for at least one year. (See "The Fixed Account," p. 27.)

PREMIUM PAYMENTS

A Nonqualified Policy may be purchased with an initial Premium Payment of at
least $5,000, and a Qualified Policy generally may be purchased with an initial
Premium Payment of at least $1,000, but a Policy purchased and used in
connection with a Tax Deferred 403(b) Annuity may be purchased with an initial
Premium Payment of at least $50. An Owner may make additional Premium Payments
of at least $500 each under either a Nonqualified Policy or a Qualified Policy,
or $50 each under a Policy used in connection with a Tax Deferred 403(b)
Annuity, at any time before the Annuity Commencement Date. There is nothing
deducted from Premium Payments, so all funds are invested immediately. (But see
"Contingent Deferred Sales Charge," p. 43.)

On the Date of Issue, the initial Premium Payment is allocated among the
Investment Options (that is, among the Fixed Account and/or the Subaccounts of
the Mutual Fund Account) in accordance with the allocation percentages
specified by the Owner in the Policy application. Any allocation must be in
whole percents, and the total allocation must equal 100%. Allocations for
additional Premium Payments may be changed by sending Written Notice to PFL's
Administrative and Service Office. (See "Premium Payments," p. 31.)

TRANSFERS

An Owner can transfer Policy Values from one Account or Subaccount to another
Account or Subaccount with certain limitations. The minimum amount which may be
transferred is the lesser of $500 or the entire Account or Subaccount Value.
However, following a transfer out of a particular Account or Subaccount, at
least $500 must remain in that Account or Subaccount. Transfers out of the
Mutual Fund Account currently may be made as often as the Owner wishes either
by telephone (subject to the provisions described below under "Telephone
Transactions," p. 29) or by sending Written Notice to the Administrative and
Service Office.

Transfers from the One Year Option Fixed Account (see "The Fixed Account," p.
27), except through Dollar Cost Averaging, are not allowed. Transfers from the
Three Year Option of the Fixed Account are subject to a yearly limit equal to
the greater of 25% of the current policy value in the Three Year Option Fixed
Account, or the amount transferred out of the Three Year Option Fixed Account
during the prior Policy Year.

A charge may be imposed for any transfers in excess of 12 per Policy Year,
but currently there is no charge for any transfers. (See "Transfers," p. 28.)

- 8 -
<PAGE>

SURRENDERS

The Owner may elect to surrender all or a portion of the Cash Value ($500
minimum) in exchange for a cash withdrawal payment from PFL at any time prior
to the earlier of the Annuitant's death or the Annuity Commencement Date. The
Cash Value equals the Policy Value less any applicable Contingent Deferred
Sales Charge (described below) and any applicable premium taxes. A surrender
request must be made by Written Request, and a request for a partial surrender
must specify the Accounts or Subaccounts from which the withdrawal is
requested. There is currently no limit on the frequency or timing of
withdrawals. (See "Surrenders," p. 33.) In addition to the Contingent Deferred
Sales Charge and any applicable premium taxes, surrenders may be subject to
income taxes and a 10% tax penalty.

CHARGES AND DEDUCTIONS

Contingent Deferred Sales Charge. In order to permit investment of the entire
Premium Payment, PFL does not deduct sales or other charges at the time of
investment. However, a Contingent Deferred Sales Charge of up to 7% of the
amount withdrawn is imposed on certain full or partial withdrawals of Premium
Payments in order to cover expenses relating to the sale of the Policies. The
applicable Contingent Deferred Sales Charge is based on the period of time
elapsed since payment of the Premium Payment(s) being withdrawn, and there will
be no Charge imposed seven or more years after the Premium Payment(s) was paid.
For purposes of determining the applicable Contingent Deferred Sales Charge,
Premium Payments are considered to be withdrawn on a "first in--first out"
basis. (See "Contingent Deferred Sales Charge," p. 43.) Amounts withdrawn in
the first Policy Year, or the second and all subsequent withdrawals in any
other Policy Year, or in excess of 10% of the Policy Value even if it is the
first withdrawal in any Policy Year, may be subject to a Contingent Deferred
Sales Charge (of up to 7%). (Put another way, after the first Policy Year, up
to 10% of the Policy Value may be withdrawn without a Contingent Deferred Sales
Charge if it is the first withdrawal in the Policy Year). Amounts applied to
provide an Annuity, if applied during the first five Policy Years and applied
under certain Payment Options, may also be subject to a Contingent Deferred
Sales Charge. (See "Surrenders," p. 33.)

NURSING CARE AND TERMINAL ILLNESS WAIVER

Account Charges. PFL deducts a daily charge equal to a percentage of the net
assets in the Mutual Fund Account for the mortality and

- 9 -
<PAGE>

expense risks assumed by PFL. The effective annual rate of this charge is 1.25%
of the value of the Account's net assets. (See "Mortality and Expense Risk
Charge," p. 44.)

PFL also deducts a daily Administrative Charge from the net assets of the
Mutual Fund Account to partially cover expenses incurred by PFL in connection
with the administration of the Account and the Policies. The effective annual
rate of this charge is .15% of the value of each Account's net assets. (See
"Administrative Charges," p. 44.)

The account charges for mortality and expense risks and administrative
expenses are guaranteed not to exceed a total of 1.40%.

Policy Charges. There is also an annual Policy Maintenance Charge each year
for Policy maintenance and related administrative expenses. This charge is the
lesser of 2% of the Policy Value or $35 per year and is deducted only from the
Mutual Fund Account. For Policies issued on or after May 1, 1995, this charge
is waived if the sum of all Premium Payments made less the sum of all partial
withdrawals is at least $50,000 on the Policy Anniversary. THIS CHARGE WILL NOT
BE INCREASED IN THE FUTURE. (See "Administrative Charges," p. 44.)

Taxes. PFL may incur premium taxes relating to the Policies. When permitted
by state law, PFL will not deduct any premium taxes related to a particular
Policy from the Policy Value until withdrawal of all Policy Value or until the
Annuity Commencement Date. (See "Premium Taxes," p. 45.)

No charges are currently made against any of the Accounts for federal, state,
or local income taxes. Should PFL determine that any such taxes may be imposed
with respect to any of the Accounts, PFL may deduct such taxes from amounts
held in the relevant Account. (See "Federal, State and Local Taxes," p. 45.)

Charges Against the Underlying Funds. The value of the net assets of the
Subaccounts of the Mutual Fund Account will reflect the investment advisory fee
and other expenses incurred by the Underlying Funds.

Expense Data. The charges and deductions are summarized in the following
tables. This tabular information regarding expenses assumes that the entire
Policy Value is in the Mutual Fund Account.

- 10 -
<PAGE>

<TABLE>
<CAPTION>
U.S. T. ROWE T. ROWE
MANAGED T. ROWE PRICE QUEST FOR QUEST FOR GOVERNMENT PRICE PRICE
ASSET MONEY INTERNATIONAL WRL VALUE VALUE SECURITIES EQUITY GROWTH
ALLOCATION MARKET STOCK GROWTH EQUITY SMALL CAP PORTFOLIO INCOME STOCK
---------- ------ ------------- ------ --------- --------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Policy Owner Transaction
Expenses/1/............
Sales Load On Purchase
Payments............... 0 0 0 0 0 0 0 0 0
Maximum Contingent
Deferred Sales Charge
(as a % of Premium
Payment
Surrendered)/2/........ 7% 7% 7% 7% 7% 7% 7% 7% 7%
Surrender Fees.......... 0 0 0 0 0 0 0 0 0
----------------------------------------------------------------------------------------------------
Annual Policy Fee $35 Per Policy
----------------------------------------------------------------------------------------------------
Transfer Fee First 12 Transfers Per Year: NO FEE
More than 12 in One Year: Currently no fee
MUTUAL FUND ACCOUNT
ANNUAL EXPENSES
(as a percentage of
account value)
Mortality and Expense
Risk Fees.............. 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25%
Administrative Charge... 0.15% 0.15% 0.15% 0.15% 0.15% 0.15% 0.15% 0.15% 0.15%
---- ---- ---- ---- ---- ---- ---- ---- ----
Total Mutual Fund
Account Annual
Expenses............... 1.40% 1.40% 1.40% 1.40% 1.40% 1.40% 1.40% 1.40% 1.40%
UNDERLYING FUNDS ANNUAL
EXPENSES
(as a percentage of
average net assets)
Management Fees ........ 0.75% 0.50% 0.90% 0.80% 0.80% 0.80% 0.65% 0.80% 0.80%
Other Expenses ......... 0.15% 0.35% 0.26% 0.04% 0.22% 0.23% 0.13% 0.50% 0.50%
---- ---- ---- ---- ---- ---- ---- ---- ----
Total Underlying Funds
Annual Expenses/3/..... 0.90% 0.85% 1.16% 0.84% 1.02% 1.03% 0.78%(/3/) 1.30%(/4/) 1.30%(/4/)
</TABLE>
- ----------------------------------
/1/ The Contingent Deferred Sales Charge and Transfer Fee, if any is imposed,
apply to each Policy, regardless of how Policy Value is allocated among the
Mutual Fund Account and the Fixed Account. The Annual Policy Fee and Mutual
Fund Account Annual Expenses do not apply to the Fixed Account. (See "Other
Expenses Including Investment Advisory Fees," p. 46.)
/2/ The Contingent Deferred Sales Charge is decreased based on the Policy year
in which the withdrawal is made, from 7% in the Policy year in which the
Premium Payment was made to 0% in the eighth Policy Year after the Premium
Payment was made.

/3/ During 1994 Endeavor Series Trust's investment manager waived payment of a
portion of its management fees and reimbursed other expenses for certain of
the Underlying Funds. Without the waiver, the actual management fee and
other expenses on an annualized basis were 1.83% of average net assets of
the U.S. Government Securities Portfolio. The Manager has agreed, until
terminated by the Manager, to assume expenses of the Portfolios that exceed
the following rates: Managed Asset Allocation--1.25%; Money Market--0.99%;
T. Rowe Price International Stock--1.53%; Quest for Value Equity--1.30%;
Quest for Value Small Cap--1.30%; U.S. Government Securities--1.00%; T. Rowe
Price Equity Income--1.30%; T. Rowe Price Growth Stock--1.30%.
/4/ The Underlying Fund expenses for the T. Rowe Price Equity Income Portfolio
and T. Rowe Price Growth Stock Portfolio are estimates for the first year of
operations.

- 11 -
<PAGE>

Examples

An Owner would pay the following expenses on a $1,000 investment, assuming a
5% annual return on assets:

1. If the Policy is surrendered at the end of the applicable time period:*

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Managed Asset Allocation Portfolio.............. $ 94 $ 124 $157 $271
Money Market Portfolio.......................... $ 94 $ 123 $154 $266
T. Rowe Price International Stock Portfolio..... $ 97 $ 132 $170 $297
WRL Growth Portfolio............................ $ 93 $ 122 $154 $265
Quest for Value Equity Portfolio................ $ 95 $ 128 $163 $283
Quest for Value Small Cap Portfolio............. $ 95 $ 128 $163 $284
U.S. Government Securities Portfolio............ $ 93 $ 120 $150 $256
T. Rowe Price Equity Income Portfolio........... $ 98 $ 137 $178 $315
T. Rowe Price Growth Stock Portfolio............ $ 98 $ 137 $178 $315
</TABLE>

2. If the Policy is annuitized at the end of the applicable time period:*

<TABLE>
<S> <C> <C> <C> <C>
Managed Asset Allocation Portfolio.............. $ 24 $ 74 $127 $271
Money Market Portfolio.......................... $ 24 $ 73 $124 $266
T. Rowe Price International Stock Portfolio..... $ 27 $ 82 $140 $297
WRL Growth Portfolio............................ $ 23 $ 72 $124 $265
Quest for Value Equity Portfolio................ $ 25 $ 78 $133 $283
Quest for Value Small Cap Portfolio............. $ 25 $ 78 $133 $284
U.S. Government Securities Portfolio............ $ 23 $ 70 $120 $256
T. Rowe Price Equity Income Portfolio........... $ 28 $ 87 $148 $315
T. Rowe Price Growth Stock Portfolio............ $ 28 $ 87 $148 $315
</TABLE>

3. If the Policy is not surrendered or annuitized:

The above tables are intended to assist the Owner in understanding the costs
and expenses that will be borne, directly or indirectly. These include the
expenses of the Underlying Funds. See "Charges and Deductions," p. 42, and the
Underlying Funds' prospectuses. In addition to the expenses listed above,
premium taxes may be applicable.
- -----------
* If the Policy is annuitized during the first five Policy Years, under a
period certain only payment option, with payments of less than five years,
then the expenses would be the same as if the Policy were surrendered.

- 12 -
<PAGE>

THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. The
figures and data for Underlying Fund annual expenses have been provided by
Western Reserve Life Assurance Co. of Ohio and Endeavor Investment Advisers,
and while PFL does not dispute these figures, PFL does not guaranty their
accuracy.

In these examples, the $35 Annual Policy Fee is reflected as a charge of
0.077% based on an average Policy Value of $45,340.

DEATH BENEFIT

In the event that the Annuitant who is not the owner dies prior to the
Annuity Commencement Date, the Owner will become the Annuitant unless the Owner
specifically requests on the application or in writing that the death benefit
be paid upon the Annuitant's death and PFL agrees to such an election. Upon
receipt of proof that the Annuitant, who is the Owner, has died before the
Annuity Commencement Date, the Death Benefit is calculated and is payable to
the Beneficiary when we receive an election of the method of settlement and
return of the Policy.

The amount of the death benefit will depend on the state where the Policy is
purchased and may depend on the death benefit option elected by the Owner.
However, the death benefit will always have at least equal to Policy Value on
the date due proof of death and election of the method of settlement are
received by PFL.

In most states, Endorsement AE 8712 95 is available. In these states, when
the Policy is issued the Owner has the option (except if either the Annuitant
or the Owner is age 75 or older) of choosing either a "5% Compound Death
Benefit" or an "Annual Step-Up Death Benefit." The 5% Compound Death Benefit is
the total Premium Payments less any "Adjusted Partial Withdrawals" (see page
40) plus interest at an effective annual rate of 5.0%. The Annual Step-Up Death
Benefit is the highest Policy Value on any Policy Anniversary prior to age 81,
plus any Premium Payments paid less any "Adjusted Partial Withdrawals" since
that anniversary.

In other states, where Endorsement AE 8712 95 is not available, the death
benefit will be at least equal to the sum of the Premium Payments less
withdrawals and charges made, plus interest at a 5% annual rate to the
Annuitant's date of death.

The death benefit does not apply on the death of the Owner if the Owner is
not the Annuitant. These death benefit provisions may vary depending on which
State the Policy is issued and when it was issued. No Contingent Deferred Sales
Charge is imposed upon amounts received as a Death Benefit. The Death Benefit
may be paid as either a lump sum cash benefit or as an Annuity as permitted by
federal or state law. (See "Death Benefit," p. 39.)

- 13 -
<PAGE>

VARIATIONS IN POLICY PROVISIONS

Certain provisions of the Policies may vary from the descriptions in this
Prospectus in order to comply with different state laws. Policies issued
without Endorsement AE 830 292 or Endorsement AE 871 295 may vary from the
description in this Prospectus in regard to Death Benefits. For Policies issued
without Endorsement AE 830 292 or Endorsement AE 871 295, the Death Benefit is
payable on the Annuitant's death prior to the Annuity Commencement Date
(regardless of whether the Annuitant is also the Owner). See the Policy itself
for variations. Any such variations will be included in the Policy itself or in
riders or endorsements.

RIGHT TO RETURN THE POLICY

The Policy Owner may, until the end of the period of time specified in the
Policy, examine the Policy and return it for a refund. The applicable period
will depend on the state in which the Policy is issued. In most states it is
ten (10) days after the Policy is delivered to the Policy Owner. The amount of
refund will also depend on the state in which the Policy is issued. Ordinarily,
the amount of the refund will be the sum of all Premium Payments made under the
Policy and the accumulated gains or losses in the Mutual Fund Account, if any.
However, some states may require a return of the premium(s) paid, or the
greater of the premium(s) paid or Cash Value. PFL will pay the refund within
seven (7) days after it receives written notice of cancellation and the
returned Policy.

If the policy is issued in California (a) to an Owner who is age 60 or more,
or (b) with a Premium Payment of less than $10,000, then the amount returned
will be the premium and any charges deducted; otherwise, the sum of the Premium
Payments and the accumulated gains or losses in the Mutual Fund Account, if
any, as of the date the cancellation request is received will be returned.

FEDERAL INCOME TAX CONSEQUENCES OF INVESTMENT IN THE POLICY

With respect to Owners who are natural persons, there should be no federal
income tax on increases in the Policy Value until a distribution under the
Policy occurs (e.g., a surrender or Annuity Payment) or is deemed to occur
(e.g., a pledge or assignment of a Policy). Generally, a portion of any
distribution or deemed distribution will be taxable as ordinary income. The
taxable portion of certain distributions will be subject to withholding unless
the recipient elects otherwise. In addition, a penalty tax may apply to certain
distributions or deemed distributions under the Policy. (See "Certain Federal
Income Tax Consequences," p. 46.)

INQUIRIES AND WRITTEN NOTICES AND REQUESTS

Any questions about procedures or the Policy, or any Written Notice or
Written Request required to be sent to PFL, should be sent to PFL's

- 14 -
<PAGE>

Administrative and Service Office, Financial Markets Division--Variable Annuity
Dept., 233 Edgewood Road, N.E., Cedar Rapids, Iowa 52499. Telephone requests
and inquires may be made by calling 800-525-6205. All inquiries, Notices and
Requests should include the Policy number, the Owner's name and the Annuitant's
name.

* * *

Note: The foregoing summary is qualified in its entirety by the detailed
information in the remainder of this Prospectus and in the Statement of
Additional Information and in the prospectuses for the Underlying Funds and in
the Policy, all of which should be referred to for more detailed information.
This Prospectus generally describes only the Policy and the Mutual Fund
Account. Separate prospectuses describe the Underlying Funds. (There is no
prospectus for the Fixed Account since interests in the Fixed Account are not
securities. See "The Fixed Account," p. 27.)

- 15 -
<PAGE>

CONDENSED FINANCIAL INFORMATION

The Accumulation Unit Values and the number of Accumulation Units outstanding
for each Subaccount from the date of inception:

<TABLE>
<CAPTION>
MANAGED ASSET ALLOCATION SUBACCOUNT
--------------------------------------------------
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE AT UNIT VALUE AT ACCUMULATION UNITS
BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------------- ------------- ------------------
<S> <C> <C> <C>
1994......................... $1.393488 $1.301669 130,909,987.116
1993......................... $1.209859 $1.393488 69,252,242.665
1992......................... $1.125386 $1.209859 11,637,563.615
1991(/1/).................... $1.000000 $1.125386 3,775,618.731
<CAPTION>
MONEY MARKET SUBACCOUNT
--------------------------------------------------
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE AT UNIT VALUE AT ACCUMULATION UNITS
BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------------- ------------- ------------------
<S> <C> <C> <C>
1994......................... $1.051501 $1.072424 17,836,839.874
1993......................... $1.043134 $1.051501 12,190,857.625
1992......................... $1.028030 $1.043134 4,334,947.760
1991(/1/).................... $1.000000 $1.028030 1,855,372.177
<CAPTION>
T. ROWE PRICE INTERNATIONAL STOCK SUBACCOUNT*
--------------------------------------------------
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE AT UNIT VALUE AT ACCUMULATION UNITS
BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------------- ------------- ------------------
<S> <C> <C> <C>
1994......................... $1.156482 $1.073958 76,518,044.179
1993......................... $0.989782 $1.156482 45,569,234.403
1992......................... $1.041235 $0.989782 6,368,485.858
1991(/1/).................... $1.000000 $1.041235 3,068,279.081
*Prior to March 24, 1995, the T. Rowe Price International Subaccount was known
as the Global Growth Subaccount.

<CAPTION>
WRL GROWTH SUBACCOUNT
--------------------------------------------------
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE AT UNIT VALUE AT ACCUMULATION UNITS
BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------------- ------------- ------------------
<S> <C> <C> <C>
1994......................... $11.114865 $10.051117 12,758,957.591
1993......................... $10.839753 $11.114865 9,252,403.800
1992(/2/).................... $10.000000 $10.839753 1,119,066,376
<CAPTION>
QUEST FOR VALUE EQUITY SUBACCOUNT
--------------------------------------------------
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE AT UNIT VALUE AT ACCUMULATION UNITS
BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------------- ------------- ------------------
<S> <C> <C> <C>
1994......................... $1.018576 $1.045610 30,512,231.489
1993(/3/).................... $1.000000 $1.018576 10,958,836.984
<CAPTION>
QUEST FOR VALUE SMALL CAP SUBACCOUNT
--------------------------------------------------
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE AT UNIT VALUE AT ACCUMULATION UNITS
BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------------- ------------- ------------------
<S> <C> <C> <C>
1994......................... $1.107747 $1.072941 32,607,348.474
1993(/4/).................... $1.000000 $1.107747 11,449,956.948
</TABLE>

- 16 -
<PAGE>

<TABLE>
<CAPTION>
U.S. GOVERNMENT SECURITIES PORTFOLIO
--------------------------------------------------
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE AT UNIT VALUE AT ACCUMULATION UNITS
BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------------- ------------- ------------------
<S> <C> <C> <C>
1994(/5/).................... $0.998670 $0.985803 3,102,671.789
<CAPTION>
T. ROWE PRICE EQUITY INCOME SUBACCOUNT*
--------------------------------------------------
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE AT UNIT VALUE AT ACCUMULATION UNITS
BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------------- ------------- ------------------
<S> <C> <C> <C>
</TABLE>
*Had not commenced business as of December 31, 1994.

<TABLE>
<CAPTION>
T. ROWE PRICE GROWTH STOCK SUBACCOUNT*
--------------------------------------------------
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE AT UNIT VALUE AT ACCUMULATION UNITS
BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------------- ------------- ------------------
<S> <C> <C> <C>
</TABLE>
*Had not commenced business as of December 31, 1994.
- -----------
(1)Period from April 8, 1991 through December 31, 1991.
(2)Period from July 21, 1992 through December 31, 1992.
(3)Period from May 27, 1993 through December 31, 1993.
(4)Period from May 4, 1993 through December 31, 1993.

(5)Period from May 13 through December 31, 1994.

FINANCIAL STATEMENTS

The financial statements of the Mutual Fund Account and PFL and the
independent auditors' reports thereon are in the Statement of Additional
Information which is available free upon request.

HISTORICAL PERFORMANCE DATA

STANDARDIZED PERFORMANCE DATA

From time to time, PFL may advertise historical yields and total returns for
the Subaccounts of the Mutual Fund Account. In addition, PFL may advertise the
effective yield of the Money Market Subaccount. These figures will be
calculated according to standardized methods prescribed by the Securities and
Exchange Commission ("SEC"). They will be based on historical earnings and are
not intended to indicate future performance.

The yield of the Money Market Subaccount for a Policy refers to the
annualized income generated by an investment under a Policy in the Subaccount
over a specified seven-day period. The yield is calculated by assuming that the
income generated for that seven-day period is generated each seven-day period
over a 52-week period and is shown as a percentage of the investment. The
effective yield is calculated similarly but, when annualized, the income earned
by an investment under a

- 17 -
<PAGE>

Policy in the Subaccount is assumed to be reinvested. The effective yield will
be slightly higher than the yield because of the compounding effect of this
assumed reinvestment.

The yield of a Subaccount of the Mutual Fund Account (other than the Money
Market Subaccount) for a Policy refers to the annualized income generated by an
investment under a Policy in the Subaccount over a specified thirty-day period.
The yield is calculated by assuming that the income generated by the investment
during that thirty-day period is generated each thirty-day period over a 12-
month period and is shown as a percentage of the investment.

The total return of a Subaccount of the Mutual Fund Account refers to return
quotations assuming an investment under a Policy has been held in the
Subaccount for various periods of time including, but not limited to, a period
measured from the date the Subaccount commenced operations. When a Subaccount
has been in operation for one, five, and ten years, respectively, the total
return for these periods will be provided. The total return quotations for a
Subaccount will represent the average annual compounded rates of return that
equate an initial investment of $1,000 in the Subaccount to the redemption
value of that investment as of the first day of each of the periods for which
total return quotations are provided.

The yield and total return calculations for a Subaccount do not reflect the
effect of any premium taxes that may be applicable to a particular Policy. The
yield calculations also do not reflect the effect of any Contingent Deferred
Sales Charge that may be applicable to a particular Policy. To the extent that
a premium tax and/or Contingent Deferred Sales Charge is applicable to a
particular Policy, the yield and/or total return of that Policy will be
reduced. For additional information regarding yields and total returns
calculated using the standard formats briefly summarized above, please refer to
the Statement of Additional Information, a copy of which may be obtained from
PFL.

- 18 -
<PAGE>

WRL GROWTH SUBACCOUNT

Prior to July 1, 1992, the WRL Growth Subaccount had not yet commenced
operations. However, the following is standardized average annual total return
information based on the hypothetical assumption that the WRL Growth Subaccount
had been available to the PFL Endeavor Variable Annuity Account since inception
of the WRL Growth Portfolio:

<TABLE>
<CAPTION>
INCEPTION
OF THE 5 YEAR 4 YEAR 3 YEAR 2 YEAR 1 YEAR
PORTFOLIO PERIOD PERIOD PERIOD PERIOD PERIOD
(10/2/86) TO ENDED ENDED ENDED ENDED ENDED
SUBACCOUNT 12/31/94* 12/31/94* 12/31/94* 12/31/94* 12/31/94* 12/31/94*
- ---------- ------------ --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
WRL Growth...... 12.72% 7.24% 9.44% (3.08)% (6.17)% (15.10)%
</TABLE>
- ----------------------------------

* The actual average annual total return for the WRL Growth Subaccount for the
period from inception (July 1, 1992) to December 31, 1994 is (2.06)% and the
actual annual total return for the year period ended December 31, 1994 is
(15.10)%. The performance data for periods prior to the date the WRL Growth
Subaccount commenced operations (July 1, 1992) is based on the performance of
the WRL Series Fund, Inc.'s Growth Portfolio and the assumption that the WRL
Growth Subaccount was in existence for the same period as the WRL Series
Fund, Inc.'s Growth Portfolio, managed by Janus Capital Corporation, with a
level of charges equal to those currently assessed against the Subaccount or
against Owners' contract values under the Policies. The WRL Series Fund,
Inc.'s Growth Portfolio, managed by Janus Capital Corporation, commenced
operations on October 2, 1986. For purposes of the calculation of the
performance data prior to July 1, 1992, the deductions for the mortality and
expense risk charge and administrative charge are made on a monthly basis,
rather than a daily basis. The monthly deduction is made at the beginning of
each month and generally approximates the performance which would have
resulted if the Subaccount had actually been in existence since the inception
of the WRL Series Fund, Inc. Performance data for periods of less than seven
years reflect deduction of the Contingent Deferred Sales Charge.

OTHER SUBACCOUNTS

Based on the method of calculation described in the Statement of Additional
Information, the average annual total returns for periods from inception of the
Subaccounts to December 31, 1994 were as follows:

<TABLE>
<CAPTION>
ONE YEAR INCEPTION OF
PERIOD ENDED THE SUBACCOUNT TO
SUBACCOUNT 12/31/94 12/31/94
- ---------- ------------ -----------------
<S> <C> <C>
Managed Asset Allocation(1)...................... (12.10)% 6.45%
Quest for Value Equity(2)........................ (0.57)% (1.11)%
Quest for Value Small Cap(3)..................... (8.61)% 1.08%
U.S. Government Securities(4).................... N/A (11.58)%
</TABLE>
- -----------
(1) Inception Date--April 8, 1991

(2) Inception Date--May 3, 1993
(3) Inception Date--May 3, 1993
(4) Inception Date - May 9, 1994

- 19 -
<PAGE>

T. ROWE PRICE EQUITY INCOME SUBACCOUNT AND T. ROWE PRICE GROWTH STOCK
SUBACCOUNT

The T. Rowe Price Equity Income Subaccount and the T. Rowe Price Growth Stock
Subaccount had not commenced operations as of December 31, 1994, so no
historical performance data exists for those Subaccounts. Similarly, the T.
Rowe Price Equity Income and T. Rowe Price Growth Stock Portfolios of Endeavor
Series Trust had not commenced operations as of December 31, 1994, so no
historical performance data exists for those Portfolios, which are the
Portfolios that the T. Rowe Price Equity Income and T. Rowe Price Growth Stock
Subaccounts will invest in.

T. Rowe Price Associates, Inc. is the investment adviser for the T. Rowe
Price Equity Income and T. Rowe Price Growth Stock Portfolios of Endeavor
Series Trust and also manages the T. Rowe Price Equity Income Fund, Inc.
("Equity Income Fund") and the T. Rowe Price Growth Stock Fund, Inc. ("Growth
Stock Fund"), registered open-end investment companies. These portfolios are
not available for investment under the Endeavor Variable Annuity. However, they
have the same investment objectives, and use the same investment strategies and
techniques as contemplated for the T. Rowe Price Equity Income and T. Rowe
Price Growth Stock Portfolios that are available under the Endeavor Variable
Annuity. The following figures represent what the investment performance of the
T. Rowe Price Equity Income Subaccount and the T. Rowe Price Growth Stock
Subaccount would have been, IF those Subaccounts had been in existence since
1983 and 1985, respectively, and invested in the Equity Income Fund and Growth
Stock Fund. Since these Subaccounts only commenced operations in January, 1995
and since these Subaccounts do not invest in the Equity Income Fund and Growth
Stock Fund, THESE ARE NOT ACTUAL PERFORMANCE FIGURES FOR THE T. ROWE PRICE
EQUITY INCOME AND T. ROWE PRICE GROWTH STOCK SUBACCOUNTS. These are
hypothetical average annual total return figures, which represent the
performance of the Equity Income Fund and Growth Stock Fund (which are not
available under the Policy), adjusted for the charges and deductions applicable
to the Endeavor Variable Annuity Policy.

<TABLE>
<CAPTION>
TEN YEARS
ENDED
FIVE YEARS 12/31/94
YEAR ENDED ENDED OR
12/31/94 12/31/94 INCEPTION DATE*
---------- ---------- ---------------
<S> <C> <C> <C>
Equity Income............................. (2.36)% 8.04% 11.99%
Growth Stock.............................. (6.00)% 7.80% 12.07%
</TABLE>
- -----------
* Inception Date of T. Rowe Price Equity Income Fund: 10/31/85.

