MERRILL LYNCH LIFE VARIABLE ANNUITY SEPARATE ACCOUNT B, 497, 1999-05-10

MERRILL LYNCH LIFE VARIABLE ANNUITY SEPARATE ACCOUNT B
497, 1999-05-10

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<PAGE>
PROSPECTUS

May 1, 1999

Merrill Lynch Life Variable Annuity Separate Account A (Account A)
and
Merrill Lynch Life Variable Annuity Separate Account B (Account B)

FLEXIBLE PREMIUM INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACT
also known as
MODIFIED SINGLE PREMIUM INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACT
issued by
MERRILL LYNCH LIFE INSURANCE COMPANY
HOME OFFICE: Little Rock, Arkansas 72201
SERVICE CENTER: P.O. Box 44222
Jacksonville, Florida 32231-4222
4804 Deer Lake Drive East,
Jacksonville, Florida 32246
PHONE: (800) 535-5549
offered through
Merrill Lynch, Pierce, Fenner & Smith Incorporated

This prospectus gives you information you need to know before you invest. Keep
it for future reference. Address all communications concerning the Contract to
our Service Center at the address above.

The variable annuity contract described here provides a variety of investment
features. It also provides options for income protection later in life. It is
important that you understand how the contract works, and its benefits, costs,
and risks. First, some basics.

WHAT IS AN ANNUITY?

An annuity provides for the systematic liquidation of a sum of money at the
annuity date through a variety of annuity options. Each Annuity Option has
different protection features intended to cover different kinds of income needs.
Many of these Annuity Options provide income streams that can't be outlived.

WHAT IS A VARIABLE ANNUITY?

A variable annuity bases its benefits on the performance of underlying
investments. These investments may typically include stocks, bonds, and money
market instruments. The annuity described here is a variable annuity.

WHAT ARE THE RISKS IN OWNING A VARIABLE ANNUITY?

A variable annuity does not guarantee the performance of the underlying
investments. The performance can go up or down. It can even decrease the value
of money you've put in. You bear all of this risk. You could lose all or part of
the money you've put in.
<PAGE>
HOW DOES THIS ANNUITY WORK?

We put your premium payments as you direct into one or more subaccounts of
Account A and/or Account B. In turn, we invest each subaccount's assets in
corresponding portfolios of the following:

<TABLE>
<C> <C> <S>
- MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
- Domestic Money Market Fund
- Prime Bond Fund
- High Current Income Fund
- Quality Equity Fund
- Special Value Focus Fund
- Global Strategy Focus Fund
- Basic Value Focus Fund
- Capital Focus Fund
- Global Growth Focus Fund
- Government Bond Fund
- Developing Capital Markets Focus Fund
- Index 500 Fund
- Reserve Assets Fund

- AIM VARIABLE INSURANCE FUNDS, INC.
- AIM V.I. Capital Appreciation Fund
- AIM V.I. Value Fund
- ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.
- Premier Growth Portfolio
- Quasar Portfolio
- MFS-REGISTERED TRADEMARK- VARIABLE INSURANCE
TRUST-SM-
- Emerging Growth Series
- Research Series
- HOTCHKIS AND WILEY VARIABLE TRUST
- International VIP Portfolio
- DEFINED ASSET FUNDS
- 1999 ML Select Ten V.I. Trust
</TABLE>

The value of your contract at any point in time up to the Annuity Date is called
your contract value. Before the Annuity Date, you are generally free to direct
your contract value among the subaccounts as you wish. You may also withdraw all
or part of your contract value. If you die before the Annuity Date, we pay a
death benefit to your beneficiary.

We've designed this annuity as a long-term investment. If you withdraw money
from the annuity too soon, you may incur substantial charges. In addition, any
money you take out of the contract is subject to tax, and if taken before age
59 1/2 may also be subject to a 10% federal penalty tax. FOR THESE REASONS, YOU
NEED TO CONSIDER YOUR CURRENT AND SHORT-TERM INCOME NEEDS CAREFULLY BEFORE YOU
DECIDE TO BUY THE CONTRACT.

WHAT DOES THIS ANNUITY COST?

We impose a number of charges. The two most significant charges are a sales
charge and a mortality and expense risk charge.

We provide more details on these two charges as well as a description of all
other charges later in the prospectus.

************************************************************************

This prospectus contains information about the Contract and the Accounts that
you should know before you invest. A Statement of Additional Information
contains more information about the Contract and the Accounts. We have filed
this Statement of Additional Information, dated May 1, 1999, with the Securities
and Exchange Commission. We incorporate this Statement of Additional Information
by reference. If you want to obtain this Statement of Additional Information,
simply call or write us at the phone number or address noted above. There is no
charge to obtain it. The table of contents for this Statement of Additional
Information is found on page 51 of this prospectus.

CURRENT PROSPECTUSES FOR THE MERRILL LYNCH VARIABLE SERIES FUNDS, INC., THE AIM
VARIABLE INSURANCE FUNDS, INC., THE ALLIANCE VARIABLE PRODUCTS SERIES FUND,
INC., THE MFS-REGISTERED TRADEMARK- VARIABLE INSURANCE TRUST-SM-, THE HOTCHKIS
AND WILEY VARIABLE TRUST, THE MERCURY ASSET MANAGEMENT V.I. FUNDS, INC., AND THE
DEFINED ASSET FUNDS MUST ACCOMPANY THIS PROSPECTUS. PLEASE READ THESE DOCUMENTS
CAREFULLY AND RETAIN THEM FOR FUTURE REFERENCE.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED THESE CONTRACTS OR
DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

2
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
---------
<S> <C>
DEFINITIONS ..................................................................................... 6
FEE TABLE ....................................................................................... 7
CAPSULE SUMMARY OF THE CONTRACT.................................................................. 12
Premiums .................................................................................... 12
The Accounts................................................................................. 12
The Funds Available For Investment........................................................... 12
Fees and Charges............................................................................. 13
Mortality & Expense Risk Charge......................................................... 13
Sales Charge............................................................................ 13
Administration Charge................................................................... 13
Contract Maintenance Charge............................................................. 13
Premium Taxes........................................................................... 13
Transfers ................................................................................... 14
Transfers Among Account A Subaccounts................................................... 14
Transfers From Account A to Account B................................................... 14
Withdrawals............................................................................. 14
Death Benefit........................................................................... 15
Annuity Payments........................................................................ 15
Ten Day Review.......................................................................... 15
YIELDS AND TOTAL RETURNS......................................................................... 15
MERRILL LYNCH LIFE INSURANCE COMPANY............................................................. 17
THE ACCOUNTS..................................................................................... 17
Segregation of Account Assets................................................................ 17
Number of Subaccounts; Subaccount Investments................................................ 17
INVESTMENTS OF THE ACCOUNTS...................................................................... 18
General Information and Investment Risks..................................................... 18
Merrill Lynch Variable Series Funds, Inc..................................................... 18
Domestic Money Market Fund.............................................................. 19
Prime Bond Fund......................................................................... 19
High Current Income Fund................................................................ 19
Quality Equity Fund..................................................................... 19
Special Value Focus Fund................................................................ 20
Natural Resources Focus Fund............................................................ 20
American Balanced Fund.................................................................. 20
Global Strategy Focus Fund.............................................................. 20
Basic Value Focus Fund.................................................................. 20
Global Bond Focus Fund.................................................................. 20
Global Utility Focus Fund............................................................... 21
International Equity Focus Fund......................................................... 21
Government Bond Fund.................................................................... 21
Developing Capital Markets Focus Fund................................................... 21
Reserve Assets Fund..................................................................... 21
Index 500 Fund.......................................................................... 22
Capital Focus Fund...................................................................... 22
Global Growth Focus Fund................................................................ 22
Defined Asset Funds-Select Ten Trust......................................................... 22
AIM Variable Insurance Funds, Inc............................................................ 23
AIM V.I. Capital Appreciation Fund...................................................... 23
AIM V.I. Value Fund..................................................................... 23
</TABLE>

3
<PAGE>
<TABLE>
<S> <C>
Alliance Variable Products Series Fund, Inc.................................................. 24
Alliance Premier Growth Portfolio....................................................... 24
Alliance Quasar Portfolio............................................................... 24
MFS-Registered Trademark- Variable Insurance Trust-SM-....................................... 24
MFS Emerging Growth Series.............................................................. 25
MFS Research Series..................................................................... 25
Hotchkis and Wiley Variable Trust............................................................ 25
Hotchkis and Wiley International VIP Portfolio.......................................... 25
Mercury Asset Management V.I. Funds, Inc..................................................... 26
Mercury V.I. U.S. Large Cap Fund........................................................ 26
Purchases and Redemptions of Fund Shares; Reinvestment....................................... 26
Material Conflicts, Substitution of Investments and Changes to Accounts...................... 26
CHARGES AND DEDUCTIONS........................................................................... 27
Mortality and Expense Risk Charge............................................................ 27
Sales Charge................................................................................. 28
When Imposed............................................................................ 28
Amount of Charge........................................................................ 28
How Deducted............................................................................ 29
Administration Charge........................................................................ 29
Contract Maintenance Charge.................................................................. 29
Other Charges................................................................................ 29
Transfer Charges........................................................................ 29
Tax Charges............................................................................. 30
Fund Expenses........................................................................... 30
Retirement Plus Advisor Fees............................................................ 30
Premium Taxes................................................................................ 30
FEATURES AND BENEFITS OF THE CONTRACT............................................................ 30
Ownership of The Contract.................................................................... 30
Issuing the Contract......................................................................... 31
Issue Age............................................................................... 31
Information We Need To Issue The Contract............................................... 31
Ten Day Right to Review................................................................. 31
Premiums .................................................................................... 31
Minimum and Maximum Premiums............................................................ 31
How to Make Payments.................................................................... 32
Premium Investments..................................................................... 32
Accumulation Units........................................................................... 32
ADDITIONAL PROVISIONS APPLICABLE TO ALL CONTRACTS................................................ 33
Death of Annuitant Prior to Annuity Date..................................................... 33
Transfers ................................................................................... 33
Transfers Within Account A.............................................................. 33
Dollar Cost Averaging........................................................................ 34
What Is It?............................................................................. 34
Minimum Amounts......................................................................... 34
When Do We Make DCA Transfers?.......................................................... 34
Merrill Lynch Retirement Plus Advisor-SM-.................................................... 35
Fees and Charges for RPA................................................................ 35
Transfers From Account A to Account B........................................................ 35
Withdrawals and Surrenders................................................................... 35
When and How Withdrawals are Made....................................................... 35
Automatic Withdrawals................................................................... 36
Minimum Amounts......................................................................... 36
</TABLE>

4
<PAGE>
<TABLE>
<S> <C>
Surrenders.............................................................................. 37
Payments to Contract Owners.................................................................. 37
Contract Changes............................................................................. 37
Death Benefit................................................................................ 37
Annuity Payments............................................................................. 39
Annuity Options.............................................................................. 39
Payments of a Fixed Amount.............................................................. 40
Payments for a Fixed Period............................................................. 40
Life Annuity............................................................................ 40
Life Annuity With Payments Guaranteed for 10 or 20 Years................................ 40
Life Annuity With Guaranteed Return of Contract Value................................... 40
Joint and Survivor Life Annuity......................................................... 41
Individual Retirement Account Annuity................................................... 41
Gender-based Annuity Purchase Rates.......................................................... 41
FEDERAL INCOME TAXES............................................................................. 41
Federal Income Taxes......................................................................... 41
Tax Status of the Contract................................................................... 41
Taxation of Annuities........................................................................ 42
Penalty Tax on Some Withdrawals.............................................................. 43
Transfers, Assignments, or Exchanges of a Contract........................................... 43
Withholding ................................................................................. 43
Multiple Contracts........................................................................... 43
Possible Changes In Taxation................................................................. 44
Possible Charge For Our Taxes................................................................ 44
Individual Retirement Annuities.............................................................. 44
OTHER INFORMATION................................................................................ 45
Voting Rights................................................................................ 45
Reports to Contract Owners................................................................... 45
Selling the Contract......................................................................... 45
State Regulation............................................................................. 46
Year 2000 ................................................................................... 46
Legal Proceedings............................................................................ 46
Experts ..................................................................................... 47
Legal Matters................................................................................ 47
Registration Statements...................................................................... 47
ACCUMULATION UNIT VALUES......................................................................... 48
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION..................................... 51
</TABLE>

5
<PAGE>
DEFINITIONS

ACCUMULATION UNIT: An index used to compute the value of the contract owner's
interest in a subaccount prior to the annuity date.

ANNUITANT: The person on whose continuation of life annuity payments may depend.

ANNUITY DATE: The date on which annuity payments begin.

BENEFICIARY: The person to whom payment is to be made on the death of the
contract owner.

CONTRACT ANNIVERSARY: The same date each year as the date of issue of the
Contract.

CONTRACT YEAR: The period from one contract anniversary to the day preceding the
next contract anniversary.

INDIVIDUAL RETIREMENT ACCOUNT OR ANNUITY ("IRA"): A Contract issued in
connection with a retirement arrangement that receives favorable tax status
under Section 408 of the Internal Revenue Code ("IRC").

MONTHIVERSARY: The same date of each month as the date on which the Contract was
issued.

NET INVESTMENT FACTOR: An index used to measure the investment performance of a
subaccount from one valuation period to the next.

NONQUALIFIED CONTRACT: A Contract issued in connection with a retirement
arrangement other than a qualified arrangement described under Section 401, 403,
408, or any similar provisions of the Internal Revenue Code ("IRC").

TAX SHELTERED ANNUITY: A Contract issued in connection with a retirement
arrangement that receives favorable tax status under Section 403(b) of the
Internal Revenue Code ("IRC").

VALUATION PERIOD: The interval from one determination of the net asset value of
a subaccount to the next.

6
<PAGE>
FEE TABLE
A. Contract Owner Transaction Expenses
1.Sales Load Imposed on Premium .................................. None
2.Contingent Deferred Sales Charge

<TABLE>
<CAPTION>
COMPLETE YEARS ELAPSED SINCE CONTINGENT DEFERRED SALES CHARGE AS A
PAYMENT OF PREMIUM PERCENTAGE OF PREMIUM WITHDRAWN
------------------------------ --------------------------------------
<S> <C>
0 years 7.00%
1 year 6.00%
2 years 5.00%
3 years 4.00%
4 years 3.00%
5 years 2.00%
6 years 1.00%
7 or more years 0.00%
</TABLE>

3.Transfer Fee .................................................... $25
The first 6 transfers among Separate Account A subaccounts in a
contract year are free. We currently do not, but may in the future,
charge a $25 fee on all subsequent transfers. These rules apply only
to transfers among Separate Account A subaccounts. They do not apply
to transfers from Separate Account A to Separate Account B. No
transfers may be made from Separate Account B.

The Fee Table and Examples do not include charges to contract owners
for premium taxes. Premium taxes may be applicable. Refer to the
PREMIUM TAXES section in this Prospectus for further details.

B. Annual Contract Maintenance Charge ................................ $40
The Contract Maintenance Charge will be assessed annually on each
contract anniversary if the contract value is less than $50,000.
C. Separate Account Annual Expenses (as a percentage of account value)

<TABLE>
<CAPTION>
SEPARATE ACCT A SEPARATE ACCT B
--------------- ---------------
<S> <C> <C>
Mortality and Expense Risk
Charge...................... 1.25% .65%
Administration Charge......... .10% .00%
---- ---
Total Separate Account Annual
Expenses.................... 1.35% .65%
</TABLE>

D. Fund Expenses for the Year Ended December 31, 1998 (see "Notes to Fee
Table") (as a percentage of each Fund's
average net assets)

<TABLE>
<CAPTION>
MERRILL LYNCH VARIABLE SERIES FUNDS, INC. (CLASS A SHARES)
-------------------------------------------------------------------------------------------------
HIGH SPECIAL NATURAL GLOBAL DOMESTIC
RESERVE PRIME CURRENT QUALITY VALUE RESOURCES STRATEGY AMERICAN MONEY
ANNUAL EXPENSES ASSETS BOND INCOME EQUITY FOCUS FOCUS* FOCUS(b) BALANCED* MARKET
- ------------------------- ------- ----- ------- ------- ------- --------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Advisory
Fees................... .50% .42% .47% .44% .75% .65% .65% .55% .50%
Other Expenses........... .18% .06% .06% .05% .06% .23% .07% .07% .06%
-- -- -- -- -- -- -- -- --
Total Annual Operating
Expenses............... .68% .48% .53% .49% .81% .88% .72% .62% .56%
Expense Reimbursements... 0% 0% 0% 0% 0% 0% 0% 0% 0%
-- -- -- -- -- -- -- -- --
Net Expenses............. .68% .48% .53% .49% .81% .88% .72% .62% .56%
</TABLE>

7
<PAGE>
<TABLE>
<CAPTION>
MERRILL LYNCH VARIABLE SERIES FUNDS, INC. (CLASS A SHARES) (CONT'D)
-------------------------------------------------------------------------------------------------------
DEVELOPING
BASIC GLOBAL GLOBAL INTERNATIONAL CAPITAL GLOBAL
VALUE BOND UTILITY EQUITY GOVERNMENT MARKETS GROWTH
ANNUAL EXPENSES FOCUS FOCUS(b)** FOCUS* FOCUS** BOND(b) FOCUS(a) INDEX 500 FOCUS
- -------------------- ----- ---------- ------ ------------- ---------- ---------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Advisory
Fees.............. .60% .60% .60% .75% .50% 1.00% .30% .75%
Other Expenses...... .06% .15% .08% .14% .06% .42% .06% .28%diamond
-- -- -- -- -- -- -- --
Total Annual
Operating
Expenses.......... .66% .75% .68% .89% .56% 1.42% .36% 1.03%
Expense
Reimbursements.... 0% 0% 0% 0% 0% .17% 0% 0%
-- -- -- -- -- -- -- --
Net Expenses........ .66% .75% .68% .89% .56% 1.25% .36% 1.03%

CAPITAL
ANNUAL EXPENSES FOCUS
- -------------------- -------
<S> <C>
Investment Advisory
Fees.............. .60%
Other Expenses...... .26%diamond
--

Total Annual
Operating
Expenses.......... .86%
Expense
Reimbursements.... 0%
--
Net Expenses........ .86%
</TABLE>
<TABLE>
<CAPTION>
MFS-REGISTERED TRADEMARK-
AIM VARIABLE ALLIANCE VARIABLE PRODUCTS VARIABLE HOTCHKIS AND WILEY
INSURANCE FUNDS, INC. SERIES FUND, INC. INSURANCE TRUST-SM- VARIABLE TRUST
----------------------- ------------------------------ ------------------- --------------------
AIM V.I. ALLIANCE MFS
CAPITAL AIM V.I. PREMIER ALLIANCE EMERGING MFS HOTCHKIS AND WILEY
ANNUAL EXPENSES APPRECIATION VALUE GROWTH(d) QUASAR(d) GROWTH RESEARCH INTERNATIONAL VIP
- ------------------------- ------------ -------- ------------ --------------- -------- -------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Advisory
Fees................... .62% .61% 1.00% 1.00% .75% .75% .75%
Other Expenses........... .05% .05% .09% .30% .10% .11% .30%diamond
-- -- -- -- -- -- --
Total Annual Operating
Expenses............... .67% .66% 1.09% 1.30% .85% .86% 1.05%
Expense Reimbursements... 0% 0% 0% 0% 0% 0% 0%
-- -- -- -- -- -- --
Net Expenses............. .67% .66% 1.09% 1.30% .85% .86% 1.05%

<CAPTION>
MERCURY ASSET
MANAGEMENT V.I.
FUNDS, INC.
(CLASS A
SHARES)
---------------
MERCURY V.I.
U.S. LARGE
ANNUAL EXPENSES CAP(c)***
- ------------------------- ---------------
<S> <C>
Investment Advisory
Fees................... .65%
Other Expenses........... 1.58%
---
Total Annual Operating
Expenses............... 2.23%
Expense Reimbursements... .98%
---
Net Expenses............. 1.25%
</TABLE>

<TABLE>
<CAPTION>
DEFINED ASSET FUNDS
-------------------------------
ANNUAL EXPENSES SELECT TEN TRUST(e)
- -------------------------------------------------- -------------------------------

<S> <C>
Deferred Transaction Fee.......................... $5.30 per 1,000 Trust Units
Trustee's Fee..................................... .082%
Portfolio Supervision, Bookkeeping and
Administrative Fees............................... .045%
Organizational Expenses........................... .046%
Other Operating Expenses.......................... .006%
---
Total Annual Operating Expenses................... .179%
</TABLE>

- ---------
* Closed to allocations of premiums or contract value following the close
of business on December 6, 1996.