T. ROWE PRICE INTERNATIONAL STOCK SUBACCOUNT

Effective January 1, 1995, Rowe-Price Fleming International, Inc. became the
new Adviser to the Global Growth Portfolio. The Portfolio's name has been
changed to the T. Rowe Price International Stock Portfolio and the Portfolio's
shareholders have approved a change in

- 20 -
<PAGE>

investment objective from investments in small capitalization companies on a
global basis to investments in a broad range of companies on an international
basis (i.e., non-U.S. companies).

Rowe Price-Fleming International, Inc. is also the investment adviser of the
T. Rowe Price International Stock Fund, Inc. ("International Stock Fund"), a
registered open-end investment company. This portfolio is not available for
investment under the Endeavor Variable Annuity. However, it has the same
investment objectives and uses the same investment strategies and techniques as
contemplated for the T. Rowe Price International Stock Portfolio that is
available under the Endeavor Variable Annuity. The following figures represent
what the investment performance of the T. Rowe Price International Stock
Subaccount would have been, IF that Subaccount had been in existence since 1985
and invested in the International Stock Fund. Since this Subaccount does not
invest in the International Stock Fund, THESE ARE NOT ACTUAL PERFORMANCE
FIGURES FOR THE T. ROWE PRICE INTERNATIONAL STOCK SUBACCOUNT. These are
hypothetical average annual total return figures, which represent the
performance of the International Stock Fund (which are not available under the
Policy), adjusted for the charges and deductions applicable to the Endeavor
Variable Annuity Policy.

<TABLE>
<CAPTION>
FIVE TEN
YEAR YEARS YEARS
ENDED ENDED ENDED
12/31/94 12/31/94 12/31/94
-------- -------- --------
<S> <C> <C> <C>
International Stock Fund............................. (7.65)% 5.40% 16.38%
</TABLE>

THESE FIGURES ARE NOT AN INDICATION OF THE PRESENT, PAST, OR FUTURE
PERFORMANCE OF THE T. ROWE PRICE INTERNATIONAL STOCK, T. ROWE PRICE EQUITY
INCOME OR T. ROWE PRICE GROWTH STOCK SUBACCOUNTS AVAILABLE UNDER THE ENDEAVOR
VARIABLE ANNUITY. The figures for the five year and from inception periods for
the Equity Income Fund reflect waiver of advisory fees and reimbursement of
other expenses. In the absence of such waivers, the average annual total return
figures above for the five year and from inception periods would have been
lower.

NON-STANDARDIZED PERFORMANCE DATA

PFL may from time to time also advertise or disclose average annual total
return or other performance data in non-standard formats for a Subaccount of
the Mutual Fund Account. The non-standard performance data may assume that no
Contingent Deferred Sales Charge is applicable, and may also make other
assumptions.

The following non-standardized average annual total return figures are based
on the assumption that the Policy is not surrendered, and therefore the
following figures assume that the Contingent Deferred Sales Charge is not
imposed.

- 21 -
<PAGE>

AVERAGE ANNUAL TOTAL RETURNS
(ASSUMING NO CONTINGENT DEFERRED SALES LOAD)

<TABLE>
<CAPTION>
ONE YEAR INCEPTION OF
PERIOD ENDED THE SUBACCOUNT
12/31/94 TO 12/31/94
------------ --------------
<S> <C> <C>
Managed Asset Allocation Portfolio.................. (6.66)% 7.23%
Quest for Value Equity Portfolio.................... 2.58% 2.64%
Quest for Value Small Cap Portfolio................. (3.19)% 4.24%
U.S. Government Securities Portfolio................ N/A (2.06)%
T. Rowe Price Equity Income Portfolio............... N/A N/A
T. Rowe Price Growth Stock Portfolio................ N/A N/A
</TABLE>

All non-standard performance data will be advertised only if the standard
performance data is also disclosed. For additional information regarding the
calculation of other performance data, please refer to the Statement of
Additional Information, a copy of which may be obtained from PFL.

PUBLISHED RATINGS

PFL may from time to time publish in advertisements, sales literature and
reports to Owners, the ratings and other information assigned to it by one or
more independent rating organizations such as A.M. Best Company, Standard &
Poor's, and Duff & Phelps. The purpose of the ratings is to reflect the
financial strength and/or claims-paying ability of PFL and should not be
considered as bearing on the investment performance of assets held in the
Mutual Fund Account. Each year the A.M. Best Company reviews the financial
status of thousands of insurers, culminating in the assignment of Best's
ratings. These ratings reflect their current opinion of the relative financial
strength and operating performance of an insurance company in comparison to the
norms of the life/health insurance industry. In addition, the claims-paying
ability of PFL as measured by Standard & Poor's Insurance Ratings Services or
Duff & Phelps may be referred to in advertisements or sales literature or in
reports to Owners. These ratings are opinions of an operating insurance
company's financial capacity to meet the obligations of its insurance policies
in accordance with their terms. Claims-paying ability ratings do not refer to
an insurer's ability to meet non-policy obligations (i.e., debt/commercial
paper).

PFL LIFE INSURANCE COMPANY

PFL Life Insurance Company ("PFL"), 4333 Edgewood Road, N.E., Cedar Rapids,
Iowa 52499, is a stock life insurance company. It was incorporated under the
name NN Investors Life Insurance Company, Inc. under the laws of the State of
Iowa on April 19, 1961. It is principally engaged in the sale of life insurance
and annuity policies, and is licensed in the District of Columbia, Guam, and in
all states except New York. As of December 31, 1994, PFL had assets of $6.1
billion. PFL is a wholly-

- 22 -
<PAGE>

owned indirect subsidiary of AEGON USA, Inc., which conducts substantially all
of its operations through subsidiary companies engaged in the insurance
business or in providing non-insurance financial services. All of the stock of
AEGON USA, Inc. is indirectly owned by AEGON n.v. of the Netherlands. AEGON
n.v., a holding company, conducts its business through subsidiary companies
engaged primarily in the insurance business.

THE ENDEAVOR ACCOUNTS

Premiums paid under a Policy may be allocated to the Mutual Fund Account, to
the Fixed Account, or to a combination of these Accounts.

THE MUTUAL FUND ACCOUNT

The PFL Endeavor Variable Annuity Account of PFL Life Insurance Company (the
"Mutual Fund Account") was established as a separate investment account under
the laws of the State of Iowa on January 19, 1990. The Mutual Fund Account
receives and invests the Premiums under the Policies that are allocated to it
for investment in shares of the WRL Growth Portfolio of the WRL Series Fund,
Inc., managed by Janus Capital Corporation, and the Endeavor Series Trust.

The Mutual Fund Account currently is divided into nine Subaccounts.
Additional Subaccounts may be established in the future at the discretion of
PFL. Each Subaccount invests exclusively in shares of one of the Portfolios of
the Underlying Funds. Under Iowa law, the assets of the Mutual Fund Account are
owned by PFL, but they are held separately from the other assets of PFL and are
not chargeable with liabilities incurred in any other business operation of PFL
(except to the extent that assets in the Mutual Fund Account exceed the
reserves and other liabilities of the Mutual Fund Account). Income, gains, and
losses incurred on the assets in the Subaccounts of the Mutual Fund Account,
whether or not realized, are credited to or charged against that Subaccount
without regard to other income, gains or losses of any other Account or
Subaccount of PFL. Therefore, the investment performance of any Subaccount
should be entirely independent of the investment performance of PFL's general
account assets or any other Account or Subaccount maintained by PFL.

The Mutual Fund Account is registered with the SEC under the Investment
Company Act of 1940 (the "1940 Act") as a unit investment trust and meets the
definition of a separate account under federal securities laws. However, the
SEC does not supervise the management or the investment practices or policies
of the Mutual Fund Account or PFL.

Underlying Funds. The Mutual Fund Account will invest exclusively in shares
of Endeavor Series Trust and the WRL Growth Portfolio of the WRL Series Fund,
Inc. (collectively the "Underlying

- 23 -
<PAGE>

Funds"). The Endeavor Series Trust is a series-type mutual fund registered
with the SEC under the 1940 Act as an open-end, diversified management
investment company./5/ The Underlying Funds currently issue shares of the
following nine Portfolios: The WRL Growth Portfolio managed by Janus Capital
Corporation, the Managed Asset Allocation Portfolio, the Money Market
Portfolio, the T. Rowe Price International Stock Portfolio (formerly the
Global Growth Portfolio), the Quest for Value Equity Portfolio, the Quest for
Value Small Cap Portfolio, the U.S. Government Securities Portfolio, the T.
Rowe Price Equity Income Portfolio, and the T. Rowe Price Growth Stock
Portfolio. The assets of each Portfolio are held separate from the assets of
the other Portfolios, and each Portfolio has its own distinct investment
objectives and policies. Each Portfolio operates as a separate investment
fund, and the income or losses of one Portfolio generally have no effect on
the investment performance of any other Portfolio.

Endeavor Investment Advisers (the "Manager"), an investment adviser
registered with the SEC under the Investment Advisers Act of 1940, is the
Endeavor Series Trust's manager. The Manager selects and contracts with
advisers for investment services for the Portfolios of Endeavor Series Trust,
reviews the advisers' activities, and otherwise performs administerial and
managerial functions for the Endeavor Series Trust. Five advisers, TCW Funds
Management, Inc. (a wholly-owned subsidiary of The TCW Group, Inc.), T. Rowe
Price Associates, Inc., Rowe Price-Fleming International, Inc. (a joint
venture between T. Rowe Price Associates, Inc. and Robert Fleming Holdings
Limited), Quest for Value Advisors, a subsidiary of Oppenheimer Capital and
The Boston Company Asset Management, Inc. (an indirect wholly-owned subsidiary
of Mellon Bank Corporation) (the "Advisers"), each perform investment advisory
services for particular Portfolios of Endeavor Series Trust. TCW Funds
Management, Inc. is the Adviser for the Managed Asset Allocation Portfolio and
the Money Market Portfolio. T. Rowe Price Associates, Inc. is the Adviser for
the T. Rowe Price Equity Income Portfolio and the T. Rowe Price Growth Stock
Portfolio. Rowe Price-Fleming International, Inc. is the Adviser for the T.
Rowe Price International Stock Portfolio.

Quest for Value Advisors is the Adviser for the Quest for Value Equity
Portfolio and the Quest for Value Small Cap Portfolio. The Boston Company
Asset Management, Inc. is the Adviser for the U.S. Government Securities
Portfolio. Western Reserve Life Assurance Co. of Ohio, an affiliate of PFL, is
the Adviser for the WRL Series Fund, Inc. and contracts with Janus Capital
Corporation (also an "Adviser") as a sub-adviser to the Growth Portfolio of
the WRL Series Fund, Inc. The Adviser of a Portfolio is responsible for
selecting the investments of the Portfolio consistent with the investment
objectives and policies of the Portfolio, and will conduct securities trading
for the Portfolio. All
- -----------

/5/ The registration of the Underlying Funds does not involve supervision of the
management or investment practices or policies of the Underlying Funds by
the SEC.

- 24 -
<PAGE>

Advisers are investment advisers registered with the SEC under the Investment
Advisers Act of 1940.

The investment objectives of each Portfolio are summarized as follows:

Managed Asset Allocation Portfolio--seeks high total return through a managed
asset allocation portfolio of equity, fixed income and money market securities.

Money Market Portfolio--seeks current income, preservation of capital and
maintenance of liquidity through investment in short-term money market
securities. The Portfolio seeks to maintain a constant net asset value of $1.00
per share although no assurances can be given that such constant net asset
value will be maintained.

T. Rowe Price International Stock Portfolio--seeks long-term growth of
capital through investments primarily in common stocks of established non-U.S.
companies.

WRL Growth Portfolio, managed by Janus Capital Corporation--seeks growth of
capital. At most times this portfolio will be invested primarily in equity
securities which are selected solely for their capital growth potential;
investment income is not a consideration.

Quest for Value Equity Portfolio--seeks long-term capital appreciation
through investment in securities (primarily equity securities) of companies
that are believed by the Portfolio's Adviser to be undervalued in the
marketplace in relation to factors such as the companies' assets or earnings.

Quest for Value Small Cap Portfolio--seeks capital appreciation through
investments in a diversified portfolio consisting primarily of equity
securities of companies with market capitalizations of under $1 billion.

U.S. Government Securities Portfolio--seeks as high a level of total return
as is consistent with prudent investment strategies by investing under normal
circumstances at least 65% of its assets in debt obligations and mortgage-
backed securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.

T. Rowe Price Equity Income Portfolio--seeks to provide substantial dividend
income and also capital appreciation by investing primarily in dividend paying
stocks of established companies.

T. Rowe Price Growth Stock Portfolio--seeks long-term growth of capital and
to increase dividend income through investment primarily in common stocks of
well established growth companies.

THERE IS NO ASSURANCE THAT ANY PORTFOLIO WILL ACHIEVE ITS STATED OBJECTIVE.
MORE DETAILED INFORMATION,

- 25 -
<PAGE>

INCLUDING A DESCRIPTION OF EACH PORTFOLIO'S INVESTMENT OBJECTIVE AND POLICIES
AND A DESCRIPTION OF RISKS INVOLVED IN INVESTING IN EACH OF THE PORTFOLIOS AND
OF EACH PORTFOLIO'S FEES AND EXPENSES IS CONTAINED IN THE PROSPECTUSES FOR THE
UNDERLYING FUNDS, CURRENT COPIES OF WHICH ARE ATTACHED TO THIS PROSPECTUS.
INFORMATION CONTAINED IN THE UNDERLYING FUNDS' PROSPECTUSES SHOULD BE READ
CAREFULLY BEFORE INVESTING IN A SUBACCOUNT OF THE MUTUAL FUND ACCOUNT.

An investment in the Mutual Fund Account, or in any Portfolio, including the
Money Market Portfolio, is not insured or guaranteed by the U.S. government.

Addition, Deletion, or Substitution of Investments. PFL cannot and does not
guarantee that any of the Portfolios will always be available for Premium
Payments, allocations, or transfers. PFL retains the right, subject to any
applicable law, to make certain changes in the Mutual Fund Account and its
investments. PFL reserves the right to eliminate the shares of any Portfolio
held by a Subaccount and to substitute shares of another Portfolio of the
Underlying Funds, or of another registered open-end management investment
company for the shares of any Portfolio, if the shares of the Portfolio are no
longer available for investment or if, in PFL's judgment, investment in any
Portfolio would be inappropriate in view of the purposes of the Mutual Fund
Account. To the extent required by the 1940 Act, substitutions of shares
attributable to an Owner's interest in a Subaccount will not be made without
prior notice to the Owner and the prior approval of the SEC. Nothing contained
herein shall prevent the Mutual Fund Account from purchasing other securities
for other series or classes of variable annuity policies, or from effecting an
exchange between series or classes of variable annuity policies on the basis of
requests made by Owners.

New Subaccounts may be established when, in the sole discretion of PFL,
marketing, tax, investment or other conditions warrant. Any new Subaccounts may
be made available to existing Owners on a basis to be determined by PFL. Each
additional Subaccount will purchase shares in a mutual fund portfolio or other
investment vehicle. PFL may also eliminate one or more Subaccounts if, in its
sole discretion, marketing, tax, investment or other conditions warrant such
change. In the event any Subaccount is eliminated, PFL will notify Owners and
request a reallocation of the amounts invested in the eliminated Subaccount. If
no such reallocation is provided by the Owner, PFL will reinvest the amounts
invested in the eliminated Subaccount in the Subaccount that invests in the
Money Market Portfolio (or in a similar portfolio of money market instruments)
or in another Subaccount, if appropriate.

In the event of any such substitution or change, PFL may, by appropriate
endorsement, make such changes in the Policies as may be necessary or
appropriate to reflect such substitution or change. Furthermore, if deemed to
be in the best interests of persons having voting rights under the Policies,
the Mutual Fund Account may be (i)

- 26 -
<PAGE>

operated as a management company under the 1940 Act or any other form permitted
by law, (ii) deregistered under the 1940 Act in the event such registration is
no longer required or (iii) combined with one or more other separate accounts.
To the extent permitted by applicable law, PFL also may transfer the assets of
the Mutual Fund Account associated with the Policies to another account or
accounts.

THE FIXED ACCOUNT

This Prospectus is generally intended to serve as a disclosure document only
for the Policy and the Mutual Fund Account. For complete details regarding the
Fixed Account, see the Policy itself.

Premiums allocated and amounts transferred to the Fixed Account become part
of the general account of PFL, which supports insurance and annuity
obligations. Interests in the general account have not been registered under
the Securities Act of 1933 (the "1933 Act"), nor is the general account
registered as an investment company under the Investment Company Act of 1940
(the "1940 Act"). Accordingly, neither the general account nor any interests
therein are generally subject to the provisions of the 1933 or 1940 Acts and
PFL has been advised that the staff of the Securities and Exchange Commission
has not reviewed the disclosures in this Prospectus which relate to the fixed
portion.

The Fixed Account is made up of all the general assets of PFL, other than
those in the Mutual Fund Account or in any other segregated asset account. The
Policy Owner may allocate Premium Payments to the Fixed Account at the time of
Premium Payment or by subsequent transfers from the Mutual Fund Account.
Instead of the Policy Owner bearing the investment risk as is the case for
Policy Value in the Mutual Fund Account, PFL bears the full investment risk for
all Policy Value in the Fixed Account. PFL has sole discretion to invest the
assets of its general account, including the Fixed Account, subject to
applicable law.

PFL currently offers two interest rate guarantee periods in the Fixed
Account, a "One Year Option" and a "Three Year Option". The One Year Option is
only available if the premium paid on the amount transferred into it is set up
on Dollar Cost Averaging (see "Dollar Cost Averaging", p. 29), or will be set
up on Dollar Cost Averaging in the future. Transfers out of the One Year
Option, except through Dollar Cost Averaging, are not allowed.

The "One Year Option" guarantees the current interest rate for one year from
the payment or transfer date. At the end of the one year period, PFL will
declare a renewal rate which will be guaranteed for at least one year. PFL also
offers a "Three Year Option" which guarantees the current interest rate for
three years from the payment or transfer date. At the end of the three year
period, PFL will declare a renewal rate which will be guaranteed for at least
one year.

- 27 -
<PAGE>

PFL guarantees that it will credit interest to amounts in the Fixed Account
at an effective annual rate of at least 4.0% per year. PFL may, IN ITS SOLE
DISCRETION, credit amounts in the Fixed Account with interest at a Current
Interest Rate in excess of 4.0%. Once declared, a Current Interest Rate will be
guaranteed for at least one year. Transfers out of the Fixed Account are
subject to restrictions on amount and timing. (See "Transfers," p. 28, and
"Surrenders," p. 33.) For purposes of crediting interest, the oldest payment or
transfer into the Fixed Account, plus interest allocable to that payment or
transfer, is considered to be withdrawn or transferred out first; the next
oldest payment plus interest is considered to be transferred out next, and so
on (this is a "first-in, first-out" procedure). The Owner bears the risk that
PFL will not credit interest in excess of 4% per year.

PFL guarantees that, at any time prior to the Annuity Commencement Date, the
amount in the Fixed Account allocable to a particular Policy will be not less
than the amount of the Premium Payments allocated or transferred to the Fixed
Account, plus interest at the rate of 4.0% per year, plus any excess interest
credited to amounts in the Fixed Account, less any applicable premium or other
taxes allocable to the Fixed Account, and less any amounts deducted from the
Fixed Account in connection with partial surrenders (including any Contingent
Deferred Sales Charges) or transfers to the Mutual Fund Account.

The Current Interest Rates will be determined by PFL in its sole discretion.

TRANSFERS

An Owner can transfer Policy Value from one Investment Option to another
within certain limits.

Subject to the limitations and restrictions described below, transfers from
an Investment Option may be made, up to thirty days prior to the Annuity
Commencement Date, by sending Written Notice, signed by the Policy Owner, to
the Administrative and Service Office. The minimum amount which may be
transferred is the lesser of $500 or the entire Account or Subaccount Value. If
the Account or Subaccount Value remaining after a transfer is less than $500,
PFL reserves the right, at its discretion, either to deny the transfer request
or to include that amount as part of the transfer.

Transfers out of a Subaccount of the Mutual Fund Account currently may be
made as often as the Owner wishes, subject to the minimum amount specified
above (PFL reserves the right to otherwise limit or restrict transfers in the
future).

Transfers out of the One Year Option Fixed Account, except through Dollar
Cost Averaging, are not allowed.

- 28 -
<PAGE>

Transfers from the Three Year Option Fixed Account are subject to a yearly
limit equal to 25% of the current Three Year Option Fixed Account Value or an
amount equal to the amount the Owner transferred out of the Three Year Option
Fixed Account during the prior year, whichever is greater. After the Annuity
Commencement Date, transfers out of the Fixed Account are not permitted. See
"Annuity Payment Options," p. 36.

A transfer charge may be imposed for any transfer in excess of 12 per Policy
Year; however, currently there is no charge for any transfers.

Transfers may be made by telephone, subject to the provisions described below
under "Telephone Transactions."

TELEPHONE TRANSACTIONS

Owners (or their designated account executive) can make transfers and/or
change the allocation of subsequent premium payments by telephone if the
"Telephone Transfer/Reallocation Authorization" box in the application has been
checked or telephone transfers have been subsequently authorized in writing.
PFL and/or the Administrative and Service Office will not be liable for
following instructions communicated by telephone that it reasonably believes to
be genuine. However, PFL and/or the Administrative and Service Office will
employ reasonable procedures to confirm that instructions communicated by
telephone are genuine. If PFL and/or the Administrative and Service Office
fails to do so, it may be liable for any losses due to unauthorized or
fraudulent instructions. All telephone requests will be recorded on voice
recorder equipment for the protection of the Owner. The Owner, when making
telephone requests, will be required to provide their social security number
and/or other information for identification purposes.

Telephone requests must be received at the Administrative and Service Office
no later than 3:00 p.m. Central time in order to assure same day pricing of the
transaction.

The telephone transaction privilege may be discontinued at any time as to
some or all Owners and PFL may require written confirmation of a transaction
request.

DOLLAR COST AVERAGING

Under the Dollar Cost Averaging program, the Policy Owner can instruct PFL to
automatically transfer an amount specified by the Policy Owner from the One
Year Option Fixed Account, the Money Market Subaccount or the U.S. Government
Securities Subaccount to any other Subaccount or Subaccounts of the Mutual Fund
Account. The automatic transfers can occur monthly or quarterly and will occur
on the 28th day of the month. The first transfer will occur on the 28th day of
the month following PFL's receipt of the Dollar Cost Averaging request. The

- 29 -
<PAGE>

amount transferred each time must be at least $500. A minimum of six monthly or
four quarterly transfers are required.

Dollar Cost Averaging results in the purchase of more units when the Unit
Value is low, and less units when the Unit Value is high. However, there is no
guarantee that the Dollar Cost Averaging program will result in higher Policy
Values or otherwise be successful.

The Policy Owner can request Dollar Cost Averaging when purchasing the Policy
or at a later date. The program will terminate when the amount in the One Year
Option Fixed Account, the Money Market Subaccount or the U.S. Government
Securities Subaccount is insufficient for the next transfer, at which time the
remaining balance is transferred.

The Owner can increase or decrease the amount of the transfers by sending PFL
a new Dollar Cost Averaging form. The Owner can discontinue the program by
sending a Written Notice to the Administrative and Service Office. There is no
charge for this program.

THE POLICY

The Endeavor Variable Annuity Policy is a Flexible Premium Variable Annuity
Policy. The rights and benefits under the Policy are summarized below; however,
the description of the Policy contained in this Prospectus is qualified in its
entirety by the Policy itself, a copy of which is available upon request from
PFL. The Policy may be purchased on a non-tax qualified basis ("Nonqualified
Policy"). The Policy may also be purchased and used in connection with
retirement plans or individual retirement accounts that qualify for favorable
federal income tax treatment ("Qualified Policy").

POLICY APPLICATION AND ISSUANCE OF POLICIES

Before it will issue a Policy, PFL must receive a completed Policy
application or transmittal form and a minimum initial Premium Payment of $5,000
for a Nonqualified Policy, $50 for a Policy purchased for use in connection
with a Tax Deferred 403(b) Annuity, or $1,000 for any other Qualified Policy. A
Policy ordinarily will be issued only in respect of Annuitants Age 0 through
80. Acceptance or declination of an application shall be based on PFL's
underwriting standards, and PFL reserves the right to reject any application or
Premium Payment based on those underwriting standards.

If the application can be accepted in the form received, the initial Premium
Payment will be credited to the Policy Value within two Business Days after the
later of receipt of the application or receipt of the initial Premium Payment.
If the initial Premium Payment cannot be credited because the application or
other issuing requirements are incomplete, the applicant will be contacted
within five Business Days and

- 30 -
<PAGE>

given an explanation for the delay and the initial Premium Payment will be
returned at that time unless the applicant consents to PFL's retaining the
initial Premium Payment and crediting it as soon as the necessary requirements
are fulfilled.

The date on which the initial Premium Payment is credited to the Policy Value
is the Policy Date. The Policy Date is the date used to determine Policy Years
and Policy Anniversaries.

PREMIUM PAYMENTS

All initial Premium Payment checks or drafts should be made payable to PFL
Life Insurance Company and sent to the Administrative and Service Office.
Additional premium payments should be sent to the Administrative and Service
Office. The Death Benefit will not take effect until the check or draft for the
Premium Payment is honored.

Initial Premium Payment. The minimum initial Premium Payment that PFL
currently will accept under a Policy is $5,000 under a Nonqualified Policy, $50
under a Policy purchased for use in connection with a Tax Deferred 403(b)
Annuity, and $1,000 under any other Qualified Policy. PFL reserves the right to
increase or decrease this amount for a class of Policies issued after some
future date. The initial Premium Payment is the only Premium Payment required
to be paid under a Policy.

Additional Premium Payments. While the Annuitant is living and prior to the
Annuity Commencement Date, the Owner may make additional Premium Payments at
any time, and in any frequency. The minimum additional Premium Payment under
both a Nonqualified Policy and a Qualified Policy is $500 with the exception of
Policies used in connection with Tax Deferred 403(b) Annuities, for which the
minimum additional Premium Payment is $50. Additional Premium Payments will be
credited to the Policy and added to the Policy Value as of the Business Day
when they are received.

Allocation of Premium Payments. An Owner must allocate Premium Payments to
one or more of the Investment Options. The Owner must specify the initial
allocation in the Policy application. This allocation will be used for
additional Premium Payments unless the Owner requests a change of allocation.
All allocations must be made in whole percentages and must total 100%. The
minimum amount that can be allocated to any Investment Option is $500 ($50 for
Policies used in connection with Tax Deferred Section 403(b) Annuities). If the
Owner fails to specify how Premium Payments are to be allocated, the Premium
Payment(s) cannot be accepted. All additional Premium Payments will be
allocated and credited to the Owner's Policy as of the Valuation Period during
which they are received.

The Owner may change the allocation instructions for future additional
Premium Payments by sending Written Notice, signed by the

- 31 -
<PAGE>

Owner, to PFL's Administrative and Service Office, or by telephone (subject to
the provisions described under "Telephone Transactions," p. 29.) The allocation
change will apply to payments received after the date the Written Notice or
telephone request is received.

Payment Not Honored by Bank. Any payment due under the Policy which is
derived, all or in part, from any amount paid to PFL by check or draft may be
postponed until such time as PFL determines that such instrument has been
honored.

POLICY VALUE

On the Policy Date, the Policy Value equals the initial Premium Payment.
Thereafter, the Policy Value equals the sum of the values in the Mutual Fund
Account and the Fixed Account. The Policy Value will increase by (1) any
additional Premium Payments received by PFL; and (2) any increases in the
Policy Value due to investment results of the selected Account(s). The Policy
Value will decrease by (1) any surrenders, including Contingent Deferred Sales
Charges; (2) any decreases in the Policy Value due to investment results of the
selected Accounts or Subaccounts; and (3) the charges imposed by PFL.

The Policy Value is expected to change from Valuation Period to Valuation
Period, reflecting the investment experience of the selected Account(s) and/or
Subaccount(s), as well as the deductions for charges. A Valuation Period is the
period between successive Business Days. It begins at the close of business on
each Business Day and ends at the close of business on the next succeeding
Business Day. A Business Day is each day that both the New York Stock Exchange
and PFL's Administrative and Service Office are open for business. Holidays are
generally not Business Days.

The Mutual Fund Account Value. When a Premium is allocated or an amount is
transferred to a Subaccount of the Mutual Fund Account, it is credited to the
Policy Value in the form of Accumulation Units. Each Subaccount of the Mutual
Fund Account has a distinct Accumulation Unit value (the "Unit Value"). The
number of units credited is determined by dividing the Premium Payment or
amount transferred by the Unit Value of the Subaccount as of the end of the
Valuation Period during which the allocation is made. When amounts are
transferred out of, or surrendered or withdrawn from an Account or Subaccount,
units are canceled or redeemed in a similar manner.

For each Subaccount, the Unit Value for a given Business Day is based on the
net asset value of a share of the corresponding Portfolio of the Underlying
Funds. Therefore, the Unit Values will fluctuate from day to day based on the
investment experience of the corresponding Portfolio. The determination of
Subaccount Unit Values is described in detail in the Statement of Additional
Information.

- 32 -
<PAGE>

NON-PARTICIPATING POLICY

The Policy does not participate or share in the profits or surplus earnings
of PFL. No dividends are payable on the Policy.

DISTRIBUTIONS UNDER THE POLICY

SURRENDERS

The Owner may surrender all or a portion of the Cash Value in exchange for a
cash withdrawal payment from PFL. The Cash Value is the Policy Value less any
applicable Contingent Deferred Sales Charge and any applicable premium taxes.
(See "Annuity Payment Options," p. 36.)

The Owner may surrender Cash Value from the Mutual Fund Account at any time
during the life of the Annuitant and prior to the Annuity Commencement Date by
sending a Written Request to PFL's Administrative and Service Office. The
minimum amount that can be withdrawn from any Subaccount or Account is $500.
After the Annuity Commencement Date, the Policy can only be surrendered if
Annuity Payment Option 4-V is in effect. (See "Annuity Payments," p. 35.)

Surrenders from the Fixed Account may be delayed for up to six months.

Currently, the only charge for surrenders is the Contingent Deferred Sales
Charge, if it applies. Premium taxes may also be deducted. Accordingly, the
amount available for surrender is the Cash Value, which is the Policy Value
less any applicable Contingent Deferred Sales Charge and premium taxes.
However, beginning in the second Policy Year, an Owner may surrender up to 10%
of the Policy Value without a Contingent Deferred Sales Charge if no withdrawal
has been made in the current Policy Year. Amounts withdrawn in excess of this
free withdrawal amount or withdrawn in the same Policy Year as a previous
withdrawal (and all surrenders in the first Policy Year) are subject to the
Contingent Deferred Sales Charge. For policies issued with endorsement AE 847
394 or a similar endorsement (depending on the state of issuance), the
Contingent Deferred Sales Charge is not imposed on partial or complete
surrenders if the Owner: 1) has been confined in a hospital or nursing facility
for 30 consecutive days or 2) has been diagnosed as having a terminal condition
as defined in the endorsement. (This benefit is not available in all states--
see the Policy endorsement for details.) In addition, a Contingent Deferred
Sales Charge will not be assessed if the withdrawal is necessary to meet the
minimum distribution requirements for that policy specified by the IRS for tax
qualified plans or if the Policy Value is applied to provide an Annuity under
one of the Annuity Payment Options, unless the Policy Value is applied, during
the first five Policy Years, under Payment Option 2, 4, or 4-V with payments
for less than five years. The Owner must specify the Investment Option from
which surrendered amounts should be taken

- 33 -
<PAGE>

(otherwise, the surrender request is incomplete and cannot be processed). For a
discussion of the Contingent Deferred Sales Charge, see "Contingent Deferred
Sales Charge," p. 43.

Since the Owner assumes the investment risk with respect to Premium Payments
allocated to the Mutual Fund Account, and because withdrawals are subject to a
Contingent Deferred Sales Charge, and possibly premium taxes, the total amount
paid upon total surrender of the Cash Value (taking any prior surrenders into
account) may be more or less than the total Premium Payments made. Following a
surrender of the total Cash Value, or at any time the Policy Value is zero, all
rights of the Owner and Annuitant will terminate.

In addition to the Contingent Deferred Sales Charge and any applicable
premium taxes, surrenders may be subject to income taxes and prior to age 59
1/2, a ten per cent penalty tax. (See "Certain Federal Income Tax
Consequences," p. 46.)

SYSTEMATIC WITHDRAWAL PLAN

Under the Systematic Withdrawal Plan, Policy Owners can instruct PFL to make
automatic payments to them monthly, quarterly, semi-annually or annually from a
specified Subaccount. Monthly and quarterly payments can only be sent by
electronic funds transfer directly to a checking or savings account. The
minimum monthly payment is $50, the minimum quarterly payment is $100, and the
minimum semi-annual or annual payment is $250. If the withdrawal is less than
the minimum then it can only be sent on an annual basis. The maximum payment is
10% of the Policy Value divided by the number of payments made per year (e.g.
12 for monthly). If this amount is below the minimum distribution requirements
for that policy specified by the IRS for tax qualified plans, the maximum
payment will be increased to this minimum required distribution amount. The
"Request for Systematic Withdrawal" form must specify a date for the first
payment, which must be at least 30 days but not more than one year after the
form is submitted.

The Contingent Deferred Sales Charge will be waived for Policy Owners under
age 59 1/2 of Qualified Policies if they take Systematic Withdrawals using one
of the payout methods described in I.R.S. Notice 89-25, Q&A-12 (the Life
Expectancy Recalculation Option, Amortization, or Annuity Factor) which
generally require payments for life or life expectancy. These payments must be
continued until the later of age 59 1/2 or five years from their commencement.
No additional withdrawals may be taken during this time. For Qualified
Policies, Policy Owners age 59 1/2 or older, the Contingent Deferred Sales
Charge will be waived if payments are made using the Life Expectancy
Recalculation Option.

In addition, for either Qualified or Nonqualified Policies, the Contingent
Deferred Sales Charge will not be imposed on Systematic Withdrawals that do not
exceed 10% of the Policy Value (that is, the Sales Charge will apply as if the
"annualized" payments were a single

- 34 -
<PAGE>

payment). For other Systematic Withdrawals, the Contingent Deferred Sales
Charge will apply in accordance with its terms.

Systematic Withdrawals will not be available for Tax Deferred 403(b)
Annuities under age 59 1/2 or that have an outstanding loan, and PFL will
terminate the option under such Policies if a loan is taken out.

Qualified Policies are subject to complex rules with respect to restrictions
on and taxation of distributions, including the applicability of penalty taxes.
In addition, the tax treatment of previous withdrawals from Nonqualified
Policies is unclear, particularly with respect to avoiding the 10% penalty tax.
Therefore, a qualified tax adviser should be consulted before a Systematic
Withdrawal Plan is requested. In certain circumstances withdrawn amounts may be
included in the Policy Owner's gross income. (See "Certain Federal Income Tax
Consequences," p. 46.)

ANNUITY PAYMENTS

Annuity Commencement Date. Unless the Annuity Commencement Date is changed,
Annuity Payments under a Policy will begin on the Annuity Commencement Date
which is selected by the Policy Owner at the time the Policy is applied for.
The Annuity Commencement Date may be changed from time to time by the Policy
Owner by Written Notice to PFL, provided that notice of each change is received
by PFL at its Administrative and Service Office at least thirty (30) days prior
to the then current Annuity Commencement Date. Except as otherwise permitted by
PFL, a new Annuity Commencement Date must be a date which is: (1) after the
Annuitant attains age 40; (2) at least thirty (30) days after the date notice
of the change is received by PFL; and (3) not later than the first day of the
first month following the Annuitant's 85th birthday. The Annuity Commencement
Date may also be changed by the Beneficiary's election of the Annuity Option
after the Annuitant's death.

Election of Payment Option. During the lifetime of the Annuitant and prior to
the Annuity Commencement Date, the Policy Owner may choose an Annuity Payment
Option or change the election, but Written Notice of any election or change of
election must be received by PFL at its Administrative and Service Office at
least thirty (30) days prior to the Annuity Commencement Date. If no election
is made prior to the Annuity Commencement Date, Annuity Payments will be made
under Option 3-V, life income with variable payments for 10 years certain. If
the Annuity Purchase Value on the Annuity Commencement Date is less than $2000,
PFL reserves the right to pay it in one lump sum in lieu of applying it under
an Annuity Payment Option.

Prior to the Annuity Commencement Date, the Beneficiary may elect to receive
the Death Benefit in a lump sum or under one of the Payment Options, to the
extent allowed by law and subject to the terms of any settlement agreement.
(See "Death Benefit," p. 39.) Annuity Payments will be made on either a fixed
basis or a variable basis as selected by the Policy Owner (or the Beneficiary,
after the Annuitant's death).

- 35 -
<PAGE>

The person who elects a Payment Option can also name one or more successor
payees to receive any unpaid amount PFL has at the death of a payee. Naming
these payees cancels any prior choice of a successor payee.

A payee who did not elect the Payment Option does not have the right to
advance or assign payments, take the payments in one sum, or make any other
change. However, the payee may be given the right to do one or more of these
things if the person who elects the option tells PFL in writing and PFL agrees.

Unless the Policy Owner specifies otherwise, the payee shall be the
Annuitant, or, after the Annuitant's death, the Beneficiary. PFL may require
written proof of the age of any person who has an annuity purchased under
Option 3, 3-V, 5 or 5-V.

Premium Tax. PFL may be required by state law to pay premium tax on the
amount applied to a payment option or upon withdrawal. If so, PFL will deduct
the premium tax before applying or paying the proceeds.

Supplementary Policy. Once proceeds become payable and a choice has been
made, PFL will issue a Supplementary Policy in settlement of the option elected
under the Policy setting forth the terms of the option elected. The
Supplementary Policy will name the payees and will describe the payment
schedule.

ANNUITY PAYMENT OPTIONS

The Policy provides five Payment Options which are described below. Three of
these are offered as either "Fixed Payment Options" or "Variable Payment
Options," and two are only available as Fixed Payment Options. The Policy Owner
may elect a Fixed Payment Option, a Variable Payment Option, or a combination
of both. If the Policy Owner elects a combination, he must specify what part of
the Annuity Purchase Value is to be applied to the Fixed and Variable Options.

NOTE CAREFULLY: Under Payment Options 3(1) and 5 (including 3-V(1) and 5-V),
it would be possible for only one Annuity Payment to be made if the
Annuitant(s) were to die before the due date of the second annuity payment;
only two Annuity Payments if the Annuitant(s) were to die before the due date
of the third annuity payment; and so forth.

On the Annuity Commencement Date, the Policy's Annuity Purchase Value will be
applied to provide for Annuity Payments under the selected Annuity Option as
specified. The Annuity Purchase Value is the Policy Value for the Valuation
Period which ends immediately preceding the Annuity Commencement Date, reduced
by any applicable premium or similar taxes and in some cases during the first
five Policy Years, any applicable Contingent Deferred Sales Charge.

- 36 -
<PAGE>

The effect of choosing a Fixed Annuity Option is that the amount of each
payment will be set on the Annuity Commencement Date and will not change. If a
Fixed Annuity Option is selected, the Policy Value will be transferred to the
general account of PFL, and the Annuity Payments will be fixed in amount by the
fixed annuity provisions selected and the age and sex (if consideration of sex
is allowed) of the Annuitant. For further information, contact PFL at its
Administrative and Service Office.

Guaranteed Values. There are five Fixed Annuity Options. Options 1, 2 and 4
are based on a guaranteed interest rate of 3%. Options 3 and 5 are based on a
guaranteed interest rate of 3% using the "1983 Table a" mortality table with
projection of improved mortality.

Option 1--Interest Payments. The policy proceeds may be left with PFL for any
term agreed to. PFL will pay the interest in equal payments or it may be left
to accumulate. Withdrawal rights will be agreed upon by the Owner and PFL when
the option is elected.

Option 2--Income for a Specified Period. Level payments of the proceeds with
interest are made for the fixed period elected, at which time the funds are
exhausted.

Option 3--Life Income. An election may be made between:

1. "No Period Certain"--Level payments will be made during the
lifetime of the Annuitant.

2. "10 Years Certain"--Level Payments will be made for the longer of
the Annuitant's lifetime or ten years.

3. "Guaranteed Return of Policy Proceeds"--Level payments will be
made for the longer of the Annuitant's lifetime or the number of
payments which, when added together, equals the proceeds applied
to the income option.

Option 4--Income of a Specified Amount. Payments are made for any specified
amount until the proceeds with interest are exhausted.

Option 5--Joint and Survivor Annuity. Payments are made during the joint
lifetime of the payee and a joint payee of the Owner's selection. Payments will
be made as long as either person is living.

Other options may be arranged by agreement with PFL. Certain options may not
be available in some states.

Current immediate annuity rates for the same class of annuities will be used
if higher than the guaranteed amount (guaranteed amounts are based upon the
tables contained in the Policy). Current amounts may be obtained from PFL.

Variable Payment Options. The dollar amount of the first Variable Annuity
Payment will be determined in accordance with the annuity

- 37 -
<PAGE>

payment rates set forth in the applicable table contained in the Policy. The
tables are based on the "1983 Table a" mortality table with a 5% effective
annual Assumed Interest Rate and assume a retirement date in the year 2000. The
dollar amount of every subsequent Variable Annuity Payment will vary based on
the investment performance of the Subaccount of the Mutual Fund Account
selected by the Annuitant or Beneficiary. If the actual investment performance
exactly matched the Assumed Interest Rate of 5% at all times, the amount of
each Variable Annuity Payment would remain equal. If actual investment
performance exceeds the Assumed Interest Rate, the amount of the payments would
increase. Conversely, if actual investment performance is worse than the
Assumed Interest Rate, the amount of the payments would decrease.

Determination of the First Variable Payment. The amount of the first variable
payment depends upon the sex (if consideration of sex is allowed) and adjusted
age of the Annuitant. The adjusted age is the Annuitant's actual age nearest
birthday, at the Annuity Commencement Date, adjusted as follows:

<TABLE>
<CAPTION>
ANNUITY
COMMENCEMENT
DATE ADJUSTED AGE
------------ ------------
<S> <C>
Before 2001 Actual Age
2001-2010 Actual Age minus 1
2011-2020 Actual Age minus 2
2021-2030 Actual Age minus 3
2031-2040 Actual Age minus 4
After 2040 As determined by PFL
</TABLE>

This adjustment assumes an increase in life expectancy, and therefore it
results in lower payments than without such an adjustment.

The following Variable Payment Options generally are available:

Option 3-V--Life Income. An election may be made between:

1."No Period Certain"--Payments will be made during the lifetime of the
Annuitant.

2."10 Years Certain"--Payments will be made for the longer of the
Annuitant's lifetime or ten years.

Option 4-V--Income of a specified Amount. Payments are made for any specified
amount until the proceeds with accumulated gains or losses are exhausted. At
any time this option is in effect, the Annuitant can surrender the Policy for
the remaining value. Payments under this option are considered withdrawals for
federal income tax purposes.

Option 5-V--Joint and Survivor Annuity. Payments are made as long as either
the Annuitant or the joint Annuitant is living.

Certain options may not be available in some states.

Determination of Subsequent Variable Payments. All Variable Annuity Payments
other than the first are calculated using "Annuity

- 38 -
<PAGE>

Units" which are credited to the Policy. The number of Annuity Units to be
credited in respect of a particular Subaccount is determined by dividing that
portion of the first Variable Annuity Payment attributable to that Subaccount
by the Annuity Unit Value of that Subaccount for the Annuity Commencement Date.
The number of Annuity Units of each particular Subaccount credited to the
Policy then remains fixed. The dollar value of variable Annuity Units in the
chosen Subaccount will increase or decrease reflecting the investment
experience of the chosen Subaccount. The dollar amount of each Variable Annuity
Payment after the first may increase, decrease or remain constant, and is equal
to the sum of the amounts determined by multiplying the number of Annuity Units
of each particular Subaccount credited to the Policy by the Annuity Unit Value
for the particular Subaccount on the date the payment is made.

Unless restricted by a particular Account or Subaccount, a Policy Owner may
transfer the value of the Annuity Units from one Subaccount to another within
the Mutual Fund Account or to the Fixed Account. However, after the Annuity
Commencement Date no transfers may be made from the Fixed Account to the Mutual
Fund Account. The minimum amount which may be transferred is the lesser of $10
of monthly income or the entire monthly income of the variable Annuity Units in
the Subaccount from which the transfer is being made. The remaining Annuity
Units in the Subaccount must provide at least $10 of monthly income. If, after
a transfer, the monthly income of the remaining Annuity Units in a Subaccount
would be less than $10, PFL reserves the right to include those Annuity Units
as part of the transfer. PFL reserves the right to limit transfers between
Subaccounts or to the Fixed Account to once per Policy Year.

* * *

A portion or the entire amount of the Annuity Payments may be taxable as
ordinary income. If, at the time the Annuity Payments begin, the Policy Owner
has not provided PFL with a written election not to have federal income taxes
withheld, PFL must by law withhold such taxes from the taxable portion of such
annuity payments and remit that amount to the federal government. (See "Certain
Federal Income Tax Consequences," p. 46.)

Adjustment of Annuity Payments. Payments will be made at 1, 3, 6, or 12 month
intervals. If the individual payments provided for would be or become less than
$30, PFL may change, at its discretion, the frequency of payments to such
intervals as will result in payments of at least $30. If the Annuity Purchase
Value on the Annuity Commencement Date is less than $2,000, PFL may pay such
value in one sum in lieu of the payments otherwise provided for.

DEATH BENEFIT

Death of Annuitant Prior to Annuity Commencement Date. A Death Benefit will
be paid to the Beneficiary if the Annuitant is also the

- 39 -
<PAGE>

Owner and dies prior to the Annuity Commencement Date. The amount of the Death
Benefit will always be at least equal to the Policy Value on the later of the
date proof of death and the date an election of the method of settlement are
received by PFL's Administrative and Service Office.

In states where Endorsement AE871295 is available, the Owner may choose
(except if either the Annuitant or the Owner is age 75 or older) either a 5%
Compound Death Benefit or an Annual Step-Up Death Benefit. The 5% Compound
Death Benefit is the total Premium Payments less any "Adjusted Partial
Withdrawals" plus interest at an effective annual rate of 5.0% up to the
Annuitant's date of death (the Policy Value will be paid instead if it is
higher).

The Annual Step-Up Death Benefit is the highest Policy Value on any Policy
Anniversary prior to the Owner's age 81, plus Premium Payments less any
"Adjusted Partial Withdrawals" since that anniversary (the Policy Value will be
paid instead if it is higher). For this purpose, the issue date will be treated
as a Policy Anniversary.

The 5% Compound Death Benefit is not available if either the Annuitant or the
Owner is age 75 or higher on the issue date; in this case, the Annual Step-Up
Death Benefit will apply. For issue age under age 75, if no choice is made in
the Policy application then the 5% Compound Death Benefit will apply.

After the issue date, an election cannot be made and the Death Benefit option
cannot be changed.

The "Adjusted Partial Withdrawal" for each partial withdrawal is the product
of (a) times (b) where:

(a) is the ratio of the amount of the partial withdrawal to the Policy
Value on the date of (but prior to) the partial withdrawal; and

(b) is the Death Benefit on the date of (but prior to) the partial
withdrawal.

If a partial withdrawal is taken when the Death Benefit exceeds the Policy
Value, then the Adjusted Partial Withdrawal amount will exceed the amount of
the partial withdrawal. In that case, the total proceeds of a partial
withdrawal followed by a Death Benefit could be less than total Premium
Payments.

If Endorsement AE871295 is not available (or not attached to the Policy),
then the Death Benefit will be the greater of (a) the Policy Value, or (b)
total Premium Payments less partial withdrawals and charges made, plus interest
at a 5% annual rate to the Annuitant's date of death.

In most states, Endorsement AE830292 or AE871295 is attached to and made a
part of the Policy, in which case the Death Benefit is payable if the Annuitant
is the Owner and dies prior to the Annuity

- 40 -
<PAGE>

Commencement Date. Note that this Death Benefit is payable on the death of the
Annuitant who is the Owner, not the death of the Owner, if different (if the
Annuitant who is not the Owner dies, the Owner will become the Annuitant unless
the Owner specifically requests on the policy application or in writing that
the Death Benefit be paid upon the Annuitant's death and PFL agrees to such
election). If neither Endorsement AE30292 nor Endorsement AE871295 is attached
to the Policy, then the Death Benefit is payable on the Annuitant's death prior
to the Annuity Commencement Date (regardless of whether the Annuitant is also
the Owner). See your policy form.

Due Proof of Death of the Annuitant is proof that the Annuitant who is the
Owner died prior to the commencement of Annuity Payments. Upon receipt of this
proof and an election of a method of settlement and return of the Policy, the
Death Benefit generally will be paid within seven days, or as soon thereafter
as PFL has sufficient information about the Beneficiary to make the payment.
The Beneficiary may receive the amount payable in a lump sum cash benefit, or,
subject to any limitation under any state or federal law, rule, or regulation,
under one of the Annuity Payment Options described above, unless a settlement
agreement is effective at the death of the Annuitant preventing such election.

If the Annuitant was the Policy Owner, and the Beneficiary was not the
Annuitant's spouse, the Death Benefit must (1) be distributed within five years
of the Annuitant's death, or (2) payments under a Payment Option must begin
within one year of the Annuitant's death and must be made for the Beneficiary's
lifetime or for a period certain (so long as any certain period does not exceed
the Beneficiary's life expectancy). Death proceeds which are not paid to or for
the benefit of a natural person must be distributed within five years of the
Annuitant's death. If the sole Beneficiary is the Annuitant's surviving spouse,
such spouse may elect to continue the Policy as the new Annuitant and Policy
Owner instead of receiving the Death Benefit. (See "Federal Tax Matters" in the
Statement of Additional Information.)

Death of Annuitant On or After Annuity Commencement Date. The death benefit
payable if the Annuitant dies on or after the Annuity Commencement Date depends
on the Payment Option selected. Upon the Annuitant's death, the remaining
portion of the entire interest in the Policy, if any, will be distributed at
least as rapidly as under the method of distribution being used as of the date
of the Annuitant's death.

Beneficiary. The Beneficiary designation in the application will remain in
effect until changed. The Policy Owner may change the designated Beneficiary by
sending Written Notice to PFL. The Beneficiary's consent to such change is not
required unless the Beneficiary was irrevocably designated or consent is
required by law. (If an irrevocable Beneficiary dies, the Policy Owner may then
designate a

- 41 -
<PAGE>

new Beneficiary.) The change will take effect as of the date the Policy Owner
signs the Written Notice, whether or not the Policy Owner is living when the
Notice is received by PFL. PFL will not be liable for any payment made before
the Written Notice is received. If more than one Beneficiary is designated, and
the Policy Owner fails to specify their interests, they will share equally.

DEATH OF OWNER

Federal tax law requires that if any Policy Owner (including any joint Owner
or any Successor Policy Owner who has become a current Owner) dies before the
Annuity Commencement Date, then the entire value of the Policy must generally
be distributed within five years of the date of death of such Policy Owner.
Certain rules apply where 1) the spouse of the deceased Owner is the sole
beneficiary, 2) the Policy Owner is not a natural person and the primary
Annuitant dies or is changed, or 3) any Policy Owner dies after the Annuity
Commencement Date. See "Federal Tax Matters" in the Statement of Additional
Information for a detailed description of these rules. Other rules may apply to
Qualified Contracts.

RESTRICTIONS UNDER THE TEXAS OPTIONAL RETIREMENT PROGRAM

Section 36.105 of the Texas Educational Code permits participants in the
Texas Optional Retirement Program (ORP) to withdraw their interest in a
variable annuity Policy issued under the ORP only upon: (1) termination of
employment in the Texas public institutions of higher education; (2)
retirement; or (3) death. Accordingly, a participant in the ORP (or the
participant's estate if the participant has died) will be required to obtain a
certificate of termination from the employer or a certificate of death before
the account can be redeemed.

RESTRICTIONS UNDER SECTION 403(B) PLANS

Section 403(b) of the Internal Revenue Code provides for tax-deferred
retirement savings plans for employees of certain non-profit and educational
organizations. In accordance with the requirements of Section 403(b), any
Policy used for a 403(b) plan will prohibit distributions of elective
contributions and earnings on elective contributions except upon death of the
employee, attainment of age 59 1/2, separation from service, disability, or
financial hardship. In addition, income attributable to elective contributions
may not be distributed in the case of hardship.

CHARGES AND DEDUCTIONS

No deductions are made from Premium Payments, so that the full amount of each
Premium Payment is invested in one or more of the Accounts. PFL will make
certain charges and deductions in connection with the Policy in order to
compensate it for incurring expenses in distributing the Policy, bearing
mortality and expense risks under the Policy, and administering the Accounts
and the Policies. Charges may also be made for premium taxes, federal, state or
local taxes, or for certain transfers or other transactions. Charges and
expenses are also deducted from the Underlying Funds.

- 42 -
<PAGE>

CONTINGENT DEFERRED SALES CHARGE

PFL will incur expenses relating to the sale of Policies, including
commissions to registered representatives and other promotional expenses. PFL
may apply a Contingent Deferred Sales Charge to any amount surrendered (i.e.,
withdrawn) in connection with a full or partial Policy surrender in order to
cover distribution expenses. A Contingent Deferred Sales Charge will not be
applied to withdrawal, after the first Policy Year, of up to 10% of the Policy
Value, if there have been no withdrawals in the current Policy Year.

For policies issued with endorsement AE 847 394 or a similar endorsement
(depending on the state of issuance), the Contingent Deferred Sales Charge is
not imposed on partial or complete surrenders if the Owner: 1) has been
confined in a hospital or nursing facility for 30 consecutive days or 2) has
been diagnosed as having a terminal condition as defined in the endorsement.
(This benefit is not available in all states, see the Policy endorsement for
details.) A Contingent Deferred Sales Charge will also not be applied if the
withdrawal is necessary to meet the minimum distribution requirements for that
policy specified by the IRS for tax qualified plans or if the Policy Value is
applied to provide an Annuity under one of the Annuity Payment Options, unless
the Policy Value is applied, during the first five Policy Years, under Payment
Options 2, 4, or 4-V with payments for less than five years. The Contingent
Deferred Sales Charge is also waived upon certain Systematic Withdrawals (see
p. 34).

The amount of the Contingent Deferred Sales Charge is determined by
multiplying the amount of the premium withdrawn by the applicable Contingent
Deferred Sales Charge Percentage. The applicable Contingent Deferred Sales
Charge Percentage will depend upon the number of Policy Anniversaries that have
elapsed since the Premium Payment that is being withdrawn was made. For this
purpose, surrenders are allocated to Premium Payments on a "first in-first out"
basis, i.e., first to the oldest Premium Payment, then to the next oldest
Premium Payment, and so on. Premium Payments are deemed to be withdrawn before
earnings, and after all Premium Payments have been withdrawn, the remaining
Cash Value may be withdrawn without any Contingent Deferred Sales Charge. The
following is the table of Contingent Deferred Sales Charge Percentages:

<TABLE>
<CAPTION>
NUMBER OF POLICY APPLICABLE CONTINGENT
YEARS SINCE DEFERRED SALES
PREMIUM PAYMENT CHARGE PERCENTAGE
---------------- ---------------------
<S> <C>
Less than 1......................................... 7%
At least 1 and less than 2.......................... 6%
At least 2 and less than 3.......................... 5%
At least 3 and less than 4.......................... 4%
At least 4 and less than 5.......................... 3%
At least 5 and less than 6.......................... 2%
At least 6 and less than 7.......................... 1%
</TABLE>

- 43 -
<PAGE>

PFL anticipates that the Contingent Deferred Sales Charge will not generate
sufficient funds to pay the cost of distributing the Policies. If this charge
is insufficient to cover the distribution expenses, the deficiency will be met
from PFL's general funds, which will include amounts derived from the charge
for mortality and expense risks.

MORTALITY AND EXPENSE RISK CHARGE

PFL imposes a daily charge as compensation for bearing certain mortality and
expense risks in connection with the Policies. This charge is equal to an
effective annual rate of 1.25% of the value of net assets in the Mutual Fund
Account. The Mortality and Expense Risk Charge is reflected in the Accumulation
or Annuity Unit Values for the Policy for each Subaccount.

Policy Values and Annuity Payments are not affected by changes in actual
mortality experience nor by actual expenses incurred by PFL. The mortality
risks assumed by PFL arise from its contractual obligations to make Annuity
Payments (determined in accordance with the Annuity tables and other provisions
contained in the Policy) and to pay Death Benefits prior to the Annuity
Commencement Date. Thus, Owners are assured that neither an Annuitant's own
longevity nor an unanticipated improvement in general life expectancy will
adversely affect the monthly Annuity payments that the Annuitant will receive
under the Policy.

PFL also bears substantial risk in connection with the Death Benefit
Guarantee since PFL will pay a Death Benefit equal to the Premium Payments,
less withdrawals, plus interest at 5% per year, if that amount is higher than
the Policy Value.

The expense risk assumed by PFL is the risk that PFL's actual expenses in
administering the Policy and the Accounts will exceed the amount recovered
through the Administrative and Policy Maintenance Charges.

If the Mortality and Expense Risk Charge is insufficient to cover PFL's
actual costs, PFL will bear the loss; conversely, if the charge is more than
sufficient to cover costs, the excess will be profit to PFL. PFL expects a
profit from this charge. To the extent that the Contingent Deferred Sales
Charge is insufficient to cover the actual cost of Policy distribution, the
deficiency will be met from PFL's general corporate assets, which may include
amounts, if any, derived from the Mortality and Expense Risk Charge. A
mortality and expense risk charge is assessed during the annuity phase for all
Variable Annuity Options including those that do not carry a life contingency.

ADMINISTRATIVE CHARGES

In order to cover the costs of administering the Policies and the Accounts,
PFL deducts a Policy Maintenance Charge from the Policy Value of each Policy,
and also deducts a daily Administrative Expense Charge from the assets of each
Subaccount of the Mutual Fund Account.

- 44 -
<PAGE>

The annual Policy Maintenance Charge is deducted from the Policy Value of
each Policy on each Policy Anniversary prior to the Annuity Commencement Date.
After the Annuity Commencement Date, the charge is not deducted. This annual
Policy Maintenance Charge generally is $35 and it will not be increased. It
will never exceed 2% of the Policy Value. For Policies issued on or after May
1, 1995, this charge is waived if the sum of the Premium Payments made less the
sum of all partial withdrawals is at least $50,000 on the Policy Anniversary.
PFL does not anticipate realizing any profit from this charge. The Policy
Maintenance Charge will be deducted only from the Subaccounts in the Mutual
Fund Account, in the same proportion that the Policy Owner's interest in each
Subaccount bears to the Policy Value in the Mutual Fund Account.

PFL also deducts a daily Administrative Expense Charge from the assets of
each Subaccount of the Mutual Fund Account. This charge is equal to an
effective annual rate of .15% of the net assets of each Subaccount of the
Mutual Fund Account. The Administrative Expense Charge may be increased in the
future (but the combined total of this charge and the Mortality and Expense
Risk Charge will never exceed 1.40%). PFL does not anticipate realizing any
profit from this charge.

PREMIUM TAXES

PFL currently makes no deduction from the Premium Payments for any state
premium taxes PFL pays in connection with Premium Payments under the Policies.
However, PFL will deduct the aggregate premium taxes paid on behalf of a
particular Policy from the Policy Value on (i) the Annuity Commencement Date
(thus reducing the Annuity Purchase Value), (ii) the total surrender of a
Policy, or (iii) payment of the death proceeds of a Policy.

FEDERAL, STATE AND LOCAL TAXES

No charges are currently made for federal, state, or local taxes other than
premium taxes. However, PFL reserves the right to deduct charges in the future
from the Accounts or Subaccounts for any taxes or other economic burden
resulting from the application of any tax laws that PFL determines to be
atttributable to the accounts or the policies.

TRANSFER CHARGE

There is no charge for the first 12 transfers between Investment Options in
each Policy Year. PFL reserves the right to impose a $25 charge for the
thirteenth and each subsequent transfer request made by the Owner during a
single Policy Year. For the purpose of determining whether a transfer charge is
payable, initial Premium Payment allocations are not considered transfers. All
transfer requests made simultaneously will be treated as a single request. No
transfer charge will be imposed for any transfer which is not at the Owner's
request.