** Closed to allocations of premiums or contract value following the close
of business on June 5, 1998.

*** Available for allocations of premiums or contract value on or about June
18, 1999.

diamond Annualized.

<PAGE>
EXAMPLES OF CHARGES

If the Contract is surrendered at the end of the applicable time period:

The following cumulative expenses would be paid on each $1,000 invested,
assuming 5% annual return on assets:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------- -------- -------- ---------
<S> <C> <C> <C> <C>
SEPARATE ACCOUNT B SUBACCOUNT INVESTING IN:
Reserve Assets Fund+.................................... $14 $44 $76 $167

SEPARATE ACCOUNT A SUBACCOUNT INVESTING IN:
Prime Bond Fund+........................................ $84 $110 $133 $222
High Current Income Fund+............................... $85 $111 $135 $228
Quality Equity Fund+.................................... $85 $110 $133 $223
Special Value Focus Fund+............................... $88 $119 $150 $257
Natural Resources Focus Fund+*.......................... $88 $121 $154 $265
Global Strategy Focus Fund+............................. $87 $117 $145 $248
American Balanced Fund+*................................ $86 $114 $140 $237
Domestic Money Market Fund+............................. $85 $112 $137 $231
Basic Value Focus Fund+................................. $86 $115 $142 $241
Global Bond Focus Fund+**............................... $87 $117 $147 $251
Global Utility Focus Fund+*............................. $86 $115 $143 $244
International Equity Focus Fund+**...................... $88 $122 $154 $266
Government Bond Fund+................................... $85 $112 $137 $231
Developing Capital Markets Focus Fund+.................. $92 $132 $173 $302
Index 500 Fund+......................................... $83 $106 $126 $209
Global Growth Focus Fund+............................... $90 $126 $161 $280
Capital Focus Fund+..................................... $88 $121 $153 $262
Select Ten Trust........................................ $86 $114 $141 $239
AIM V.I. Capital Appreciation Fund...................... $86 $115 $143 $243
AIM V.I. Value Fund..................................... $86 $115 $142 $241
Alliance Premier Growth Portfolio....................... $90 $127 $164 $286
Alliance Quasar Portfolio............................... $92 $134 $175 $307
MFS Emerging Growth Series.............................. $88 $120 $152 $261
MFS Research Series..................................... $88 $121 $153 $262
Hotchkis and Wiley International VIP Portfolio.......... $90 $126 $162 $282
Mercury V.I. U.S. Large Cap Fund+***.................... $92 $132 $173 $302
</TABLE>

- ---------

+ Class A Shares.

* Closed to allocations of premiums or contract value following the close of
business on December 6, 1996.

** Closed to allocations of premiums or contract value following the close of
business on June 5, 1998.

*** Available for allocations of premiums or contract value on or about June
18, 1999.

9
<PAGE>
If the Contract is annuitized, or not surrendered, at the end of the applicable
time period:

The following cumulative expenses would be paid on each $1,000 invested,
assuming 5% annual return on assets:

SEPARATE ACCOUNT A SUBACCOUNT INVESTING IN:
Prime Bond Fund+........................................ $19 $60 $103 $222
High Current Income Fund+............................... $20 $61 $105 $228
Quality Equity Fund+.................................... $19 $60 $103 $223
Special Value Focus Fund+............................... $23 $70 $120 $257
Natural Resources Focus Fund+*.......................... $23 $72 $124 $265
Global Strategy Focus Fund+............................. $22 $67 $115 $248
American Balanced Fund+*................................ $21 $64 $110 $237
Domestic Money Market Fund+............................. $20 $62 $107 $231
Basic Value Focus Fund+................................. $21 $65 $112 $241
Global Bond Focus Fund+**............................... $22 $68 $117 $251
Global Utility Focus Fund+*............................. $21 $66 $113 $244
International Equity Focus Fund+**...................... $24 $73 $124 $266
Government Bond Fund+................................... $20 $62 $107 $231
Developing Capital Markets Focus Fund+.................. $27 $84 $143 $302
Index 500 Fund+......................................... $18 $56 $ 96 $209
Global Growth Focus Fund+............................... $25 $77 $131 $280
Capital Focus Fund+..................................... $23 $72 $123 $262
Select Ten Trust........................................ $21 $65 $111 $239
AIM V.I. Capital Appreciation Fund...................... $21 $66 $113 $243
AIM V.I. Value Fund..................................... $21 $65 $112 $241
Alliance Premier Growth Portfolio....................... $26 $79 $134 $286
Alliance Quasar Portfolio............................... $28 $85 $145 $307
MFS Emerging Growth Series.............................. $23 $71 $122 $261
MFS Research Series..................................... $23 $72 $123 $262
Hotchkis and Wiley International VIP Portfolio.......... $25 $77 $132 $282
Mercury V.I. U.S. Large Cap Fund+***.................... $27 $84 $143 $302
</TABLE>

- ---------

+ Class A Shares.

* Closed to allocations of premiums or contract value following the close of
business on December 6, 1996.

** Closed to allocations of premiums or contract value following the close of
business on June 5, 1998.

*** Available for allocations of premiums or contract value on or about June
18, 1999.

10
<PAGE>
The preceding Fee Table and Examples help you understand the costs and expenses
you will bear, directly or indirectly. The Fee Table and Examples include
expenses and charges of the Accounts as well as the Funds. The Examples also
reflect the $40 contract maintenance charge as .029% of average assets. See the
CHARGES AND DEDUCTIONS section in this Prospectus and the Fund prospectuses for
a further discussion of fees and charges.

THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR ANNUAL RATES OF RETURN OF ANY FUND. ACTUAL EXPENSES AND ANNUAL RATES
OF RETURN MAY BE MORE OR LESS THAN THOSE ASSUMED FOR THE PURPOSE OF THE
EXAMPLES.

Condensed financial information containing the accumulation unit value history
appears at the end of this prospectus.

NOTES TO FEE TABLE

(a) Merrill Lynch Asset Management, L.P. ("MLAM") and Merrill Lynch Life
Agency, Inc. have entered into a Reimbursement Agreement that limits the
operating expenses, exclusive of any distribution fees imposed on Class B
shares, paid by each Fund of the Merrill Variable Funds in a given year to
1.25% of its average net assets. This Reimbursement Agreement is expected to
remain in effect for the current year. Under this Reimbursement Agreement,
the Developing Capital Markets Focus Fund was reimbursed for a portion of
its operating expenses for 1998.

(b) Effective following the close of business on December 6, 1996, (i) the
International Bond Fund merged with and into the former World Income Focus
Fund, the World Income Focus Fund was renamed the Global Bond Focus Fund and
its investment objective was modified; (ii) the Flexible Strategy Fund
merged with and into the Global Strategy Focus Fund; and (iii) the
Intermediate Government Bond Fund was renamed the Government Bond Fund and
its investment objective was modified. See the accompanying prospectus for
Merrill Variable Funds for additional information regarding these changes.

(c) "Other Expenses" and "Total Annual Operating Expenses" shown for the
Mercury V.I. U.S. Large Cap Fund are based on expenses estimated for the
current fiscal year. Mercury Asset Management International Ltd. has agreed
to limit for one year the operating expenses paid by the Mercury V.I. U.S.
Large Cap Fund to 1.25% of its average net assets.

(d) The Fee Table does not reflect fees waived or expenses assumed by Alliance
Capital Management L.P. ("Alliance") for the Alliance Quasar Portfolio and
the Alliance Premier Growth Portfolio during the year ended December 31,
1998. Such waivers and assumption of expenses were made on a voluntary
basis. Alliance may discontinue or reduce any such waiver or assumption of
expenses at any time without notice. During the fiscal year ended December
31, 1998, Alliance waived management fees totaling 0.35% for the Alliance
Quasar Portfolio and 0.03% for the Alliance Premier Growth Portfolio.
Considering such reimbursements, "Investment Advisory Fees" would have been
0.65% and 0.97% and "Total Annual Operating Expenses" would have been 0.95%
and 1.06% for the Alliance Quasar Portfolio and the Alliance Premier Growth
Portfolio, respectively.

(e) Merrill Lynch, Pierce, Fenner & Smith Incorporated, the sponsor of Defined
Asset Funds, receives a deferred transaction fee accrued daily at an annual
rate of $5.30 per 1,000 units of the Select Ten Trust ("Trust Units") (about
0.47% per Trust Unit) for creating and maintaining the Select Ten Trust.
This deferred transaction fee also applies to income and principal
distributions on Trust Units, which are reinvested in Trust Units. Other
annual operating expenses are shown as a percentage of net assets of the
Select Ten Trust, and are based on estimates. The amount of each of these
other expenses, on a per 1,000 Trust Unit basis, are as follows: $0.82
(trustee's fee); $0.45 (portfolio supervision, bookkeeping and
administrative fees); $0.46 (organizational expenses); and $0.06 (other
operating expenses); for a total of $1.79 per 1,000 Trust Units. These
estimates do not include the costs of purchasing and selling the underlying
stocks held by the Select Ten Trust.

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<PAGE>
CAPSULE SUMMARY OF THE CONTRACT

This capsule summary provides a brief overview of the Contract. More detailed
information about the Contract can be found in the sections of this Prospectus
that follow, all of which should be read in their entirety.

PREMIUMS

Generally, before the annuity date you can pay premiums as often as you like.
The minimum initial premium is $5,000 for a non-qualified Contract and $2,000
for an IRA Contract. Subsequent premiums generally must be $100 or more. It is
intended that, in the future, rollover and transfer amounts from tax sheltered
annuity plans that are not subject to the Employee Retirement Income Security
Act of 1974, as amended, will be accepted as premium payments, as permitted by
law. Other premium payments will not be accepted under a Contract used as a tax
sheltered annuity. Federal law limits maximum annual contributions to IRA
Contracts. Under an automatic investment feature, you can make subsequent
premium payments systematically from your Merrill Lynch brokerage account. For
more information, contact your Financial Consultant.

Tax qualified arrangements, including qualified plans, should carefully consider
the costs and benefits of the Contracts (including annuity income benefits)
before purchasing the Contract, since the tax qualified arrangement itself
provides for tax-sheltered growth.

THE ACCOUNTS

As you direct, we will put premiums into sub-accounts of Account A and/or
Account B corresponding to the Funds in which we invest your contract value. For
the first 14 days following the date of issue, we put all premiums you've
directed into Account A into the Domestic Money Market Subaccount. After the 14
days, we'll put the money into the Account A subaccounts you've selected. In
Pennsylvania, however, we won't wait 14 days. Instead, we'll invest your premium
immediately in the subaccounts you've selected. Currently, you may allocate
premiums or contract value among 18 of 21 available subaccounts. On or about
June 18, 1999, an additional subaccount corresponding to the Mercury V.I. U.S.
Large Cap Fund of the Mercury Asset Management V.I. Funds, Inc. becomes
available for allocations of premiums and contract value. Generally, within
certain limits you may transfer Account A value periodically among Account A
subaccounts.

THE FUNDS AVAILABLE FOR INVESTMENT

<TABLE>
<S> <C>
- --ARROW-- FUNDS OF MERRILL LYNCH VARIABLE SERIES --ARROW-- FUNDS OF ALLIANCE VARIABLE PRODUCTS
FUNDS SERIES FUND
--ARROW-- Domestic Money Market Fund --ARROW-- Premier Growth Portfolio
--ARROW-- Prime Bond Fund --ARROW-- Quasar Portfolio
--ARROW-- High Current Income Fund --ARROW-- FUNDS OF AIM VARIABLE INSURANCE FUNDS,
INC.
--ARROW-- Quality Equity Fund --ARROW-- AIM V.I. Capital Appreciation Fund
--ARROW-- Special Value Focus Fund --ARROW-- AIM V.I. Value Fund
--ARROW-- Global Strategy Focus Fund --ARROW-- FUNDS OF MFS-REGISTERED TRADEMARK-
VARIABLE INSURANCE TRUST-SM-
--ARROW-- Basic Value Focus Fund --ARROW-- Emerging Growth Series
--ARROW-- Capital Focus Fund --ARROW-- Research Series
--ARROW-- Global Growth Focus Fund --ARROW-- FUNDS OF HOTCHKIS AND WILEY VARIABLE
TRUST
--ARROW-- Government Bond Fund --ARROW-- International VIP Portfolio
--ARROW-- Developing Capital Markets Focus --ARROW-- TRUSTS OF DEFINED ASSETS FUNDS
Fund
--ARROW-- Index 500 Fund --ARROW-- 1999 ML Select Ten V.I. Trust
--ARROW-- Reserve Assets Fund
</TABLE>

12
<PAGE>
We have closed to new purchase payments and to transfers the subaccounts
investing in the Natural Resources Focus Fund, American Balanced Fund, Global
Bond Focus Fund, International Equity Focus Fund, and the Global Utility Focus
Fund of the Merrill Lynch Variable Series Funds.

If you want detailed information about the investment objectives of the Funds,
see "Investments of the Accounts" and the attached prospectuses for the Funds.

FEES AND CHARGES

MORTALITY & EXPENSE RISK CHARGE

We impose a mortality and expense risk charge to cover certain risks. The
mortality portion compensates us for mortality risks we assume for the annuity
payment and death benefit guarantees made under the Contract. The expense
portion compensates us for expense risks we assume if the contract maintenance
and administration charges aren't enough to cover all Contract maintenance and
administration expenses. The charge equals 1.25% annually for Account A and
0.65% annually for Account B. We deduct it daily from the net asset value of the
Accounts. This charge ends on the Annuity Date.

SALES CHARGE

We may impose a deferred sales charge only if you withdraw money from Account A.
The maximum charge is 7% of premium withdrawn during the first year after that
premium is paid. The charges decrease by 1% each year. After year seven, it's
0%. We don't impose a sales charge on withdrawals or surrenders from Account B.

ADMINISTRATION CHARGE

We charge 0.10% annually to reimburse us for costs associated with the
establishment and administration of the Contract. We deduct this charge daily
only from the net asset value of Account A. We don't impose the charge on the
assets of Account B. This charge ends on the Annuity Date.

CONTRACT MAINTENANCE CHARGE

We charge $40 a year to reimburse us for expenses related to maintenance of the
Contract. We waive this charge on all Contracts with a contract value of at
least $50,000 and in certain circumstances where you own at least three
Contracts. The charge ends after the Annuity Date.

PREMIUM TAXES

On the Annuity Date we deduct a charge for any premium taxes imposed by a state
or local government. Premium tax rates vary from jurisdiction to jurisdiction.
They currently range from 0% to 5%.

You can find detailed information about fees and charges imposed on the Contract
under "Charges and Deductions".

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<PAGE>
TRANSFERS

TRANSFERS AMONG ACCOUNT A SUBACCOUNTS

Before the Annuity Date, you may transfer all or part of your Account A value
among the subaccounts up to six times per contract year without charge. However,
the Natural Resources Focus Subaccount, American Balanced Subaccount, Global
Bond Focus Subaccount, International Equity Focus Subaccount, and Global Utility
Focus Subaccount are closed to transfers.

You may make more than six transfers among available subaccounts, but we may
charge $25 per extra transfer. You may elect a Dollar Cost Averaging feature so
that money you've put in the Domestic Money Market Subaccount is systematically
transferred monthly into other Account A subaccounts you select without charge.
In addition, through participation in the Merrill Lynch RPA-SM- program, you may
have your Account A values invested under an investment program based on your
investment profile (See "Transfers", "Dollar Cost Averaging", and "Merrill Lynch
Retirement Plus Advisor-SM-").

TRANSFERS FROM ACCOUNT A TO ACCOUNT B

Once each contract year, you may transfer from Account A to Account B an amount
equal to any gain in account value since the date of issue and/or any premium no
longer subject to a sales charge. Where permitted by state regulation, once each
contract year, you may transfer from Account A to Account B all or a portion of
the greater of that amount or 10% of premiums still subject to a sales charge
(minus any premium already withdrawn or transferred). Additionally, where
permitted by state regulation, we allow periodic transfers of all or a portion
of the greater amount, determined at the time of each periodic transfer, on a
monthly, quarterly, semi-annual or annual basis.

This is the only amount you may transfer from Account A to Account B during a
contract year. We impose no charge on this transfer. We don't permit transfers
from Account B to Account A.

WITHDRAWALS

You can withdraw money from the Contract six times each contract year.
Withdrawals from Account A are generally subject to a sales charge (see "Sales
Charge"). However, we won't impose a sales charge to the first withdrawal in any
contract year of gain out of Account A and/or any premium no longer subject to a
sales charge. Where permitted by state regulation, we won't impose a sales
charge on that portion of the first withdrawal from Account A in any contract
year that does not exceed the greater of:

(1) any gain in account value and/or any premium not subject to a sales
charge; and
(2) 10% of premiums subject to a sales charge (minus any of that premium
already withdrawn or transferred out of Account A).

Additionally, where permitted by state regulation, you may elect for the amount
withdrawn to be paid on a monthly, quarterly, semi-annual or annual basis.

We don't impose a sales charge on withdrawals from Account B.

In addition to the six withdrawals permitted each contract year, you may
withdraw the value in Account B automatically on a monthly, quarterly,
semi-annual, or annual basis. These automatic withdrawals are not subject to any
sales charge (see "Withdrawals and Surrenders").

14
<PAGE>
A withdrawal may have adverse tax consequences (see "Federal Income Taxes").

DEATH BENEFIT

Regardless of investment experience, the Contract provides a guaranteed minimum
death benefit if the contract owner dies before the annuity date.

Depending on state approval, one of two kinds of death benefit applies to your
contract -- a Rising Floor Death Benefit or a Combination Rising Floor/Step-Up
Death Benefit. The Rising Floor Death Benefit is equal to the greater of
premiums paid into Account A compounded at 5% plus the value of Account B, or
the contract value at date of death. The Combination Rising Floor/Step-Up Death
Benefit is equal to the greatest of premiums paid into Account A compounded at
5% plus the value of Account B, the greatest 7th anniversary value plus the
value of Account B, or the contract value as of the date of death. The death
benefit is adjusted for certain contract transactions. Certain restrictions
apply. (See "Death Benefit" for more information.)

ANNUITY PAYMENTS

Annuity payments begin on the Annuity Date and are made under the annuity option
you select. When you buy the Contract, the annuity date for nonqualified
Contracts is the annuitant's 85th birthday. The Annuity Date for IRA Contracts
or Tax Sheltered Annuity Contracts is when the owner/annuitant reaches age
70 1/2.

Details about the annuity options available under the Contract can be found
under "Annuity Options".

TEN DAY REVIEW

When you receive the Contract, read it carefully to make sure it's what you
want. Generally, within 10 days after you receive the Contract, you may return
it for a refund. Some states allow a longer period of time to return the
Contract. To get a refund, return the Contract to the Service Center or to the
Financial Consultant who sold it. We will then refund the greater of all
premiums paid into the Contract or the contract value as of the date you return
the Contract. For contracts issued in Pennsylvania, we'll refund the contract
value as of the date you return the Contract.

YIELDS AND TOTAL RETURNS

From time to time, we may advertise yields, effective yields, and total returns
for the subaccounts. THESE FIGURES ARE BASED ON HISTORICAL EARNINGS AND DO NOT
INDICATE OR PROJECT FUTURE PERFORMANCE. We may also advertise performance of the
subaccounts in comparison to certain performance rankings and indices. More
detailed information on the calculation of performance information, as well as
comparisons with unmanaged market indices, appears in the Statement of
Additional Information.

Effective yields and total returns for a subaccount are based on the investment
performance of the corresponding Fund. Fund expenses influence Fund performance.