- 45 -
<PAGE>

OTHER EXPENSES INCLUDING INVESTMENT ADVISORY FEES

Each of the Portfolios of the Underlying Funds is responsible for all of its
expenses. In addition, charges will be made against each of the Portfolios of
the Underlying Funds for investment advisory services provided to the
Portfolio. The net assets of each Portfolio of the Underlying Funds will
reflect deductions in connection with the investment advisory fee and other
expenses.

For more information concerning the investment advisory fee and other charges
against the Portfolios, see the prospectuses for the Underlying Funds, current
copies of which accompany this Prospectus.

EMPLOYEE AND AGENT PURCHASES

The Policy may be acquired by an employee or registered representative of any
broker/dealer authorized to sell the Policy or their spouse or minor children,
or by an officer, director, trustee or bona-fide full-time employee of PFL or
its affiliated companies or their spouse or minor children. In such case, a
bonus of 5% of each premium deposit may be credited to the Policy due to lower
acquisition costs PFL experiences on these purchases. Compensation to the
registered representative and broker/dealer will be reduced by the amount of
such bonus.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following summary does not constitute tax advice. It is a general
discussion of certain of the expected federal income tax consequences of
investment in and distributions with respect to a Policy, based on the Internal
Revenue Code of 1986, as amended (the "Code"), proposed and final Treasury
Regulations thereunder, judicial authority, and current administrative rulings
and practice. This summary discusses only certain federal income tax
consequences to "United States Persons," and does not discuss state, local, or
foreign tax consequences. United States Persons means citizens or residents of
the United States, domestic corporations, domestic partnerships and trusts or
estates that are subject to United States federal income tax regardless of the
source of their income.

At the time the initial Premium Payment is paid, a prospective purchaser must
specify whether he or she is purchasing a Nonqualified Policy or a Qualified
Policy. If the initial Premium Payment is derived from an exchange or surrender
of another annuity policy, PFL may require that the prospective purchaser
provide information with regard to the federal income tax status of the
previous annuity policy. PFL will require that persons purchase separate
Policies if they desire to invest monies qualifying for different annuity tax
treatment under the Code. Each such separate Policy would require the minimum
initial Premium Payment stated above. Additional Premium Payments under a
Policy must qualify for the same federal income tax treatment as the initial
Premium Payment under the Policy; PFL will not accept an additional

- 46 -
<PAGE>

Premium Payment under a Policy if the federal income tax treatment of such
Premium Payment would be different from that of the initial Premium Payment.

The Qualified Policies were designed for use by retirement plans and
individual retirement accounts that qualify for special federal income tax
treatment under Sections 401(a), 403(b), or 408(a) of the Code and individuals
purchasing individual retirement annuities that qualify for special federal
income tax treatment under Section 408(b) of the Code. Certain requirements
must be satisfied in purchasing a Qualified Policy in order for the plan,
account or annuity to retain its special tax treatment. This summary is not
intended to cover such requirements, and assumes that Qualified Policies are
purchased pursuant to retirement plans or individual retirement accounts, or
are individual retirement annuities, that qualify for such special tax
treatment. This summary was prepared by PFL after consultation with tax
counsel, but no opinion of tax counsel has been obtained.

THE DISCUSSION SET FORTH BELOW IS INCLUDED FOR GENERAL PURPOSES ONLY. EACH
POTENTIAL PURCHASER IS URGED TO CONSULT HIS/HER OWN TAX ADVISER AS TO THE
CONSEQUENCES OF INVESTMENT IN A POLICY UNDER FEDERAL AND APPLICABLE STATE,
LOCAL AND FOREIGN TAX LAWS.

TAX STATUS OF THE POLICY

The following discussion is based on the assumption that the Policy qualifies
as an annuity contract for federal income tax purposes. The Statement of
Additional Information discusses the tax requirements for qualifying as an
annuity contract.

TAXATION OF ANNUITIES

The discussion below applies only to those Policies owned by natural persons,
and that qualify as annuity contracts for federal income tax purposes. With
respect to Owners who are natural persons, the Policy should be treated as an
annuity contract for federal income tax purposes.

In General. Except as described below with respect to Owners who are not
natural persons, an Owner who holds a Policy satisfying the diversification and
distribution requirements described in the Statement of Additional Information
should not be taxed on increases in the Policy Value until an amount is
received or deemed received, e.g., upon a partial or full surrender or as
Annuity Payments under the Annuity Option selected. Generally, any amount
received or deemed received under a Nonqualified Annuity Contract prior to the
Annuity Commencement Date is deemed to come first from any "Income on the
Contract" and then from the "Investment in the Contract." The "Investment in
the Contract" generally equals total premium payments less amounts received
which were not includable in gross income. To the extent that

- 47 -
<PAGE>

the Policy Value (ignoring any surrender charges except on a full surrender)
exceeds the "Investment in the Contract," such excess constitutes the "Income
on the Contract." As a result, any such amount received or deemed received (i)
shall be includable in gross income to the extent that such amount does not
exceed any such "Income on the Contract," and (ii) shall not be includable in
gross income to the extent that such amount does exceed any such "Income on the
Contract." For these purposes such "Income on the Contract" shall be computed
by reference to the aggregation rules described below, and the amount
includable in gross income will be taxable as ordinary income. If at the time
that any amount if received or deemed received there is no "Income on the
Contract" (e.g., because the gross Policy Value does not exceed the "Investment
in the Contract" and no aggregation rule applies), then such amount received or
deemed received will not be includable in gross income, and will simply reduce
the "Investment in the Contract."

For this purpose, the assignment, pledge or agreement to assign or pledge any
portion of the Policy Value (including assignment of Owner's right to receive
Annuity Payments prior to the Annuity Commencement Date) generally will be
treated as a distribution in the amount of such portion of the Policy Value.
Additionally, if an Owner designates a new Owner prior to the Annuity
Commencement Date without receiving full and adequate consideration, the old
Owner generally will be treated as receiving a distribution under the Policy in
an amount equal to the Policy Value. A transfer of ownership or an assignment
of a Policy, or designation of an Annuitant or Beneficiary who is not also the
Owner, may result in certain tax consequences to the Owner that are not
discussed herein. An Owner contemplating any such transfer, designation or
assignment of a Policy should contact a competent tax adviser with respect to
the potential tax effects of such a transaction.

Aggregation Rules. Generally all nonqualified deferred annuity contracts
issued by the same company (or an affiliated company) to the same owner during
any calendar year shall be treated as one annuity contract, and "aggregated"
for purposes of determining the amount includable in gross income. In addition,
for such purposes all individual retirement annuities and accounts under
Section 408 of the Code for an individual are aggregated, and generally all
distributions therefrom during a calendar year are treated as one distribution
made as of the end of such year.

Surrenders. In the case of a partial surrender (including systematic
withdrawals) under a Nonqualified Policy, the amount received generally will be
includable in gross income only up to the amount of the "Income on the
Contract." In the case of a partial surrender (including systematic
withdrawals) under a Qualified Policy, a ratable portion of the amount received
is generally excludable from gross income, based on the ratio of the
"Investment in the Contract" to the individual's total account balance or
accrued benefit under the retirement plan at the time of each such payment. For
a Qualified Policy, the "Investment in the Contract" can be zero. Special tax
rules may be available for certain distributions

- 48 -
<PAGE>

from a Qualified Policy. In the case of a full surrender under a Nonqualified
Policy or a Qualified Policy, the amount received generally will be taxable
only to the extent it exceeds the "Investment in the Contract."

Annuity Payments. Although the tax consequences may vary depending on the
Annuity Payment Option elected under the Policy, in general only the portion of
the Annuity Payments received after the Annuity Commencement Date that
represent the amount by which the Annuity Purchase Value exceeds the
"Investment in the Contract" on the Annuity Commencement Date will be
includable in the gross income of the recipient. After the "Investment in the
Contract" is recovered, the full amount of any additional Annuity Payments is
includable in gross income.

For Fixed Annuity Payments, in general the excludable portion of each payment
is determined by dividing the "Investment in the Contract" on the Annuity
Commencement Date by the total expected value of the Annuity Payments for the
term of the payments. The remainder of each Annuity Payment is includable in
gross income. Once the "Investment in the Contract" has been fully recovered,
the full amount of any additional Annuity Payments is includable in gross
income.

For Variable Annuity Payments, the includable portion is generally determined
by an equation that establishes a specific dollar amount of each payment that
is excludable from gross income. This dollar amount is determined by dividing
the "Investment in the Contract" on the Annuity Commencement Date by the total
number of expected periodic payments. However, the entire distribution will be
includable in gross income once the recipient has recovered the dollar amount
of his or her "Investment in the Contract."

If, after the Annuity Commencement Date, Annuity Payments cease by reason of
the death of the Annuitant, the excess (if any) of the "Investment in the
Contract" as of the Annuity Commencement Date over the aggregate amount of
Annuity Payments received on or after the Annuity Commencement Date that was
excluded from gross income is allowable as a deduction for the last taxable
year of the Annuitant.

Penalty Taxes. In the case of any amount received or deemed received from the
Policy, e.g., upon a surrender of a Policy or a deemed distribution under a
Policy resulting from a pledge, assignment or agreement to pledge or assign or
an Annuity Payment with respect to a Policy, there may be imposed on the
recipient a federal penalty tax equal to 10% of the amount includable in gross
income. The penalty tax generally will not apply to any distribution: (i) made
on or after the date on which the taxpayer attains age 59 1/2; (ii) made as a
result of the death of the holder (generally the Owner); (iii) attributable to
the disability of the taxpayer; or (iv) which is part of a series of
substantially equal periodic payments made (not less frequently than annually)
for the life (or life expectancy) of the taxpayer or the joint lives (or joint
life expectancies) of such taxpayer and his/her beneficiary. Other rules may
apply to Qualified Policies.

- 49 -
<PAGE>

Withholding. The portion of any distribution under a Policy that is
includable in gross income will be subject to federal income tax withholding
unless the recipient of such distribution elects not to have federal income tax
withheld. Election forms will be provided at the time distributions are
requested or made. For certain Qualified Policies, certain distributions are
subject to mandatory withholding.

Qualified Policies. The Qualified Policy is designed for use with several
types of tax-qualified retirement plans. The tax rules applicable to
participants and beneficiaries in tax-qualified retirement plans vary according
to the type of plan and the terms and conditions of the plan. Special favorable
tax treatment may be available for certain types of contributions and
distributions. Adverse tax consequences may result from contributions in excess
of specified limits; distributions prior to age 59 1/2 (subject to certain
exceptions); distributions that do not conform to specified commencement and
minimum distribution rules; aggregate distributions in excess of a specified
annual amount; and in other specified circumstances.

PFL makes no attempt to provide more than general information about use of
the Policy with the various types of retirement plans. Purchasers of Policies
for use with any retirement plan should consult their legal counsel and tax
adviser regarding the suitability of the Policy.

Individual Retirement Annuities. In order to qualify as an individual
retirement annuity under Section 408(b) of the Code, a Policy must contain
certain provisions: (i) the Owner must be the Annuitant; (ii) the Policy may
not be transferable by the Owner, e.g., the Owner may not designate a new
Owner, designate a Contingent Owner or assign the Policy as collateral
security; (iii) the total Premium Payments for any calendar year may not exceed
$2,000, unless the portion of such Premium Payments in excess of $2,000
qualifies as a rollover amount or contribution under Sections 402(c) or
408(d)(3) of the Code; (iv) Annuity Payments or withdrawals must begin no later
than April 1 of the calendar year following the calendar year in which the
Annuitant attains age 70 1/2; (v) an Annuity Payment Option with a Period
Certain that will guarantee Annuity Payments beyond the life expectancy of the
Annuitant and the Beneficiary may not be selected; and (vi) certain payments of
Death Benefits must be made in the event the Annuitant dies prior to the
distribution of the Policy Value. Policies intended to qualify as individual
retirement annuities under Section 408(b) of the Code contain such provisions.

Section 408 of the Code also indicates that no part of the funds for an
individual retirement account or annuity should be invested in a life insurance
contract, but the regulations thereunder allow such funds to be invested in an
annuity contract that provides a death benefit that equals the greater of the
premiums paid or the cash value for the contract. The Policy provides an
enhanced death benefit that could exceed the amount of such a permissible death
benefit, but it is unclear

- 50 -
<PAGE>

to what extent such an enhanced death benefit could disqualify the Policy under
Section 408 of the Code. The Internal Revenue Service has not reviewed the
Policy for qualification as an IRA, and has not addressed in a ruling of
general applicability whether an enhanced death benefit provision, such as the
provision in the Policy comports with IRA qualification requirements.

Section 403(b) Plans. Under Section 403(b) of the Code, payments made by
public school systems and certain tax exempt organizations to purchase Policies
for their employees are excludable from the gross income of the employee,
subject to certain limitations. However, such payments may be subject to FICA
(Social Security) taxes. Additionally, in accordance with the requirements of
the Code, Section 403(b) annuities generally may not permit distribution of (i)
elective contributions made in years beginning after December 31, 1988, and
(ii) earnings on those contributions and (iii) earnings on amounts attributed
to elective contributions held as of the end of the last year beginning before
January 1, 1989. Distributions of such amounts will be allowed only upon the
death of the employee, on or after attainment of age 59 1/2, separation from
service, disability, or financial hardship, except that income attributable to
elective contributions may not be distributed in the case of hardship.

Corporate Pension and Profit-Sharing Plans and H.R. 10 Plans. Sections 401(a)
and 403(a) of the Code permit corporate employers to establish various types of
retirement plans for employees and self-employed individuals to establish
qualified plans for themselves and their employees. Such retirement plans may
permit the purchase of the Policies to accumulate retirement savings. Adverse
tax consequences to the plan, the participant or both may result if the Policy
is assigned or transferred to any individual as a means to provide benefit
payments.

Deferred Compensation Plans. Section 457 of the Code, while not actually
providing for a qualified plan as that term is normally used, provides for
certain deferred compensation plans with respect to service for state
governments, local governments, political sub-divisions, agencies,
instrumentalities and certain affiliates of such entities and tax exempt
organizations which enjoy special treatment. The Policies can be used with such
plans. Under such plans a participant may specify the form of investment in
which his or her participation will be made. All such investments, however, are
owned by, and are subject to, the claims of the general creditors of the
sponsoring employer. Depending on the terms of the particular plan, the
employer may be entitled to draw on deferred amounts for purposes unrelated to
its Section 457 plan obligations. In general, all amounts received under a
Section 457 plan are taxable and are subject to federal income tax withholding
as wages.

Non-natural Persons. Pursuant to Section 72(u) of the Code, an annuity
contract held by a taxpayer other than a natural person generally will not be
treated as an annuity contract under the Code;

- 51 -
<PAGE>

accordingly, an Owner who is not a natural person will recognize as ordinary
income for a taxable year the excess of (i) the sum of the Cash Value as of the
close of the taxable year and all previous distributions under the Policy over
(ii) the sum of the Premium Payments paid for the taxable year and any prior
taxable year and the amounts includable in gross income for any prior taxable
year with respect to the Policy. Notwithstanding the preceding sentence,
Section 72(u) of the Code does not apply to (i) a Policy the nominal Owner of
which is not a natural person but the beneficial Owner of which is a natural
person, (ii) a Policy acquired by the estate of a decedent by reason of such
decedent's death, (iii) a Qualified Policy or (iv) a single-payment annuity the
Annuity Commencement Date for which is no later than one year from the date of
the single Premium Payment; instead, such Policies are taxed as described above
under the heading "Taxation of Annuities."

Possible Changes in Taxation. In past years, legislation has been proposed in
the U.S. Congress that would have adversely modified the federal taxation of
certain annuities. For example, one such proposal would have changed the tax
treatment of non-qualified annuities that did not have "substantial life
contingencies" by taxing income as it is credited to the annuity. Although as
of the date of this Prospectus Congress was not actively considering any
legislation regarding the taxation of annuities, there is always the
possibility that the tax treatment of annuities could change by legislation or
other means (such as IRS regulations, revenue rulings, judicial decisions,
etc.). Moreover, it is also possible that any change could be retroactive (that
is, effective prior to the date of the change).

DISTRIBUTOR OF THE POLICIES

AEGON USA Securities, Inc., an affiliate of PFL, is the principal underwriter
of the Policies. AEGON USA Securities, Inc. has entered or will enter into one
or more contracts with various broker-dealers for the distribution of the
Policies. Commissions on Policy sales are paid to dealers. Commissions payable
to a broker-dealer will be up to 4 1/2% of Premium Payments. In addition,
certain broker-dealers may receive additional commissions of up to .75% of
Premium Payments and certain expense allowances based upon the attainment of
specific sales volume targets and other factors. Certain broker-dealers may
also receive annual continuing fees based on Policy Values. These commissions
are not deducted from Premium Payments, they are paid by PFL.

VOTING RIGHTS

To the extent required by law, PFL will vote the Underlying Funds shares held
by the Mutual Fund Account at regular and special shareholder meetings of the
Underlying Funds in accordance with instructions received from persons having
voting interests in the portfolios. If, however, the 1940 Act or any regulation
thereunder should

- 52 -
<PAGE>

be amended or if the present interpretation thereof should be amended or if the
present interpretation thereof should change, and as a result PFL determines
that it is permitted to vote the Underlying Funds' shares in its own right, it
may elect to do so.

Before the Annuity Commencement Date, the Policy Owner holds the voting
interest in the selected Portfolios. The number of votes that an Owner has the
right to instruct will be calculated separately for each Subaccount. The number
of votes that an Owner has the right to instruct for a particular Subaccount
will be determined by dividing his or her Policy Value in the Subaccount by the
net asset value per share of the corresponding Portfolio in which the
Subaccount invests. Fractional shares will be counted.

After the Annuity Commencement Date, the person receiving Annuity Payments
has the voting interest, and the number of votes decreases as Annuity Payments
are made and as the reserves for the Policy decrease. The person's number of
votes will be determined by dividing the reserve for the Policy allocated to
the applicable Subaccount by the net asset value per share of the corresponding
Portfolio. Fractional shares will be counted.

The number of votes that the Owner or person receiving income payments has
the right to instruct will be determined as of the date established by the
Underlying Funds for determining shareholders eligible to vote at the meeting
of the Underlying Funds. PFL will solicit voting instructions by sending Owners
or other persons entitled to vote written requests for instructions prior to
that meeting in accordance with procedures established by the Underlying Funds.
Portfolio shares as to which no timely instructions are received and shares
held by PFL in which Owners or other persons entitled to vote have no
beneficial interest will be voted in proportion to the voting instructions that
are received with respect to all Policies participating in the same Subaccount.

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

LEGAL PROCEEDINGS

There are no legal proceedings to which the Mutual Fund Account is a party or
to which the assets of the Account are subject. PFL is not involved in any
litigation that is of material importance in relation to its total assets or
that relates to the Mutual Fund Account.

- 53 -
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

A Statement of Additional Information is available (at no cost) which
contains more details concerning the subjects discussed in this Prospectus. The
following is the Table of Contents for that Statement:

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Policy--General Provisions............................................. 3
Owner.................................................................... 3
Entire Policy............................................................ 3
Deferment of Payment and Transfers....................................... 3
Misstatement of Age or Sex............................................... 4
Reallocation of Policy Values After the Annuity Commencement Date........ 4
Assignment............................................................... 4
Evidence of Survival..................................................... 4
Amendments............................................................... 4
Federal Tax Matters........................................................ 5
Tax Status of the Policy................................................. 5
Taxation of PFL.......................................................... 5
Investment Experience...................................................... 6
State Regulation of PFL.................................................... 9
Administration............................................................. 9
Records and Reports........................................................ 10
Distribution of the Policies............................................... 10
Custody of Assets.......................................................... 10
Historical Performance Data................................................ 10
Money Market Yields...................................................... 10
Other Subaccount Yields.................................................. 11
Total Returns............................................................ 12
Other Performance Data................................................... 13
Legal Matters.............................................................. 13
Independent Auditors....................................................... 13
Other Information.......................................................... 13
Financial Statements....................................................... 14
</TABLE>

- 54 -
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

THE ENDEAVOR VARIABLE ANNUITY

Issued through

PFL ENDEAVOR VARIABLE
ANNUITY ACCOUNT

Offered by
PFL LIFE INSURANCE COMPANY

4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499

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

This Statement of Additional Information expands upon subjects discussed in
the current Prospectus for the Endeavor Variable Annuity Policy (the "Policy")
offered by PFL Life Insurance Company. You may obtain a copy of the Prospectus
dated May 1, 1995 by calling 1-800-525-6205, or by writing to the
Administrative and Service Office, Financial Markets Division--Variable Annuity
Dept., 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499. Terms used in the
current Prospectus for the Policy are incorporated in this Statement.

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE
READ ONLY IN CONJUNCTION WITH THE PROSPECTUSES FOR THE POLICY, ENDEAVOR SERIES
TRUST AND THE WRL GROWTH PORTFOLIO OF THE WRL SERIES FUND, INC.

Dated: May 1, 1995

- 1 -
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Policy--General Provisions........................................... 3
Owner.................................................................. 3
Entire Policy.......................................................... 3
Deferment of Payment and Transfers..................................... 3
Misstatement of Age or Sex............................................. 4
Reallocation of Policy Values After the Annuity Commencement Date...... 4
Assignment............................................................. 4
Evidence of Survival................................................... 4
Amendments............................................................. 4
Federal Tax Matters (46)................................................. 5
Tax Status of the Policy............................................... 5
Taxation of PFL........................................................ 5
Investment Experience.................................................... 6
State Regulation of PFL.................................................. 9
Administration........................................................... 9
Records and Reports...................................................... 10
Distribution of the Policies (52)........................................ 10
Custody of Assets........................................................ 10
Historical Performance Data (17)......................................... 10
Money Market Yields.................................................... 10
Other Subaccount Yields................................................ 11
Total Returns.......................................................... 12
Other Performance Data................................................. 13
Legal Matters............................................................ 13
Independent Auditors..................................................... 13
Other Information........................................................ 13
Financial Statements (17)................................................ 14
</TABLE>

(Numbers in parenthesis indicate corresponding sections of the Prospectus).

- 2 -
<PAGE>

In order to supplement the description in the Prospectus, the following
provides additional information about PFL and the Policy which may be of
interest to an Owner.

THE POLICY--GENERAL PROVISIONS

OWNER

The Policy shall belong to the Policy Owner upon issuance of the Policy after
completion of an application and delivery of the initial Premium Payment. While
the Annuitant is living, the Owner may: (1) assign the Policy; (2) surrender
the Policy; (3) amend or modify the Policy with PFL's consent; (4) receive
annuity payments or name a Payee to receive the payments; and (5) exercise,
receive and enjoy every other right and benefit contained in the Policy. The
exercise of these rights may be subject to the consent of any assignee or
irrevocable Beneficiary.

A Successor Owner can be named in the Policy application or in a Written
Notice. The Successor Owner will become the new Owner upon the Owner's death,
if the Owner predeceases the Annuitant. If no Successor Owner survives the
Owner and the Owner predeceases the Annuitant, the Owner's estate will become
the Owner.

The Owner may change the ownership of the Policy in a Written Notice. When
this change takes effect, all rights of ownership in the Policy will pass to
the new Owner.

When there is a change of Owner or Successor Owner, the change will take
effect as of the date the Owner signs the Written Notice, subject to any
payment PFL has made or action PFL has taken before recording the change.
Changing the Owner or naming a new Successor Owner cancels any prior choice of
Successor Owner, but does not change the designation of the Beneficiary or the
Annuitant.

If ownership is transferred (except to the Owner's spouse) because the Owner
dies before the Annuitant, the Cash Value generally must be distributed to the
Successor Owner within five years of the Owner's death, or payments must be
made for a period certain or for the Successor Owner's lifetime so long as any
period certain does not exceed that Successor Owner's life expectancy, if the
first payment begins within one year of the Owner's death.

ENTIRE POLICY

The Policy and any endorsements thereon and the Policy application constitute
the entire contract between PFL and the Owner. All statements in the
application are representations and not warranties. No statement will cause the
Policy to be void or to be used in defense of a claim unless contained in the
application.

DEFERMENT OF PAYMENT AND TRANSFERS

Payment of any amount due from the Mutual Fund Account in respect of a
surrender, the Death Benefit or the death of the Owner of a Nonqualified Policy
generally will occur within seven business days from the date the Written
Notice (and any other required documentation or information) is received,
except that PFL may be permitted to defer such payment from the Mutual Fund
Account if: (1) the New York Stock Exchange is closed for other than usual
weekends or holidays or trading on the Exchange is otherwise restricted; or (2)
an emergency exists as defined by the SEC or the SEC requires that trading be
restricted; or (3) the SEC permits a delay for the protection of Owners. In
addition, transfers of amounts from the Subaccounts may be deferred under these
circumstances.

- 3 -
<PAGE>

Certain delays and restrictions apply to transfers of amounts out of the
Fixed Account. See page 26 of the Policy Prospectus.

MISSTATEMENT OF AGE OR SEX

If the age or sex of the Annuitant has been misstated, PFL will change the
annuity benefit payable to that which the Premium Payments would have purchased
for the correct age or sex. The dollar amount of any underpayment made by PFL
shall be paid in full with the next payment due such person or the Beneficiary.
The dollar amount of any overpayment made by PFL due to any misstatement shall
be deducted from payments subsequently accruing to such person or Beneficiary.
Any underpayment or overpayment will include interest at 5% per year, from the
date of the wrong payment to the date of the adjustment. The age of the
Annuitant may be established at any time by the submission of proof
satisfactory to PFL.

REALLOCATION OF POLICY VALUES AFTER THE ANNUITY COMMENCEMENT DATE

After the Annuity Commencement Date, the Policy Owner may reallocate the
value of a designated number of Annuity Units of a Subaccount of the Mutual
Fund Account then credited to a Policy into an equal value of Annuity Units of
one or more other Subaccounts of the Mutual Fund Account, or the Fixed Account.
The reallocation shall be based on the relative value of the Annuity Units of
the Account(s) or Subaccount(s) at the end of the Business Day on the next
payment date. The minimum amount which may be reallocated is the lesser of (1)
$10 of monthly income or (2) the entire monthly income of the Annuity Units in
the Account or Subaccount from which the transfer is being made. If the monthly
income of the Annuity Units remaining in an Account or Subaccount after a
reallocation is less than $10, PFL reserves the right to include the value of
those Annuity Units as part of the transfer. The request must be in writing to
PFL's Administrative and Service Office. There is no charge assessed in
connection with such reallocation. PFL reserves the right to limit the number
of times a reallocation of Policy Value may be made in any given Policy Year.

ASSIGNMENT

During the lifetime of the Annuitant the Policy Owner may assign any rights
or benefits provided by the Policy. An assignment will not be binding on PFL
until a copy has been filed at its Administrative and Service Office. The
rights and benefits of the Policy Owner and Beneficiary are subject to the
rights of the assignee. PFL assumes no responsibility for the validity or
effect of any assignment. Any claim made under an assignment shall be subject
to proof of interest and the extent of the assignment. An assignment may have
tax consequences.

Unless the Policy Owner so directs by filing written notice with PFL, no
Beneficiary may assign any payments under the Policy before they are due. To
the extent permitted by law, no payments will be subject to the claims of any
Beneficiary's creditors.

EVIDENCE OF SURVIVAL

PFL reserves the right to require satisfactory evidence that a person is
alive if a payment is based on that person being alive. No payment will be made
until PFL receives such evidence.

AMENDMENTS

No change in the Policy is valid unless made in writing by PFL and approved
by one of PFL's officers. No Registered Representative has authority to change
or waive any provision of the Policy.

PFL reserves the right to amend the Policies to meet the requirements of the
Code, regulations or published rulings. A Policy Owner can refuse such a change
by giving Written Notice, but a refusal may result in adverse tax consequences.

- 4 -
<PAGE>

FEDERAL TAX MATTERS

TAX STATUS OF THE POLICY

Diversification Requirements. Section 817(h) of the Code provides that in
order for a variable contract which is based on a segregated asset account to
qualify as an annuity contract under the Code, the investments made by such
account must be "adequately diversified" in accordance with Treasury
regulations. The Treasury regulations issued under Section 817(h) (Treas. Reg.
(S) 1.817-5) apply a diversification requirement to each of the Subaccounts of
the Mutual Fund Account. The Mutual Fund Account, through the Underlying Funds
and their Portfolios, intends to comply with the diversification requirements
of the Treasury. PFL has entered into agreements regarding participation in the
Endeavor Series Trust and WRL Series Fund, Inc. that require the Underlying
Funds and their Portfolios to be operated in compliance with the Treasury
regulations.

Owner Control. In connection with the issuance of temporary regulations on
diversification requirements, the Treasury also announced that such regulations
do not provide guidance concerning the extent to which Owners may direct their
investments to the Subaccounts of the Mutual Fund Account. It is not clear
whether additional guidance in this regard will be provided nor whether, if
provided, it will be prospective only. It is possible that any such guidance
could treat an Owner as the owner of the assets of the Mutual Fund Account if a
Subaccount is too narrow in its investment strategy (e.g., a fund that invests
only in gold or stock of gold mining companies) or if Owners have too many
subaccount options to select, even though it technically meets the
diversification requirements. It is possible that if any guidance is provided
then the Mutual Fund Account may not be in compliance. PFL can provide no
assurances that any such guidance will not adversely affect the tax treatment
of existing Policies. For these reasons, PFL reserves the right to modify the
Policy as necessary to prevent the Owner from being considered the owner of the
assets of the Mutual Fund Account or otherwise to qualify the Policy for
favorable tax treatment.

Distribution Requirements. The Code also requires that Nonqualified Policies
contain specific provisions for distribution of Policy proceeds upon the death
of the Owner. In order to be treated as an annuity contract for federal income
tax purposes, the Code requires that such Policies provide that if any Owner
dies on or after the Annuity Commencement Date and before the entire interest
in the Policy has been distributed, the remaining portion must be distributed
at least as rapidly as under the method in effect on such Owner's death. If any
Owner dies before the Annuity Commencement Date, the entire interest in the
Policy must generally be distributed within 5 years after such Owner's date of
death or be used to purchase an immediate annuity under which payments will
begin within one year of such Owner's death and will be made for the life of
the Beneficiary or for a period not extending beyond the life expectancy of the
Beneficiary. However, if upon such Owner's death prior to the Annuity
Commencement Death, such Owner's surviving spouse becomes the sole new Owner
under the Policy, then the Policy may be continued with the surviving spouse as
the new Owner. If any Owner is not a natural person, then for purposes of these
distribution requirements, the primary Annuitant shall be treated as the Owner
and any death or change of such primary Annuitant shall be treated as the Death
of the Owner. The Policy contains provisions intended to comply with these
requirements of the Code. No regulations interpreting these requirements of the
Code have yet been issued and thus no assurance can be given that the
provisions contained in the Policies satisfy all such Code requirements. The
provisions contained in the Policies will be reviewed and modified if necessary
to assure that they comply with the Code requirements when clarified by
regulation or otherwise.