The yields of the Domestic Money Market Subaccount and the Reserve Assets
Subaccount refer to the annualized income generated by an investment in each
subaccount over a specified 7-day period. The yield is calculated by assuming
that the income generated for that 7-day period is generated each 7-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 is assumed to be reinvested. The effective yield will be
slightly higher than the yield because of the compounding effect of this assumed
reinvestment.

15
<PAGE>
The yield of an Account A subaccount (besides the Domestic Money Market
Subaccount) refers to the annualized income generated by an investment in the
subaccount over a specified 30-day or one month period. The yield is calculated
by assuming the income generated by the investment during that 30-day or
one-month period is generated each period over 12 months and is shown as a
percentage of the investment.

The average annual total return of a subaccount refers to return quotations
assuming an investment has been held in each subaccount for 1, 5 and 10 years,
or for a shorter period, if applicable. The average annual total returns
represent the average compounded rates of return that would cause an initial
investment of $1,000 to equal the value of that investment at the end of each
period. These percentages include any sales charge that would apply if you
terminated the Contract at the end of each period indicated, but exclude any
deductions for premium taxes.

We may also advertise or present yield or total return performance information
computed on different bases, but this information will always be accompanied by
average annual total returns for the corresponding subaccounts. For example, we
may present total return information that doesn't reflect a deduction for the
sales charge. This presentation assumes that an investment in the Contract will
extend beyond the period when the sales charge applies, consistent with the long
term investment and retirement objectives of the Contract. We may also advertise
total return performance information for the Funds. We may also present total
return performance information for a subaccount for periods before the date the
subaccount commenced operations. If we do, we'll base performance of the
corresponding Fund as if the subaccount existed for the same periods as those
indicated for the corresponding Fund, with a level of fees and charges equal to
those currently imposed under the Contracts. We may also present total
performance information for a hypothetical Contract assuming allocation of the
initial premium to more than one subaccount or assuming monthly transfers from
the Domestic Money Market Subaccount to designated subaccounts under a dollar
cost averaging program. This information will reflect the performance of the
affected subaccounts for the duration of the allocation under the hypothetical
Contract. It will also reflect the deduction of charges described above except
for the sales charge. This information may also be compared to various indices.

Advertising and sales literature for the Contracts may also compare the
performance of the subaccounts and Funds to the performance of other variable
annuity issuers in general or to the performance of particular types of variable
annuities investing in mutual funds, with investment objectives similar to each
of the Funds corresponding to the subaccounts.

Performance information may also be based on rankings by services which monitor
and rank the performance of variable annuity issuers in each of the major
categories of investment objectives on an industry-wide basis. Ranking services
we may use as sources of performance comparison are Lipper, VARDS,
CDA/Weisenberger, Morningstar, MICROPAL, and Investment Company Data, Inc.

Advertising and sales literature for the Contracts may also compare the
performance of the subaccounts to the Standard & Poor's Index of 500 Common
Stocks, the Morgan Stanley EAFE Index, the Russell 2000 Index and the Dow Jones
Indices, all widely used measures of stock market performance. These unmanaged
indices assume the reinvestment of dividends, but do not reflect any "deduction"
for the expense of operating or managing an investment portfolio. Other sources
of performance comparison that we may use are Chase Investment Performance
Digest, Money, Forbes, Fortune, Business Week, Financial Services Weekly,
Kiplinger Personal Finance, Wall Street Journal, USA Today, Barrons, U.S. News &
World Report, Strategic Insight, Donaghues, Investors Business Daily, and
Ibbotson Associates.

Advertising and sales literature for the Contracts may also contain information
on the effect of tax deferred compounding on subaccount investment returns, or
returns in general. The tax deferral may be illustrated by graphs and charts and
may include a comparison at various points in time of the return from an
investment in

16
<PAGE>
a Contract (or returns in general) on a tax-deferred basis (assuming one or more
tax rates) with the return on a currently taxable basis.

MERRILL LYNCH LIFE INSURANCE COMPANY

We are a stock life insurance company organized under the laws of the State of
Washington on January 27, 1986. We changed our corporate location to Arkansas on
August 31, 1991. We are an indirect wholly-owned subsidiary of Merrill Lynch &
Co., Inc., a corporation whose common stock is traded on the New York Stock
Exchange.

Our financial statements can be found in the Statement of Additional
Information. You should consider them only in the context of our ability to meet
any Contract obligation.

THE ACCOUNTS

You may direct premiums into one or both of two segregated investment accounts
available to the Contract (the "Accounts"). The Merrill Lynch Life Variable
Annuity Separate Account A ("Account A") offers through its subaccounts a
variety of investment options. Each option has a different investment objective.
The Merrill Lynch Life Variable Annuity Separate Account B ("Account B") offers
a money market investment through its subaccount.

We established the Accounts on August 6, 1991. They are governed by Arkansas
law, our state of domicile. They are registered with the Securities and Exchange
Commission as unit investment trusts under the Investment Company Act of 1940.
Each account meets the definition of a separate account under the federal
securities laws. The Accounts' assets are SEGREGATED from all of our other
assets.

SEGREGATION OF ACCOUNT ASSETS

Obligations to contract owners and beneficiaries that arise under the Contract
are our obligations. We own all of the assets in the Accounts. Each Account's
income, gains, and losses, whether or not realized, derived from Account assets
are credited to or charged against the Account without regard to our other
income, gains or losses. The assets in each Account will always be at least
equal to the reserves and other liabilities of the Account. If an Account's
assets exceed the required reserves and other Contract liabilities, we may
transfer the excess to our general account. Under Arkansas insurance law the
assets in each Account, to the extent of its reserves and liabilities, may not
be charged with liabilities arising out of any other business we conduct nor may
the assets of either Account be charged with any liabilities of the other
Account.

NUMBER OF SUBACCOUNTS; SUBACCOUNT INVESTMENTS

There are 20 subaccounts currently available through Account A and one
subaccount currently available through Account B. Five subaccounts previously
available through Account A (the Natural Resources Focus Subaccount, the
American Balanced Subaccount, the Global Bond Focus Subaccount, the
International Equity Focus Subaccount and the Global Utility Focus Subaccount)
are closed to allocations of premiums and contract value. All subaccounts invest
in a corresponding portfolio of the Merrill Lynch Variable Series Funds, Inc.
(the "Merrill Variable Funds"); the AIM Variable Insurance Funds, Inc. (the "AIM
V.I. Funds"); the Alliance Variable Products Series Fund, Inc. (the "Alliance
Fund"); the MFS-Registered Trademark- Variable Insurance Trust-SM- (the "MFS
Trust"); the Hotchkis and Wiley Variable Trust (the "Hotchkis and Wiley Trust");
or the Defined Asset Funds. Additional subaccounts may be added or closed in the
future. On or about June 18, 1999, an additional subaccount corresponding to the
Mercury V.I. U.S. Large Cap Fund of the Mercury Asset Management V.I. Funds,
Inc. becomes available for allocations of premiums and contract value.

17
<PAGE>
Although the investment objectives and policies of certain Funds are similar to
the investment objectives and policies of other portfolios that may be managed
or sponsored by the same investment adviser, manager, or sponsor, nevertheless,
we do not represent or assure that the investment results will be comparable to
any other portfolio, even where the investment advisors or manager is the same.
Differences in portfolio size, actual investments held, fund expenses, and other
factors all contribute to differences in fund performance. For all of these
reasons, you should expect investment results to differ. In particular, certain
funds available only through the Contract have names similar to funds not
available through the Contract. The performance of a fund not available through
the Contract should not be indicative of performance of the similarly named fund
available through the Contract.

INVESTMENTS OF THE ACCOUNTS

GENERAL INFORMATION AND INVESTMENT RISKS

Information about investment objectives, management, policies, restrictions,
expenses and all other aspects of fund operations can be found in the Fund's
prospectus and Statement of Additional Information. Fund shares are currently
sold to our separate accounts as well as separate accounts of ML Life Insurance
Company of New York (an indirect wholly owned subsidiary of Merrill Lynch & Co.,
Inc.), and insurance companies not affiliated with us to fund benefits under
certain variable annuity and variable life insurance contracts. Shares of these
funds may be offered in the future to certain pension or retirement plans.

Generally, you should consider the funds as long-term investments and vehicles
for diversification, but not as a balanced investment program. Many of these
funds may not be appropriate as the exclusive investment to fund a Contract for
all contract owners. There is no guarantee that any fund will be able to meet
its investment objectives. Meeting these objectives depends upon future economic
conditions and upon how well fund management anticipates changes in economic
conditions.

MERRILL LYNCH VARIABLE SERIES FUNDS, INC.

The Merrill Lynch Variable Series Funds, Inc. ("Merrill Variable Funds") is
registered with the Securities and Exchange Commission as an open-end management
investment company. It currently offers the Accounts Class A shares of 18 of its
separate investment mutual fund portfolios. The Reserve Assets Fund is available
only to Account B.

Merrill Lynch Asset Management, L.P. ("MLAM") is the investment adviser to the
Merrill Variable Funds. MLAM, together with its affiliates, Fund Asset
Management, L.P., Mercury Asset Management International Ltd., and Hotchkis and
Wiley, is a worldwide mutual fund leader, and has a total of $501.68 billion in
investment company and other portfolio assets under management as of the end of
February 1999. It is registered as an investment adviser under the Investment
Advisers Act of 1940. MLAM is an indirect subsidiary of Merrill Lynch & Co.,
Inc. MLAM's principal business address is 800 Scudders Mill Road, Plainsboro,
New Jersey 08536. As the investment adviser, it is paid fees by these Funds for
its services. The fees charged to each of these Funds are set forth in the
summary below.

MLAM has entered into an agreement with Merrill Lynch Insurance Group, Inc.
("MLIG"), an affiliate of ours, under which MLIG provides administration
services for the Funds of Merrill Variable Funds used with the Contracts and
other variable life insurance and variable annuity contracts we issue. Under
this agreement, MLAM compensates MLIG in an amount equal to a portion of the
annual gross investment advisory fees paid by these Funds to MLAM attributable
to contracts we issue. MLAM and Merrill Lynch Life Agency, Inc. have entered
into a Reimbursement Agreement that limits the operating expenses paid by each
Fund of the Merrill Variable Funds in a given year to 1.25% of its average net
assets. (see "Selling the Contract")

18
<PAGE>
Details about these Funds, including their investment objectives, management,
policies, restrictions, expenses and risks, and all other aspects of these
Funds' operation can be found in the attached prospectus for the Merrill
Variable Funds and in their Statement of Additional Information. Read these
carefully before investing. As described in the prospectus for Merrill Variable
Funds, many of these Funds should be considered a long-term investment and a
vehicle for diversification, and not as a balanced investment program. Such
Funds may not be appropriate as the exclusive investment to fund a Contract for
all contract owners. The Merrill Variable Funds prospectus also describes
certain additional risks, including investing on an international basis or in
foreign securities and investing in lower rated or unrated fixed income
securities. There is no guarantee that any Fund will be able to meet its
investment objective. Meeting the objectives depends upon future economic
conditions and upon how well these Funds' management anticipates changes in
those economic conditions.

DOMESTIC MONEY MARKET FUND. This Fund seeks to preserve capital, maintain
liquidity, and achieve the highest possible current income consistent with the
foregoing objectives by investing in short-term domestic money market
securities. The Fund invests in short-term United States government securities;
United States government agency securities; bank certificates of deposit and
bankers' acceptances; short-term debt securities such as commercial paper and
variable amount master demand notes; repurchase agreements and other domestic
money market instruments. MLAM receives an advisory fee from the Fund at the
annual rate of 0.50% of the average daily net assets of the Fund.

PRIME BOND FUND. This Fund seeks to obtain as high a level of current income as
is consistent with the investment policies of the Fund and with prudent
investment management. Secondarily, the Fund seeks capital appreciation when
consistent with the foregoing objective. The Fund invests primarily in long-term
corporate bonds rated in the top three ratings categories by Moody's Investors
Service, Inc. ("Moody's") or Standard & Poor's Ratings Group ("Standard &
Poor's"). MLAM receives an advisory fee from the Fund at the annual rate of
0.50% of the first $250 million of the combined average daily nets assets of the
Fund and High Current Income Fund; 0.45% of the next $250 million; 0.40% of the
next $250 million; and 0.35% of the combined average daily net assets, in excess
of $750 million. The reduction of the advisory fee applicable to the Fund is
determined on a uniform percentage basis as described in the Statement of
Additional Information for the Merrill Variable Funds.

HIGH CURRENT INCOME FUND. This Fund seeks to obtain the highest level of current
income as is consistent with the investment policies of the Fund and with
prudent investment management. Secondarily, the Fund seeks capital appreciation
to the extent consistent with the foregoing objective. The Fund invests
principally in fixed-income securities that are rated in the lower rating
categories of the established rating services or in unrated securities of
comparable quality (including securities commonly known as "junk bonds").
Investment in such securities entails relatively greater risk of loss of income
or principal. In an effort to minimize risk, the Fund will diversify its
holdings among many issuers. However, there can be no assurance that
diversification will protect the Fund from widespread defaults during periods of
sustained economic downturn. MLAM receives an advisory fee from the Fund at the
annual rate of 0.55% of the first $250 million of the combined average daily net
assets of the Fund and Prime Bond Fund; 0.50% of the next $250 million; 0.45% of
the next $250 million; and 0.40% of the combined average daily net assets in
excess of $750 million. The reduction of the advisory fee applicable to the Fund
is determined on a uniform percentage basis as described in the Statement of
Additional Information for the Merrill Variable Funds.

QUALITY EQUITY FUND. This Fund seeks to achieve the highest total investment
return consistent with prudent risk. The Fund employs a fully managed investment
policy utilizing equity securities, primarily common stocks of
large-capitalization companies, as well as investment grade debt and convertible
securities. Management of the Fund will shift the emphasis among investment
alternatives for capital growth, capital stability, and income as market trends
change. MLAM receives an advisory fee from the Fund at the annual rate of 0.50%
of the first $250 million of average daily net assets; 0.45% of the next $250
million; 0.425% of the next $100 million; and 0.40% of the average daily net
assets in excess of $400 million.

19
<PAGE>
SPECIAL VALUE FOCUS FUND (FORMERLY, THE EQUITY GROWTH FUND). This Fund seeks
long term growth of capital by investing in a diversified portfolio of
securities, primarily common stocks, of relatively small companies that
management of the Merrill Variable Funds believes have special investment value,
and of emerging growth companies regardless of size. Companies are selected by
management on the basis of their long-term potential for expanding their size
and profitability or for gaining increased market recognition for their
securities. Current income is not a factor in the selection of securities. MLAM
receives an advisory fee from the Fund at the annual rate of 0.75% of the
average daily net assets of the Fund. This is a higher fee than that of many
other mutual funds, but management of the Fund believes it is justified by the
high degree of care that must be given to the initial selection and continuous
supervision of the types of portfolio securities in which the Fund invests.

NATURAL RESOURCES FOCUS FUND. This Fund seeks to achieve long-term growth of
capital and protect the purchasing power of capital by investing primarily in
equity securities of domestic and foreign companies with substantial natural
resource assets. MLAM receives an advisory fee from the Fund at the annual rate
of 0.65% of the average daily net assets of the Fund.

We reserve the right to suspend the sale of units of the Natural Resources Focus
Subaccount in response to conditions in the securities markets or otherwise.

The subaccount corresponding to this Fund was closed to allocations of premiums
and contract value following the close of business on December 6, 1996.

AMERICAN BALANCED FUND. This Fund seeks a level of current income and a degree
of stability of principal not normally available from an investment solely in
equity securities and the opportunity for capital appreciation greater than is
normally available from an investment solely in debt securities by investing in
a balanced portfolio of fixed income and equity securities. MLAM receives an
advisory fee from the Fund at the annual rate of 0.55% of the average daily net
assets of the Fund.

The subaccount corresponding to this Fund was closed to allocations of premiums
and contract value following the close of business on December 6, 1996.

GLOBAL STRATEGY FOCUS FUND. This Fund seeks high total investment return by
investing primarily in a portfolio of equity and fixed-income securities,
including convertible securities, of U.S. and foreign issuers. The Fund seeks to
achieve its objective by investing primarily in securities of issuers located in
the United States, Canada, Western Europe, the Far East and Latin America. MLAM
receives an advisory fee from the Fund at the annual rate of 0.65% of the
average daily net assets of the Fund.

Effective following the close of business on December 6, 1996, the Flexible
Strategy Fund was merged with and into the Global Strategy Focus Fund.

BASIC VALUE FOCUS FUND. This Fund seeks capital appreciation and, secondarily,
income by investing in securities, primarily equities, that management of the
Fund believes are undervalued and therefore represent basic investment value.
The Fund seeks special opportunities in securities that are selling at a
discount, either from book value or historical price-earnings ratios, or seem
capable of recovering from temporarily out-of-favor considerations. Particular
emphasis is placed on securities which provide an above-average dividend return
and sell at a below-average price/earnings ratio. MLAM receives an advisory fee
from the Fund at the annual rate of 0.60% of the average daily net assets of the
Fund.

GLOBAL BOND FOCUS FUND (FORMERLY, THE WORLD INCOME FOCUS FUND). This Fund seeks
to provide high total investment return by investing in a global portfolio of
fixed-income securities denominated in various currencies, including
multinational currency units. The Fund may invest in fixed-income securities
that have a

20
<PAGE>
credit rating of A or better by Standard & Poor's or by Moody's or commercial
paper rated A-1 by Standard & Poor's or Prime-1 by Moody's or obligations that
MLAM has determined to be of similar creditworthiness. MLAM receives an advisory
fee from the Fund at the annual rate of 0.60% of the average daily net assets of
the Fund.

Effective following the close of business on December 6, 1996, the International
Bond Fund was merged with and into the Global Bond Focus Fund. The subaccount
corresponding to this Fund was closed to allocations of premiums and contract
value following the close of business on June 5, 1998.

GLOBAL UTILITY FOCUS FUND. This Fund seeks both capital appreciation and current
income through investment of at least 65% of its total assets in equity and debt
securities issued by domestic and foreign companies which are, in the opinion of
MLAM, primarily engaged in the ownership or operation of facilities used to
generate, transmit or distribute electricity, telecommunications, gas or water.
MLAM receives an advisory fee from the Fund at the annual rate of 0.60% of the
average daily net assets of the Fund.

The subaccount corresponding to this Fund was closed to allocations of premiums
and contract value following the close of business on December 6, 1996.

INTERNATIONAL EQUITY FOCUS FUND. This Fund seeks capital appreciation and,
secondarily, income by investing in a diversified portfolio of equity securities
of issuers located in countries other than the United States. Under normal
conditions, at least 65% of the Fund's net assets will be invested in such
equity securities and at least 65% of the Fund's total assets will be invested
in the securities of issuers from at least three different foreign countries.
MLAM receives an advisory fee from the Fund at the annual rate of 0.75% of the
average daily net assets of the Fund.

The subaccount corresponding to this Fund was closed to allocations of premiums
and contract value following the close of business on June 5, 1998.

GOVERNMENT BOND FUND (FORMERLY, THE INTERMEDIATE GOVERNMENT BOND FUND). This
Fund seeks the highest possible current income consistent with the protection of
capital afforded by investing in debt securities issued or guaranteed by the
United States Government, its agencies or instrumentalities. MLAM receives an
advisory fee from the Fund at an annual rate of 0.50% of the average daily net
assets of the Fund.

DEVELOPING CAPITAL MARKETS FOCUS FUND. This Fund seeks long-term capital
appreciation by investing in securities, principally equities, of issuers in
countries having smaller capital markets. For purposes of its investment
objective, the Fund considers countries having smaller capital markets to be all
countries other than the four countries having the largest equity market
capitalizations. The Developing Capital Markets Focus Fund has established no
rating criteria for the debt securities in which it may invest, and will rely on
the investment adviser's judgment in evaluating the creditworthiness of an
issuer of such securities. In an effort to minimize the risk, the Fund will
diversify its holdings among many issuers. However, there can be no assurance
that diversification will protect the Fund from widespread defaults during
periods of sustained economic downturn. Investment in the Developing Capital
Markets Focus Fund entails relatively greater risk of loss of income or
principal. MLAM receives an advisory fee from the Fund at an annual rate of
1.00% of the average daily net assets of the Fund.

RESERVE ASSETS FUND. This Fund seeks to preserve capital, maintain liquidity,
and achieve the highest possible current income consistent with the foregoing
objectives by investing in short-term money market securities. The Fund invests
in short-term United States government securities; U.S. government agency
securities; bank certificates of deposit and bankers' acceptances; short-term
debt securities such as commercial paper and variable amount master demand
notes; repurchase agreements and other money market instruments. MLAM receives
an advisory fee from the Fund at the annual rate of 0. 50% of the first $500
million of the Fund's

21
<PAGE>
average daily net assets; 0.425% of the next $250 million; 0.375% of the next
$250 million; 0.35% of the next $500 million; 0.325% of the next $500 million;
0.30% of the next $500 million; and 0.275% of the average daily net assets in
excess of $2.5 billion.

INDEX 500 FUND. This Fund seeks investment results that, before expenses,
correspond to the aggregate price and yield performance of the Standard & Poor's
500 Composite Stock Price Index (the "S&P 500 Index"). MLAM receives an advisory
fee from the Fund at an annual rate of 0.30% of the Fund's average daily net
assets.

CAPITAL FOCUS FUND. This Fund seeks to achieve the highest total investment
return consistent with prudent risk. To do this, management of the Fund uses a
flexible "fully managed" investment policy that shifts the emphasis among
equity, debt (including money market), and convertible securities. MLAM receives
an advisory fee from the Fund at the annual rate of 0.60% of the Fund's average
daily net assets.

GLOBAL GROWTH FOCUS FUND. This Fund seeks long-term growth of capital. The Fund
invests in a diversified portfolio of equity securities of issuers located in
various countries and the United States, placing particular emphasis on
companies that have exhibited above-average growth rates in earnings. Because a
substantial portion of the Fund's assets may be invested on an international
basis, contract owners should be aware of certain risks, such as fluctuations in
foreign exchange rates, future political and economic developments, different
legal systems, and the possible imposition of exchange controls or other foreign
government laws or restrictions. An investment in the Fund may be appropriate
only for long-term investors who can assume the risk of loss of principal, and
do not seek current income. MLAM receives an advisory fee from the Fund at an
annual rate of 0.75% of the Fund's average daily net assets.

DEFINED ASSET FUNDS--SELECT TEN TRUST

Defined Asset Funds is America's oldest and largest family of unit investment
trusts, with over $160 billion sponsored over the last 28 years. Each Defined
Asset Fund is a portfolio of preselected securities. The portfolio is divided
into "units" representing equal shares of the underlying assets ("Trust Units").
Each Trust Unit receives an equal share of income and principal distributions.
Units are redeemable securities.

Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") serves as sponsor
of Defined Asset Funds. For its services as sponsor, MLPF&S receives a deferred
transaction fee, accrued daily at an annual rate of $5.30 per 1,000 Trust Units
(about 0.47%) for creating and maintaining the Select Ten Trust. Half of this
fee is paid to MLIG to compensate it for its administrative services in making
Trust Units available for investment by Account A. The Select Ten Trust is also
subject to additional operating expenses, summarized in the Fee Table on page 8
and described more fully in the attached prospectus for the Select Ten Trust.

The Select Ten Trust, one portfolio of Defined Asset Funds, Equity Investor
Fund, buys approximately equal amounts of the ten highest dividend-yielding
common stocks of the 30 stocks in the Dow Jones Industrial Average* ("DJIA")
(determined three business days prior to May 1, 1999) and holds them for about
one year. MLPF&S anticipates that the Select Ten Trust portfolio will remain
unchanged over its one year life despite any adverse developments concerning an
issuer, an industry, or the economy or stock market generally. AT THE END OF THE
YEAR (ON OR ABOUT MAY 1, 2000), THE SELECT TEN TRUST WILL BE LIQUIDATED. SUBJECT
TO OUR RECEIVING AN SEC EXEMPTIVE ORDER (WHICH THERE CAN BE NO ASSURANCE WILL BE
GRANTED), WE CURRENTLY ANTICIPATE THAT THE SAME INVESTMENT STRATEGY WILL BE
REAPPLIED TO THE DJIA TO SELECT (AS OF THREE BUSINESS DAYS PRIOR TO MAY 1, 2000)
A NEW STOCK PORTFOLIO FOR A SUCCESSOR TRUST. At that time, it is contemplated
that Trust Units will be redeemed,

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

* The name "Dow Jones Industrial Average" is the property of Dow Jones &
Company, Inc., which is not affiliated with MLPF&S, has not participated in
any way in the creation of the Select Ten Trust, or in the selection of
stocks included in the Select Ten Trust, and has not reviewed or approved
any information included in this prospectus.

22
<PAGE>
and the proceeds will be immediately invested in a new trust. Brokerage
commissions in selling and purchasing stocks for the rollover trust will be
borne indirectly by contract owners.

The 1999 Select Ten Trust will terminate on or about May 1, 2000. From that
date, for thirty days after the Rollover Date, you will be permitted to make one
transfer from the Select Ten subaccount of all account value in the Select Ten
subaccount to other subaccounts of Account A. This special transfer won't count
toward the six transfers among subaccounts of Account A that may be made without
charge during a contract year. In addition, we won't exercise our right to
impose additional conditions or charges on transfers during this thirty day time
period. See "Transfers".

MLPF&S RESERVES THE RIGHT TO DEPART FROM THE SELECT TEN INVESTMENT STRATEGY
DESCRIBED ABOVE IN ORDER TO MAINTAIN THE SELECT TEN TRUST'S COMPLIANCE WITH THE
DIVERSIFICATION REQUIREMENTS OF SECTION 817(H) OF THE INTERNAL REVENUE CODE AND
REGULATIONS THEREUNDER.

WE RESERVE THE RIGHT TO CEASE OFFERING THE SELECT TEN SUBACCOUNT AT ANY TIME.
THERE CAN BE NO ASSURANCE THAT DEFINED ASSET FUNDS OR MLPF&S WILL CONTINUE TO
MAKE TRUSTS AVAILABLE IN 2000, OR THEREAFTER.

AIM VARIABLE INSURANCE FUNDS, INC.

AIM Variable Insurance Funds, Inc. ("AIM V.I. Funds") is registered with the
Securities and Exchange Commission as an open-end, series, management investment
company. It currently offers Account A two of its separate investment
portfolios.

AIM Advisors, Inc. ("AIM"), 11 Greenway Plaza, Suite 100, Houston, Texas
77046-1173, serves as the investment adviser to each of the Funds of AIM V.I.
Funds. AIM has acted as an investment adviser since its organization in 1976.
Today AIM, together with its subsidiaries, advises or manages over 110
investment portfolios, including the Funds, encompassing a broad range of
investment objectives. As the investment adviser, AIM is paid fees by these
Funds for its services. The fees charged to each of these Funds are set forth in
the summary of investment objectives below.

AIM has entered into an agreement with us with respect to administrative
services for these Funds in connection with the Contracts. Under this agreement,
AIM pays us compensation in an amount equal to a percentage of the average net
assets of these Funds attributable to the Contracts.

AIM V.I. CAPITAL APPRECIATION FUND. This Fund seeks growth of capital through
investment in common stocks, with emphasis on medium and small-sized growth
companies. AIM will be particularly interested in companies that are likely to
benefit from new or innovative products, services or processes as well as those
that have experienced above-average, long-term growth in earnings and have
excellent prospects for future growth. AIM receives an advisory fee from the
Fund at an annual rate of 0.65% of the first $250 million of the Fund's average
daily net assets and 0.60% of the Fund's average daily net assets in excess of
$250 million.

AIM V.I. VALUE FUND. This Fund seeks to achieve long-term growth of capital by
investing primarily in equity securities judged by AIM to be undervalued
relative to AIM's appraisal of the current or projected earnings of the
companies issuing the securities, or relative to current market values of assets
owned by the companies issuing the securities or relative to the equity market
generally. Income is a secondary objective. AIM receives an advisory fee from
the Fund at an annual rate of 0.65% of the first $250 million of the Fund's
average daily net assets and 0.60% of the Fund's average daily net assets in
excess of $250 million.

23
<PAGE>
ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.

Alliance Variable Products Series Fund, Inc. ("Alliance Fund") is registered
with the Securities and Exchange Commission as an open-end management investment
company. It currently offers Account A two of its separate investment
portfolios. Alliance Capital Management L.P. ("Alliance"), a Delaware limited
partnership with principal offices at 1345 Avenue of the Americas, New York, New
York 10105 serves as the investment adviser to each Fund of the Alliance Fund.
Alliance Capital Management Corporation ("ACMC"), the sole general partner of
Alliance, is an indirect wholly owned subsidiary of The Equitable Life Assurance
Society of the United States, which is in turn a wholly owned subsidiary of the
Equitable Companies Incorporated, a holding company which is controlled by AXA,
a French insurance holding company. As the investment adviser, Alliance is paid
fees by the Funds for its services. The fees charged to the Funds are set forth
in the summary of investment objective below.

Alliance Fund Distributors, Inc. ("AFD"), an affiliate of Alliance, has entered
into an agreement with us with respect to administrative services for these
Funds in connection with the Contracts. Under this agreement, AFD pays us
compensation in an amount equal to a percentage of the average net assets of
these Funds attributable to the Contracts.

ALLIANCE PREMIER GROWTH PORTFOLIO. This Fund seeks growth of capital by pursuing
aggressive investment policies. Since investments will be made based upon their
potential for capital appreciation, current income is incidental to the
objective of capital growth. Because of the market risks inherent in any
investment, the selection of securities on the basis of their appreciation
possibilities cannot ensure against possible loss in value, and there is no
assurance that the Fund's investment objective will be met. This Fund is
therefore not intended for contract owners whose principal objective is assured
income and conservation of capital. Alliance receives an advisory fee from the
Fund at an annual rate of 1.00% of the Fund's average daily net assets.

ALLIANCE QUASAR PORTFOLIO. This Fund seeks growth of capital by pursuing
aggressive investment policies. The Fund invests principally in a diversified
portfolio of equity securities of any company and industry and in any type of
security which is believed to offer possibilities for capital appreciation, and
invests only incidentally for current income. The selection of securities based
on the possibility of appreciation cannot prevent loss in value. Moreover,
because the Fund's investment policies are aggressive, an investment in the Fund
is risky and investors who want assured income or preservation of capital should
not invest in the Fund. Alliance receives an advisory fee from the Fund at an
annual rate of 1.00% of the Fund's average daily net assets. (See "Notes to Fee
Table" for a discussion of a reimbursement arrangement applicable to this Fund.)

MFS-REGISTERED TRADEMARK- VARIABLE INSURANCE TRUST-SM-

MFS-Registered Trademark- Variable Insurance Trust-SM- ("MFS Trust") is
registered with the Securities and Exchange Commission as an open-end management
investment company. It currently offers Account A two of its separate investment
portfolios.

Massachusetts Financial Services Company ("MFS"), a Delaware corporation, 500
Boylston Street, Boston, Massachusetts 02116, serves as the investment adviser
to each of the Funds of MFS Trust. MFS is a subsidiary of Sun Life of Canada
(U.S.) Financial Services Holdings, Inc., which, in turn, is a indirect wholly
owned subsidiary of Sun Life Assurance Company of Canada. As the investment
adviser, MFS is paid fees by each of these Funds for its services. The fees
charged to these Funds are set forth in the summary of investment objectives
below.

MFS has entered into an agreement with MLIG with respect to administrative
services for these Funds in connection with the Contracts and certain contracts
issued by ML Life Insurance Company of New York.

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<PAGE>
Under this agreement, MFS pays compensation to MLIG in an amount equal to a
percentage of the average net assets of these Funds attributable to such
contracts.

MFS EMERGING GROWTH SERIES. This series will seek long-term growth of capital.
The series invests, under normal market conditions, at least 65% of its total
assets in common stocks and related securities, such as preferred stocks,
convertible securities and depositary receipts for those securities, of emerging
growth companies. These companies are companies that the series' adviser
believes are either early in their life cycle but have the potential to become
major enterprises or are major enterprises whose rates of earnings growth are
expected to accelerate.

MFS RESEARCH SERIES. This series will seek to provide long-term growth of
capital and future income. The series invests, under normal market conditions,
at least 80% of its total assets in common stocks and related securities, such
as preferred stocks, convertible securities and depositary receipts. The series
focuses on companies that the series' adviser believes have favorable prospects
for long-term growth, attractive valuations based on current and expected
earnings or cash flow, dominant or growing market share and superior management.

HOTCHKIS AND WILEY VARIABLE TRUST

Hotchkis and Wiley Variable Trust ("Hotchkis and Wiley Trust"), a Massachusetts
business trust, is registered with the Securities and Exchange Commission as an
open-end management investment company. The Hotchkis and Wiley Trust is intended
to serve as the investment medium for variable annuity contracts and variable
life insurance policies to be offered by the separate accounts of certain
insurance companies.

Hotchkis and Wiley, 725 S. Figueroa Street, Suite 4000, Los Angeles, California
90017-5400, serves as the investment adviser to the Hotchkis and Wiley
International VIP Portfolio and generally administers the affairs of the
Hotchkis and Wiley Trust. Hotchkis and Wiley is a division of MLAM. As the
investment adviser, Hotchkis and Wiley is paid fees by the Fund for its
services. The fees charged to the Fund for advisory services are set forth in
the summary of investment objectives below.

Hotchkis and Wiley has entered into an agreement with MLIG with respect to
administrative services for the Hotchkis and Wiley Trust in connection with the
Contracts and certain Contracts issued by ML Life Insurance Company of New York.
Under this agreement, Hotchkis and Wiley pays compensation to MLIG in an amount
equal to a portion of the annual gross investment advisory fees paid by the
Hotchkis and Wiley International VIP Portfolio to Hotchkis and Wiley
attributable to such contracts.

HOTCHKIS AND WILEY INTERNATIONAL VIP PORTFOLIO. The Fund's investment objective
is to provide current income and long-term growth of income, accompanied by
growth of capital. The Fund invests at least 65% of its total assets in stocks
in at least ten foreign markets. Ordinarily, the Fund invests in stocks of
companies located in the developed foreign markets and invests at least 80% of
its total assets in stocks that pay dividends. It also may invest in stocks that
don't pay dividends or interest, but have growth potential unrecognized by the
market or changes in business or management that indicate growth potential. In
investing the Fund, Hotchkis and Wiley follows a VALUE style. This means that it
buys stocks that it believes are currently undervalued by the market and thus
have a lower price than their true worth. Typical VALUE characteristics include:

- low price-to-earnings ration relative to the market;

- high dividend yield relative to the market;

- low price-to-book value ratio relative to the market;

- financial strength.

25
<PAGE>
Stocks may be "undervalued" because they are part of an industry that is out of
favor with investors generally. Even in those industries, though, individual
companies may have high rates of growth of earnings and be financially sound. At
the same time, the price of their common stock may be depressed because
investors associate the companies with their industries. This value discipline
sometimes prevents investments in stocks that are in well-known indexes, like
the S&P 500 or similar large foreign indexes. Hotchkis and Wiley receives from
the Fund an advisory fee at an annual rate of 0.75% of the Fund's average daily
net assets.

MERCURY ASSET MANAGEMENT V.I. FUNDS, INC.

Mercury Asset Management V.I. Funds, Inc. ("Mercury V.I. Funds") is registered
with the Securities and Exchange Commission as an open-end management investment
company, and its adviser is Mercury Asset Management International Ltd. Class A
shares of one of its mutual fund portfolios, the Mercury V.I. U.S. Large Cap
Fund, becomes available through Account A on or about June 18, 1999. The
investment objective of the Mercury V.I. U.S. Large Cap Fund is described below.

Mercury Asset Management International Ltd. is located at 33 King William
Street, London EC4R 9AS, England. Its immediate parent is Mercury Asset
Management Group Ltd. a London-based holding company. The ultimate parent of
Mercury Asset Management Group Ltd. is Merrill Lynch & Co., Inc. The Mercury
V.I. U.S. Large Cap Fund, as part of its operating expenses, pays an investment
advisory fee to Mercury Asset Management International Ltd. set forth in the
summary of investment objective below.

Mercury Asset Management International Ltd. has entered into an agreement with
MLIG with respect to administrative services for the Mercury V.I. Funds in
connection with the Contracts and certain Contracts issued by ML Life Insurance
Company of New York. Under this agreement, Mercury Asset Management
International Ltd. pays compensation to MLIG in an amount equal to a portion of
the annual gross investment advisory fees paid by the Mercury V.I. U.S. Large
Cap Fund to Mercury Asset Management International Ltd. attributable to such
contracts.

MERCURY V.I. U.S. LARGE CAP FUND. This Fund's main goal is long-term capital
growth. The Fund invests primarily in a diversified portfolio of equity
securities of large cap companies (which are companies whose market
capitalization is at least $5 billion) located in the U.S. that Fund management
believes are undervalued or have good prospects for earnings growth. Generally,
the Fund will invest at least 65% of its total assets in these equity
securities. The Fund may also invest up to 10% of its assets in stocks of
companies located in Canada. The Mercury V.I. Funds incurs operating expenses
and pays a monthly advisory fee to Mercury Asset Management International Ltd.
at an annual rate of .65% of the average daily net assets of the Mecury V.I.
U.S. Large Cap Fund.

The Subaccount corresponding to this Fund becomes available for allocations of
premium payments and contract value on or about June 18, 1999.

PURCHASES AND REDEMPTIONS OF FUND SHARES; REINVESTMENT

The Accounts will purchase and redeem shares or Trust Units of the Funds at net
asset value to provide benefits under the Contract. Fund distributions to the
Accounts are automatically reinvested at net asset value in additional shares or
Trust Units of the Funds.

MATERIAL CONFLICTS, SUBSTITUTION OF INVESTMENTS AND CHANGES TO ACCOUNTS

It is conceivable that material conflicts could arise as a result of both
variable annuity and variable life insurance separate accounts investing in the
Funds. Although no material conflicts are foreseen, the

26
<PAGE>
participating insurance companies will monitor events in order to identify any
material conflicts between variable annuity and variable life insurance contract
owners to determine what action, if any, should be taken. Material conflicts
could result from such things as (1) changes in state insurance law, (2) changes
in federal income tax law or (3) differences between voting instructions given
by variable annuity and variable life insurance contract owners. If a conflict
occurs, we may be required to eliminate one or more subaccounts of Separate
Account A or Separate Account B or substitute a new subaccount. In responding to
any conflict, we will take the action we believe necessary to protect our
contract owners.

We may substitute a different investment option for any of the current Funds. We
can do this for both existing investments and the investment of future premiums.
However, before any such substitution, we would need the approval of the
Securities and Exchange Commission and applicable state insurance departments.
We will notify you of any substitutions.

We may also add new subaccounts to either Account, eliminate subaccounts in
either Account, deregister either or both of the Accounts under the Investment
Company Act of 1940 (the "1940 Act"), make any changes required by the 1940 Act,
operate either or both Accounts as a managed investment company under the 1940
Act or any other form permitted by law, transfer all or a portion of the assets
of a subaccount or account to another subaccount or account pursuant to a
combination or otherwise, and create new accounts. Before we make certain
changes we need approval of the Securities and Exchange Commission and
applicable state insurance departments. We will notify you of any changes.

CHARGES AND DEDUCTIONS

We deduct the charges described below to cover costs and expenses, services
provided, and risks assumed under the Contracts. The amount of a charge may not
necessarily correspond to the costs associated with providing the services or
benefits. For example, the sales charge may not fully cover all of the sales and
distribution expenses we actually incur, and we may use proceeds from other
charges, including the mortality and expense risk charge, in part to cover such
expenses.

MORTALITY AND EXPENSE RISK CHARGE

We impose a mortality and expense risk charge on the Accounts. It equals 1.25%
annually for Account A and 0.65% annually for Account B. We deduct it daily from
the net asset value of the Accounts. Of this amount, 0.75% annually for Account
A and 0.35% annually for Account B is attributable to mortality risks we assume
for the annuity payment and death benefit guarantees made under the Contract.
These guarantees include making annuity payments which won't change based on our
actual mortality experience, and providing a guaranteed minimum death benefit
under the Contract.