TAXATION OF PFL

PFL at present is taxed as a life insurance company under part I of
Subchapter L of the Code. The Mutual Fund Account is treated as part of PFL
and, accordingly, will not be taxed separately as a "regulated investment
company" under Subchapter M of the Code. PFL does not expect to incur any
federal income tax liability with respect to investment income and net capital
gains

- 5 -
<PAGE>

arising from the activities of the Mutual Fund Account retained as part of the
reserves under the Policy. Based on this expectation, it is anticipated that no
charges will be made against the Mutual Fund Account for federal income taxes.
If, in future years, any federal income taxes are incurred by PFL with respect
to the Mutual Fund Account, PFL may make a charge to the Mutual Fund Account.

INVESTMENT EXPERIENCE

An "Investment Experience Factor" is used to determine the value of
Accumulation Units and Annuity Units, and to determine annuity payment rates.

ACCUMULATION UNITS

Upon allocation to the selected Subaccount, Premium Payments are converted
into Accumulation Units of the Subaccount. The number of Accumulation Units to
be credited is determined by dividing the dollar amount allocated to each
Subaccount by the value of an Accumulation Unit for that Subaccount as next
determined after the Premium Payment is received at the Administrative and
Service Office or, in the case of the initial Premium Payment, when the Policy
application is completed, whichever is later. The value of an Accumulation Unit
was arbitrarily established at $1 (except the WRL Growth Subaccount which was
established at $10) at the inception of each Subaccount. Thereafter, the value
of an Accumulation Unit is determined as of the close of trading on each day
the New York Stock Exchange and PFL's Administrative and Service Office are
open for business.

An index (the "Investment Experience Factor") which measures the investment
performance of a Subaccount during a Valuation Period is used to determine the
value of an Accumulation Unit for the next subsequent Valuation Period. The
Investment Experience Factor may be greater or less than or equal to one;
therefore, the value of an Accumulation Unit may increase, decrease or remain
the same from one Valuation Period to the next. The Policy Owner bears this
investment risk. The Net Investment Performance of a Subaccount and deduction
of certain charges affect the Accumulation Unit Value.

The Investment Experience Factor for any Subaccount for any Valuation Period
is determined by dividing (a) by (b) and subtracting (c) from the result,
where:

(a) is the net result of:

(1) the net asset value per share of the shares held in the
Subaccount determined at the end of the current Valuation Period, plus

(2) The per share amount of any dividend or capital gain distribution
made with respect to the shares held in the Subaccount if the ex-
dividend date occurs during the current Valuation Period, plus or minus

(3) a per share charge or credit for any taxes determined by PFL to
have resulted from the investment operations of the Subaccount and for
which it has created a reserve;

(b) is the net result of:

(1) the net asset value per share of the shares held in the
Subaccount determined as of the end of the immediately preceding
Valuation Period, plus or minus

(2) the per share charge or credit for taxes pertaining to the
immediately preceding Valuation Period for which PFL has created a
reserve; and

(c) is the charge for mortality and expense risk during the Valuation
Period equal on an annual basis to 1.25% of the daily net asset value of
the Subaccount, plus the .15% administrative charge.

- 6 -
<PAGE>

ILLUSTRATION OF ACCUMULATION UNIT VALUE CALCULATIONS

FORMULA AND ILLUSTRATION FOR DETERMINING THE INVESTMENT EXPERIENCE FACTOR

Investment Experience Factor = A + B - C - F
---------
D - E

Where: A = The Net Asset Value of an Underlying Fund share as of the end of
the current Valuation Period.
Assume...................A = $11.57

B = The per share amount of any dividend or capital gains distribution
since the end of the immediately preceding Valuation Period.
Assume...............................................B = 0

C = The per share charge or credit for any taxes reserved for at the
end of the current Valuation Period.
Assume..............C = 0

D = The Net Asset Value of an Underlying Fund share at the end of the
immediately preceding Valuation Period.
Assume.........D = $11.40

E = The per share amount of any taxes reserved for at the end of the
immediately preceding Valuation Period.
Assume..............E = 0

F = The daily deduction for mortality and expense risk and
administrative charges, which totals 1.40% on an annual basis.
On a daily basis..... = .0000380909

Then, the
Investment Experience Factor = 11.57 - 0 - 0 - .0000380909 = Z = 1.0148741898
-------------
11.40 - 0

FORMULA AND ILLUSTRATION FOR DETERMINING ACCUMULATION UNIT VALUE

Accumulation Unit Value = A X B

Where: A = The Accumulation Unit Value for the immediately preceding
Valuation Period.
Assume....................... = $ X

B = The Net Investment Factor for the current Valuation Period.
Assume......................... = Y

Then, the Accumulation Unit Value = $ X X Y = $ Z

ANNUITY UNIT VALUE AND ANNUITY PAYMENT RATES

The amount of Variable Annuity Payments will vary with Annuity Unit Values.
Annuity Unit Values rise if the net investment performance of the Subaccount
exceeds the assumed interest rate of 5% annually. Conversely, Annuity Unit
Values fall if the net investment performance of the Subaccount is less than
the assumed rate. The value of a variable Annuity Unit in each Subaccount

- 7 -
<PAGE>

was established at $1.00 on the date operations began for that Subaccount. The
value of a variable Annuity Unit on any subsequent Business Day is equal to (a)
multiplied by (b) multiplied by (c), where:

(a) is the variable Annuity Unit Value on the immediately preceding
Business Day;

(b) is the net investment factor of the valuation period; and

The investment result adjustment factor for the valuation period is the
product of discount factors of .99986634 per day to recognize the 5% effective
annual Assumed Investment Return. The valuation period is the period from the
close of the immediately preceding Business Day to the close of the current
Business Day.

The net investment factor for the Policy used to calculate the value of a
variable Annuity Unit in each Subaccount for the valuation period is determined
by dividing (i) by (ii) and subtracting (iii) from the result, where:

(i) is the result of:

(1) the net asset value of a fund share held in the Mutual Fund
Account for that Subaccount determined at the end of the current
valuation period; plus

(2) the per share amount of any dividend or capital gain
distributions made by the fund for shares held in the Mutual Fund
Account for that Subaccount if the ex-dividend date occurs during the
valuation period.

(ii) is the net asset value of a fund share held in the Mutual Fund
Account for that Subaccount determined as of the end of the immediately
preceding valuation period.

(iii) is a factor representing the mortality and expense risk fee and
administrative charge. This factor is equal, on an annual basis, to 1.40%
of the daily net asset value of a fund share held in the Mutual Fund
Account for that Subaccount.

The dollar amount of subsequent Variable Annuity Payments will depend upon
changes in applicable Annuity Unit Values.

The annuity payment rates vary according to the Annuity Option elected and
the sex and adjusted age of the Annuitant at the Annuity Commencement Date. The
Policy also contains a table for determining the adjusted age of the Annuitant.

ILLUSTRATION OF CALCULATIONS FOR ANNUITY UNIT VALUE
AND VARIABLE ANNUITY PAYMENTS

FORMULA AND ILLUSTRATION FOR DETERMINING ANNUITY UNIT VALUE

Annuity Unit Value = A X B X C

Where: A = Annuity Unit Value for the immediately preceding Valuation Period.
Assume.............. = $ X

B = Investment Experience Factor for the Valuation Period for which
the Annuity Unit Value is being calculated.
Assume................ = Y

C = A factor to neutralize the assumed interest rate of 5% built into
the Annuity Tables used.
Assume................ = Z

Then, the Annuity Unit Value is:
$ X X Y X Z = $ Q

- 8 -
<PAGE>

FORMULA AND ILLUSTRATION FOR DETERMINING AMOUNT OF FIRST MONTHLY VARIABLE
ANNUITY PAYMENT

First Monthly Variable Annuity Payment = A X B
------
$1,000

Where: A = The Policy Value as of the Annuity Commencement Date.
Assume............. = $ X

B = The Annuity purchase rate per $1,000 based upon the option
selected, the sex and adjusted age of the Annuitant according to
the tables contained in the Policy.
Assume............. = $ Y

Then, the first Monthly Variable Annuity
Payment = $ X X $ Y = $ Z
-----
1,000

FORMULA AND ILLUSTRATION FOR DETERMINING THE NUMBER OF ANNUITY UNITS
REPRESENTED BY EACH MONTHLY VARIABLE ANNUITY PAYMENT

Number of Annuity Units = A
-
B

Where: A = The dollar amount of the first monthly Variable Annuity Payment.
Assume............. = $ X

B = The Annuity Unit Value for the Valuation Date on which the first
monthly payment is
due. Assume.......... = $ Y

Then, the number of Annuity Units = $ X = Z
---
$ Y

STATE REGULATION OF PFL

PFL is subject to the laws of Iowa governing insurance companies and to
regulation by the Iowa Division of Insurance. An annual statement in a
prescribed form is filed with the Division of Insurance each year covering the
operation of PFL for the preceding year and its financial condition as of the
end of such year. Regulation by the Division of Insurance includes periodic
examination to determine PFL's contract liabilities and reserves so that the
Division may determine the items are correct. PFL's books and accounts are
subject to review by the Division of Insurance at all times and a full
examination of its operations is conducted periodically by the National
Association of Insurance Commissioners. In addition, PFL is subject to
regulation under the insurance laws of other jurisdictions in which it may
operate.

ADMINISTRATION

PFL performs administrative services for the Policies. These services
include issuance of the Policies, maintenance of records concerning the
Policies, and certain valuation services.

- 9 -
<PAGE>

RECORDS AND REPORTS

All records and accounts relating to the Mutual Fund Account will be
maintained by PFL. As presently required by the Investment Company Act of 1940
and regulations promulgated thereunder, PFL will mail to all Policy Owners at
their last known address of record, at least annually, reports containing such
information as may be required under that Act or by any other applicable law
or regulation. Policy Owners will also receive confirmation of each financial
transaction and any other reports required by law or regulation.

DISTRIBUTION OF THE POLICIES

The Policies are offered to the public through brokers licensed under the
federal securities laws and state insurance laws. The offering of the Policies
is continuous and PFL does not anticipate discontinuing the offering of the
Policies. However, PFL reserves the right to discontinue the offering of the
Policies.

AEGON USA Securities, Inc., an affiliate of PFL, will be the principal
underwriter of the Policies. AEGON USA Securities, Inc. has entered into
agreements with broker-dealers for the distribution of the Policies. During
1994 and 1993, the amount paid to AEGON USA Securities, Inc. and/or the
broker-dealers for their services was $19,983,219 and $16,173,142,
respectively.

CUSTODY OF ASSETS

The assets of each of the Subaccounts of the Mutual Fund Account are held by
PFL. The assets of each of the Subaccounts of the Mutual Fund Account are
segregated and held separate and apart from the assets of the other
Subaccounts and from PFL's general account assets. PFL maintains records of
all purchases and redemptions of shares of the Underlying Funds held by each
of the Subaccounts. Additional protection for the assets of the Mutual Fund
Account is afforded by PFL's fidelity bond, presently in the amount of
$5,000,000, covering the acts of officers and employees of PFL.

HISTORICAL PERFORMANCE DATA

MONEY MARKET YIELDS

PFL may from time to time disclose the current annualized yield of the Money
Market Subaccount, which invests in the Money Market Portfolio, for a 7-day
period in a manner which does not take into consideration any realized or
unrealized gains or losses on shares of the Money Market Portfolio or on its
portfolio securities. This current annualized yield is computed by determining
the net change (exclusive of realized gains and losses on the sale of
securities and unrealized appreciation and depreciation) at the end of the 7-
day period in the value of a hypothetical account having a balance of 1 unit
of the Money Market Subaccount at the beginning of the 7-day period, dividing
such net change in account value by the value of the account at the beginning
of the period to determine the base period return, and annualizing this
quotient on a 365-day basis. The net change in account value reflects (i) net
income from the Portfolio attributable to the hypothetical account; and (ii)
charges and deductions imposed under a Policy that are attributable to the
hypothetical account. The charges and deductions include the per unit

- 10 -
<PAGE>

charges for the hypothetical account for (i) the Administrative Charges; and
(ii) the Mortality and Expense Risk Charge. Current Yield will be calculated
according to the following formula:

Current Yield=((NCS-ES)/UV) X (365/7)

Where:

NCS = The net change in the value of the Portfolio (exclusive of realized gains
and losses on the sale of securities and unrealized appreciation and
depreciation) for the 7-day period attributable to a hypothetical account
having a balance of 1 Subaccount unit.
ES = Per unit expenses of the Subaccount for the 7-day period.
UV = The unit value on the first day of the 7-day period.

Because of the charges and deductions imposed under a Policy, the yield for
the Money Market Subaccount will be lower than the yield for the Money Market
Portfolio. The yield calculations do not reflect the effect of any premium
taxes or Contingent Deferred Sales Charges that may be applicable to a
particular Policy. Contingent Deferred Sales Charges range from 7% to 0% of the
amount of premium withdrawn based on the Policy Year since payment of the
premium.

PFL may also disclose the effective yield of the Money Market Subaccount for
the same 7-day period, determined on a compounded basis. The effective yield is
calculated by compounding the base period return according to the following
formula:

Effective Yield = (1 + ((NCS - ES) / UV))/365/7/ - 1

Where:

The yield on amounts held in the Money Market Subaccount normally will
fluctuate on a daily basis. Therefore, the disclosed yield for any given past
period is not an indication or representation of future yields or rates of
return. The Money Market Subaccount's actual yield is affected by changes in
interest rates on money market securities, average portfolio maturity of the
Money Market Portfolio, the types and quality of portfolio securities held by
the Money Market Portfolio and its operating expenses. For the seven days ended
December 31, 1994, the yield of the Money Market Subaccount was 1.94%, and the
effective yield was 1.96%.

OTHER SUBACCOUNT YIELDS

PFL may from time to time advertise or disclose the current annualized yield
of one or more of the Subaccounts of the Mutual Fund Account (except the Money
Market Subaccount) for 30-day periods. The annualized yield of a Subaccount
refers to income generated by the Subaccount over a specific 30-day period.
Because the yield is annualized, the yield generated by a Subaccount during the
30-day period is assumed to be generated each 30-day period over a 12-month
period. The yield is computed by: (i) dividing the net investment income of the
Subaccount less Subaccount expenses for the period, by (ii) the maximum
offering price per unit on the last day of the period times the daily average
number of units outstanding for the period, (iii) compounding that yield for a
6-month

- 11 -
<PAGE>

period, and (iv) multiplying that result by 2. Expenses attributable to the
Subaccount include (i) the Administrative Charge and (ii) the Mortality and
Expense Risk Charge. The 30-day yield is calculated according to the following
formula:

Yield =2 X ((((NI - ES)/(U X UV)) + 1)/6/ - 1)

Where:

NI = Net investment income of the Subaccount for the 30-day period attributable
to the Subaccount's unit.
ES = Expenses of the Subaccount for the 30-day period.
U = The average number of units outstanding.
UV = The unit value at the close (highest) of the last day in the 30-day
period.

Because of the charges and deductions imposed by the Mutual Fund Account, the
yield for a Subaccount of the Mutual Fund Account will be lower than the yield
for its corresponding Portfolio. The yield calculations do not reflect the
effect of any premium taxes that may be applicable to a particular Policy.
Contingent Deferred Sales Charges range from 7% to 0% of the amount of premium
withdrawn based on the Policy Year since payment of the premium.

The yield on amounts held in the Subaccounts of the Mutual Fund Account
normally will fluctuate over time. Therefore, the disclosed yield for any given
past period is not an indication or representation of future yields or rates of
return. A Subaccount's actual yield is affected by the types and quality of its
investments and its operating expenses.

TOTAL RETURNS

PFL may from time to time also advertise or disclose total returns for one or
more of the Subaccounts of the Mutual Fund Account for various periods of time.
One of the periods of time will include the period measured from the date the
Subaccount commenced operations. When a Subaccount has been in operation for 1,
5 and 10 years, respectively, the total return for these periods will be
provided. Total returns for other periods of time may from time to time also be
disclosed. Total returns represent the average annual compounded rates of
return that would equate an initial investment of $1,000 to the redemption
value of that investment as of the last day of each of the periods. The ending
date for each period for which total return quotations are provided will be for
the most recent month end practicable, considering the type and media of the
communication and will be stated in the communication.

Total returns will be calculated using Subaccount Unit Values which PFL
calculates on each Business Day based on the performance of the Subaccount's
underlying Portfolio, and the deductions for the Mortality and Expense Risk
Charge and the Administrative Charges. Total return calculations will reflect
the effect of Contingent Deferred Sales Charges that may be applicable to a
particular period. The total return will then be calculated according to the
following formula:

P(1 + T)/n/ = ERV

Where:

T = The average annual total return net of Subaccount recurring charges.
ERV = The ending redeemable value of the hypothetical account at the end of the
period.
P = A hypothetical initial payment of $1,000.
N = The number of years in the period.

- 12 -
<PAGE>

OTHER PERFORMANCE DATA

PFL may from time to time also disclose average annual total returns in a
non-standard format in conjunction with the standard format described above.
The non-standard format will be identical to the standard format except that
the Contingent Deferred Sales Charge percentage will be assumed to be 0%.

PFL may from time to time also disclose cumulative total returns in
conjunction with the standard format described above. The cumulative returns
will be calculated using the following formula assuming that the Contingent
Deferred Sales Charge percentage will be 0%.

CTR = (ERV / P) - 1

Where:

CTR = The cumulative total return net of Subaccount recurring charges for the
period.
ERV = The ending redeemable value of the hypothetical investment at the end of
the period.
P = A hypothetical initial payment of $1,000.

All non-standard performance data will only be advertised if the standard
performance data for the same period, as well as for the required period, is
also disclosed.

LEGAL MATTERS

Legal advice relating to certain matters under the federal securities laws
applicable to the issue and sale of the Policies has been provided to PFL by
Sutherland, Asbill & Brennan, of Washington D.C.

INDEPENDENT AUDITORS

The Financial Statements of PFL as of December 31, 1994 and 1993, and for
each of the three years in the period ended December 31, 1994, and the
Financial Statements of PFL Endeavor Variable Annuity Account at December 31,
1994, and for each of the two years in the period then ended, included in this
Statement of Additional Information have been audited by Ernst & Young LLP,
Independent Auditors, Des Moines, Iowa.

OTHER INFORMATION

A Registration Statement has been filed with the Securities and Exchange
Commission, under the Securities Act of 1933 as amended, with respect to the
Policies discussed in this Statement of Additional Information. Not all of the
information set forth in the Registration Statement, amendments and exhibits
thereto has been included in the Prospectus or this Statement of Additional
Information. Statements contained in the Prospectus and this Statement of
Additional Information concerning the content of the Policies and other legal
instruments are intended to be summaries. For a complete statement of the terms
of these documents, reference should be made to the instruments filed with the
Securities and Exchange Commission.

- 13 -
<PAGE>

FINANCIAL STATEMENTS

The values of the interest of Policy Owners in the Mutual Fund Account will
be affected solely by the investment results of the selected Subaccount(s).
Financial Statements of PFL Endeavor Variable Annuity Account are contained
herein. The Financial Statements of PFL, which are included in this Statement
of Additional Information, should be considered only as bearing on the ability
of PFL to meet its obligations under the Policies. They should not be
considered as bearing on the investment performance of the assets held in the
Mutual Fund Account.

- 14 -
<PAGE>

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
PFL Life Insurance Company

We have audited the accompanying statutory-basis balance sheets of PFL Life
Insurance Company as of December 31, 1994 and 1993, and the related statutory-
basis statements of operations, capital and surplus and cash flows for each of
the three years in the period ended December 31, 1994. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

The Company presents its financial statements in conformity with the
accounting practices prescribed or permitted by the Insurance Division of the
Commerce Department of the State of Iowa. The variances between such practices
and generally accepted accounting principles are described in Note 1. The
effects of these variances have not been determined but we believe they are
material.

In our opinion, because of the materiality of the effects of the variances
between generally accepted accounting principles and the accounting practices
referred to in the preceding paragraph, the financial statements referred to
above are not intended to and do not present fairly, in conformity with
generally accepted accounting principles, the financial position of PFL Life
Insurance Company at December 31, 1994 and 1993, or the results of its
operations or its cash flows for each of the three years in the period ended
December 31, 1994.

Also, in our opinion, the financial statements referred to above present
fairly, in all material respects, the admitted assets, liabilities and capital
and surplus of PFL Life Insurance Company at December 31, 1994 and 1993, and
the results of its operations and its cash flows for each of the three years in
the period ended December 31, 1994 in conformity with accounting practices
prescribed or permitted by the Insurance Division of the Commerce Department of
the State of Iowa.

Ernst & Young LLP

Des Moines, Iowa
February 17, 1995

- 15 -
<PAGE>

PFL LIFE INSURANCE COMPANY

BALANCE SHEETS--STATUTORY BASIS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
DECEMBER 31
---------------------
1994 1993
---------- ----------
<S> <C> <C>
ADMITTED ASSETS
Cash and invested assets:
Cash and short-term investments........................ $ 34,062 $ 18,135
Bonds (Note 2)......................................... 4,094,407 3,511,009
Stocks (Note 2):
Preferred............................................ 12,667 14,002
Common (cost: 1994--$15,812; 1993--$14,653).......... 16,754 18,651
Affiliated entities (cost: 1994--$13,155; 1993--
$14,705)............................................ 26,530 48,226
Mortgage loans on real estate (Note 2)................. 527,410 415,829
Real estate, at cost less accumulated depreciation and
encumbrances ($12,318 in 1994; $12,728 in 1993):
Home office properties............................... 21,226 12,791
Properties acquired in satisfaction of debt.......... 10,381 13,222
Investment properties................................ 45,859 45,682
Policy loans........................................... 51,798 48,596
Other invested assets.................................. 4,593 5,289
---------- ----------
Total cash and invested assets......................... 4,845,687 4,151,432
Premiums deferred and uncollected........................ 18,386 18,877
Accrued investment income................................ 61,969 56,852
Receivable from affiliates............................... 31,843 31,478
Federal income taxes recoverable (Note 4)................ 10,274 --
Other assets (Note 8).................................... 29,441 32,569
Separate account assets.................................. 1,120,391 907,255
---------- ----------
Total admitted assets.................................. $6,117,991 $5,198,463
========== ==========
LIABILITIES AND CAPITAL AND SURPLUS
Liabilities:
Aggregate reserves for policies and contracts:
Life................................................. $ 557,624 $ 475,503
Annuity.............................................. 3,763,714 3,183,571
Accident and health.................................. 99,240 81,635
Policy and contract claim reserves:
Life................................................. 7,493 8,540
Accident and health.................................. 66,407 61,643
Other policyholders' funds............................. 5,494 3,207
Remittances and items not allocated.................... 35,415 19,238
Federal income taxes payable (Note 4).................. -- 5,824
Asset valuation reserve (Note 1)....................... 37,975 44,015
Interest maintenance reserve (Note 1).................. 22,826 36,487
Other liabilities (Note 8)............................. 73,071 56,774
Separate account liabilities........................... 1,120,391 907,255
---------- ----------
Total liabilities...................................... 5,789,650 4,883,692
Commitments and contingencies (Notes 3 and 8)
Capital and surplus (Note 6):
Common stock, $10 par value, 500 shares authorized, 266
issued and outstanding................................ 2,660 2,660
Paid-in surplus........................................ 114,129 99,129
Unassigned surplus..................................... 211,552 212,982
---------- ----------
Total capital and surplus.............................. 328,341 314,771
---------- ----------
Total liabilities and capital and surplus.............. $6,117,991 $5,198,463
========== ==========
</TABLE>

See accompanying notes.

- 16 -
<PAGE>

PFL LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS--STATUTORY BASIS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Revenues:
Premiums and other considerations, net of
reinsurance:
Life................................... $ 148,954 $ 98,670 $ 93,360
Annuity................................ 1,067,406 740,787 492,426
Accident and health.................... 230,889 266,789 263,540
Net investment income (Note 2)........... 343,880 322,393 315,416
Amortization of interest maintenance
reserve (Note 1)........................ 2,871 2,674 481
Commissions and expense allowances on
reinsurance ceded....................... 94,635 62,584 53,688
---------- ---------- ----------
1,888,635 1,493,897 1,218,911
Benefits and expenses:
Death, surrender and other life insurance
and annuity benefits.................... 499,120 298,457 212,371
Accident and health benefits............. 107,882 132,044 135,400
Increase in aggregate reserves for
policies and contracts:
Life................................... 82,062 26,703 29,441
Annuity................................ 580,564 254,593 375,219
Accident and health.................... 22,144 19,216 16,552
Commissions.............................. 215,635 198,251 181,644
General insurance expenses............... 52,166 53,367 51,480
Taxes, licenses and fees................. 15,368 10,781 10,606
Transfer to separate account............. 243,806 414,819 131,512
Other expenses........................... 1,014 814 2,875
---------- ---------- ----------
1,819,761 1,409,045 1,147,100
---------- ---------- ----------
Gain from operations before federal income
taxes and net realized capital losses on
investments............................... 68,874 84,852 71,811
Federal income tax expense (Note 4)........ 23,858 31,667 24,052
---------- ---------- ----------
Gain from operations before net realized
capital losses on investments............. 45,016 53,185 47,759
Net realized capital losses on investments
(net of related federal income taxes and
transfer to interest maintenance reserve)
(Note 2).................................. (3,624) (451) (1,407)
---------- ---------- ----------
Net income................................. $ 41,392 $ 52,734 $ 46,352
========== ========== ==========
</TABLE>

See accompanying notes.

- 17 -
<PAGE>

PFL LIFE INSURANCE COMPANY

STATEMENTS OF CAPITAL AND SURPLUS--STATUTORY BASIS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Common stock, at beginning and end of year....... $ 2,660 $ 2,660 $ 2,660
Paid-in surplus:
Beginning of year.............................. 99,129 99,129 99,129
Capital contribution (Note 7).................. 15,000 -- --
-------- -------- --------
End of year...................................... 114,129 99,129 99,129
Unassigned surplus:
Beginning of year.............................. 212,982 213,665 213,038
Net income..................................... 41,392 52,734 46,352
Net change in unrealized capital gains/losses.. (25,350) 1,719 254
Change in non-admitted assets.................. (248) (5) 44
Change in asset valuation reserve.............. 6,040 (10,773) (7,354)
Surplus effect of mergers (Note 1)............. -- -- 6,364
Surplus effect of sale of division (Note 1).... -- (862) --
Surplus effect of ceding commissions associated
with the sale of a division (Note 1).......... 184 -- --
Cancellation of coinsurance agreements (Note
1)............................................ -- (288) 877
Amendment of reinsurance agreement (Note 1).... 391 -- --
Dividends to stockholder (Note 6).............. (20,900) (46,000) (31,200)
Prior period adjustment (Notes 4 and 8)........ (3,444) 452 (13,791)
Change in liability for reinsurance in
unauthorized companies........................ 505 2,340 (919)
-------- -------- --------
End of year...................................... 211,552 212,982 213,665
-------- -------- --------
Total capital and surplus........................ $328,341 $314,771 $315,454
======== ======== ========
</TABLE>

See accompanying notes.

- 18 -
<PAGE>

PFL LIFE INSURANCE COMPANY

STATEMENTS OF CASH FLOWS--STATUTORY BASIS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
------------------------------------
1994 1993 1992
----------- ----------- ----------
<S> <C> <C> <C>
SOURCES OF CASH
Net cash provided by operations:
Premiums and other considerations, net
of reinsurance........................ $ 1,547,797 $ 1,169,096 $ 898,953
Net investment income.................. 339,856 326,480 318,076
----------- ----------- ----------
1,887,653 1,495,576 1,217,029
Life and accident and health claims.... (137,602) (159,968) (158,039)
Surrender benefits and other fund with-
drawals............................... (392,064) (217,998) (144,230)
Other benefits to policyholders........ (73,237) (50,180) (42,699)
Commissions, other expenses and other
taxes................................. (288,151) (264,124) (244,208)
Net transfers to separate accounts..... (243,806) (414,819) (131,512)
Dividends to policyholders............. (1,155) (1,200) (1,374)
Federal income taxes, excluding tax on
capital gains and IRS settlements..... (39,864) (32,548) (2,728)
Increase in policy loans............... (3,202) (677) (3,497)
----------- ----------- ----------
(1,179,081) (1,141,514) (728,287)
----------- ----------- ----------
Net cash provided by operations.......... 708,572 354,062 488,742
Proceeds from investments sold, matured
or repaid:
Bonds and preferred stocks............. 1,430,339 1,532,807 1,418,990
Common stocks.......................... 12,941 11,121 11,132
Mortgage loans on real estate.......... 43,495 47,460 25,480
Real estate............................ 9,536 8,286 1,112
Other proceeds......................... 189 1,407 2,691
----------- ----------- ----------
Total cash from investments.............. 1,496,500 1,601,081 1,459,405
Capital contribution (Note 7)............ 15,000 --
Cash received as the result of coinsur-
ance cancellations (Note 1)............. -- 114 23,471
Cash received in connection with mergers
(Note 1)................................ -- -- 675
Dividend from subsidiary (Note 7)........ 10,000 -- --
Cash received from ceding commissions as-
sociated with the sale of a division
(Note 1)................................ 284 -- --
Other cash provided...................... 45,799 12,457 30,849
----------- ----------- ----------
Total sources of cash.................... 2,276,155 1,967,714 2,003,142
APPLICATIONS OF CASH
Cost of investments acquired:
Bonds and preferred stocks............. 2,043,615 1,846,839 1,697,452
Common stocks.......................... 11,228 18,832 10,471
Mortgage loans on real estate.......... 160,068 94,557 73,508
Real estate............................ 14,801 8,587 2,961
Other invested assets.................. 664 347 720
----------- ----------- ----------
Total investments acquired............... 2,230,376 1,969,162 1,785,112
Dividends to stockholder (Note 6)........ 20,900 46,000 31,200
Cash transferred as the result of sale of
division (Note 1)....................... -- 8,773 -
Other cash applied....................... 8,952 46,504 88,948
----------- ----------- ----------
Total applications of cash............... 2,260,228 2,070,439 1,905,260
----------- ----------- ----------
Net change in cash and short-term invest-
ments................................... 15,927 (102,725) 97,882
Cash and short-term investments at begin-
ning of year............................ 18,135 120,860 22,978
----------- ----------- ----------
Cash and short-term investments at end of
year.................................... $ 34,062 $ 18,135 $ 120,860
=========== =========== ==========
</TABLE>

See accompanying notes.

- 19 -
<PAGE>

PFL LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS--STATUTORY BASIS
DECEMBER 31, 1994
(DOLLARS IN THOUSANDS)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

PFL Life Insurance Company (the Company) is a stock life insurance company
and is a wholly-owned subsidiary of First AUSA Life Insurance Company (AUSA),
which is an indirect wholly-owned subsidiary of AEGON nv, a holding company
organized under the laws of The Netherlands. The financial statements presented
herein are prepared on the statutory accounting principles basis for the
Company only; as such, the accounts of the Company's wholly-owned subsidiary,
Equity National Life Insurance Company (Equity National), are not consolidated
with those of the Company.

In connection with the sale of certain affiliated companies by AUSA, the
Company has assumed various blocks of business from these former affiliates
through mergers. In addition, the Company has cancelled or entered into several
coinsurance agreements with affiliates and non-affiliates. The following is a
description of those transactions:

. On January 1, 1994, the Company revised a reinsurance agreement with
a non-affiliate (primarily group health business). As a result, the
Company transferred $3,881 in assets and $4,080 in liabilities. The
difference between the assets and liabilities of $199, plus a tax
credit of $192, was credited directly to unassigned surplus.

. During 1993, the Company sold the Oakbrook Division (primarily group
health business). The initial transfer of risk occurred through an
indemnity reinsurance agreement. The policies will then be assumed by
the reinsurer by novation as state regulatory and policyholder
approvals are received. In addition, the Company will receive from
the third party administrator a ceding commission of one percent of
the premiums collected between January 1, 1994 and December 31, 1996.
As a result of the sale, in 1993, the Company transferred $12,094 in
assets including $8,773 in cash and short-term investments and
$10,570 in liabilities to the assuming company. The difference
between the assets and liabilities transferred, net of a tax effect
of $662, was charged directly to unassigned surplus. The income
statement for 1993 includes revenues of $53,558 and net income of
$2,839 earned by the division prior to its sale. During 1994, the
Company received $284 for ceding commissions; the commissions net of
the related tax effect of $100 was credited directly to unassigned
surplus.

. During 1993, the Company cancelled several coinsurance agreements
with affiliated and non-affiliated companies. As a result of the
cancellations with affiliates, the Company received $1,006 in assets,
and $1,051 in liabilities. As a result of the cancellations with non-
affiliates, the Company received $6,736 in assets, including $114 in
cash and short-term investments, and $7,131 in liabilities. The
difference between the assets and liabilities, net of a tax effect of
$152, was charged directly to surplus.

. During 1992, the Company cancelled several coinsurance agreements
with affiliates. As a result of the cancellations, the Company
transferred $8,199 in assets, including $358 in cash and short-term
investments, and $10,986 in liabilities to affiliates. Also in 1992,
the Company entered into a reinsurance agreement with an affiliate
and received $23,474 in assets including $23,471 in cash and short-
term investments, and $24,934 in liabilities. The net effect of these
transactions, net of the related tax effect, was credited directly to
unassigned surplus.

- 20 -
<PAGE>

. In 1991, the majority of the assets, liabilities and capital and
surplus of Pacific Fidelity Life Insurance Company (PFL) and National
Old Line Insurance Company, Inc. (NOL) (affiliated companies) were
merged into the Company. In 1992, the remaining assets, liabilities
and capital and surplus of $36,984, $30,620 and $6,364, respectively,
were merged into the Company. Revenues and net income of this
remaining merged business are not significant to current or prior
years' operations.

Basis of Presentation

The accompanying statutory-basis financial statements have been prepared in
accordance with accounting practices prescribed or permitted by the Insurance
Division of the Commerce Department of the State of Iowa, which are designed
primarily to reflect the Company's ability to meet obligations to
policyholders. Statutory insurance accounting principles differ in many
respects from generally accepted accounting principles (GAAP) followed by other
business enterprises in determining financial position, and results of
operations. The effects of such variances from GAAP have not been determined.
Accordingly, the accompanying statutory-basis financial statements are not
intended to present financial position, results of operations and cash flows in
conformity with GAAP. Pursuant to statutory requirements: (a) bonds are
generally carried at amortized cost rather than segregating the portfolio into
held-to-maturity (carried at amortized cost), available-for-sale (carried at
fair value), and trading (carried at fair value) classifications; (b) premium
income on life policies is recognized over the premium paying period of the
policies and premium income on accident and health policies is recognized over
the coverage period of the policies, whereas the related acquisition costs such
as commissions and other costs related to acquiring new business are charged to
current operations as incurred; (c) aggregate policy reserves are based on
statutory mortality and interest requirements without consideration of
withdrawals, which may differ from reserves determined using estimates of
mortality, interest and withdrawals; (d) deferred federal income taxes are not
provided for timing differences between the financial statements and the tax
returns; (e) certain assets designated as "non-admitted assets" have been
excluded from the balance sheet by a charge to surplus; (f) the asset valuation
reserve (AVR), which is in the nature of a contingency reserve for possible
losses on investments, is recorded as a liability through a charge to surplus;
(g) net realized capital gains and losses attributable to changes in the level
of market interest rates are deferred and amortized over the remaining life of
the bonds and mortgage loans disposed of rather than being recognized in the
statement of operations in the year of disposition; (h) gross premiums for all
insurance products are considered revenues rather than reporting only various
policy charges and fees for certain long-duration contracts; (i) pension
expense is recorded as amounts are paid; and (j) reinsurance reserve credits
are recorded as a reduction to aggregate policy reserves rather than being
recorded as reinsurance recoverable assets. All pertinent financial statement
disclosures otherwise required under generally accepted accounting principles
are presented herein using the corresponding statutory-basis amounts.

The National Association of Insurance Commissioners (NAIC) currently is in
the process of recodifying statutory accounting practices, the result of which
is expected to constitute the only source of "prescribed" statutory accounting
practices. Accordingly, that project, which is expected to be completed in
1996, will likely change, to some extent, prescribed statutory accounting
practices and may result in changes to the accounting practices that the
Company uses to prepare its statutory-basis financial statements.

Fair Values of Financial Instruments

FASB Statement No. 107, "Disclosures about Fair Value of Financial
Instruments", requires disclosure of fair value information about financial
instruments, whether or not recognized in the balance sheet, for which it is
practicable to estimate that value. In cases where quoted market prices are not
available, fair values are based on estimates using present value or other
valuation

- 21 -
<PAGE>

techniques. Those techniques are significantly affected by the assumptions
used, including the discount rate and estimates of future cash flows. In that
regard, the derived fair value estimates cannot be substantiated by
comparisons to independent markets and, in many cases, could not be realized
in immediate settlement of the instrument. Statement 107 excludes certain
financial instruments and all nonfinancial instruments from its disclosure
requirements. Accordingly, the aggregate fair value amounts presented do not
represent the underlying value of the Company.

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

Cash and cash equivalents, short-term investments: The carrying amounts
reported in the balance sheet for these instruments approximate their fair
values.

Investment securities: Fair values for fixed maturity securities
(including redeemable preferred stocks) are based on quoted market prices,
where available. For fixed maturity securities not actively traded, fair
values are estimated using values obtained from independent pricing
services or, in the case of private placements, are estimated by
discounting expected future cash flows using a current market rate
applicable to the yield, credit quality, and maturity of the investments.
The fair values for equity securities other than insurance subsidiaries are
based on quoted market prices and are recognized in the balance sheet. Fair
value for the Company's insurance subsidiary is the statutory net book
value of that subsidiary.

Mortgage loans and policy loans: The fair values for mortgage loans are
estimated utilizing discounted cash flow analyses, using interest rates
reflective of current market conditions and the risk characteristics of the
loans. The fair value of policy loans are assumed to equal their carrying
value.

Investment contracts: Fair values for the Company's liabilities under
investment-type insurance contracts are estimated using discounted cash
flow calculations, based on interest rates currently being offered for
similar contracts with maturities consistent with those remaining for the
contracts being valued.

Fair values for the Company's insurance contracts other than investment
contracts are not required to be disclosed. However, the fair values of
liabilities under all insurance contracts are taken into consideration in the
Company's overall management of interest rate risk, which minimizes exposure
to changing interest rates through the matching of investment maturities with
amounts due under insurance contracts.

The following sets forth a comparison of the fair values and carrying values
of the Company's financial instruments subject to the provisions of Statement
of Financial Accounting Standards No. 107:

<TABLE>
<CAPTION>
DECEMBER 31
-------------------------------------------
1994 1993
--------------------- ---------------------
CARRYING CARRYING
VALUE FAIR VALUE VALUE FAIR VALUE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
ADMITTED ASSETS
Bonds (Note 2).................. $4,094,407 $3,952,849 $3,511,009 $3,691,415
Preferred stocks (Note 2)....... 12,667 12,905 14,002 14,622
Common stocks................... 16,754 16,754 18,651 18,651
Affiliated common stock......... 26,530 26,530 48,226 48,226
Mortgage loans on real estate
(Note 2)....................... 527,410 499,350 415,829 432,363
Policy loans.................... 51,798 51,798 48,596 48,596
Cash and short-term investments. 34,062 34,062 18,135 18,135
Separate account assets......... 1,120,391 1,120,391 907,255 907,255
LIABILITIES
Investment contract liabilities
(including separate accounts).. 4,898,221 4,587,228 4,102,845 4,103,903
</TABLE>

- 22 -
<PAGE>

Cash and Short-Term Investments

For purposes of the statements of cash flows, the Company considers all
highly liquid investments with remaining maturity of one year or less when
purchased to be short-term investments. Short-term investments are recorded at
amortized cost, which approximates market.

Investments

Mortgage loans on real estate and policy loans are recorded at unpaid
balances. Bonds are valued primarily at amortized cost using the effective
interest method. Preferred stocks are valued primarily at cost. Common stocks,
which include shares of mutual funds (money market and other), are valued at
market with market value for the Company's investment in an insurance
subsidiary equal to the statutory net book value of the subsidiary. Realized
gains and losses on the sale of securities are recognized using the specific
identification method.

Depreciation on real estate is provided over the estimated useful lives of
the assets using the straight-line method.

Aggregate Policy Reserves

Life, annuity and accident and health benefit reserves are developed by
actuarial methods and are determined based on published tables using
statutorily specified interest rates and valuation methods that will provide,
in the aggregate, reserves that are greater than or equal to the minimum
required by law.

The aggregate policy reserves for life insurance policies are based
principally upon the 1941, 1958, and 1980 Commissioners' Standard Ordinary
Mortality and American Experience Mortality Tables. The reserves are calculated
using interest rates ranging from 2.00 to 6.00 percent and are computed
principally on the Net Level Valuation and the Commissioners' Reserve Valuation
Methods. Reserves for universal life policies are based on account balances
adjusted for the Commissioners' Reserve Valuation Method.

Deferred annuity reserves are calculated according to the Commissioners'
Annuity Reserve Valuation Method including excess interest reserves to cover
situations where the future interest guarantees plus the decrease in surrender
charges are in excess of the maximum valuation rates of interest. Reserves for
immediate annuities and supplementary contracts with and without life
contingencies are equal to the present value of future payments assuming
interest rates ranging from 2.50 to 11.25 percent and mortality rates, where
appropriate, from a variety of tables.

Accident and health policy reserves are equal to the greater of the gross
unearned premiums or any required midterminal additional reserves plus net
unearned premiums and the present value of amounts not yet due on both reported
and unreported claims.

Policy and Contract Claim Reserves

Claim reserves represent the estimated accrued liability for claims reported
to the Company and claims incurred but not yet reported through the statement
date. These reserves are estimated using either individual case-basis
valuations or statistical analysis techniques. These estimates are subject to
the effects of trends in claim severity and frequency. The estimates are
continually reviewed and adjusted as necessary as experience develops or new
information becomes available.

Separate Account

Assets held in trust for purchases of variable annuity contracts and the
Company's corresponding obligation to the contract owners are shown separately
in the balance sheets. The

- 23 -
<PAGE>

assets in the separate account are valued at market. Income and gains and
losses with respect to the assets in the separate account accrue to the benefit
of the policyholders.

Asset Valuation Reserve and Interest Maintenance Reserve

As prescribed by the NAIC, the Company is required to record an Asset
Valuation Reserve (AVR). The AVR is computed in accordance with a prescribed
formula and represents a provision for possible fluctuations in the value of
bonds, equity securities, mortgage loans, real estate, and other invested
assets. Changes to the AVR are charged or credited directly to unassigned
surplus.

Also, as prescribed by the NAIC, the Company reports an Interest Maintenance
Reserve (IMR) that represents the net accumulated unamortized realized capital
gains and losses attributable to changes in the general level of interest rates
on sales of fixed income investments, principally bonds and mortgage loans.
During 1994, 1993 and 1992, net realized capital gains (losses) of $(10,790),
$21,403 and $18,166, respectively, were credited to the IMR rather than being
recognized in the statements of operations. Such gains or losses are amortized
into income on a straight-line basis over the remaining period to maturity
based on groupings of individual securities sold in five-year bands;
amortization of these net gains aggregated $2,871, $2,674 and $481 for the
years ended December 31, 1994, 1993 and 1992, respectively.

Reclassifications

Certain reclassifications have been made to the 1993 and 1992 financial
statements to conform to the 1994 presentation.

2. INVESTMENTS

The carrying value and estimated fair value of investments in debt securities
were as follows:

<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
CARRYING UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
DECEMBER 31, 1994
Bonds:
United States Government and
agencies..................... $ 104,798 $ 395 $ (1,958) $ 103,235
State, municipal and other
government................... 51,650 390 (2,739) 49,301
Public utilities.............. 164,975 1,860 (5,710) 161,125
Industrial and miscellaneous.. 1,891,899 27,082 (69,137) 1,849,844
Mortgage-backed securities.... 1,881,085 9,074 (100,815) 1,789,344
---------- -------- --------- ----------
4,094,407 38,801 (180,359) 3,952,849
Preferred stocks.............. 12,667 778 (540) 12,905
---------- -------- --------- ----------
$4,107,074 $ 39,579 $(180,899) $3,965,754
========== ======== ========= ==========
DECEMBER 31, 1993
Bonds:
United States Government and
agencies..................... $ 89,357 $ 5,207 $ (347) $ 94,217
State, municipal and other
government................... 65,767 3,125 (308) 68,584
Public utilities.............. 223,954 15,903 (923) 238,934
Industrial and miscellaneous.. 1,668,026 126,858 (10,693) 1,784,191
Mortgage-backed securities.... 1,463,905 49,624 (8,040) 1,505,489
---------- -------- --------- ----------
3,511,009 200,717 (20,311) 3,691,415
Preferred stocks.............. 14,002 620 -- 14,622
---------- -------- --------- ----------
$3,525,011 $201,337 $ (20,311) $3,706,037
========== ======== ========= ==========
</TABLE>

- 24 -
<PAGE>

The carrying value of bonds at December 31, 1994 and 1993 included $9,655 and
$5,876, respectively, in writedowns on certain debt securities which are valued
at estimated fair value.

The carrying value and estimated fair value of bonds at December 31, 1994, by
contractual maturity, are shown below. Expected maturities may differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
CARRYING ESTIMATED
VALUE FAIR VALUE
---------- ----------
<S> <C> <C>
Due in one year or less............................... $ 48,345 $ 48,022
Due after one year through five years................. 949,309 922,700
Due after five years through ten years................ 973,031 944,929
Due after ten years................................... 242,637 247,854
---------- ----------
2,213,322 2,163,505
Mortgage-backed securities............................ 1,881,085 1,789,344
---------- ----------
$4,094,407 $3,952,849
========== ==========
</TABLE>

A detail of net investment income is presented below:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
--------------------------
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Interest on bonds and notes....................... $294,145 $286,013 $278,475
Dividends on equity investments................... 12,091 3,990 7,553
Interest on mortgage loans........................ 42,385 37,587 34,655
Rental income on real estate...................... 9,360 8,753 7,624
Interest on policy loans.......................... 3,182 2,943 2,813
Other investment income........................... 282 555 541
-------- -------- --------
Gross investment income........................... 361,445 339,841 331,661
Investment expenses............................... 17,565 17,448 16,245
-------- -------- --------
Net investment income............................. $343,880 $322,393 $315,416
======== ======== ========
</TABLE>

Proceeds from sales and maturities of debt securities and related gross
realized gains and losses were as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Proceeds................................. $1,430,339 $1,532,807 $1,418,990
========== ========== ==========
Gross realized gains..................... $ 15,411 $ 42,020 $ 47,854
Gross realized losses.................... (33,044) (9,071) (17,537)
---------- ---------- ----------
Net realized gains (losses).............. $ (17,633) $ 32,949 $ 30,317
========== ========== ==========
</TABLE>

At December 31, 1994, investments with an aggregate carrying value of
$4,713,391 were on deposit with regulatory authorities or were restrictively
held in bank custodial accounts for the benefit of such regulatory authorities
as required by statute.

- 25 -
<PAGE>

Realized investment gains (losses) and changes in unrealized gains (losses)
for investments are summarized below:

<TABLE>
<CAPTION>
REALIZED
YEAR ENDED DECEMBER 31
----------------------------
1994 1993 1992
--------- ------- --------
<S> <C> <C> <C>
Debt securities............................... $ (17,633) $32,949 $ 30,317
Short-term investments........................ (309) 679 --
Equity securities............................. 1,322 (348) 979
Mortgage loans on real estate................. (2,186) 199 (1,705)
Real estate................................... (2,858) (41) (1,343)
Other invested assets......................... 14 33 40
--------- ------- --------
(21,650) 33,471 28,288
Tax effect.................................... 7,236 (12,519) (11,529)
Transfer to interest maintenance reserve...... 10,790 (21,403) (18,166)
--------- ------- --------
Net realized losses........................... $ (3,624) $ (451) $ (1,407)
========= ======= ========
<CAPTION>
CHANGE IN UNREALIZED
YEAR ENDED DECEMBER 31
----------------------------
1994 1993 1992
--------- ------- --------
<S> <C> <C> <C>
Debt securities............................... $(322,346) $28,210 $(48,889)
Equity securities............................. (23,202) 3,449 1,289
--------- ------- --------
Change in unrealized appreciation (deprecia-
tion)........................................ $(345,548) $31,659 $(47,600)
========= ======= ========
</TABLE>

Gross unrealized gains and gross unrealized losses on common stocks were as
follows:

<TABLE>
<CAPTION>
DECEMBER 31
-------------------------
1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Unrealized gains.................................. $20,244 $42,045 $39,161
Unrealized losses................................. (5,927) (4,526) (5,091)
------- ------- -------
Net unrealized gains.............................. $14,317 $37,519 $34,070
======= ======= =======
</TABLE>

The carrying values and fair values of the Company's investments in mortgage
loans are as follows at December 31:

<TABLE>
<CAPTION>
1994 1993
------------------- -------------------
CARRYING CARRYING
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Commercial mortgages................. $520,625 $492,292 $407,115 $422,446
Residential mortgages................ 6,785 7,058 8,714 9,917
-------- -------- -------- --------
$527,410 $499,350 $415,829 $432,363
======== ======== ======== ========
</TABLE>

- 26 -
<PAGE>

During 1994, 1993 and 1992, mortgage loans of $799, $101 and $11,022,
respectively, were foreclosed and transferred to real estate. At December 31,
1994 and 1993, the Company held a mortgage loan loss reserve in the asset
valuation reserve of $5,204 and $5,375, respectively. At December 31, 1994, the
mortgage loan portfolio is diversified by geographic region and specific
collateral property type as follows:

<TABLE>
<CAPTION>
GEOGRAPHIC DISTRIBUTION
- ----------------------------
<S> <C>
South Atlantic.......... 26%
Mountain................ 16
W. South Central........ 15
Pacific................. 14
E. North Central........ 14
E. South Central........ 6
W. North Central........ 5
Middle Atlantic......... 2
New England............. 2
</TABLE>
<TABLE>
<CAPTION>
PROPERTY TYPE DISTRIBUTION
- --------------------------
<S> <C>
Retail.................. 33%
Apartment............... 23
Office.................. 20
Industrial.............. 18
Hotel/Motel............. 3
Other................... 3
</TABLE>

At December 31, 1994, the Company had the following investments (excluding U.
S. Government guaranteed or insured issues) which individually represented more
than ten percent of capital and surplus and the asset valuation reserve:

<TABLE>
<CAPTION>
CARRYING
DESCRIPTION OF SECURITY OR ISSUER VALUE
--------------------------------- --------
<S> <C>
Bonds:
Standard Credit Card Trust........................................ $60,426
G E Capital....................................................... 53,028
Residential Funding............................................... 41,609
</TABLE>

3. REINSURANCE

The Company reinsures portions of risk on certain insurance policies which
exceed its established limits, thereby providing a greater diversification of
risk and minimizing exposure on larger risks. The Company remains contingently
liable with respect to any insurance ceded, and this would become an actual
liability in the event that the assuming insurance company became unable to
meet its obligation under the reinsurance treaty.

Reinsurance assumption and cession treaties are transacted primarily with
affiliates. Premiums earned reflect the following reinsurance assumed and ceded
amounts:

<TABLE>
<CAPTION>
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Direct premiums.......................... $1,857,446 $1,472,409 $1,311,871
Reinsurance assumed...................... 1,832 3,040 23,052
Reinsurance ceded........................ (412,029) (369,203) (485,597)
---------- ---------- ----------
Net premiums earned...................... $1,447,249 $1,106,246 $ 849,326
========== ========== ==========
</TABLE>

The Company received reinsurance recoveries in the amount of $148,414,
$97,409 and $80,795 during 1994, 1993 and 1992, respectively. At December 31,
1994 and 1993, estimated amounts recoverable from reinsurers that have been
deducted from policy and contract claim reserves totaled $62,882 and $57,821,
respectively. The aggregate reserves for policies and contracts were reduced
for reserve credits for reinsurance ceded at December 31, 1994 and 1993 of
$2,977,954 and $2,857,448, respectively.

- 27 -
<PAGE>

At December 31, 1994, amounts recoverable from unauthorized reinsurers of
$43,055 (1993--$55,112) and reserve credits for reinsurance ceded of $59,131
(1993--$54,481) were associated with a single reinsurer and its affiliates. The
Company holds collateral under these reinsurance agreements in the form of
trust agreements totaling $64,038 at December 31, 1994 that can be drawn on for
amounts that remain unpaid for more than 120 days.

4. INCOME TAXES

For federal income tax purposes, the Company joins in a consolidated tax
return filing with certain affiliated companies. Under the terms of a tax-
sharing agreement between the Company and its affiliates, the Company computes
federal income tax expense as if it were filing a separate income tax return,
except that tax credits and net operating loss carryforwards are determined on
the basis of the consolidated group. Additionally, the alternative minimum tax
is computed for the consolidated group and the resulting tax, if any, is
allocated back to the separate companies on the basis of the separate
companies' alternative minimum taxable income.

The following is a reconciliation of the expected federal tax on income
before realized capital gains (losses), based on statutory rates, to the actual
tax expense:

<TABLE>
<CAPTION>
1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Computed "expected" tax........................... $24,106 $29,698 $24,415
Tax reserve adjustment............................ 1,150 1,433 1,073
Excess tax depreciation........................... (406) (248) (273)
Deferred acquisition costs--tax basis............. 7,378 5,200 3,334
Amortization of in-force.......................... -- -- (414)
Prior year over accrual........................... (644) (330) (2,009)
Dividend received deduction....................... (3,513) (1,202) (2,304)
Charitable contribution........................... (3,935) -- --
Other items--net.................................. (278) (2,884) 230
------- ------- -------
Federal income tax expense........................ $23,858 $31,667 $24,052
======= ======= =======
</TABLE>

Prior to 1984, as provided for under the Life Insurance Company Tax Act of
1959, a portion of statutory income was not subject to current taxation but was
accumulated for income tax purposes in a memorandum account referred to as the
policyholders' surplus account. No federal income taxes have been provided for
in the financial statements on income deferred in the policyholders' surplus
account ($20,387 at December 31, 1994). To the extent dividends are paid from
the amount accumulated in the policyholders' surplus account, net earnings
would be reduced by the amount of tax required to be paid. Should the entire
amount in the policyholders' surplus account become taxable, the tax thereon
computed at current rates would amount to approximately $7,135.

The Company's federal income tax returns have been examined and closing
agreements have been executed with the Internal Revenue Service through 1986.
During 1993, there was a prior period adjustments of $452, which consisted of
an adjustment to the tax accrual. The 1992 amount consisted of an IRS
settlement of $10,882 less asset capitalization relating to the NOL merger of
$5,387. An examination is underway for years 1987 through 1992.

5. PARTICIPATING INSURANCE

Participating life insurance policies are issued by the Company which entitle
policyholders to a share in the earnings of the participating policies,
provided that a dividend distribution, which is determined annually based on
mortality and persistency experience of the participating policies, is
authorized by the Company. Participating insurance constituted approximately
1.2% and 1.3% of ordinary life insurance in force at December 31, 1994 and
1993, respectively.

- 28 -
<PAGE>

6. DIVIDEND RESTRICTIONS

Generally, an insurance company's ability to pay dividends is limited to the
amount that their net assets, as determined in accordance with statutory
accounting practices, exceed minimum statutory capital requirements. However,
payment of such amounts as dividends may be subject to approval by regulatory
authorities.

The Company paid dividends to its parent of $20,900, $46,000 and $31,200 in
1994, 1993 and 1992, respectively.

7. RELATED PARTY TRANSACTIONS

The Company is allocated administrative and benefit expenses from the parent
for employee related costs, as all employees are considered employees of the
parent, not employees of the Company.

The Company receives data processing, investment advisory and management,
marketing and administration services from certain affiliates. During 1994,
1993 and 1992, the Company paid $11,820, $11,689 and $9,566, respectively, for
these services, which approximates their costs to the affiliates.

The Company's allocated share of pension expense for 1994, 1993 and 1992, was
$1,135, $782 and $547, respectively. Total net assets available for benefits of
the pension plan exceeded the actuarial present value of accumulated plan
benefits at December 31, 1994. Amounts for the Company relating to plan assets
and actuarial liabilities are not determinable.

Payable to affiliates and intercompany borrowings bear interest at the
thirty-day commercial paper rate of 5.90% at December 31, 1994. During 1994,
1993 and 1992, the Company paid net interest of $363, $283 and $255,
respectively, to affiliates.

During 1994, the Company received a capital contribution of $15,000 in cash
from its parent and received a dividend of $10,000 from its subsidiary, Equity
National, which was included in net investment income.

8. COMMITMENTS AND CONTINGENCIES

The Company is a party to legal proceedings incidental to its business.
Although such litigation sometimes includes substantial demands for
compensatory and punitive damages, in addition to contract liability, it is
management's opinion, after consultation with counsel and a review of available
facts, that damages arising from such demands will not be material to the
Company's financial position.

The Company is subject to insurance guaranty laws in the states in which it
writes business. These laws provide for assessments against insurance companies
for the benefit of policyholders and claimants in the event of insolvency of
other insurance companies. Assessments are charged to operations when received
by the Company except where right of offset against other taxes paid is allowed
by law; amounts available for future offsets are recorded as an asset on the
Company's balance sheet. Potential future obligations for unknown insolvencies
are not determinable by the Company. The future obligation has been based on
the most recent information available from the National Organization of Life
and Health Insurance Guaranty Associations (NOLHGA). The Company has
established a reserve of $18,344 and $15,874 and an offsetting premium tax
benefit of $10,556 and $11,477 at December 31, 1994 and 1993, respectively, for
its estimated share of future guaranty fund assessments related to several
major insurer insolvencies. During 1994, 1993 and 1992, $3,444, $0 and $8,296,
respectively, were charged to surplus as prior period adjustments to provide
for this net reserve plus certain assessments paid that related to several
major insurer insolvencies prior to 1992.

- 29 -
<PAGE>

SCHEDULE I

PFL LIFE INSURANCE COMPANY

SUMMARY OF INVESTMENTS--OTHER THAN INVESTMENTS IN RELATED PARTIES
DECEMBER 31, 1994
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
AMOUNT AT WHICH
SHOWN IN THE
TYPE OF INVESTMENT COST (1) VALUE BALANCE SHEET
------------------ ---------- ---------- ---------------
<S> <C> <C> <C>
FIXED MATURITIES
Bonds:
United States Government and government
agencies and authorities.............. $1,509,285 $1,444,834 $1,506,080
States, municipalities and political
subdivisions.......................... 9,522 9,091 9,389
Foreign governments.................... 48,341 45,181 47,645
Public utilities....................... 166,777 161,124 164,974
All other corporate bonds.............. 2,384,012 2,292,619 2,366,319
Redeemable preferred stock............... 12,912 12,905 12,667
---------- ---------- ----------
Total fixed maturities................... 4,130,849 3,965,754 4,107,074(2)
EQUITY SECURITIES
Common stocks:
Banks, trust and insurance............. 4,252 4,027 4,027
Industrial, miscellaneous and all
other................................. 24,715 39,257 39,257
---------- ---------- ----------
Total equity securities.................. 28,967 43,284 43,284
Mortgage loans on real estate............ 527,410 527,410
Real estate.............................. 67,085 67,085
Real estate acquired in satisfaction of
debt.................................... 10,381 10,381
Policy loans............................. 51,798 51,798
Other long-term investments.............. 4,593 4,593
Cash and short-term investments.......... 34,062 34,062
---------- ----------
Total investments........................ $4,855,145 $4,845,687
========== ==========
</TABLE>
- --------
(1) Original cost of equity securities and, as to fixed maturities, original
cost reduced by repayments and adjusted for amortization of premiums or
accrual of discounts.
(2) Amount differs from cost as certain bonds have been adjusted to reflect
other than temporary decline in value charged to surplus, as prescribed by
the NAIC.