The remaining portion of the charge, 0.50% annually for Account A and 0.30%
annually for Account B, is attributable to expense risks we assume should the
Contract maintenance and administration charges be insufficient to cover all
Contract maintenance and administration expenses.

The mortality and expense risk charge is greater for Account A than for Account
B because a greater guaranteed death benefit and higher administrative expenses
are attributable to Account A. If this charge is inadequate to cover the actual
expenses of mortality, maintenance, and administration, we will bear the loss.
If the charge exceeds the actual expenses, we will add the excess to our profit
and it may be used to finance distribution expenses. The charge will never
increase.

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<PAGE>
SALES CHARGE

WHEN IMPOSED
We may impose a contingent deferred sales charge on withdrawals and surrenders
from Account A. We don't impose the charge on withdrawals or surrenders from
Account B. This charge is for expenses relating to the sale of the Contract,
such as commissions, preparation of sales literature, and other promotional
activity. We impose the charge only on premium withdrawn from Account A held for
less than seven years. However, where permitted by state regulation, up to 10%
of this premium will not be subject to such a charge if withdrawn from Account A
as part of the first withdrawal of the contract year, whether paid in a lump sum
or paid on a monthly, quarterly, semi-annual or annual basis. In addition, where
permitted by state regulation, we won't impose a contingent deferred sales
charge on any premium withdrawn from Contracts purchased by our employees or our
affiliates or from Contracts purchased by the employees' spouses or dependents.

AMOUNT OF CHARGE
The maximum charge is 7% of the premium withdrawn during the first year after
that premium is paid. The charge decreases by 1% annually to 0% after year
seven, as shown below.

<TABLE>
<CAPTION>
NUMBER OF COMPLETE YEARS ELAPSED CONTINGENT DEFERRED
SINCE PREMIUM WAS PAID SALES CHARGE
<S> <C>
0 7%
1 6%
2 5%
3 4%
4 3%
5 2%
6 1%
7 0%
</TABLE>

The charge is calculated on total premiums withdrawn from Account A. If,
however, your account value at the time of withdrawal is less than your premiums
paid in, the charge is based on your account value. Gain in account value is
never subject to this sales charge. The example below explains this charge.

HOW THE SALES CHARGE WORKS

If you made a $5,000 premium payment to Account A and
withdrew the entire $5,000 three years later, we would
impose a 4% charge on the $5,000 withdrawal. If you
had made a $5,000 premium payment to Account A and due
to negative investment experience only $4,500 remained
in Account A when you withdrew it three years later,
we would impose a 4% charge only on $4,500 of the
original premium. If instead the $5,000 premium
payment you made to Account A grew to $5,500 due to
positive investment experience, and you withdrew $200
of gain in account value as the first withdrawal three
years later, and thereafter withdrew the remaining
$5,300 in a subsequent withdrawal that same year, we
would impose no contingent deferred sales charge on
the $200 first withdrawn (as it represents gain, and
not premium) and we would impose a 4% contingent
deferred sales charge only on $5,000 of the $5,300
subsequent withdrawal (as $300 of that amount
represents gain).

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<PAGE>
HOW DEDUCTED
We deduct the charge on a pro rata basis from among the subaccounts you're
invested in, based on the ratio of your subaccount value to your Account A
value. The example below shows how this works.
PRO-RATA DEDUCTIONS

Kim Investor's Retirement Plus Contract has a
current account value of $100,000. $60,000 is
in the Basic Value Focus Subaccount, and
$40,000 is in the Capital Focus Subaccount.
Kim withdraws $20,000 from the Contract, and
the entire $20,000 is subject to a 7% sales
charge ($1400). Accordingly, $840--60% of
$1400--is deducted from the Basic Value Focus
Subaccount and $560--40% of $1400--is deducted
from the Capital Focus Subaccount.

(See "Withdrawals and Surrenders" and "Accumulation Units" for a discussion of
the effect the deduction of this charge will have on the number of accumulation
units credited to a Contract.)

ADMINISTRATION CHARGE

We charge 0.10% annually to reimburse us for costs associated with the
establishment and administration of the Contract. We deduct the charge daily
only from the net asset value of Account A. We don't impose the charge on the
assets in Account B. This charge covers such expenses as optional contract
transactions (for example, processing transfers and Dollar Cost Averaging
transactions). This charge will never increase.

CONTRACT MAINTENANCE CHARGE

We charge $40 a year to reimburse us for expenses related to maintenance of the
Contract. These expenses include issuing Contracts, maintaining records, and
performing accounting, regulatory compliance, and reporting functions. We deduct
this charge from your contract value on each contract anniversary that occurs on
or before the annuity date. We won't deduct it after the annuity date. We also
deduct the charge if you surrender the contract on any date besides a contract
anniversary. We deduct the charge on a pro rata basis from among all subaccounts
in which your contract value is invested. The contract maintenance charge will
never increase.

We'll waive this charge on all Contracts with a contract value equal to or
greater than $50,000 on the date the charge would normally be deducted.

Currently, a contract owner of three or more Contracts will be assessed no more
than $120 in Contract Maintenance Charges annually. We reserve the right to
change this limit at any time.

OTHER CHARGES

TRANSFER CHARGES
You may make up to six transfers among Account A subaccounts per contract year
without charge. If you make more than six, we may, but currently do not, charge
you $25 for each extra transfer. Certain transfers from the Select Ten
subaccount will not count toward the six transfers permitted among Account A
subaccounts per contract year without charge. (See "Defined Asset Funds--Select
Ten Trust" and "Transfers".)

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<PAGE>
TAX CHARGES
We reserve the right, subject to any necessary regulatory approval, to charge
for assessments or federal premium taxes or federal, state or local excise,
profits or income taxes measured by or attributable to the receipt of premiums.
We also reserve the right to deduct from the Accounts any taxes imposed on the
Accounts' investment earnings. (See "Tax Status of the Contract".)

FUND EXPENSES
In calculating the net asset values of the Funds (except the Select Ten Trust),
advisory fees and operating expenses are deducted from the assets of each Fund.
Deferred transaction fees, trustee's fees, portfolio supervision, bookkeeping
and administrative fees, organizational expenses, and other operating expenses
are deducted from the assets of the Select Ten Trust. Information about those
fees and expenses can be found in the attached prospectuses for the Funds, and
in the Statement of Additional Information for each Fund, if applicable.

RETIREMENT PLUS ADVISOR FEES
Fees associated with participation in the Merrill Lynch RPA-SM- program are paid
by the participating contract owner and are not deducted from the contract value
or imposed on the Accounts. (See "Merrill Lynch Retirement Plus Advisor-SM-".)

PREMIUM TAXES

Various states and municipalities impose a premium tax on annuity premiums when
they are received by an insurance company. In other jurisdictions, a premium tax
is paid on the contract value on the annuity date.

Premium tax rates vary from jurisdiction to jurisdiction and currently range
from 0% to 5%. Although we pay these taxes when due, we won't deduct them from
your contract value until the annuity date. (See "Accumulation Units" for a
discussion of the effect the deduction of this charge will have on the number of
accumulation units credited to a Contract.) In those jurisdictions that do not
allow an insurance company to reduce its current taxable premium income by the
amount of any withdrawal, surrender or death benefit paid, we will also deduct a
charge for these taxes on any withdrawal, surrender or death benefit paid under
the Contract.

Premium tax rates are subject to change by law, administrative interpretations,
or court decisions. Premium tax amounts will depend on, among other things, the
contract owner's state of residence, our status within that state, and the
premium tax laws of that state.

FEATURES AND BENEFITS OF THE CONTRACT

As we describe the contract, we will often use the word "you". In this context
"you" means "contract owner".

OWNERSHIP OF THE CONTRACT

The contract owner is entitled to exercise all rights under the Contract. Unless
otherwise specified, the purchaser of the Contract will be the contract owner.
The Contract can be owned by a trust or a corporation. However, special tax
rules apply to Contracts owned by "non-natural persons" such as corporations or
trusts. If you are a human being, you are considered a "natural person." You may
designate a beneficiary. If you die, the beneficiary will receive a death
benefit. You may also designate an annuitant. You may change the annuitant at
any time prior to the annuity date. If you don't select an annuitant, you are
the annuitant.

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If a non-natural person owns the Contract and changes the annuitant, the
Internal Revenue Code (IRC) requires us to treat the change as the death of a
contract owner. We will then pay the beneficiary the contract value, less any
applicable fees and charges.

Only spouses may be co-owners of the Contract. When co-owners are established,
they exercise all rights under the Contract jointly unless they elect otherwise.
Co-owner spouses must each be designated as beneficiary for the other. Co-owners
may also designate a beneficiary to receive benefits on the surviving co-owner's
death. IRA Contracts may not have co-owners.

You may assign the Contract to someone else by giving notice to our Service
Center. Only complete ownership of the Contract may be assigned to someone else.
You can't do it in part. An assignment to a new owner cancels all prior
beneficiary designations except a prior irrevocable beneficiary designation.
Assignment of the Contract may have tax consequences or may be prohibited on
certain IRA Contracts, so you should consult with a qualified tax adviser before
assigning the Contract. (See "Federal Income Taxes".)

ISSUING THE CONTRACT

ISSUE AGE
You can buy a nonqualified Contract if you are less than 85 years old.
Annuitants on nonqualified Contracts must also be less than 85 years old when we
issue the Contract. For qualified Contracts owned by natural persons, the
contract owner and annuitant must be the same person. Contract owners and
annuitants on qualified Contracts must be less than 70 1/2 years old when we
issue the Contract.

INFORMATION WE NEED TO ISSUE THE CONTRACT
Before we issue the Contract, we need certain information from you. We may
require you to complete and return a written application in certain
circumstances, such as when the Contract is being issued to replace, or in
exchange for, another annuity or life insurance contract. Once we review and
approve that information or application, and you pay the initial premium, we'll
issue a Contract. The date we do this is called the Date of Issue. Generally,
we'll do this and invest the premium within two business days of our receiving
your premium. If we haven't received necessary information within five business
days, however, we will offer to return the premium and no Contract will be
issued. You can consent to our holding the premium until we get all necessary
information, and then we will invest the premium within two business days after
we get the information.

TEN DAY RIGHT TO REVIEW
When you get the Contract, review it carefully to make sure it is what you
intended to purchase. Generally, within ten days after you receive the Contract,
you may return it for a refund. The Contract will then be deemed void. Some
states allow a longer period of time to return the Contract. To get a refund,
return the Contract to our Service Center or to the Financial Consultant who
sold it. We will then refund the greater of all premiums paid into the Contract
or the contract value as of the date the Contract is returned. For contracts
issued in Pennsylvania, we'll refund the contract value as of the date the
Contract is returned.

PREMIUMS

MINIMUM AND MAXIMUM PREMIUMS
Initial premium payments must be $5,000 or more on a nonqualified Contract and
$2,000 or more on an IRA Contract. Subsequent premium payments generally must be
$100 or more. You can make them at any time before the annuity date. It is
intended that, in the future, rollover and transfer amounts from tax-sheltered
annuity plans that are not subject to the Employee Retirement Income Security
Act of 1974, as amended, will be accepted as premium payments, as permitted by
law. Other premium payments will not be accepted under a Contract used as a tax
sheltered annuity. We may waive the $100 minimum for premiums paid under IRA

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Contracts held in Retirement Plan Operations accounts of MLPF&S where you're
transferring the complete cash balance of such account into a Contract. Maximum
annual contributions to IRA Contracts are limited by federal law. We reserve the
right to reject subsequent premium payments, if required by law.

HOW TO MAKE PAYMENTS
You can pay premiums directly to our Service Center at the address printed on
the cover of this Prospectus or have money debited from your MLPF&S brokerage
account. Under an automatic investment feature, you can make systematic premium
payments on a monthly, quarterly, semi-annual or annual basis from a MLPF&S
brokerage account. Contact your Financial Consultant for additional information.
You may cancel the automatic investment feature at any time.

PREMIUM INVESTMENTS
For the first 14 days following the date of issue, we'll hold all premiums
directed into Account A in the Domestic Money Market Subaccount. After the 14
days, we'll reallocate the account value to the Account A subaccounts you
selected. (In Pennsylvania, we'll invest all premiums as of the date of issue in
the subaccounts you selected.) We'll place premiums directed into Account B in
the Reserve Assets Subaccount on the issue date. We'll place subsequent premiums
allocated to Account B in the Reserve Assets Subaccount as of the end of the
valuation period in which our Service Center receives them.

Currently, you may allocate your premium among 18 of 21 subaccounts (20
available through Account A and one available through Account B). Allocations
must be made in whole numbers. For example, 12% of a premium received may be
allocated to the Prime Bond Subaccount, 58% allocated to the High Current Income
Subaccount, and 30% allocated to the Quality Equity Subaccount However, you may
not allocate 33 1/3% to the Prime Bond Subaccount and 66 2/3%, to the High
Current Income Subaccount If we don't get allocation instructions when we
receive subsequent premiums, we will allocate those premiums according to the
allocation instructions you last gave us. We reserve the right to modify the
limit on the number of subaccounts to which future allocations may be made.

ACCUMULATION UNITS

Each subaccount has a distinct value, called the accumulation unit value. The
accumulation unit value for a subaccount varies daily with the performance and
expenses of the corresponding fund. We use this value to determine the number of
subaccount accumulation units represented by your investment in a subaccount.
HOW ARE MY CONTRACT TRANSACTIONS PRICED?

We calculate an accumulation unit value for
each subaccount at the close of business on
each day that the New York Stock Exchange is
open. Transactions are priced, which means
that accumulation units in your Contract are
purchased (added to your Contract) or redeemed
(taken out of your contract), at the unit
value next calculated after our Service Center
receives notice of the transaction. For
premium payments and transfers into a
subaccount, units are purchased. For payment
of Contract proceeds (i.e., partial
withdrawals, surrenders, annuitization, and
death benefits), transfers out of a
subaccount, and deduction for the contract
maintenance charge, any sales charge, any
transfer charge, and any premium taxes due,
units are redeemed.

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HOW DO WE DETERMINE THE NUMBER OF UNITS?

We determine the number of units by dividing
the dollar value of the amount of the purchase
or redemption allocated to the subaccount by
the value of one accumulation unit for that
subaccount for the valuation period in which
the transfer is made. The number of
accumulation units in each subaccount credited
to a Contract will therefore increase or
decrease as these transactions are made. The
number of subaccount accumulation units
credited to a Contract will not change as a
result of investment experience or the
deduction of mortality and expense risk and
administration charges. Instead, these charges
and investment experience are reflected in the
accumulation unit value.

When we first established each subaccount, we arbitrarily set the value of an
accumulation unit at $10. Accumulation unit values increase, decrease, or stay
the same from one valuation period to the next. A valuation period is the time
period from one determination of the net asset value of a subaccount to the
next, measured from the time each day the Funds are valued. The Funds are valued
at the close of business on each day the New York Stock Exchange is open. An
accumulation unit value for any valuation period is determined by multiplying
the accumulation unit value for the prior valuation period by the net investment
factor for the subaccount for the current valuation period.

The net investment factor is an index used to measure the investment performance
of a subaccount from one valuation period to the next. For any subaccount, we
determine the net investment factor by dividing the value of the assets of the
subaccount for that valuation period by the value of the assets of the
subaccount for the preceding valuation period. We subtract from that result the
valuation period equivalent of the annual administration and mortality and
expense risk charges. The net investment factor takes into account the
reinvestment of dividends and capital gains. We may adjust the net investment
factor to make provisions for any change in law that requires us to pay tax on
capital gains in the Accounts or for any assessments or federal premium taxes or
federal, state or local excise, profits or income taxes measured by or
attributable to the receipt of premiums. (See "Other Charges".)

ADDITIONAL PROVISIONS APPLICABLE TO ALL CONTRACTS

DEATH OF ANNUITANT PRIOR TO ANNUITY DATE

If the annuitant dies before the annuity date, and the annuitant is not a
contract owner, the owner may designate a new annuitant. If a new annuitant is
not designated, the contract owner will become the annuitant unless any owner is
not a natural person. If any contract owner is not a natural person, no new
annuitant may be named and the death benefit will be paid to the beneficiary.

TRANSFERS

TRANSFERS WITHIN ACCOUNT A
Before the annuity date, you may transfer all or part of your Account A value
among the Account A subaccounts up to six times per contract year without
charge. You can make additional transfers among Account A subaccounts, but we
may charge you $25 for each extra transfer. We will deduct the transfer charge
pro rata from among the subaccounts you're transferring from. Certain transfers
from the Select Ten subaccount will not count toward the six transfers permitted
among Account A subaccounts per contract year

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without charge. (See "Defined Asset Funds--Select Ten Trust".) We reserve the
right to change the number of additional transfers permitted each contract year.

Transfers among subaccounts may be made in specific dollar amounts or as a
percentage of Account A value. You must transfer at least $100 or the total
value of a subaccount, if less. Transfers specified as percentages are also
subject to a $100 minimum with allocations in whole numbers. For example, 10% or
30% of $1,000 Account A value in the Prime Bond Subaccount may be transferred to
the High Current Income Subaccount, but 10.5% may not. Also, 20% of $600 Account
A value in the Prime Bond Subaccount may be transferred to the High Current
Income Subaccount, but 10% of $600 ($60) may not.

You may request transfers in writing or by telephone, once we get proper
telephone transfer authorization. Transfer requests may also be made through
your Merrill Lynch Financial Consultant, or another person you designate, once
we receive proper authorization. Transfers will take effect as of the end of the
valuation period on the date the Service Center receives the request. We will
consider telephone transfer requests received after 4:00 p.m. (ET) to be
received the following business day.

DOLLAR COST AVERAGING

WHAT IS IT?
The Contract offers an optional transfer feature called Dollar Cost Averaging
("DCA"). This feature allows you to reallocate money at monthly intervals from
the Account A Domestic Money Market Subaccount to any of the remaining Account A
subaccounts. The DCA feature is intended to reduce the effect of short term
price fluctuations on investment cost. Since the same dollar amount is
transferred to selected subaccounts each month, more accumulation units are
purchased in a subaccount when their value is low and fewer accumulation units
are purchased when their value is high. Therefore, over the long haul a DCA
program may let you buy accumulation units at a lower than average cost.
However, a DCA program does not assure a profit or protect against a loss in
declining markets.

You can choose the DCA feature any time before the annuity date. Once you start
using it, you must continue it for at least three months. Once you reach the
annuity date, you may no longer use Dollar Cost Averaging.

If you participate in the RPA program, you can't use DCA.

MINIMUM AMOUNTS
To elect DCA, you need to have a minimum amount of money in the Domestic Money
Market subaccount. We determine the amount required by multiplying the specified
length of your DCA program in months by your specified monthly transfer amount.
Amounts of $100 or more must be allotted for transfer each month in the DCA
feature. Allocations must be designated in whole percentage increments. No
specific dollar amount designations may be made. We reserve the right to change
these minimums. Should the amount in your Domestic Money Market Subaccount drop
below the selected monthly transfer amount, we'll notify you that you need to
put more money in to continue DCA.

WHEN DO WE MAKE DCA TRANSFERS?
You select the date for DCA transfers. After we receive your request at our
Service Center, we will make the first DCA transfer on the selected date of the
following month. We'll make subsequent DCA transfers on the same day of each
succeeding month. We don't charge for DCA transfers. These transfers are in
addition to the six annual transfers permitted under the Contract.

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MERRILL LYNCH RETIREMENT PLUS ADVISOR-SM-

If you qualify, you may participate in the Merrill Lynch Retirement Plus
Advisor-SM- ("RPA") program. Through RPA, an investment program developed by
MLPF&S, premiums and Account A money are allocated and transferred periodically
among the subaccounts of Account A based on your investment profile. MLPF&S is a
registered investment adviser under the Investment Advisers Act of 1940.

Before you can participate, you must complete a profiling questionnaire and
client agreement for each contract with which you're using the RPA program.

If you participate in the RPA program, you can't use DCA. In addition, MLPF&S
may ask you to give up the RPA program if you request a transfer while the RPA
program is in effect; such transfers may be inconsistent with investment
strategies being implemented through the RPA program.

FEES AND CHARGES FOR RPA
MLPF&S charges a fee for the RPA program. MLPF&S deducts this fee directly from
your brokerage account. The fee is not deducted from your contract value or
imposed on the Accounts. We don't charge for RPA program transfers of Account A
money.

If you wish to participate in the RPA program, consult with your Financial
Consultant for additional information regarding the availability of the program
and specific eligibility requirements.

Participation in the program does not guarantee that you will attain your
investment goals. In addition, the program does not guarantee investment gains,
or protect against investment losses.

TRANSFERS FROM ACCOUNT A TO ACCOUNT B

Once each contract year, you may transfer from Account A to Account B an amount
equal to any gain in account value and/or any premium not subject to sales
charge, determined as of the date we receive the request. Where permitted by
state regulation, once each contract year, you may transfer from Account A to
Account B all or a portion of the greater of that amount, or 10% of premiums
still subject to a sales charge determined as of the date we receive the request
(minus any of that premium already withdrawn or transferred). Additionally,
where permitted by state regulation, periodic transfers of all or a portion of
the greater amount, determined at the time of each periodic transfer, are
permitted, on a monthly, quarterly, semi-annual or annual basis. You may cancel
periodic transfers at any time. Once canceled, they cannot be activated again
until the next contract year.

Generally, we will deduct the amount transferred on a pro rata basis from among
the Account A subaccounts you specify, based on your proportional interest in
each of these subaccounts to the Account A value, unless you request otherwise.
However, if you want the amount transferred on a monthly, quarterly, semi-annual
or annual basis, it must be deducted on a pro rata basis. There is no charge
imposed on the transfer of this amount. No transfers are permitted from Account
B to Account A.

WITHDRAWALS AND SURRENDERS

WHEN AND HOW WITHDRAWALS ARE MADE
Before the annuity date, you may withdraw money from the Contract up to six
times per contract year. Withdrawals are subject to tax and prior to age 59 1/2
may also be subject to a 10% federal penalty tax. (See "Federal Income Taxes".)

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The Contract provides a specific order for
withdrawals. We treat the first withdrawal
from Account A in any contract year in the
following order:

1. Gain in account value and premium no
longer subject to a sales charge; then
2. Premium on a "first-in, first-out"
basis.

"Gain" means any positive difference between
account value and premiums paid, less
withdrawals and transfers from Account A.

By using this order, we don't impose a sales charge on the first withdrawal in
any contract year out of Account A to the extent that the withdrawal consists of
gain and/or any premium no longer subject to such a charge. Where permitted by
state regulation, we won't impose a sales charge on that portion of the first
withdrawal from Account A in any contract year that does not exceed the greater
of:

(1) 10% of premiums subject to a sales charge determined as of the date the
request is received, minus any prior amount withdrawn or transferred from
Account A to Account B, and

(2) any gain in Account A plus premiums allocated to Account A that are not
subject to a sales charge.

Where permitted by state regulation, you may elect that the amount withdrawn be
paid on a monthly, quarterly, semi-annual or annual basis.

Unless you direct us otherwise, withdrawals will be taken from subaccounts in
the same proportion as the subaccounts of the Account from which the withdrawal
is made bear to your Account A value. You may withdraw money by telephone, once
you've submitted a proper telephone authorization form to our Service Center,
but only if the amount withdrawn is to be paid into a Merrill Lynch brokerage
account. You may make a withdrawal request in writing to our Service Center. We
will consider telephone withdrawal requests received after 4:00 p.m. (ET) to be
received the following business day.

We will treat all subsequent withdrawals from Account A in the same contract
year as if premium is withdrawn on a "first-in, first-out" basis before any gain
in account value is withdrawn. Therefore, premium accumulated the longest will
be withdrawn first. These withdrawals are subject to a sales charge. (See "Sales
Charge".)

We don't impose sales charges on any withdrawals from Account B. In addition,
where permitted by state regulation we don't impose a sales charge on
withdrawals from Account A on a Contract purchased by our employees or employees
of our affiliates or purchased by the employee's spouse or dependents.

AUTOMATIC WITHDRAWALS
You may request monthly, quarterly, semi-annual, or annual automatic withdrawals
from Account B. You may activate or cancel this optional automatic withdrawal
program once each contract year. Once canceled, you can't activate the program
again until the next contract year. You may increase or decrease withdrawals at
any time by contacting our Service Center. These automatic withdrawals are in
addition to the annual six withdrawals permitted under the Contract.

MINIMUM AMOUNTS
The minimum amount that may be withdrawn is $100. At least $2,000 must remain in
the Contract after you make a withdrawal. We reserve the right to change these
minimums.

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SURRENDERS
At any time before the annuity date you may surrender the Contract through a
full withdrawal. The Contract must be delivered to our Service Center. We will
pay you an amount equal to the contract value as of the end of the valuation
period when we process the surrender, minus any applicable sales charge, minus
any applicable contract maintenance charge, and minus any applicable charge for
premium taxes. (See "Charges and Deductions".)

PAYMENTS TO CONTRACT OWNERS

We'll make any payments to you usually within seven days of our Service Center
receiving your proper request. However, we may delay any payment, or delay
processing any annuity payment or transfer request if:

(a) the New York Stock Exchange is closed, other than for a customary weekend
or holiday;

(b) trading on the New York Stock Exchange is restricted by the Securities
and Exchange Commission;

(c) the Securities and Exchange Commission declares that an emergency exists
making it difficult to dispose of securities held in the Accounts or to
determine their value;

(d) the Securities and Exchange Commission by order so permits for the
protection of security holders; or

(e) payment is derived from a check used to make a premium payment which has
not cleared through the banking system.

CONTRACT CHANGES

Requests to change the owner, beneficiary, annuitant, or annuity date of a
Contract will take effect as of the date you sign such a request, unless we have
already acted in reliance on the prior status. Such changes may have tax
consequences. (See "Federal Income Taxes". See also "Ownership of the
Contract".)

DEATH BENEFIT

Regardless of investment experience, the Contract provides a guaranteed minimum
death benefit if a contract owner dies before the annuity date.

Unless you irrevocably designated a beneficiary, you may change the beneficiary
at any time before the annuity date. If your beneficiary is your surviving
spouse, your spouse may elect to continue the Contract. Your spouse becomes the
contract owner and the beneficiary until your spouse names a new beneficiary.

We will pay the death benefit in a lump sum unless the beneficiary chooses an
annuity payment option available under the Contract. (See "Annuity Options".)
However, if you die before the annuity date, federal tax law generally requires
us to distribute the entire contract value within five years of the date of
death. Special rules may apply to a surviving spouse. (See "Federal Income
Taxes".)

We determine the death benefit as of the date we receive certain information at
our Service Center. We call this information due proof of death. It consists of
the Beneficiary Statement, a certified copy of the death certificate, and any
additional documentation we may need to process the death claim. If we haven't
received the other documents within 60 days following our receipt of a certified
death certificate, we will consider due proof of death to have been received and
we will pay the death benefit in a lump sum.

Depending on state approval, one of two kinds of death benefit applies to your
contract.

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The RISING FLOOR DEATH BENEFIT is calculated this way:

(a) We credit 5% annual interest on premiums you pay into Account A.

(b) We credit 5% annual interest on any transfers to Account B and any
withdrawals from Account A.

(d) We add the value of Account B to the amount in (c).

(e) We compare the result in (d) to your contract value. The guaranteed death
benefit is the higher of the two.

There are limits on the period during which interest will accrue for purposes of
this calculation. For Contracts issued beginning June 1, 1995 (or later as state
approvals are obtained), interest accrues until the earliest of:

1. The last day of the 20th contract year;

2. The last day of the contract year in which the contract owner reaches age
80;

3. The date the contract owner dies.

For Contracts issued before June 1, 1995, (and for Contracts issued on or after
that date but before state approvals are obtained) interest accrues until the
last day of the 20th contract year.

The COMBINATION RISING FLOOR/STEP-UP DEATH BENEFIT, if approved in your state,
is calculated this way:

(a) To determine premiums compounded at 5% we credit 5% annual interest on
premiums you pay into Account A, adjusted for transfers to Account B and
withdrawals from Account A with interest at 5% annually. (If your Contract
was issued after state approval has been obtained, we use "adjusted
transfers" and "adjusted withdrawals" in this calculation.)

(b) To determine the greatest 7th anniversary values

(i) we credit 5% annual interest to your Account A value at the end of
each 7th contract year (i.e., 7, 14, 21, etc);

(ii) we credit 5% annual interest to premiums paid into Account A since
the end of the 7th contract year;

(iii) we credit 5% annual interest to each "adjusted transfer" to Account
B and to each "adjusted withdrawal" from Account A since the end of
that 7th contract year.

(iv) for each 7th contract year, we add (ii) to (i) and subtract (iii)
from that amount. Each of these is a 7th anniversary value. We pick
the greatest of these 7th anniversary values.

(c) We compare the result in (a) with the result in (b). We pick the higher
of the two. This amount is referred to as the Guaranteed Minimum Death
Benefit.

(d) We compare the Guaranteed Minimum Death Benefit PLUS the value of Account
B with the contract value and pick the higher of the two. The higher
amount is your Combination Rising Floor/Step-Up Death Benefit.

Each "adjusted transfer" and "adjusted withdrawal" equals:

- the amount by which each transfer or withdrawal from Account A reduces the
value of Account A

MULTIPLIED BY

- an amount equal to (i) DIVIDED BY (ii) where (i) is the Guaranteed Minimum
Death Benefit of Account A prior to the transfer or withdrawal, and (ii)
is the value of Account A prior to the transfer or withdrawal; but not
less than one.

There are limits on the period during which the 5% interest will accrue for
purposes of calculating the Combination Rising Floor/Step-Up Death Benefit.
Interest accrues until the earliest of:

(1) The last day of the 20th contract year;

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(2) The last day of the contract year in which the contract owner attains age
80;

(3) The date of death of the contract owner.

For Contracts issued before June 1, 1995, and for Contracts issued on or after
that date but before state approvals are obtained, interest on premiums in (a)
accrues until the last day of the 20th contract year.

We determine 7th anniversary values in (b) until the earlier of the last day of
the contract year in which the contract owner reaches age 80, or the date the
contract owner dies.

ANNUITY PAYMENTS

We'll make the first annuity payment on the annuity date, and payments will
continue according to the annuity option selected. When you first buy the
Contract, the Annuity Date for non-qualified Contracts is the annuitant's 85th
birthday. The Annuity Date for IRA Contracts or Tax Sheltered Annuity Contracts
is when the owner/annuitant reaches age 70 1/2. However, you may specify an
earlier Annuity Date. Contract owners may select from a variety of fixed annuity
payment options, as outlined below in "Annuity Options." If you don't choose an
annuity option, we'll use the Life Annuity with Payments Guaranteed for 10 Years
annuity option when the contract owner reaches age 85 (age 70 1/2 for an IRA
Contract). You may change the annuity option before the annuity date. We reserve
the right to limit annuity options available to IRA contract owners to comply
with the Internal Revenue Code or regulations under it.

We determine the dollar amount of annuity payments by applying your contract
value on the annuity date to our then current annuity purchase rates less any
applicable premium tax. Purchase rates show the amount of periodic payment that
a $1000 value buys. These rates are based on the annuitant's age and sex at the
time payments begin. The rates will never be less than those shown in the
Contract.

If the age and/or sex of the annuitant was misstated to us, resulting in an
incorrect calculation of annuity payments, we will adjust future annuity
payments to reflect the correct age and/or sex. We will deduct any amount we
overpaid as the result of a misstatement from future payments with 6% annual
interest charges. Likewise, if we underpaid any amount as the result of a
misstatement, we correct it with the next payment made with 6% annual interest
credited.

If the contract value on the annuity date after the deduction of any applicable
premium taxes is less than $5,000, we may cash out your Contract in a lump sum.
If any annuity payment would be less than $20 (or a different minimum amount, if
required by state law), we may change the frequency of payments so that all
payments will be at least $20 (or the minimum amount required by state law).
Unless you tell us differently, we'll make annuity payments directly to your
Merrill Lynch brokerage account.

ANNUITY OPTIONS

We currently provide the following fixed annuity payment options. After the
annuity date, your contract value does not vary with the performance of the
Accounts. We may in the future offer more options. Under certain circumstances,
several options provide the ability to take the present value of future
guaranteed payments in a lump sum.

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HOW WE DETERMINE PRESENT VALUE OF FUTURE
GUARANTEED ANNUITY PAYMENTS

Present value refers to the amount of money
needed today to fund the remaining guaranteed
payments under the annuity payment option you
select. The primary factor in determining
present value is the interest rate assumption
we use. If you are receiving annuity payments
under an option that gives you the ability to
take the present value of future payments in a
lump sum and you elect to take the lump sum,
we will use the same interest rate assumption
in calculating the present value that we used
to determine your payment stream at the time
your annuity payments commenced.

PAYMENTS OF A FIXED AMOUNT
We will make equal payments in an amount you choose until the sum of all
payments equals the contract value applied, increased for interest credited. The
amount you choose must provide at least five years of payments. These payments
don't depend on the annuitant's life. If the annuitant dies before the end of
the period, you may elect to receive the present value of the remaining
guaranteed payments in a lump sum. If the contract owner dies while guaranteed
amounts remain unpaid, the beneficiary may elect to receive the present value of
the remaining guaranteed payments in a lump sum.

PAYMENTS FOR A FIXED PERIOD
We will make equal payments for a period you select of at least five years.
These payments don't depend on the annuitant's life. If the annuitant dies
before the end of the period, you may elect to receive the present value of the
remaining guaranteed payments in a lump sum. If the contract owner dies while
guaranteed amounts remain unpaid, the beneficiary may elect to receive the
present value of the remaining guaranteed payments in a lump sum.

*LIFE ANNUITY
We make payments for as long as the annuitant lives. Payments will cease with
the last payment made before the annuitant's death.

LIFE ANNUITY WITH PAYMENTS GUARANTEED FOR 10 OR 20 YEARS
We make payments for as long as the annuitant lives. In addition, even if the
annuitant dies before the period ends, we guarantee payments for either 10 or 20
years as you selected. If the annuitant dies before the end of the period, you
may elect to receive the present value of the remaining guaranteed payments in a
lump sum. If the contract owner dies while guaranteed amounts remain unpaid, the
beneficiary may elect to receive the present value of the remaining guaranteed
payments in a lump sum.

LIFE ANNUITY WITH GUARANTEED RETURN OF CONTRACT VALUE
We make payments for as long as the annuitant lives. In addition, even if the
annuitant dies, we guarantee payments until the sum of all annuity payments
equals the contract value applied, increased by interest credited.

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

* These options are "pure" life annuities. Therefore, it is possible for the
payee to receive only one annuity payment if the person (or persons) on
whose life (lives) payment is based dies after only one payment or to
receive only two annuity payments if that person (those persons) dies after
only two payments, etc.

40
<PAGE>
*JOINT AND SURVIVOR LIFE ANNUITY
We make payments for the lives of the annuitant and a designated second person.
Payments will continue as long as either one is living.

INDIVIDUAL RETIREMENT ACCOUNT ANNUITY
This annuity option is available only to IRA contract owners. Payments will be
made annually based on either (a) the life expectancy of the owner/ annuitant;
(b) the joint life expectancy of the owner/annuitant and his or her spouse; (c)
the life expectancy of the surviving spouse if the owner/annuitant dies before
the annuity date. Each annual payment will be equal to the remaining contract
value applied, divided by the then current life expectancy, as defined by
Internal Revenue Service regulations. If the measuring life or lives dies before
the remaining value has been distributed, we will pay that value to you in a
lump sum.

GENDER-BASED ANNUITY PURCHASE RATES

Generally, the Contract provides for gender-based annuity purchase rates when
life annuity options are chosen. However, in states that have adopted
regulations prohibiting gender-based rates, blended unisex annuity purchase
rates will be applied to both male and female annuitants. Unisex annuity
purchase rates will provide the same annuity payments for male or female
annuitants that are the same age on their annuity dates.

Employers and employee organizations considering purchase of the Contract should
consult with their legal advisor to determine whether purchasing a Contract
containing gender-based annuity purchase rates is consistent with Title VII of
the Civil Rights Act of 1964 or other applicable law. We may offer such contract
owners Contracts containing unisex annuity purchase rates.

FEDERAL INCOME TAXES

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

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

TAX STATUS OF THE CONTRACT

DIVERSIFICATION REQUIREMENTS
Section 817(h) of the Internal Revenue Code (IRC) and the regulations under it
provide that separate account investments underlying a contract must be
"adequately diversified" for it to qualify as an annuity contract under IRC
section 72. The separate account intends to comply with the diversification
requirements of the regulations under Section 817(h). This will affect how we
make investments.

OWNER CONTROL
In certain circumstances, owners of variable annuity contracts have been
considered for Federal income tax purposes to be the owners of the assets of the
separate account supporting their Contracts due to their ability to exercise
investment control over those assets. When this is the case, the contract owners
have been currently taxed on income and gains attributable to the separate
account assets. There is little guidance in this area, and some features such as
the flexibility of an owner to allocate premium payments and transfer contract

41
<PAGE>
accumulation values, have not been explicitly addressed in IRS published
rulings. While we believe that the Contracts do not give owners investment
control over Variable Account assets, we reserve the right to modify the
Contracts as necessary to prevent an owner from being treated as the owner of
the Variable Account assets supporting the Contract.

REQUIRED DISTRIBUTIONS
To qualify as an annuity contract under Section 72(s) of the IRC, a
non-qualified annuity contract must provide that: (a) if any owner dies on or
after the annuity starting date but before all amounts under the Contract have
been distributed, the remaining amounts will be distributed at least as quickly
as under the method being used when the owner died; and (b) if any owner dies
before the annuity starting date, all amounts under the Contract will be
distributed within five years of the date of death. So long as the distributions
begin within a year of the owner's death, the IRS will consider these
requirements satisfied for any part of the owner's interest payable to or for
the benefit of a "designated beneficiary" and distributed over the beneficiary's
life or over a period that cannot exceed the beneficiary's life expectancy. A
designated beneficiary is the person the owner names as beneficiary and who
assumes ownership when the owner dies. A designated beneficiary must be a
natural person. If the deceased owner's spouse is the designated beneficiary, he
or she can continue the Contract when such contract owner dies.

The contract is designed to comply with Section 72(s). We will review the
Contract and amend it if necessary to make sure that it continues to comply with
the section's requirements.

Other rules regarding required distributions apply to Individual Retirement
Annuities.

TAXATION OF ANNUITIES

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

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

The following discussion applies generally to Contracts owned by a natural
person:

PARTIAL WITHDRAWALS AND SURRENDERS
When you take a withdrawal from a Contract, the amount received generally will
be treated as ordinary income subject to tax up to an amount equal to the excess
(if any) of the Contract value immediately before the distribution over the
investment in the Contract (generally, the premiums or other consideration paid
for the Contract, reduced by any amount previously distributed from the Contract
that was not subject to tax) at that time. Other rules apply to Individual
Retirement Annuities.

If you withdraw your entire contract value, you will be taxed only on the part
that exceeds your investment in the Contract.

42
<PAGE>
ANNUITY PAYMENTS
Although tax consequences may vary depending on the annuity option selected
under an annuity contract, a portion of each annuity payment is generally not
taxed and the remainder is taxed as ordinary income. The non-taxable portion of
an annuity payment is generally determined in a manner that is designed to allow
you to recover your investment in the Contract ratably on a tax-free basis over
the expected stream of annuity payments, as determined when annuity payments
start. Once your investment in the Contract has been fully recovered, however,
the full amount of each annuity payment is subject to tax as ordinary income.

TAXATION OF DEATH BENEFIT PROCEEDS
Amounts may be paid from a Contract because an owner or annuitant (if owner is
not a natural person) has died. If the payments are made in a single sum,
they're taxed the same way a full withdrawal from the Contract is taxed. If they
are distributed as annuity payments, they're taxed as annuity payments.