- 30 -
<PAGE>

SCHEDULE V

PFL LIFE INSURANCE COMPANY

SUPPLEMENTARY INSURANCE INFORMATION
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
FUTURE POLICY POLICY AND
BENEFITS AND UNEARNED CONTRACT
EXPENSES PREMIUMS LIABILITIES
------------- -------- -----------
<S> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1994
Individual life.............................. $ 555,841 $ -- $ 7,298
Individual health............................ 16,649 6,487 8,643
Group life and health........................ 60,207 17,680 57,959
Annuity...................................... 3,763,714 -- --
---------- ------- -------
$4,396,411 $24,167 $73,900
========== ======= =======
YEAR ENDED DECEMBER 31, 1993
Individual life.............................. $ 414,663 $ -- $ 8,424
Individual health............................ 11,714 4,623 6,494
Group life and health........................ 108,355 17,783 55,265
Annuity...................................... 3,183,571 -- --
---------- ------- -------
$3,718,303 $22,406 $70,183
========== ======= =======
YEAR ENDED DECEMBER 31, 1992
Individual life.............................. $ 447,444 $ -- $ 6,166
Individual health............................ 9,081 3,088 4,740
Group life and health........................ 36,051 15,904 64,767
Annuity...................................... 2,920,639 -- --
---------- ------- -------
$3,413,215 $18,992 $75,673
========== ======= =======
</TABLE>

- 31 -
<PAGE>

<TABLE>
<CAPTION>
NET BENEFITS, CLAIMS OTHER
PREMIUM INVESTMENT LOSSES AND OPERATING PREMIUMS
REVENUE INCOME SETTLEMENT EXPENSES EXPENSES WRITTEN
------- ---------- ------------------- --------- ----------
<S> <C> <C> <C> <C>
$ 146,328 $ 43,025 $ 124,736 $ 42,309 $ --
38,811 3,983 22,323 22,707 38,797
194,704 10,531 108,400 143,645 192,034
1,067,406 286,341 1,036,313 319,328 1,067,404
- ---------- -------- ---------- -------- ----------
$1,447,249 $343,880 $1,291,772 $527,989 $1,298,235
========== ======== ========== ======== ==========
$ 95,716 $ 36,471 $ 71,638 $ 56,462 $ --
28,388 1,024 16,663 15,987 28,434
241,356 13,465 135,764 148,254 239,575
740,786 271,433 506,949 457,328 740,900
- ---------- -------- ---------- -------- ----------
$1,106,246 $322,393 $ 731,014 $678,031 $1,008,909
========== ======== ========== ======== ==========
$ 90,437 $ 40,273 $ 66,422 $ 62,486 $ --
19,550 2,091 11,303 10,684 19,693
246,913 12,635 141,575 145,629 246,234
492,426 260,417 549,683 27,806 360,323
- ---------- -------- ---------- -------- ----------
$ 849,326 $315,416 $ 768,983 $246,605 $ 626,250
========== ======== ========== ======== ==========
</TABLE>

- 32 -
<PAGE>

SCHEDULE VI

PFL LIFE INSURANCE COMPANY

REINSURANCE
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
ASSUMED PERCENTAGE
CEDED TO FROM OF AMOUNT
GROSS OTHER OTHER NET ASSUMED
AMOUNT COMPANIES COMPANIES AMOUNT TO NET
---------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31,
1994
Life insurance in force.. $4,713,817 $468,811 $112,054 $4,357,060 2.6%
========== ======== ======== ========== ===
Premiums:
Individual life........ $ 148,702 $ 3,639 $ 1,265 $ 146,328 .9%
Individual health...... 50,303 11,492 -- 38,811 --
Group life and health.. 412,200 217,496 -- 194,704 --
Annuity................ 1,246,241 179,402 567 1,067,406 .05%
---------- -------- -------- ---------- ---
$1,857,446 $412,029 $ 1,832 $1,447,249 .1%
========== ======== ======== ========== ===
YEAR ENDED DECEMBER 31,
1993
Life insurance in force.. $4,773,533 $387,843 $192,203 $4,577,893 4.2%
========== ======== ======== ========== ===
Premiums:
Individual life........ $ 95,982 $ 2,640 $ 2,373 $ 95,715 2.5%
Individual health...... 37,709 9,321 -- 28,388 --
Group life and health.. 401,906 160,550 -- 241,356 --
Annuity................ 936,812 196,692 667 740,787 .1%
---------- -------- -------- ---------- ---
$1,472,409 $369,203 $ 3,040 $1,106,246 .3%
========== ======== ======== ========== ===
YEAR ENDED DECEMBER 31,
1992
Life insurance in force.. $4,714,489 $392,343 $405,036 $4,727,182 8.6%
========== ======== ======== ========== ===
Premiums:
Individual life........ $ 88,285 $ 2,220 $ 4,372 $ 90,437 4.8%
Individual health...... 25,110 5,560 -- 19,550 --
Group life and health.. 372,315 142,944 17,542 246,913 7.1%
Annuity................ 826,161 334,873 1,138 492,426 .3%
---------- -------- -------- ---------- ---
$1,311,871 $485,597 $ 23,052 $ 849,326 3.2%
========== ======== ======== ========== ===
</TABLE>

- 33 -
<PAGE>

THE PFL ENDEAVOR VARIABLE ANNUITY ACCOUNT

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Contract Owners of
The PFL Endeavor Variable Annuity Account,
PFL Life Insurance Company:

We have audited the accompanying balance sheet of The PFL Endeavor Variable
Annuity Account (comprising, respectively, the Money Market, Managed Asset
Allocation, Global Growth, Quest for Value Equity, Quest for Value Small Cap,
U.S. Government Securities and Growth subaccounts) as of December 31, 1994, and
the related statements of operations and changes in contract owners' equity for
the periods indicated therein. These financial statements are the
responsibility of the Variable Account's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of mutual fund shares owned as of December 31,
1994 by correspondence with the mutual funds' transfer agent. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective
portfolios constituting The PFL Endeavor Variable Annuity Account at December
31, 1994, and the results of their operations and changes in their contract
owners' equity for the periods indicated therein in conformity with generally
accepted accounting principles.

Ernst & Young LLP

Des Moines, Iowa
February 7, 1995

- 34 -
<PAGE>

THE PFL ENDEAVOR VARIABLE ANNUITY ACCOUNT

BALANCE SHEET
DECEMBER 31, 1994
<TABLE>
<CAPTION>
MANAGED
MONEY ASSET
MARKET ALLOCATION
TOTAL SUBACCOUNT SUBACCOUNT
------------ ---------- -----------
<S> <C> <C> <C>
ASSETS
Cash..................................... $ 130,115 207 33,717
Investments in mutual funds, at current
market value:
Endeavor Series Trust--Money Market
Portfolio 19,160,322.060 shares (cost
$19,160,322).......................... 19,160,322 19,160,322 --
Endeavor Series Trust--Managed Asset
Allocation Portfolio 12,652,824.988
shares (cost $177,030,450)............ 170,560,081 -- 170,560,081
Endeavor Series Trust--Global Growth
Portfolio 7,285,429.563 shares (cost
$85,685,840).......................... 82,252,499 -- --
Endeavor Series Trust--Quest for Value
Equity Portfolio 2,986,417.175 shares
(cost $31,111,812).................... 31,924,799 -- --
Endeavor Series Trust--Quest for Value
Small Cap Portfolio 3,188,471.835
shares (cost $34,910,999)............. 35,009,421 -- --
Endeavor Series Trust--U.S. Government
Securities Portfolio 307,391.504
shares (cost $3,067,226).............. 3,061,619 -- --
WRL Series Fund, Inc.--Growth Portfolio
5,390,435.886 shares (cost
$139,098,258)......................... 128,336,861 -- --
------------ ---------- -----------
Total investments in mutual funds...... 470,305,602 19,160,322 170,560,081
------------ ---------- -----------
Total Assets........................... $470,435,717 19,160,529 170,593,798
============ ========== ===========
LIABILITIES AND CONTRACT OWNERS' EQUITY
LIABILITIES:
Contract terminations payable.......... $ 4,044 4,044 --
Accrued mortality and expense risk
charge (Note 4)......................... 534,326 27,830 192,326
------------ ---------- -----------
Total Liabilities...................... 538,370 31,874 192,326
CONTRACT OWNERS' EQUITY:
Deferred annuity contracts terminable
by owners (Notes 2 and 5)............. 469,897,347 19,128,655 170,401,472
------------ ---------- -----------
$470,435,717 19,160,529 170,593,798
============ ========== ===========
</TABLE>

See accompanying Notes to Financial Statements.

- 35 -
<PAGE>

<TABLE>
<CAPTION>
QUEST QUEST U.S.
GLOBAL FOR VALUE FOR VALUE GOVERNMENT
GROWTH EQUITY SMALL CAP SECURITIES GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
17,998 14,367 14,102 239 49,485
-- -- -- -- --
-- -- -- -- --
82,252,499
-- 31,924,799 -- -- --
-- -- 35,009,421 -- --
-- -- -- 3,061,619 --
-- -- -- -- 128,336,861
- ---------- ---------- ---------- --------- -----------
82,252,499 31,924,799 35,009,421 3,061,619 128,336,861
- ---------- ---------- ---------- --------- -----------
82,270,497 31,939,166 35,023,523 3,061,858 128,386,346
========== ========== ========== ========= ===========
-- -- -- -- --
93,331 35,272 37,762 3,235 144,570
- ---------- ---------- ---------- --------- -----------
93,331 35,272 37,762 3,235 144,570
82,177,166 31,903,894 34,985,761 3,058,623 128,241,776
- ---------- ---------- ---------- --------- -----------
82,270,497 31,939,166 35,023,523 3,061,858 128,386,346
========== ========== ========== ========= ===========
</TABLE>

- 36 -
<PAGE>

THE PFL ENDEAVOR VARIABLE ANNUITY ACCOUNT

STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1994 OR COMMENCEMENT OF OPERATIONS TO DECEMBER 31, 1994

<TABLE>
<CAPTION>
MONEY
MARKET
TOTAL SUBACCOUNT
------------ ----------
<S> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends........................................... $ 2,845,997 776,732
Expenses:
Administrative fee (Note 4)......................... 229,923 6,325
Mortality and expense risk charge (Note 4).......... 5,890,591 304,737
------------ ----------
Net investment income (loss)...................... (3,274,517) 465,670
------------ ----------
NET REALIZED AND UNREALIZED CAPITAL GAIN (LOSS) FROM
INVESTMENTS
Net realized capital gain (loss) from sales of invest-
ments:
Proceeds from sales................................. 82,227,420 37,253,502
Cost of investments sold............................ 79,807,554 37,253,502
------------ ----------
Net realized capital gain (loss)...................... 2,419,866 --
------------ ----------
Net change in unrealized appreciation (depreciation)
of investments:
Beginning of period................................. 9,412,824 --
End of period....................................... (19,759,305) --
------------ ----------
Net change in unrealized appreciation
(depreciation) of investments.................... (29,172,129) --
------------ ----------
Net realized and unrealized capital gain (loss)
from investments................................. (26,752,263) --
------------ ----------
INCREASE (DECREASE) FROM OPERATIONS................... $(30,026,780) 465,670
============ ==========
</TABLE>

(/1/)Period from May 9, 1994 (commencement of operations) to December 31, 1994

See accompanying Notes to Financial Statements.

- 37 -
<PAGE>

<TABLE>
<CAPTION>
MANAGED QUEST QUEST U.S.
ASSET GLOBAL FOR VALUE FOR VALUE GOVERNMENT
ALLOCATION GROWTH EQUITY SMALL CAP SECURITIES GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT/1/ SUBACCOUNT
---------- ---------- ---------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C>
699,110 -- 20,563 -- -- 1,349,592
68,787 46,001 10,473 10,943 112 87,282
2,118,566 1,063,592 328,627 366,373 15,956 1,692,740
----------- ---------- --------- --------- ------- -----------
(1,488,243) (1,109,593) (318,537) (377,316) (16,068) (430,430)
----------- ---------- --------- --------- ------- -----------
19,396,350 8,786,625 2,862,770 4,018,338 402,745 9,507,090
17,418,359 7,808,701 2,739,337 3,930,981 404,374 10,252,300
----------- ---------- --------- --------- ------- -----------
1,977,991 977,924 123,433 87,357 (1,629) (745,210)
----------- ---------- --------- --------- ------- -----------
5,382,265 2,761,141 111,324 436,254 -- 721,840
(6,470,369) (3,433,341) 812,987 98,422 (5,607) (10,761,397)
----------- ---------- --------- --------- ------- -----------
(11,852,634) (6,194,482) 701,663 (337,832) (5,607) (11,483,237)
----------- ---------- --------- --------- ------- -----------
(9,874,643) (5,216,558) 825,096 (250,475) (7,236) (12,228,447)
----------- ---------- --------- --------- ------- -----------
(11,362,886) (6,326,151) 506,559 (627,791) (23,304) (12,658,877)
=========== ========== ========= ========= ======= ===========
</TABLE>

- 38 -
<PAGE>

THE PFL ENDEAVOR VARIABLE ANNUITY ACCOUNT

STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY
YEARS ENDED DECEMBER 31, 1994 AND 1993 OR COMMENCEMENT OF OPERATIONS
TO DECEMBER 31, 1994 AND 1993

<TABLE>
<CAPTION>
MANAGED
MONEY ASSET
MARKET ALLOCATION
TOTAL SUBACCOUNT SUBACCOUNT
------------------------- ----------------------- -----------------------
1994 1993 1994 1993 1994 1993
------------ ----------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment income
(loss)................. $ (3,274,517) (505,595) 465,670 70,134 (1,488,243) (412,962)
Net realized capital
gain (loss)............ 2,419,866 3,133,182 -- -- 1,977,991 1,050,826
Net change in unrealized
appreciation
(depreciation) of
investments............ (29,172,129) 8,626,522 -- -- (11,852,634) 4,457,002
------------ ----------- ----------- ---------- ----------- ----------
Increase (decrease) from
operations............. (30,026,780) 11,254,109 465,670 70,134 (11,362,886) 5,094,866
------------ ----------- ----------- ---------- ----------- ----------
CONTRACT TRANSACTIONS
Net contract purchase
payments............... 234,302,912 234,018,890 23,014,906 17,223,942 89,871,864 74,951,364
Transfers between funds. -- -- (2,201,349) (8,086,753) 441,178 2,931,563
Transfers (to) from gen-
eral account .......... 6,082,359 (243,692) (3,346,951) (548,762) 2,115,472 197,169
Contract terminations,
withdrawals, and other
deductions............. (29,167,293) (2,575,168) (11,622,320) (361,793) (7,166,325) (752,604)
------------ ----------- ----------- ---------- ----------- ----------
Increase (decrease) from
contract transactions.. 211,217,978 231,200,030 5,844,286 8,226,634 85,262,189 77,327,492
------------ ----------- ----------- ---------- ----------- ----------
Net increase (decrease)
in contract owners'
equity................. 181,191,198 242,454,139 6,309,956 8,296,768 73,899,303 82,422,358
------------ ----------- ----------- ---------- ----------- ----------
CONTRACT OWNERS' EQUITY
Beginning of period..... 288,706,149 46,252,010 12,818,699 4,521,931 96,502,169 14,079,811
------------ ----------- ----------- ---------- ----------- ----------
End of period........... $469,897,347 288,706,149 19,128,655 12,818,699 170,401,472 96,502,169
============ =========== =========== ========== =========== ==========
</TABLE>

1 Period from May 9, 1994 (commencement of operations) to December 31, 1994
2 Period from May 3, 1993 (commencement of operations) to December 31, 1993
3 Period from January 1, 1993 to April 30, 1993

See accompanying Notes to Financial Statements.

- 39 -
<PAGE>

<TABLE>
<CAPTION>
GLOBAL
MANAGED QUEST QUEST U.S.
ASSET GLOBAL FOR VALUE FOR VALUE GOVERNMENT
ALLOCATION GROWTH EQUITY SMALL CAP SECURITIES GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ---------------------- ---------------------- ---------------------- ---------- ------------------------
1993/3/ 1994 1993 1994 1993/2/ 1994 1993/2/ 1994/1/ 1994 1993
----------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
38,511 (1,109,593) (341,124) (318,537) (33,186) (377,316) (32,144) (16,068) (430,430) 205,176
433,576 977,924 262,772 123,433 4,970 87,357 16,101 (1,629) (745,210) 1,364,937
93,856 (6,194,482) 2,835,418 701,663 111,324 (337,832) 436,254 (5,607) (11,483,237) 692,668
----------- ---------- ---------- ---------- ---------- ---------- ---------- --------- ----------- -----------
565,943 (6,326,151) 2,757,066 506,559 83,108 (627,791) 420,211 (23,304) (12,658,877) 2,262,781
----------- ---------- ---------- ---------- ---------- ---------- ---------- --------- ----------- -----------
1,477,351 36,258,430 31,906,348 17,773,676 10,336,578 20,426,242 11,052,436 1,474,717 45,483,077 87,070,871
(11,210,024) 937,439 12,347,560 1,897,752 725,569 1,976,528 1,161,470 1,559,949 (4,611,497) 2,130,615
-- 1,776,331 90,600 1,495,294 27,182 1,381,963 54,249 70,947 2,589,303 (64,130)
(49,722) (3,168,882) (704,988) (931,795) (10,029) (854,836) (4,711) (23,686) (5,399,449) (691,321)
----------- ---------- ---------- ---------- ---------- ---------- ---------- --------- ----------- -----------
(9,782,395) 35,803,318 43,639,520 20,234,927 11,079,300 22,929,897 12,263,444 3,081,927 38,061,434 88,446,035
----------- ---------- ---------- ---------- ---------- ---------- ---------- --------- ----------- -----------
(9,216,452) 29,477,167 46,396,586 20,741,486 11,162,408 22,302,106 12,683,655 3,058,623 25,402,557 90,708,816
----------- ---------- ---------- ---------- ---------- ---------- ---------- --------- ----------- -----------
9,216,452 52,699,999 6,303,413 11,162,408 -- 12,683,655 -- -- 102,839,219 12,130,403
----------- ---------- ---------- ---------- ---------- ---------- ---------- --------- ----------- -----------
-- 82,177,166 52,699,999 31,903,894 11,162,408 34,985,761 12,683,655 3,058,623 128,241,776 102,839,219
=========== ========== ========== ========== ========== ========== ========== ========= =========== ===========
</TABLE>

- 40 -
<PAGE>

THE PFL ENDEAVOR VARIABLE ANNUITY ACCOUNT

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization--The PFL Endeavor Variable Annuity Account ("Mutual Fund
Account") is a segregated investment account of PFL Life Insurance Company
("PFL Life"), an indirect, wholly-owned subsidiary of AEGON USA, Inc. ("AUSA"),
a holding company. AUSA is an indirect, wholly-owned subsidiary of AEGON nv, a
holding company organized under the laws of The Netherlands.

The U.S. Government Securities Portfolio of the Endeavor Series Trust, as
part of the Mutual Fund Account, commenced operations on May 9, 1994. The Quest
for Value Equity and the Quest for Value Small Cap Portfolios of the Endeavor
Series Trust, as part of the Mutual Fund Account, commenced operations May 3,
1993. The Global Managed Asset Portfolio merged into the Global Growth
Portfolio effective April 30, 1993. The investment advisor of the Endeavor
Series Trust is Endeavor Investment Advisors, a general partnership between
Endeavor Management Co. and AUSA Financial Markets, Inc., an affiliate of PFL
Life. The investment adviser for the WRL Series Fund, Inc. is Western Reserve
Life Assurance Co. of Ohio, an affiliate of PFL Life.

The Mutual Fund Account is registered with the Securities and Exchange
Commission as a Unit Investment Trust pursuant to provisions of the Investment
Company Act of 1940.

Investments--Net purchase payments received by the Mutual Fund Account are
invested in the portfolios of the Endeavor Series Trust, and the Growth
Portfolio of the WRL Series Fund, Inc. (collectively the "Series Funds"), as
selected by the contract owner. Investments are stated at the closing net asset
values per share on December 31, 1994.

Realized capital gains and losses from sale of shares in the Series Funds are
determined on the first-in, first-out basis. Investment transactions are
accounted for on the trade date (date the order to buy or sell is executed) and
dividend income is recorded on the ex-dividend date. Unrealized gains or losses
from investments in the Series Funds are credited or charged to contract
owners' equity.

Dividend Income--Dividends received from the Series Funds investments are
reinvested to purchase additional mutual fund shares.

2. CONTRACT OWNERS' EQUITY

Contract owners' equity includes an amount of $453,735, which represents the
current value of PFL Life's initial capital contribution of $400,000. A summary
of deferred annuity contracts terminable by owners at December 31, 1994
follows:

<TABLE>
<CAPTION>
ACCUMULATION
ACCUMULATION UNIT TOTAL
SUBACCOUNT UNITS OWNED VALUE CONTRACT VALUE
---------- --------------- ------------ --------------
<S> <C> <C> <C>
Money Market.................... 17,836,839.874 $ 1.072424 $ 19,128,655
Managed Asset Allocation........ 130,909,987.116 1.301669 170,401,472
Global Growth................... 76,518,044.179 1.073958 82,177,166
Quest for Value Equity.......... 30,512,231.489 1.045610 31,903,894
Quest for Value Small Cap....... 32,607,348.474 1.072941 34,985,761
U.S. Government Securities...... 3,102,671.789 0.985803 3,058,623
Growth.......................... 12,758,957.591 10.051117 128,241,776
------------
$469,897,347
============
</TABLE>

- 41 -
<PAGE>

A summary of changes in contract owners' account units follows:

<TABLE>
<CAPTION>
GLOBAL U.S.
MANAGED MANAGED QUEST QUEST GOVERNMENT
MONEY ASSET ASSET GLOBAL FOR VALUE FOR VALUE SECURITIES
MARKET ALLOCATION ALLOCATION GROWTH EQUITY SMALL CAP PORTFOLIO GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Units outstanding at
1/1/93................. 4,334,948 11,637,564 9,517,952 6,368,486 -- -- -- 1,119,066
Units purchased......... 16,444,525 55,837,487 1,490,079 28,412,446 10,219,666 10,318,082 -- 8,010,775
Units redeemed and
transferred............ (8,588,615) 1,777,192 (11,008,031) 10,788,302 739,171 1,131,875 -- 122,562
----------- ----------- ----------- ---------- ---------- ---------- --------- ----------
Units outstanding at
12/31/93............... 12,190,858 69,252,243 -- 45,569,234 10,958,837 11,449,957 -- 9,252,403
Units purchased......... 21,768,210 65,293,446 -- 31,452,554 17,192,747 18,848,853 1,486,305 4,241,096
Units redeemed and
transferred............ (16,122,228) (3,635,702) -- (503,744) 2,360,647 2,308,538 1,616,367 (734,541)
----------- ----------- ----------- ---------- ---------- ---------- --------- ----------
Units outstanding at
12/31/94............... 17,836,840 130,909,987 -- 76,518,044 30,512,231 32,607,348 3,102,672 12,758,958
=========== =========== =========== ========== ========== ========== ========= ==========
</TABLE>

3. TAXES

Operations of the Mutual Fund Account form a part of PFL Life, which is taxed
as a life insurance company under Subchapter L of the Internal Revenue Code of
1986, as amended (the "Code"). The operations of the Mutual Fund Account are
accounted for separately from other operations of PFL Life for purposes of
federal income taxation. The Mutual Fund Account is not separately taxable as a
regulated investment company under Subchapter M of the Code and is not
otherwise taxable as an entity separate from PFL Life. Under existing federal
income tax laws, the income of the Mutual Fund Account, to the extent applied
to increase reserves under the variable annuity contracts, is not taxable to
PFL Life.

4. ADMINISTRATIVE, MORTALITY AND EXPENSE RISK CHARGE

Administrative charges include an annual charge of $35 per contract which
will commence on the first policy anniversary of each contract owner's account.
Charges for administrative fees to the variable annuity contracts are an
expense of the Mutual Fund Account.

PFL Life deducts a daily charge equal to an annual rate of 1.25% of the value
of the contract owners' individual account as a charge for assuming certain
mortality and expense risks. PFL Life also deducts a daily charge equal to an
annual rate of .15% of the contract owners' individual account for
administrative expenses.

5. NET ASSETS

At December 31, 1994 contract owners' equity was comprised of:

<TABLE>
<CAPTION>
QUEST QUEST
MANAGED FOR FOR U.S.
MONEY ASSET GLOBAL VALUE VALUE GOVERNMENT
MARKET ALLOCATION GROWTH EQUITY SMALL CAP SECURITIES GROWTH
TOTAL SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------ ---------- ----------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Unit transactions,
accumulated net
investment income and
realized capital gains. $489,656,652 19,128,655 176,871,841 85,610,507 31,090,907 34,887,339 3,064,230 139,003,173
Adjustment for
appreciation
(depreciation) to
market value........... (19,759,305) -- (6,470,369) (3,433,341) 812,987 98,422 (5,607) (10,761,397)
------------ ---------- ----------- ---------- ---------- ---------- --------- -----------
Total Contract Owners'
Equity................. $469,897,347 19,128,655 170,401,472 82,177,166 31,903,894 34,985,761 3,058,623 128,241,776
============ ========== =========== ========== ========== ========== ========= ===========
</TABLE>

- 42 -
<PAGE>

6. PURCHASES AND SALES OF INVESTMENT SECURITIES

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

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31 OR COMMENCEMENT OF
OPERATIONS TO DECEMBER 31
----------------------------------------------
1994 1993
----------------------- ----------------------
PURCHASES SALES PURCHASES SALES
------------ ---------- ----------- ----------
<S> <C> <C> <C> <C>
Endeavor Series Trust
Money Market Portfolio..... $ 43,579,370 37,253,502 30,928,748 22,620,947
Managed Asset Allocation
Portfolio................. 103,215,961 19,396,350 83,070,475 6,032,795
Global Managed Asset
Allocation Portfolio...... -- -- 2,361,832 11,677,722
Global Growth Portfolio.... 43,503,521 8,786,625 46,146,178 2,794,212
Quest for Value Equity
Portfolio................. 22,790,075 2,862,770 11,289,831 233,728
Quest for Value Small Cap
Portfolio................. 26,582,382 4,018,338 12,462,239 218,741
U.S. Government Securities
Portfolio................. 3,471,600 402,745 -- --
WRL Series Fund, Inc.
Growth Portfolio........... 47,107,997 9,507,090 97,624,538 7,488,648
------------ ---------- ----------- ----------
$290,250,906 82,227,420 283,883,841 51,066,793
============ ========== =========== ==========
</TABLE>

7. SUBSEQUENT EVENTS

The Board of Trustees of the Endeavor Series Trust approved the termination
of the investment advisory agreement with respect to the Global Growth
Portfolio of the Endeavor Series Trust between Endeavor Investment Advisers
(the "Manager") and Ivory & Sime International, Inc. effective December 31,
1994. The execution of a new investment advisory agreement, effective January
1, 1995, between the Manager and Rowe Price-Fleming International, Inc., is
subject to approval by the shareholders of the Portfolio.

The T. Rowe Price Equity Income Portfolio and the T. Rowe Price Growth Stock
Portfolio will be added to the Mutual Fund Account effective January 1, 1995.

- 43 -
<PAGE>

PART C OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements

All required financial statements are included in Part B
of this Registration Statement.

(b) Exhibits: The following exhibits are filed herewith:

(1) (a) Resolution of the Board of Directors of PFL Life
Insurance Company authorizing establishment of the Mutual
Fund Account. Note 1.

(b) Authorization Changing Name of the Mutual Fund Account.
Note 3.

(2) Not Applicable.

(3) (a) Principal Underwriting Agreement by and between PFL Life
Insurance Company, on its own behalf and on the behalf of
the Mutual Fund Account, and MidAmerica Management
Corporation. Note 3.

(b) Form of Broker/Dealer Supervision and Sales Agreement by
and between MidAmerica Management Corporation and the
Broker/Dealer. Note 3.

(4) (a) Form of Policy for the Endeavor Variable Annuity. Note 3.

(b) Form of Policy Endorsement (Required Distributions). Note
3.

(d) Form of Policy Endorsement (Nursing Care). Note 7.

(e) Form of Policy Endorsement (Death Benefit). Note 8.

(5) Form of Application for the Endeavor Variable Annuity.
Note 8.

(6) (a) Articles of Incorporation of PFL Life Insurance Company.
Note 3.

(b) Bylaws of PFL Life Insurance Company. Note 3.

1
<PAGE>

(7) Not Applicable.

(8) (a) Participation Agreement by and between PFL Life Insurance
Company and Endeavor Series Trust. Note 3.

(b) Participation Agreement with WRL Series Fund, Inc. Note
5.

(c) Administrative Services Agreement by and between PFL Life
Insurance Company and State Street Bank and Trust Company
(assigned to Vantage Computer Systems, Inc.). Note 2.

(d) Amendment and Assignment of Administrative Services
Agreement. Note 3.

(e) Second Amendment to Administrative Services Agreement.
Note 4.

(9) (a) Opinion and Consent of Counsel. Note 2.

(b) Consent of Counsel. Note 2.

(10) Consent of Independent Auditors. Note 8.

(11) Not Applicable.

(12) Not Applicable.

(13) Performance Data Calculations. Note 7.

(14) Powers of Attorney (P.S. Baird, L.G. Brown, W.L. Busler,
P.E. Falconio, D.C. Kolsrud, R.J. Kontz, R.J. McGraw).
Note 6.

Note 1. Filed with the initial filing of this Form N-4 Registration
Statement (File No. 33-33085 on January 23, 1990.

Note 2. Filed with Pre-Effective Amendment No. 1 to this Form N-4
Registration Statement (File No. 33-33085) on April 9, 1990.

Note 3. Filed with Post-Effective Amendment No. 2 to this Form N-4
Registration Statement (File No. 33-33085) on April 1, 1991.

Note 4. Filed with Post-Effective Amendment No. 3 to this Form N-4
Registration Statement (File No. 33-33085) on April 29, 1992.

Note 5. Filed with Post-Effective Amendment No. 5 to this Form N-4
Registration Statement (File No. 33-33085) on April 30, 1993.

2
<PAGE>

Note 6. Filed with Post-Effective Amendment No. 6 to this Form N-4
Registration Statement (File No. 33-33085) on January 28,
1994.

Note 7. Filed with Post-Effective Amendment No. 7 to this Form N-4
Registration Statement (File No. 33-33085) on March 29, 1994.

Note 8. Filed herewith.