PENALTY TAX ON SOME WITHDRAWALS

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

(1) on or after you reach age 59 1/2;

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

(3) after you become disabled; or

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

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

TRANSFERS, ASSIGNMENTS, OR EXCHANGES OF A CONTRACT

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

WITHHOLDING

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

MULTIPLE CONTRACTS

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

43
<PAGE>
POSSIBLE CHANGES IN TAXATION

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

POSSIBLE CHARGE FOR OUR TAXES

Currently we don't charge the Account for any federal, state, or local taxes on
them or the Contracts (other than premium taxes), but we reserve the right to
charge the Account or the Contracts for any tax or other cost resulting from the
tax laws that we believe should be attributed to them.

INDIVIDUAL RETIREMENT ANNUITIES

Section 408 of the Code permits eligible individuals to contribute to an
individual retirement program known as an "Individual Retirement Annuity" or
"IRA." An individual may make annual contributions of up to the lesser of $2,000
or 100% of adjusted gross income to an IRA. The contributions may be deductible
in whole or in part, depending on the individual's income. Distributions from
certain pension plans may be "rolled over" into an IRA on a tax-deferred basis
without regard to these limits. Amounts in the IRA (other than nondeductible
contributions) are taxed when distributed from the IRA. A 10% penalty tax
generally applies to distributions made before age 59 1/2, unless certain
exceptions apply. IRAs have minimum distribution rules that govern the timing
and amount of distributions. You should refer to your adoption agreement or
consult a tax advisor for more information about these distribution rules.
Adverse tax consequences may result if you do not ensure that contributions,
distributions and other transactions with respect to the Contract comply with
the law. The IRS has not reviewed the Contract for qualification as an IRA, and
has not addressed in a ruling of general applicability whether a death benefit
provision such as the enhanced death benefit provision in the Contract comports
with IRA qualification requirements.

TAX SHELTERED ANNUITIES
Section 403(b) of the IRC allow employees of certain Section 501(c)(3)
organizations and public schools to exclude from their gross income the premium
payments made, within certain limits, on a contract that will provide an annuity
for the employee's retirement. In the future, it is intended that rollover and
transfer amounts from tax sheltered annuity plans that are not subject to the
Employee Retirement Income Security Act of 1974, as amended, will be accepted as
premium payments, as permitted by law, under a Contract. Other premium payments,
including premium payments subject to IRC Section 402(g), will not be accepted.
Distributions of (1) salary reduction contributions made in years beginning
after December 31, 1988; (2) earnings on those contributions; and (3) earnings
on amounts held as of the last year beginning before January 1, 1989, are not
allowed prior to age 59 1/2, separation from service, death or disability.
Salary reduction contributions may also be distributed upon hardship, but would
generally be subject to penalties.

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

44
<PAGE>
years starting with the year in which the first contribution is made to any Roth
IRA. A 10% penalty tax may apply to amounts attributable to a conversion from an
IRA if they are distributed during the five taxable years beginning with the
year in which the conversion was made.

OTHER TAX ISSUES FOR IRAS AND ROTH IRAS
Distributions from an IRA or Roth IRA generally are subject to withholding for
the participant's federal income tax liability. The withholding rate varies
according to the type of distribution and the owner's tax status. The owner will
be provided the opportunity to elect not have tax withheld from distributions.

OTHER INFORMATION

VOTING RIGHTS

We own all Fund shares and Trust Units held in the Accounts. As the owner, we
have the right to vote on any matter put to vote at any Funds' shareholder
meetings.(1) However, we will vote all Fund shares attributable to Contracts by
following instructions we receive from you. If we don't receive voting
instructions, we'll vote those shares in the same proportion as shares for which
we receive instructions. We determine the number of shares you may give voting
instructions on by dividing your interest in a subaccount by the net asset value
per share of the corresponding Fund. We'll determine the number of shares you
may give voting instructions on as of a record date we choose. We may vote Fund
shares in our own right if laws change to permit us to do so.

You have voting rights until the annuity date. You may give voting instructions
concerning:

(1) the election of a Fund's Board of Directors;

(2) ratification of a Fund's independent accountant;

(3) approval of the investment advisory agreement for a Fund corresponding to
your selected subaccounts;

(4) any change in a fundamental investment policy of a Fund corresponding to
your selected subaccounts; and

(5) any other matter requiring a vote of the Fund's shareholders.

REPORTS TO CONTRACT OWNERS

At least once each contract year before the annuity date, we will send you
information about your Contract. It will outline all your Contract transactions
during the year, your Contract's current number of accumulation units in each
Fund, the value of each accumulation unit, and the contract value.

You will also receive an annual and a semi-annual report containing financial
statements and a list of portfolio securities of the Funds.

SELLING THE CONTRACT

MLPF&S is the principal underwriter of the Contract. Its principal business
address is World Financial Center, 250 Vesey Street, New York, New York 10281.
It was organized in 1958 under the laws of the state of Delaware and is
registered as a broker-dealer under the Securities Exchange Act of 1934. It is a
member of the National Association of Securities Dealers, Inc..

Registered representatives (Financial Consultants) of MLPF&S sell the Contract.
These Financial Consultants are also licensed through various Merrill Lynch Life
Agencies as our insurance agents. Through a distribution

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

(1) The Select 10 Trust is a unit investment trust. It has no board of
directors. No voting rights exist.

45
<PAGE>
agreement we have with MLPF&S and companion sales agreements we have with the
Merrill Lynch Life Agencies, Merrill Lynch Life Agencies and/or MLPF&S
compensate the Financial Consultants. The maximum commission paid to a Financial
Consultant is 2.3% of each premium allocated to Account A. In addition, on the
annuity date, the Financial Consultant will receive compensation of up to 1.5%
of contract value not subject to a sales charge. Financial Consultants may also
be paid additional annual compensation of up to 0.51% of contract value. Reduced
compensation is paid on Contracts purchased by our employees or their spouses or
dependents. Compensation may be paid in the form of non-cash compensation,
subject to applicable regulatory requirements.

The maximum commission we will pay to the applicable insurance agency to be used
to pay commissions to Financial Consultants is 5.0% of each premium allocated to
Account A and up to 0.70% of contract value.

MLPF&S may arrange for sales of the Contract by other broker-dealers. Registered
representatives of these other broker-dealers may be compensated on a different
basis than MLPF&S Financial Consultants.

STATE REGULATION

We are subject to the laws of the State of Arkansas and to the regulations of
the Arkansas Insurance Department. We are also subject to the insurance laws and
regulations of all jurisdictions in which we're licensed to do business.

We file an annual statement with the insurance departments of jurisdictions
where we do business. The statement discloses our operations for the preceding
year and our financial condition as of the end of that year. Our books and
accounts are subject to insurance department review at all times. The Arkansas
Insurance Department, in conjunction with the National Association of Insurance
Commissions, conducts a full examination of our operations periodically.

YEAR 2000

Many computer systems were designed using only two digits to designate years.
These systems may not be able to distinguish the Year 2000 from the Year 1900
(commonly known as the "Year 2000 Problem"). Like other investment companies and
financial and business organizations, the Accounts could be adversely affected
if the computer systems we use or the other service providers we use do not
properly address this problem before January 1, 2000. Merrill Lynch & Co., Inc.
has established a dedicated group to analyze these issues and to implement any
systems modifications necessary to prepare for the Year 2000. Substantial
resources are devoted to this effort. Currently, we don't anticipate that the
transition to the 21st century will have any material impact on our ability to
continue to service the Contract at current levels. In addition we have sought
assurances from the other service providers that they are taking all necessary
steps to ensure that their computer systems will accurately reflect the Year
2000. We will continue to monitor the situation. At this time, however, we can't
give assurance that the other service providers have anticipated every step
necessary to avoid any adverse effect on the Accounts attributable to the Year
2000 Problem.

LEGAL PROCEEDINGS

There are no legal proceedings involving the Accounts. We and MLPF&S are engaged
in various kinds of routine litigation that, in our judgment, is not material to
our total assets.

46
<PAGE>
EXPERTS

Deloitte & Touche LLP, independent auditors, have audited our financial
statements as of December 31, 1998 and 1997 and for each of the three years in
the period ended December 31, 1998. They've also audited financial statements of
the Accounts as of December 31, 1998 and for the periods presented in the
Statement of Additional Information. We include these financial statements in
reliance upon the reports of Deloitte & Touche LLP given upon their authority as
experts in accounting and auditing. Their principal business address is Two
World Financial Center, New York, New York 10281-1420.

LEGAL MATTERS

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

REGISTRATION STATEMENTS

Registration Statements that relate to the Contract and its investment options
have been filed with the Securities and Exchange Commission under the Securities
Act of 1933 and the Investment Company Act of 1940. This Prospectus does not
contain all of the information in the registration statements. You can obtain
the omitted information from the Securities and Exchange Commission's principal
office in Washington, D.C., upon payment of a prescribed fee.

47
<PAGE>
ACCUMULATION UNIT VALUES
(CONDENSED FINANCIAL INFORMATION)
<TABLE>
<CAPTION>
SUBACCOUNTS
--------------------------------------------------------------------
DOMESTIC MONEY MARKET
--------------------------------------------------------------------
1/1/98 1/1/97 1/1/96 1/1/95 1/1/94
TO TO TO TO TO
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
(1) Accumulation unit value at beginning of period.... $11.94 $11.50 $11.09 $10.64 $10.37
(2) Accumulation unit value at end of period.......... $12.39 $11.94 $11.50 $11.09 $10.64
(3) Number of accumulation units outstanding at end of
period......................................... 30,449,124.5 24,720,327.5 22,091,953.20 25,642,773.0 32,396,626.5

PRIME BOND
--------------------------------------------------------------------

1/1/98 1/1/97 1/1/96 1/1/95 1/1/94

TO TO TO TO TO

12/31/98 12/31/97 12/31/96 12/31/95 12/31/94

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

<S> <C> <C> <C> <C> <C>
(1) Accumulation unit value at beginning of period.... $14.36 $13.40 $13.29 $11.21 $11.94

(2) Accumulation unit value at end of period.......... $15.28 $14.36 $13.40 $13.29 $11.21

(3) Number of accumulation units outstanding at end of
period......................................... 34,324,782.1 32,188,775.1 34,996,244.10 31,553,814.4 29,135,349.6

</TABLE>
<TABLE>
<CAPTION>
HIGH CURRENT INCOME
--------------------------------------------------------------------
1/1/98 1/1/97 1/1/96 1/1/95 1/1/94
TO TO TO TO TO
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
(1) Accumulation unit value at beginning of period.... $16.93 $15.46 $14.08 $12.18 $12.80
(2) Accumulation unit value at end of period.......... $16.18 $16.93 $15.46 $14.08 $12.18
(3) Number of accumulation units outstanding at end of
period........................................... 29,043,029.8 29,861,630.9 24,631,752.80 23,078,926.0 18,784,994.7

<CAPTION>
QUALITY EQUITY
--------------------------------------------------------------------

1/1/98 1/1/97 1/1/96 1/1/95 1/1/94

TO TO TO TO TO

12/31/98 12/31/97 12/31/96 12/31/95 12/31/94

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

<S> <C> <C> <C> <C> <C>
(1) Accumulation unit value at beginning of period.... $19.54 $16.01 $13.77 $11.38 $11.67

(2) Accumulation unit value at end of period.......... $22.28 $19.54 $16.01 $13.77 $11.38

(3) Number of accumulation units outstanding at end of
period........................................... 33,613,045.0 38,815,927.3 42,908,676.70 39,846,415.5 33,600,288.0

</TABLE>
<TABLE>
<CAPTION>
SPECIAL VALUE FOCUS*
--------------------------------------------------------------------
1/1/98 1/1/97 1/1/96 1/1/95 1/1/94
TO TO TO TO TO
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
(1) Accumulation unit value at beginning of period.... $16.75 $15.20 $14.25 $9.90 $10.82
(2) Accumulation unit value at end of period.......... $15.45 $16.75 $15.20 $14.25 $9.90
(3) Number of accumulation units outstanding at end of
period........................................... 25,287,229.6 25,060,617.0 26,282,042.40 21,157,583.8 14,844,233.7

<CAPTION>
FLEXIBLE STRATEGY**
--------------------------------------------------------------------

1/1/98 1/1/97 1/1/96 1/1/95 1/1/94

TO TO TO TO TO

12/31/98 12/31/97 12/31/96 12/31/95 12/31/94

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

<S> <C> <C> <C> <C> <C>
(1) Accumulation unit value at beginning of period.... ** ** $13.00 $11.22 $11.87

(2) Accumulation unit value at end of period.......... ** ** ** $13.00 $11.22

(3) Number of accumulation units outstanding at end of
period........................................... ** 0.0 0.00 19,761,710.2 18,841,816.9

</TABLE>
<TABLE>
<CAPTION>
AMERICAN BALANCED
--------------------------------------------------------------------
1/1/98 1/1/97 1/1/96 1/1/95 1/1/94
TO TO TO TO TO
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
(1) Accumulation unit value at beginning of period.... $16.72 $14.47 $13.37 $11.21 $11.86
(2) Accumulation unit value at end of period.......... $18.73 $16.72 $14.47 $13.37 $11.21
(3) Number of accumulation units outstanding at end of
period........................................... 8,811,560.6 10,336,623.9 12,953,901.30 13,988,384.1 12,253,488.1

<CAPTION>
NATURAL RESOURCES FOCUS
--------------------------------------------------------------------

1/1/98 1/1/97 1/1/96 1/1/95 1/1/94

TO TO TO TO TO

12/31/98 12/31/97 12/31/96 12/31/95 12/31/94

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

<S> <C> <C> <C> <C> <C>
(1) Accumulation unit value at beginning of period.... $12.14 $14.06 $12.56 $11.30 $11.29

(2) Accumulation unit value at end of period.......... $10.14 $12.14 $14.06 $12.56 $11.30

(3) Number of accumulation units outstanding at end of
period........................................... 1,411,604.8 2,034,154.7 2,971,830.10 3,136,512.9 3,158,540.0

</TABLE>

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

* Effective August 15, 1997, the Equity Growth Fund changed its name to the
Special Value Focus Fund.

** Effective following the close of business on December 6, 1996, the Flexible
Strategy Fund was merged with and into the Global Strategy Focus Fund.

48
<PAGE>
<TABLE>
<CAPTION>
GLOBAL STRATEGY FOCUS**
--------------------------------------------------------------------
1/1/98 1/1/97 1/1/96 1/1/95 1/1/94
TO TO TO TO TO
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
(1) Accumulation unit value at beginning of period.... $15.85 $14.35 $12.85 $11.78 $12.12
(2) Accumulation unit value at end of period.......... $17.02 $15.85 $14.35 $12.85 $11.78
(3) Number of accumulation units outstanding at end of
period........................................... 40,349,522.0 48,987,486.9 54,187,786.60 39,315,443.7 40,759,049.2

<CAPTION>
BASIC VALUE FOCUS
--------------------------------------------------------------------

1/1/98 1/1/97 1/1/96 1/1/95 1/1/94

TO TO TO TO TO

12/31/98 12/31/97 12/31/96 12/31/95 12/31/94

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

<S> <C> <C> <C> <C> <C>
(1) Accumulation unit value at beginning of period.... $19.27 $16.19 $13.60 $10.98 $10.88

(2) Accumulation unit value at end of period.......... $20.81 $19.27 $16.19 $13.60 $10.98

(3) Number of accumulation units outstanding at end of
period........................................... 28,219,085.9 27,721,815.8 28,054,066.00 20,468,571.0 13,875,148.9

</TABLE>
<TABLE>
<CAPTION>
GLOBAL BOND FOCUS***
--------------------------------------------------------------------
1/1/98 1/1/97 1/1/96 1/1/95 1/1/94
TO TO TO TO TO
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
(1) Accumulation unit value at beginning of period.... $12.27 $12.20 $11.45 $9.94 $10.52
(2) Accumulation unit value at end of period.......... $13.63 $12.27 $12.20 $11.45 $9.94
(3) Number of accumulation units outstanding at end of
period........................................... 4,521,788.3 5,666,135.2 7,186,613.40 6,621,174.7 6,989,051.9

<CAPTION>
GLOBAL UTILITY FOCUS
--------------------------------------------------------------------

1/1/98 1/1/97 1/1/96 1/1/95 1/1/94

TO TO TO TO TO

12/31/98 12/31/97 12/31/96 12/31/95 12/31/94

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

<S> <C> <C> <C> <C> <C>
(1) Accumulation unit value at beginning of period.... $16.27 $13.10 $11.75 $9.58 $10.61

(2) Accumulation unit value at end of period.......... $19.91 $16.27 $13.10 $11.75 $9.58

(3) Number of accumulation units outstanding at end of
period........................................... 6,354,180.9 7,581,562.1 10,020,789.90 11,837,175.7 12,374,137.9

</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL
EQUITY FOCUS
--------------------------------------------------------------------
1/1/98 1/1/97 1/1/96 1/1/95 1/1/94
TO TO TO TO TO
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
(1) Accumulation unit value at
beginning of period.............................. $11.20 $11.90 $11.31 $10.87 $10.96
(2) Accumulation unit value at end
of period........................................ $11.91 $11.20 $11.90 $11.31 $10.87
(3) Number of accumulation units outstanding at end of
period........................................... 13,703,986.4 33,698,719.2 26,446,868.60 21,726,485.8 21,157,145.1

RESERVE ASSETS
--------------------------------------------------------------------

1/1/98 1/1/97 1/1/96 1/1/95 1/1/94

TO TO TO TO TO

12/31/98 12/31/97 12/31/96 12/31/95 12/31/94

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

<S> <C> <C> <C> <C> <C>
(1) Accumulation unit value at
beginning of period.............................. $12.32 $11.79 $11.29 $10.76 $10.43

(2) Accumulation unit value at end
of period........................................ $12.87 $12.32 $11.79 $11.29 $10.76

(3) Number of accumulation units outstanding at end of
period........................................... 913,135.2 917,759.7 890,380.20 1,002,197.4 1,286,558.6

</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL BOND***
--------------------------------------------------------------------
1/1/98 1/1/97 1/1/96 1/1/95 5/16/94*
TO TO TO TO TO
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
(1) Accumulation unit value at
beginning of period.............................. *** *** $11.40 $9.93 $10.00
(2) Accumulation unit value at end
of period........................................ *** *** *** $11.40 $9.93
(3) Number of accumulation units outstanding at end of
period........................................... *** 0.0 0.00 1,191,641.1 464.604.1

<CAPTION>
GOVERNMENT BOND
--------------------------------------------------------------------

1/1/98 1/1/97 1/1/96 1/1/95 5/16/94*

TO TO TO TO TO

12/31/98 12/31/97 12/31/96 12/31/95 12/31/94

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

<S> <C> <C> <C> <C> <C>
(1) Accumulation unit value at
beginning of period.............................. $12.45 $11.59 $11.42 $10.08 $10.00

(2) Accumulation unit value at end
of period........................................ $13.36 $12.45 $11.59 $11.42 $10.08

(3) Number of accumulation units outstanding at end of
period........................................... 24,286,677.2 13,405,996.1 7,173,354.60 3,417,936.4 1,484,500.1

</TABLE>

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

* Commencement of business

** Effective following the close of business on December 6, 1996, the Flexible
Strategy Fund was merged with and into the Global Strategy Focus Fund.

*** Effective following the close of business on December 6, 1996, the
International Bond Fund was merged with and into the former World Income
Focus Fund; the World Income Focus Fund was renamed the Global Bond Focus
Fund and its investment objective was modified.