3
<PAGE>

ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

<TABLE>
<CAPTION>
PRINCIPAL POSITIONS
NAME AND AND OFFICES WITH
BUSINESS ADDRESS DEPOSITOR
- ---------------- ---------
<S> <C>
William L. Busler Director, Chairman of
4333 Edgewood Road, N.E. the Board and President
Cedar Rapids, IA 52499

Patrick S. Baird Director, Vice President
4333 Edgewood Road, N.E. and Chief Financial
Cedar Rapids, IA 52499 Officer

Larry G. Brown Director
4333 Edgewood Road, N.E. Senior Vice President,
Cedar Rapids, IA 52499 Secretary, and General
Counsel

Douglas C. Kolsrud Director, Vice President
4333 Edgewood Road, N.E. and Corporate Actuary
Cedar Rapids, IA 52499

Robert J. Kontz Vice President and
4333 Edgewood Road, N.E. Controller
Cedar Rapids, IA 52499

Patrick E. Falconio Director, Senior Vice
4333 Edgewood Road, N.E. President and Chief
Cedar Rapids, IA 52499 Investment Officer

Robert J. McGraw Vice President and
4333 Edgewood Road, N.E. Treasurer
Cedar Rapids, IA 52499
</TABLE>

ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE
DEPOSITOR OR REGISTRANT

AEGON USA, Inc. - Holding Company

Life Investors Insurance Company of America - Insurance

International Life Investors Insurance Company - Insurance

Transunion Casualty Company - Insurance

Investors Warranty of America, Inc. - Provider of automobile extended
maintenance contracts

Supplemental Insurance Division, Inc. - Insurance

4
<PAGE>

Creditor Resources, Inc. - Credit Insurance

AEGON USA Investment Management, Inc. - Investment Advisor

AEGON USA Realty Advisors, Inc. - Provides real estate administrative
and real estate investment services

AEGON USA Realty Management, Inc. - Real Estate Management

AEGON USA Securities, Inc. - Broker-Dealer

AEGON USA Managed Portfolios, Inc. - Mutual Fund

USP Real Estate Investment Trust - Real Estate Investment Trust

Cedar Income Fund, Ltd. - Real Estate Investment Trust

Forty-Six Hundred Limited Partnership - Limited Partnership

First AUSA Life Insurance Company - Insurance

Bankers United Life Assurance Company - Insurance

Universal Benefits Corporation - Third party administrator

Massachusetts Fidelity Trust Company - Trust company

Money Services, Inc. - Provides financial counseling for employees and
agents of affiliated companies

Zahorik Company, Inc. - Broker-Dealer

Partel Holding, Inc. - Telemarketing

Partel Research Corp. - Telemarketing

Telequote Insurance Services, Inc. - Telemarketing

Tele-Quote Corporation - Telemarketing

Tele-Quote, Inc. - Telemarketing

Cadet Holding Corp. - Holding company

ISI Insurance Agency, Inc. - Broker/Dealer

Southwest Equity Life Insurance Company - Insurance

Iowa Fidelity Life Insurance Company - Insurance

The Whitestone Corporation - Insurance agency

Monumental Life Insurance Company - Insurance

5
<PAGE>

United Financial Services, Inc. - General agency

Equity National Life Insurance Company - Insurance

Monumental General Insurance Group, Inc. - Holding company

Monumental General Administrators, Inc. - Provides management services
to unaffiliated third party administrator

Executive Management and Consultant Services, Inc. - Provides
actuarial consulting services

Monumental General Mass Marketing, Inc. - Marketing arm for sale of
mass marketed insurance coverages

Cross-Country Life Insurance Company - Insurance

Bankers Financial Life Insurance Company - Insurance

Monumental General Casualty Company - Insurance

AUSA Holding Company - Holding company

JLW Financial Management Systems, Inc. - Management and Administrative
Services

ZCI, Inc. - Insurance agency

AUSA Financial Markets, Inc. - Marketing

CRC Creditor Resources Canadian Dealer Network Inc. - Insurance agency

American Forum For Fiscal Fitness, Inc. - Marketing

Western Reserve Life Assurance Co. of Ohio - Insurance

Landauer Realty Advisors, Inc. - Real estate counseling

Landauer Associates, Inc. - Real estate counseling

WRL Series Fund, Inc. - Mutual fund

Intersecurities, Inc. - Broker-dealer

Idex Investor Services, Inc. - Shareholder services

Idex Management, Inc. - Investment advisor

Idex Total Income Trust - Mutual fund

Idex Fund - Mutual fund

Idex II - Mutual fund

6
<PAGE>

Idex Fund 3 - Mutual fund

AUSA Life Insurance Company, Inc. - Insurance

Diversified Investment Advisors, Inc. - Registered Investment Advisor

Diversified Investors Securities Corp. - Broker-Dealer

Associated Mariner Financial Group, Inc. - Holding company management
services

Mariner Financial Services, Inc. - Broker/Dealer

Mariner Planning Corporation - Financial planning

Associated Mariner Agency, Inc. - Insurance agency

Mariner Mortgage Corp. - Mortgage origination

AMCORP, Inc. - Insurance Agency

Colorado Annuity Agency, Inc. - Insurance agency

Realty Information Systems, Inc. - Information Systems for real estate
investment management

ITEM 27. NUMBER OF POLICYOWNERS

As of December 31, 1994, there were 11,521 Owners of the Policies.

ITEM 28. INDEMNIFICATION

The Iowa Code (Sections 490.850 et. seq.) provides for permissive
indemnification in certain situations, mandatory indemnification in other
situations, and prohibits indemnification in certain situations. The Code also
specifies procedures for determining when indemnification payments can be made.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Depositor pursuant to the foregoing provisions, or otherwise, the Depositor
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 Depositor of expenses incurred
or paid by a director, officer or controlling person in connection with the
securities being registered), the Depositor will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

7
<PAGE>

ITEM 29. PRINCIPAL UNDERWRITER

AEGON USA Securities, Inc.
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499

The directors and officers of
AEGON USA Securities, Inc.
are as follows:5

Patrick E. Falconio Charles Bennett
Director Vice President

Larry G. Brown Thomas Walsh
Director and Secretary Vice President

Brenda K. Clancy Donna Craft
Director Vice President

Robert A. Thelen Sara L. Haas
Senior Vice-President Assistant Secretary

Lorri Mehaffey
President and Treasurer

Donald A. Froehle
Assistant Secretary

Billy J. Berger
Vice President and Assistant Treasurer

_____________________

/5/ The principal business address of each person listed is AEGON USA
Securities, Inc., 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499.

Commissions and Other Compensation Received by Principal Underwriter.

AEGON USA Securities, Inc. and/or the broker-dealers received $19,983,219
from the Registrant during the last fiscal year for its services in distributing
the Policies. No other commission or compensation was received by the principal
underwriter, directly or indirectly, from the Registrant during the fiscal
year.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

The records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 to 31a-3 promulgated thereunder,
are maintained by PFL Life Insurance Company at 4333 Edgewood Road, N.E., Cedar
Rapids, Iowa 52499.

ITEM 31. MANAGEMENT SERVICES.

8
<PAGE>

All management Policies are discussed in Part A or Part B.

ITEM 32. UNDERTAKINGS

(a) Registrant undertakes that it will file a post-effective
amendment to this registration statement as frequently as necessary to ensure
that the audited financial statements in the registration statement are never
more than 16 months old for so long as Premiums under the Policy may be
accepted.

(b) Registrant undertakes that it will include either (i) a
postcard or similar written communication affixed to or included in the
Prospectus that the applicant can remove to send for a Statement of Additional
Information or (ii) a space in the Policy application that an applicant can
check to request a Statement of Additional Information.

(c) Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available under
this Form promptly upon written or oral request to PFL at the address or phone
number listed in the Prospectus.

SECTION 403(B) REPRESENTATIONS

PFL represents that it is relying on a no-action letter dated November
28, 1988, to the American Council of Life Insurance (Ref. No. IP-6-88),
regarding Sections 22(e), 27(c)(1), and 27(d) of the Investment Company Act of
1940, in connection with redeemability restrictions on Section 403(b) Policies,
and that paragraphs numbered (1) through (4) of that letter will be complied
with.

STATEMENT PURSUANT TO RULE 6C-7: TEXAS OPTIONAL RETIREMENT PROGRAM

PFL and the Mutual Fund Account rely on 17 C.F.R. Sec. 270.6c-7, and
represent that the provisions of that Rule have been or will be complied with.

9
<PAGE>

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act
of 1940, the Registrant hereby certifies that this Amendment to the Registration
Statement meets the requirements for effectiveness pursuant to paragraph (b) of
Rule 485 and has caused this Registration Statement to be signed on its behalf,
in the City of Cedar Rapids and State of Iowa, on this 27th day of April,
1995.

PFL ENDEAVOR VARIABLE
ANNUITY ACCOUNT

PFL LIFE INSURANCE
COMPANY
Depositor

/s/William L. Busler
--------------------
William L. Busler
President

As required by the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the duties
indicated.

<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
Patrick S. Baird Director April 27, 1995
- ----------------------
Patrick S. Baird

Larry G. Brown Director April 27, 1995
- ----------------------
Larry G. Brown

William L. Busler Director April 27, 1995
- -----------------
William L. Busler (Principal Executive Officer)

Patrick E. Falconio Director April 27, 1995
- -------------------
Patrick E. Falconio

Douglas C. Kolsrud Director April 27, 1995
- ---------------------
Douglas C. Kolsrud
</TABLE>

10
<PAGE>

<TABLE>
<S> <C> <C>
Robert J. Kontz Controller April 27, 1995
- ----------------------
Robert J. Kontz

Robert J. McGraw Treasurer April 27, 1995
- ----------------------
Robert J. McGraw
</TABLE>

<PAGE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM
N-4 FOR PFL ENDEAVOR VARIABLE ANNUITY ACCOUNT AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 490,064,907
<INVESTMENTS-AT-VALUE> 470,305,602
<RECEIVABLES> 0
<ASSETS-OTHER> 130,115
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 470,435,717
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 538,370
<TOTAL-LIABILITIES> 538,370
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 304,246,080
<SHARES-COMMON-PRIOR> 158,673,532
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (19,759,305)
<NET-ASSETS> 469,897,347
<DIVIDEND-INCOME> 2,845,997
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 6,120,514
<NET-INVESTMENT-INCOME> (3,274,517)
<REALIZED-GAINS-CURRENT> 2,419,866
<APPREC-INCREASE-CURRENT> (29,172,129)
<NET-CHANGE-FROM-OPS> (30,026,780)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 160,283,211
<NUMBER-OF-SHARES-REDEEMED> 14,710,663
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>

[LOGO OF PFL LIFE PFL LIFE INSURANCE COMPANY
APPEARS HERE] A STOCK COMPANY
HOME OFFICE LOCATED AT: 4333 EDGEWOOD ROAD N.E,
CEDAR RAPIDS, IOWA, 52499
(HEREAFTER CALLED THE COMPANY, WE, OUR OR US)

AMENDATORY ENDORSEMENT

Section 1 is amended as follows:

BENEFICIARY
Before the Annuity Commencement Date, the person to whom the death proceeds
will be paid if the annuitant who is the owner dies (or if the annuitant who
is not the owner dies, and the owner has elected to have the death proceeds
paid upon the annuitant's death and we agree with such election).

After the Annuity Commencement Date, the person to whom payments will be
made if the annuitant dies.

YOU, YOUR
The owner of this policy. Unless otherwise specified on the Policy Data
Page, the annuitant and the owner shall be one and the same person. If there
is more than one owner, then the death of any owner will be treated the same
as the death of the owner.

The Service Charge in Section 4 is amended by the addition of the following:

The Service Charge will not be deducted on a policy anniversary if the sum
of all premiums paid minus the sum of all withdrawals taken equals at least
$50,000 on that policy anniversary.

The Guaranteed Return of Fixed Account Payments in Section 5 is amended to be:

You will always receive at least the premiums paid to, less prior
withdrawals and transfers from, the Fixed Account.

The maximum amount that can be transferred out of the Fixed Account during any
policy year as stated in Section 7 is amended to be:

The maximum amount that can be transferred out of the Fixed Account during
any policy year is the larger of 1) 25% of the current policy value in the
Fixed Account or 2) the amount transferred out of the Fixed Account during
the previous policy year. No transfers will be allowed out of the one year
Fixed Account except through dollar cost averaging.

Section 8 is amended to be:

A. PRIOR TO ANNUITY COMMENCEMENT DATE
Unless the owner has elected to have the death proceeds paid to the
Beneficiary upon the annuitant's death, and we agree to such election, the
owner will become the annuitant if the annuitant who is not the owner dies
before the Annuity Commencement Date.

When we have proof that the annuitant who is the owner has died before the
Annuity Commencement Date (or that the annuitant has died, if the owner has
elected to have the death proceeds paid upon the annuitant's death and we
agree to such election), we will provide death proceeds to the beneficiary
upon return of the policy.

The amount of the death proceeds will be the greater of (a) or (b) where:
(a) is the policy value on the date we receive due proof of death and an
election of a method of settlement, and;
(b) is the Guarantee Minimum Death Benefit

The amount of the Guaranteed Minimum Death Benefit depends on which option
you elected when you purchased this policy. Your election is shown on page
3. You may not change the Guaranteed Minimum Death Benefit option after the
policy is issued.

Option A: 5% Compound Death Benefit

The Guaranteed Minimum Death Benefit is equal to the total premiums paid
for this policy, less any Adjusted Partial Withdrawals, accumulated at 5%
per annum from the payment or withdrawal date to the date of death.
<PAGE>

Option B: Annual Step-Up Death Benefit

The Guaranteed Minimum Death Benefit is equal to the largest Policy Value
on the issue date or on any policy anniversary prior to the owner's 81st
birthday, plus any premiums paid, less any Adjusted Partial Withdrawals
taken, subsequent to the date of the largest anniversary Policy Value.

Adjusted Partial Withdrawals are equal to the ratio of a) the amount of
partial withdrawal taken to b) the Policy Value on the date of, but prior to
the partial withdrawal, times c) the amount of the death proceeds on the
date of, but prior to the partial withdrawal.

Interest on death proceeds will be paid as required by law.

The beneficiary may elect to receive the death proceeds as a lump sum
payment or may use the death proceeds to provide any of the annuity payment
options described in Section 9.

A beneficiary who is the deceased owner's surviving spouse may elect to
continue this policy rather than receiving the death proceeds. If the
beneficiary is not the deceased owner's surviving spouse, or if the death
proceeds are being paid upon the death of the annuitant who was not an
owner, the death proceeds must be distributed: a) within five years of the
date of death, or b) payments must begin within one year of the date of
death and must be made for a period certain or for the beneficiary's
lifetime, so long as any period certain does not exceed that beneficiary's
life expectancy. Death proceeds which are not paid to or for the benefit of
a natural person must be distributed within 5 years of the date of death.

B. ON OR AFTER THE ANNUITY COMMENCEMENT DATE
The death proceeds on or after the Annuity Commencement Date depend on the
payment option selected. If any owner dies on or after the Annuity
Commencement Date, the remaining portion of any interest in the contract
will be distributed at least as rapidly as under the method of distribution
being used as of the date of that owner's death.

The payment provision of Section 9.A is amended to be:

PAYMENT
If the annuitant is living and this policy is in force on the Annuity
Commencement Date, we will use the Policy Value to make annuity payments to
the Payee under Option 3-V with 10 years certain or if elected, under one or
more of the other options described in this section. Before the Annuity
Commencement Date, if the annuitant who is the owner dies (or if the
annuitant dies, and the owner has elected to have the death proceeds paid
upon the annuitant's death and we agree with such election) or if you
surrender this policy, we will pay any proceeds in one sum, or if elected,
all or part of these proceeds may be placed under one or more of the options
described in the section. If we agree, the proceeds may be placed under some
other method of payment instead.

You may direct that the beneficiary shall not have the right to withdraw,
assign or commute any sum payable under an option. In the absence of such
election or direction, the beneficiary may change the manner of payment or
make an election of an option.

This Amendatory Endorsement takes effect and expires concurrently with the
Policy to which it is attached and is subject to all the terms and conditions of
the Policy not inconsistent herewith.

/s/ LARRY G. BROWN /s/ WILLIAM L. BUSLER

SECRETARY PRESIDENT

<PAGE>

EXHIBIT 99.5
- --------------------------------------------------------------------------------
[PFL LOGO PFL LIFE INSURANCE COMPANY APPLICATION FOR
APPEARS HERE] 4333 EDGEWOOD ROAD N.E. VARIABLE ANNUITY
CEDAR RAPIDS, IOWA 52499 CONTRACT
- -------------------------------------------------------------------------------
<TABLE>

<S> <C>
1. DESIGNATED ANNUITANT 8. MINIMUM DEATH BENEFIT OPTION
----------------------------------------------------------
------------------------------------------------------------------ SELECT ONE:
NAME [_]5% Compound Death Benefit (Not Available for owners
------------------------------------------------------------------ or annuitants over 74 years old;
------------------------------------------------------------------
ADDRESS [_]Annual Step-Up Death Benefit
------------------------------------------------------------------
------------------------------------------------------------------
CITY, STATE *This selection cannot be changed after the contract has
------------------------------------------------------------------ been issued.
--------------------- --------------------------------------------
ZIP --------- ----- TELEPHONE NOTE:If no option has been specified the contract will
--------------------- -------------------------------------------- issued with:
5% Compound (owner and annuitant under age 75);
Annual Step-Up (owner or annuitant over age 74);
--------------------------- -------------------------------------- __________________________________________________________
--------------------------- --------------------------------------
DATE OF BIRTH SEX: MALE [_] FEMALE [_] 9. PURCHASE PAYMENTS
--------------------------- -------------------------------------- (Make check payable to PFL Life Insurance Company)
--------------------------- --------------------------------------
SS #: CITIZENSHIP: US.[_] OTHER [_] ----------------------------------------------------------
--------------------------- --------------------------------------
--------------------------- --------------------------------------
2. CONTRACT OWNER* (IF OTHER THAN ABOVE) PREMIUM AMOUNT $_________________________________________
------------------------------------------------------------------ ----------------------------------------------------------
NAME I WOULD LIKE TO BE BILLED FOR FUTURE PAYMENTS: NO [_]
------------------------------------------------------------------
------------------------------------------------------------------
ADDRESS YES [_]...ANNUALLY [_] QUARTERLY [_]
------------------------------------------------------------------ ----------------------------------------------------------
------------------------------------------------------------------
CITY, STATE, ZIP 10. ALLOCATION OF PREMIUM PAYMENTS (Whole percentages only)
------------------------------------------------------------------ ----------------------------------------------------------
------------------------------------------------------------------
TELEPHONE T. ROWE PRICE ASSOCIATES, INC.
------------------------------------------------------------------
--------------------------- -------------------------------------- EQUITY INCOME PORTFOLIO .0%
----------
DATE OF BIRTH SEX: MALE [_] FEMALE [_] GROWTH STOCK PORTFOLIO .0%
----------
--------------------------- --------------------------------------
--------------------------- -------------------------------------- ----------------------------------------------------------
SS#/TAX ID#: CITIZENSHIP: US.[_] OTHER [_] ROWE PRICE FLEMING
--------------------------- --------------------------------------
3. JOINT CONTRACT OWNER* [_] SUCCESSOR CONTRACT OWNER* [_] INTERNATIONAL STOCK PORTFOLIO .0%
----------
--------------------------- -------------------------------------- ----------------------------------------------------------
NAME TRUST COMPANY OF THE WEST
------------------------------------------------------------------
------------------------------------------------------------------
ADDRESS MANAGED ASSET ALLOCATION PORTFOLIO .0%
------------------------------------------------------------------ ----------
------------------------------------------------------------------
CITY, STATE, ZIP MONEY MARKET PORTFOLIO .0%
------------------------------------------------------------------ ----------
------------------------------------------------------------------ ----------------------------------------------------------
QUEST FOR VALUE ADVISORS
TELEPHONE QUEST FOR VALUE SMALL CAP PORTFOLIO .0%
------------------------------------------------------------------
----------------------------- ------------------------------------ ----------
DATE OF BIRTH SEX: MALE [_] FEMALE [_] QUEST FOR VALUE EQUITY PORTFOLIO .0%
----------------------------- ------------------------------------ ----------
----------------------------- ------------------------------------ ---------------------------------------------------------
SS#/TAX ID#: CITIZENSHIP: US.[_] OTHER [_] BOSTON ADVISORS
----------------------------- ------------------------------------
*In the event the owner is a trust or plan, a copy of the trust U.S GOVERNMENT SECURITIES PORTFOLIO .0%
/plan agreement must be submitted ----------
----------------------------------------------------------
4. BENEFICIARY DESIGNATION JANUS CAPITAL CORP.
NAME JANUS CAPITAL CORPORATION
------------------------------------------------------------------ GROWTH PORTFOLIO (WRL SERIES FUND) .0%
----------
------------------------------------------------------------------ ----------------------------------------------------------
RELATIONSHIP TO ANNUITANT
------------------------------------------------------------------
------------------------------------------------------------------ PFL LIFE INSURANCE COMPANY
NAME OF CONTINGENT BENEFICIARY RATE GUARANTEED FIXED ACCOUNT - 1 YEAR RATE .0%
------------------------------------------------------------------ (FOR DOLLARS COST AVERAGING ONLY) ----------
------------------------------------------------------------------
RELATIONSHIP TO ANNUITANT RATE GUARANTEED FIXED ACCOUNT - 3 YEAR RATE .0%
----------
------------------------------------------------------------------ ---------------------------------------------------------
.0%
5. TYPE OF ANNUITY ADDITIONAL:_________________________________ ----------
------------------------------------------------------------------
NON-QUALIFIED [_] SEP (Complete Box 6) [_] .0%
_____________________________________________ ----------
HR-10 [_] IRA (Complete Box 6) [_] .0%
____________________________________________ ----------
403(b) (Complete Box 6) [_] .0%
____________________________________________ ----------
Other [_] __________________________________________________ .0%
------------------------------------------------------------------ ____________________________________________ ----------
----------------------------------------------------------
6. IRA/SEP INFORMATION INVESTMENT ALLOCATION MUST TOTAL 100%
------------------------------------------------------------------
IRA INFORMATION 11. TELEPHONE TRANSFER/REALLOCATION AUTHORIZATION
----------------------------------------------------------
$______________ CONTRIBUTION FOR TAX YEAR _____________________ BY CHECKING ONE OF THE FOLLOWING BOXES, I AUTHORIZE THE
$______________ TRUSTEE TO TRUSTEE TRANSFER ___________________ COMPANY TO ACCEPT TELEPHONE TRANSFERS/REALLOCATION
INSTRUCTION FROM:
$_______________ ROLLOVER FROM: (CHECK ONE) 403 (b) PENSION [_] ONLY MYSELF [_] MYSELF & MY ACCOUNT EXECUTIVE [_]
HR-10 [_] OTHER:[_] __________________________ Acct. Rep. Name ________________________________________
------------------------------------------------------------------
7. WILL THIS ANNUITY REPLACE ANY EXISTING ANNUITY OR LIFE INSURANCE? TO CHANGE THE ALLOCATION OF ANY PURCHASE PAYMENTS AND/OR
------------------------------------------------------------------ TO TRANSFER FUNDS AMONG MY INVESTMENT CHOICES BASE ON MY
NO [_] YES [_] TELEPHONE INSTRUCTION OF MY ACCOUNT EXECUTIVE (IF
INDICATED ABOVE), I AGREE TO ESTABLISHED CONDITIONS AND
IF ANSWER IS YES, PLEASE STATE COMPANY NAME AND POLICY NUMBER. REQUIREMENTS STATED IN THE PROSPECTUS.

------------------------------------------------------------------ I AM AWARE THAT TELEPHONE INSTRUCTIONS WILL BE RECORDED
TO PROTECT ME AND THE COMPANY AND WILL BE PUT INTO
_______________________________________________________________ EFFECT ONLY WHEN PROPER IDENTIFICATION IS PROVIDED.
- --------------------------------------------------------------------- ----------------------------------------------------------
</TABLE>
YOUR SIGNATURE IS REQUIRED ON THE BACK PAGE (CONTINUED ON THE BACK PAGE)
<PAGE>
- --------------------------------------------------------------------------------
APPLICATIONS FOR
VARIABLE ANNUITY CONTRACT
- --------------------------------------------------------------------------------

12. DOLLAR COST AVERAGING
- --------------------------------------------------------------------------------
BY signing below I (We) authorize PFL Life Insurance Company to transfer
funds from my selected account to invest in the portfolio(s), in the amount
indicated below. Transfers will be made monthly, unless indicated differently
below. I understand that the transfers will continue until I terminate the
program in writing, or until my balance under the program falls below the
minimum transfer amount. If this happens, the balance will be transferred as
indicated below but on a pro-rata basis. I also understand the PFL Life's
Dollar Cost Averaging program is subject to the rules and restrictions
associated with the PFL Life contract and at the time the program begins
there must be sufficient Policy Value to cover one years transfers.

<TABLE>

<S> <C> <C>
TRANSFER FROM: [_] One Year Fixed Account; or PLEASE INVEST IN FOLLOWING ACCOUNTS FOR EACH TRANSFER:
[_] Money Market Portfolio; or Managed Asset Allocation .0% International Stock (Mang.
--------
[_] U.S. Govt. Securities Portfolio WRL Series Fund Growth Portfolio by Rowe Price Fleming .0%
-----
PLEASE INVEST: [_] Monthly (Six Transfers Minimum) (Mang. by Janus Capital Corp.) .0% U.S. Govt. Sec. Port. .0%
-------- -----
[_] Quarterly (Four Transfers Minimum) Growth (Mang. by Rowe Price) .0% Quest for Value Equity .0%
-------- -----
Equity Income (Mang.by Rowe Price) .0% Quest for Value Small Cap. .0%
-------- -----
Additional .0%
----------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

RESIDENTS OF COMMUNITY AND MARITAL PROPERTY STATES (AZ,CA,ID,LA,NV,NM,TX,WA,
WI)...Both spouses must consent to this application by signing below where
indicated. If there is no spouse and the annuity contract is to be owned by an
individual, please indicate marital status by checking the applicable box:
[_] Never married; or [_] Spouse is deceased; or [_] I am divorced.
To the best of my knowledge and belief, my answers to the questions on this
application are correct and true,and I agree that this application shall be a
part of any annuity contract issued to me. I also understand that the Company
reserves the right to reject any application or purchase payment. If this
application is declined, there shall be no liability on the part of the Company
and any purchase payments submitted shall be returned.
I UNDERSTAND THAT ANNUITY PAYMENTS AND TERMINATION VALUES, WHEN BASED ON
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT OF THE COMPANY, ARE VARIABLE AND ARE
NOT GUARANTEED AS TO A FIXED DOLLAR AMOUNT.
[_] Please check if you wish to receive the Statement of Additional
Information. Receipt of a current prospectus of the PFL Variable Annuity
Account, Endeavor Series Trust and WRL Series Fund, Inc. is hereby acknowledged.
ADDITIONAL FORMS ARE REQUIRED FOR SYSTEMATIC WITHDRAWALS.
- --------------------------------------------------------------------------------

<TABLE>

<S> <C>
SIGNED AT: BE SURE TO COMPLETE THIS SECTION

__________________________________________________________ _______________________________________________________________
CITY SIGNATURE OF CONTRACT OWNER
_____________________________________ _____/_____/_______ _______________________________________________________________
STATE DATE SIGNED SIGNATURE OF JOINT/SUCCESSOR CONTRACT OWNER (WHERE APPLICABLE)

COMMUNITY AND MARITAL PROPERTY STATE (SEE ABOVE)
SPOUSAL CONSENT WHEN SPOUSE IS NOT A CONTRACT OWNER _______________________________________________________________
SIGNATURE OF ANNUITANT
_____________________________________ _____/_____/_______
SIGNATURE OF SPOUSE DATE SIGNED
- -----------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SELLING AGENT USE ONLY -- NOT TO BE FILLED IN BY APPLICANT

<S> <C>
___________________________________________________________ ______________________________________________________________
AGENT NAME (PLEASE PRINT) AGENTS FIRM

______________________________________________________________
AGENT ADDRESS

___________________________________________________________ ______________________________________________________________
SIGNATURE OF LICENSED AGENT AGENT PHONE NO.

___________________________________________________________ _____/_____/____ ____________________________________________
BROKER/DEALER CLIENT ACCOUNT# PFL AGENT# DATE (IF APPLICABLE) FLORIDA AGENT LIC.ID.NO

DO YOU HAVE REASON TO BELIEVE THE CONTRACT APPLIED FOR IS TO REPLACE ANY EXISTING ANNUITY OR INSURANCE OWNED BY APPLICANT?
NO [_] YES [_]

If yes, what company:________________________________________________________________________________________________________
- ------------------------------------------------------------------------------------------------------------------------------------
PLEASE MAKE CHECK PAYABLE TO...PFL LIFE INSURANCE COMPANY (Use following address for mail, Fed. Express, etc.)
SEND CHECK WITH APPLICATION TO... PFL Life Insurance Company, Attn: Annuity Department, 433 Edgewood Road N.E., Cedar RApids, Iowa
52499-0001

VA-APP PLEASE FILL OUT THE FRONT PAGE TXS0911 PC 195 CR
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
If you have chosen to name someone other than yourself as The Annuitant, please
select one of the following regarding payment of the death benefit. IF NEITHER
IS SELECTED, THE FIRST OPTION WILL BE UTILIZED.

[_] At the Annuitant's death, I wish to become the ____________________________
annuitant and defer payout of the death until SIGNATURE OF CONTRACT OWNER
my death.
[_] At the death, I wish to have the death benefit ____________________________
paid to the named beneficiary/Signature SIGNATURE OF JOINT/SUCCESSOR
required for this option CONTRACT OWNER

<PAGE>

EXHIBIT 99.10

CONSENT OF INDEPENDENT AUDITORS
-------------------------------

We consent to the reference to our firm under the captions "Independent
Auditors" and "Financial Statements", to the use of our report dated February
7, 1995 with respect to the financial statements of The PFL Endeavor Variable
Annuity Account, and to the use of our report dated February 17, 1995 with
respect to the statutory-basis financial statements of PFL Life Insurance
Company, included in Amendment No. 10 to Registration Statement (Form N-4 No.
33-33085) and related Prospectus of The PFL Endeavor Variable Annuity Account
for the registration of individual variable annuity contracts.

Our audits also included the statutory-basis financial statement schedules of
PFL Life Insurance Company included in the Statement of Additional Information.
These schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits. In our opinion,
with respect to which the date is February 17, 1995, the statutory-basis
financial statement schedules referred to above, when considered in relation to
the basic financial statements taken as a whole, present fairly in all material
respects the information set forth therein.

ERNST & YOUNG LLP

/s/ Ernst & Young LLP

Des Moines, Iowa
April 19, 1995