49
<PAGE>
<TABLE>
<CAPTION>
DEVELOPING CAPITAL
MARKETS FOCUS
--------------------------------------------------------------------
1/1/98 1/1/97 1/1/96 1/1/95 5/16/94*
TO TO TO TO TO
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
(1) Accumulation unit value at
beginning of period................................... $9.21 $9.99 $9.16 $9.38 $10.00
(2) Accumulation unit value at end
of period............................................. $6.42 $9.21 $9.99 $9.16 $9.38
(3) Number of accumulation units outstanding at end of
period................................................ 8,301,183.8 12,981,977.3 7,960,705.20 4,912,543.0 2,702,530.7

<CAPTION>
GLOBAL CAPITAL

INDEX 500 GROWTH FOCUS FOCUS

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

1/1/98 1/1/97 12/18/96* 1/1/98 1/1/98

TO TO TO TO TO

12/31/98 12/31/97 12/31/96 12/31/98 12/31/98

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

<S> <C> <C> <C> <C> <C>
(1) Accumulation unit value at
beginning of period................................... $13.27 $10.12 $0.00 **** ****

(2) Accumulation unit value at end
of period............................................. $16.79 $13.27 $10.12 $10.74 $9.68

(3) Number of accumulation units outstanding at end of
period................................................ 19,261,320.4 13,455,750.2 33,052.40 1,298,842.5 1,724,252.1

</TABLE>
<TABLE>
<CAPTION>
HOTCHKIS AND
WILEY
INTERNATIONAL SELECT TEN AIM V.I. CAPITAL
VIP TRUST APPRECIATION
------------ ------------ ----------------------------------------
1/1/98 1/1/98 1/1/98 1/1/97 1/1/96
TO TO TO TO TO
12/31/98 12/31/98 12/31/98 12/31/97 12/31/96
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
(1) Accumulation unit value at
beginning of period...................... **** **** $11.23 $10.03 $0.00
(2) Accumulation unit value at end
of period................................ $9.49 $10.12 $13.22 $11.23 $10.03
(3) Number of accumulation units outstanding
at end of period......................... 28,051,199.1 2,066,901.2 7,273,224.1 9,024,846.3 53,080.90

AIM V.I. ALLIANCE
VALUE PREMIER GROWTH
---------------------------------------- ----------------------------------------

1/1/98 1/1/97 1/1/96 1/1/98 1/1/97 1/1/96

TO TO TO TO TO TO

12/31/98 12/31/97 12/31/96 12/31/98 12/31/97 12/31/96

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

<S> <C> <C> <C> <C> <C> <C>
(1) Accumulation unit value at
beginning of period...................... $12.52 $10.26 $0.00 $13.21 $10.00 $0.00

(2) Accumulation unit value at end
of period................................ $16.35 $12.52 $10.26 $19.28 $13.21 $10.00

(3) Number of accumulation units outstanding
at end of period......................... 18,123,583.9 8,189,098.3 29,828.90 32,445,966.0 17,656,658.9 14,562.50

</TABLE>
<TABLE>
<CAPTION>
ALLIANCE MFS EMERGING
QUASAR GROWTH
------------ ----------------------------------------
1/1/98 1/1/98 1/1/97 1/1/96
TO TO TO TO
12/31/98 12/31/98 12/31/97 12/31/96
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
(1) Accumulation unit value at
beginning of period........... **** $11.83 $9.83 $0.00
(2) Accumulation unit value at end
of period..................... $8.57 $15.66 $11.83 $9.83
(3) Number of accumulation units
outstanding at end of
period........................ 1,208,208.4 13,340,981.2 6,318,571.3 23,931.10

<CAPTION>
MFS
RESEARCH
----------------------------------------
1/1/98 1/1/97 1/1/96
TO TO TO
12/31/98 12/31/97 12/31/96
------------ ------------ ------------
<S> <C> <C> <C>
(1) Accumulation unit value at
beginning of period........... $11.96 $10.08 $0.00
(2) Accumulation unit value at end
of period..................... $14.56 $11.96 $10.08
(3) Number of accumulation units
outstanding at end of
period........................ 14,322,681.4 9,049,568.0 25,095.40
</TABLE>

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

* Commencement of business

**** Available for allocations of premiums or contract value effective
following the close of business on June 5, 1998.

50
<PAGE>
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION

The contents of the Statement of Additional Information for the Contract include
the following:

OTHER INFORMATION
Principal Underwriter
Financial Statements
Administrative Services Arrangements
CALCULATION OF YIELDS AND TOTAL RETURNS

FINANCIAL STATEMENTS OF MERRILL LYNCH LIFE VARIABLE ANNUITY
SEPARATE ACCOUNT A

FINANCIAL STATEMENTS OF MERRILL LYNCH LIFE VARIABLE ANNUITY
SEPARATE ACCOUNT B

FINANCIAL STATEMENTS OF MERRILL LYNCH LIFE INSURANCE COMPANY

51
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1999

MERRILL LYNCH LIFE VARIABLE ANNUITY SEPARATE ACCOUNT A
AND
MERRILL LYNCH LIFE VARIABLE ANNUITY SEPARATE ACCOUNT B
FLEXIBLE PREMIUM INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACT
ALSO KNOWN AS
MODIFIED SINGLE PREMIUM INDIVIDUAL DEFERRED
VARIABLE ANNUITY CONTRACT
ISSUED BY
MERRILL LYNCH LIFE INSURANCE COMPANY
HOME OFFICE: LITTLE ROCK, ARKANSAS 72201
SERVICE CENTER: P.O. BOX 44222,
JACKSONVILLE, FLORIDA 32231-4222
4804 DEER LAKE DRIVE EAST,
JACKSONVILLE, FLORIDA 32246
PHONE: (800) 535-5549
OFFERED THROUGH
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

This individual deferred variable annuity contract (the "Contract") is designed
to provide comprehensive and flexible ways to invest and to create a source of
income protection for later in life through the payment of annuity benefits. An
annuity is intended to be a long term investment. Contract owners should
consider their need for deferred income before purchasing the Contract. The
Contract is issued by Merrill Lynch Life Insurance Company ("Merrill Lynch
Life") both on a nonqualified basis, and as an Individual Retirement Annuity
("IRA") that is given qualified tax status.

This Statement of Additional Information is not a Prospectus and should be read
together with the Contract's Prospectus dated May 1, 1999, which is available on
request and without charge by writing to or calling Merrill Lynch Life at the
Service Center address or phone number set forth above.
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
OTHER INFORMATION......................................................................................... 3

Principal Underwriter..................................................................................... 3

Financial Statements...................................................................................... 3

Administrative Services Arrangements...................................................................... 3

CALCULATION OF YIELDS AND TOTAL RETURNS................................................................... 3

FINANCIAL STATEMENTS OF MERRILL LYNCH LIFE VARIABLE ANNUITY SEPARATE ACCOUNT A............................ S-1

FINANCIAL STATEMENTS OF MERRILL LYNCH LIFE VARIABLE ANNUITY SEPARATE ACCOUNT B............................ S-xx

FINANCIAL STATEMENTS OF MERRILL LYNCH LIFE INSURANCE COMPANY.............................................. G-1
</TABLE>

2
<PAGE>
OTHER INFORMATION

PRINCIPAL UNDERWRITER

Merrill Lynch, Pierce, Fenner & Smith Incorporated, an affiliate of Merrill
Lynch Life, performs all sales and distribution functions regarding the
Contracts and may be deemed the principal underwriter of Merrill Lynch Life
Variable Annuity Separate Account A and Merrill Lynch Life Variable Annuity
Separate Account B (the "Accounts") under the Investment Company Act of 1940.
The offering is continuous. For the years ended December 31, 1998, 1997, and
1996, Merrill Lynch, Pierce, Fenner & Smith Incorporated received $50.2 million,
$49.4 million, and $26.1 million, respectively, in commissions in connection
with the sale of the Contracts.

FINANCIAL STATEMENTS

The financial statements of Merrill Lynch Life included in this Statement of
Additional Information should be distinguished from the financial statements of
the Accounts and should be considered only as bearing upon the ability of
Merrill Lynch Life to meet any obligations it may have under the Contract.

ADMINISTRATIVE SERVICES ARRANGEMENTS

Merrill Lynch Life has entered into a Service Agreement with its parent, Merrill
Lynch Insurance Group, Inc. ("MLIG") pursuant to which Merrill Lynch Life can
arrange for MLIG to provide directly or through affiliates certain services.
Pursuant to this agreement, Merrill Lynch Life has arranged for MLIG to provide
administrative services for the Accounts and the Contracts, and MLIG, in turn,
has arranged for a subsidiary, Merrill Lynch Insurance Group Services, Inc.
("MLIG Services"), to provide these services. Compensation for these services,
which will be paid by Merrill Lynch Life, will be based on the charges and
expenses incurred by MLIG Services, and will reflect MLIG Services' actual
costs. For the years ended December 31, 1998, 1997, and 1996, Merrill Lynch Life
paid administrative services fees of $43.2 million, $43.0 million, and $44.5
million, respectively.

CALCULATION OF YIELDS AND TOTAL RETURNS

MONEY MARKET YIELDS

From time to time, Merrill Lynch Life may quote in advertisements and sales
literature the current annualized yield for the Domestic Money Market Subaccount
of Account A and the Reserve Assets Subaccount of Account B for a 7-day period
in a manner that does not take into consideration any realized or unrealized
gains or losses on shares of the underlying Funds or on their respective
portfolio securities. The current annualized yield is computed by: (a)
determining the net change (exclusive of realized gains and losses on the sales
of securities and unrealized appreciation and depreciation) at the end of the
7-day period in the value of a hypothetical account under a Contract having a
balance of 1 unit at the beginning of the period, (b) 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 (c) annualizing this quotient on a 365-day
basis. The net change in account value reflects: (1) net income from the Fund
attributable to the hypothetical account; and (2) charges and deductions imposed
under the Contract which are attributable to the hypothetical account. The
charges and deductions include the per unit charges for the hypothetical account
for: (1) the mortality and expense risk charge; (2) the administration charge in
the case of the Domestic Money Market Subaccount; and (3) the annual contract
maintenance charge. For purposes of calculating current yields for a Contract,
an average per unit

3
<PAGE>
contract maintenance charge is used, as described below. Current yield will be
calculated according to the following formula:

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

Where:

<TABLE>
<S> <C> <C>
NCF = the net change in the value of the Fund (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 unit.

ES = per unit expenses for the hypothetical account for the 7-day
period.

UV = the unit value on the first day of the 7-day period.
</TABLE>

Merrill Lynch Life also may quote the effective yield of the Domestic Money
Market Subaccount or the Reserve Assets Subaccount for the same 7-day period,
determined on a compounded basis. The effective yield is calculated by
compounding the unannualized base period return according to the following
formula:

Effective Yield = (1 + ((NCF - ES)/UV)) TO THE POWER OF (365/7) - 1

Where:

ES = per unit expenses of the hypothetical account for the 7-day period.

UV = the unit value for the first day of the 7-day period.
</TABLE>

The effective yield for the Domestic Money Market subaccount for the 7-day
period ended December 31, 1998 was 3.41%. The effective yield for the Reserve
Assets subaccount for the 7-day period ended December 31, 1998 was 4.02%.

Because of the charges and deductions imposed under the Contract, the yield for
the Domestic Money Market Subaccount and the Reserve Assets Subaccount will be
lower than the yield for the corresponding underlying Fund.

The yields on amounts held in the Domestic Money Market Subaccount or the
Reserve Assets 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 actual yield for those
subaccounts is affected by changes in interest rates on money market securities,
average portfolio maturity of the underlying Fund, the types and qualities of
portfolio securities held by the Fund and the Fund's operating expenses. Yields
on amounts held in the Domestic Money Market Subaccount and Reserve Assets
Subaccount may also be presented for periods other than a 7-day period.

OTHER SUBACCOUNT YIELDS

From time to time, Merrill Lynch Life may quote in sales literature or
advertisements the current annualized yield of one or more of the Account A
subaccounts (other than the Domestic Money Market Subaccount) for a contract for
30-day or one-month periods. The annualized yield of a subaccount refers to
income generated by the subaccount over a specified 30-day or one-month period.
Because the yield is annualized, the yield generated by the subaccount during
the 30-day or one-month period is assumed to be generated each period over a
12-month period. The yield is computed by: (1) dividing the net investment
income of the Fund attributable to the subaccount units less subaccount expenses

4
<PAGE>
for the period; by (2) the maximum offering price per unit on the last day of
the period times the daily average number of units outstanding for the period;
then (3) compounding that yield for a 6-month period; and then (4) multiplying
that result by 2. Expenses attributable to the subaccount include the mortality
and expense risk charge, the administration charge and the annual contract
maintenance charge. For purposes of calculating the 30-day or one-month yield,
an average contract maintenance charge per dollar of contract value in the
subaccount is used to determine the amount of the charge attributable to the
subaccount for the 30-day or one-month period; as described below. The 30-day or
one-month yield is calculated according to the following formula:

Yield = 2 ((((NI - ES)/(U X UV)) + 1) TO THE POWER OF (6) - 1)

Where:

<TABLE>
<S> <C> <C>
NI = net investment income of the Fund for the 30-day or one-month
period attributable to the subaccount's units.

ES = expenses of the subaccount for the 30-day or one-month period.

U = the average number of units outstanding.

UV = the unit value at the close of the last day in the 30-day or
one-month period.
</TABLE>

Currently, Merrill Lynch Life may quote yields on bond subaccounts within
Account A. The yield for those subaccounts for the 30-day period ended December
31, 1998 was:

<TABLE>
<CAPTION>
NAME OF SUBACCOUNT YIELD
- -------------------------------------------------------------------------------------- -----------
<S> <C>
Prime Bond 4.28%
High Current Income 8.86%
Global Bond Focus (formerly, World Income Focus) 2.36%
Government Bond (formerly, Intermediate Government Bond) 3.17%
</TABLE>

Because of the charges and deductions imposed under the contracts, the yield for
an Account A subaccount will be lower than the yield for the corresponding Fund.

The yield on the amounts held in the Account A subaccounts 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 portfolio
securities held by the corresponding Fund, and its operating expenses.

Yield calculations do not take into account the declining contingent deferred
sales charge under the Contract of amounts surrendered or withdrawn under the
Contract deemed to consist of premiums paid within the preceding seven years. A
contingent deferred sales charge will not be imposed on the first withdrawal in
any Contract year to the extent that it is deemed to consist of gain on premiums
paid during the preceding seven contract years and/or premiums not subject to
such a charge.

5
<PAGE>
TOTAL RETURNS

From time to time, Merrill Lynch Life also may quote in sales literature or
advertisements, total returns, including average annual total returns for one or
more of the subaccounts for various periods of time. Average annual total
returns will be provided for a subaccount for 1, 5 and 10 years, or for a
shorter period, if applicable. For the year ended December 31, 1998, returns
were:

<TABLE>
<CAPTION>
5 10 SINCE
NAME OF SUBACCOUNT 1 YEAR YEAR YEAR INCEPTION
- ----------------------------------------- ---------- --------- ----- -----------
<S> <C> <C> <C> <C>
Prime Bond -0.45% 4.46% N/A 6.16%
High Current Income -10.47% 4.19% N/A 7.06%
Quality Equity 6.91% 13.32% N/A 12.19%
Special Value Focus
(formerly, Equity Growth) -13.60% 6.82% N/A 6.33%
Natural Resources Focus* -21.67% -2.74% N/A -0.03%
American Balanced* 4.92% 9.03% N/A 9.38%
Global Strategy Focus 0.49% 6.47% N/A 7.86%
Basic Value Focus 1.01% 13.37% N/A 13.91%
Global Bond Focus**
(formerly, World Income Focus) 3.99% 4.72% N/A 5.39%
Global Utility Focus* 15.27% 12.92% N/A 12.99%
International Equity Focus** -0.49% 1.03% N/A 2.80%
Government Bond
(formerly, Intermediate Government
Bond) 0.39% N/A N/A 5.82%
Developing Capital Markets Focus -34.58% N/A N/A -9.74%
Index 500 19.42% N/A N/A 26.88%
Capital Focus N/A N/A N/A -15.72%
Global Growth Focus N/A N/A N/A 0.78%
Select Ten Trust N/A N/A N/A -9.07%
AIM V.I. Capital Appreciation 10.58% N/A N/A 12.34%
AIM V.I. Value 23.49% N/A N/A 25.21%
Alliance Premier Growth 38.83% N/A N/A 36.08%
Alliance Quasar N/A N/A N/A -31.85%
MFS Emerging Growth 25.22% N/A N/A 22.47%
MFS Research 14.60% N/A N/A 18.03%
Hotchkis and Wiley International VIP N/A N/A N/A -18.66%
</TABLE>

Total returns assume the Contract was surrendered at the end of the period
shown, and are not indicative of performance if the Contract was continued for a
longer period.
- ------------------------
* This subaccount was closed to allocations of premiums or contract value
following the close of business on December 6, 1996.

** This subaccount was closed to allocations of premiums or contract value
following the close of business on June 5, 1998.

6
<PAGE>
Average annual total returns for other periods of time may also be disclosed
from time to time. For example, average annual total returns may be provided
based on the assumption that a subaccount had been in existence and had invested
in the corresponding underlying Fund for the same period as the corresponding
Fund had been in operation. The Funds commenced operations as indicated below:

<TABLE>
<CAPTION>
FUND COMMENCED OPERATIONS
- --------------------------------------------------------- -----------------------
<S> <C>
Domestic Money Market Fund February 21, 1992
Prime Bond Fund April 29, 1982
High Current Income Fund April 29, 1982
Quality Equity Fund April 29, 1982
Equity Growth Fund April 29, 1982
Natural Resources Focus Fund* June 1, 1988
American Balanced Fund* June 1, 1988
Global Strategy Focus Fund February 21, 1992
Basic Value Focus Fund July 1, 1993
Global Bond Focus Fund**
(formerly, World Income Focus) July 1, 1993
Global Utility Focus Fund* July 1, 1993
International Equity Focus Fund** July 1, 1993
Government Bond Fund
(formerly, Intermediate Government Bond) May 16, 1994
Developing Capital Markets Focus Fund May 16, 1994
Reserve Assets Fund November 23, 1981
Index 500 Fund December 18, 1996
AIM V.I. Capital Appreciation Fund May 5, 1993
AIM V.I. Value Fund May 5, 1993
Alliance Premier Growth Portfolio March 12, 1992
Alliance Quasar Portfolio September 17, 1990
MFS Emerging Growth Series July 24, 1995
MFS Research Series July 26, 1995
Hotchkis and Wiley International VIP Portfolio June 10, 1998
</TABLE>

Average annual total returns represent the average annual compounded rates of
return that would equate an initial investment of $1,000 under a contract to the
redemption value or 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 generally be as of the most recent calendar quarter-end.

Average annual total returns are calculated using subaccount unit values
calculated on each valuation day based on the performance of the corresponding
underlying Fund, the deductions for the mortality and expense risk charge, the
administration charge (in the case of Account A subaccounts), and the contract
maintenance charge, and assume a surrender of the Contract at the end of the
period for the return quotation. Total returns therefore reflect a deduction of
the contingent deferred sales charge for any period of less than seven years.
For purposes of calculating total return, an average per dollar contract
maintenance charge attributable to the hypothetical account for the period is
used, as described below. The total return is then calculated according to the
following formula:

TR = ((ERV/P) TO THE POWER OF (1/N)) + 1

<TABLE>
<S> <C> <C>
Where:
TR = the average annual total return net of subaccount recurring charges
(such as the mortality and expense risk charge, administration
charge, if applicable, and contract maintenance charge).
ERV = the ending redeemable value (net of any applicable contingent
deferred sales charge) at the end of the period of the hypothetical
account with an initial payment of $1,000.
P = a hypothetical initial payment of $1,000.
N = the number of years in the period.
</TABLE>

- ------------------------
* The subaccount corresponding to this Fund was closed to allocations of
premiums or contract value following the close of business on December 6,
1996.

** The subaccount corresponding to this Fund was closed to allocations of
premiums or contract value following the close of business on June 5, 1998.

7
<PAGE>
From time to time, Merrill Lynch Life also may quote in sales literature or
advertisements, total returns that do not reflect the contingent deferred sales
charge. These are calculated in exactly the same way as average annual total
returns described above, except that the ending redeemable value of the
hypothetical account for the period is replaced with an ending value for the
period that does not take into account any contingent deferred sales charge on
surrender of the Contract. In addition, such nonstandard returns may also be
quoted for other periods.

For the year ended December 31, 1998, returns not reflecting any contingent
deferred sales charge were:

<TABLE>
<CAPTION>
5 10 SINCE
NAME OF SUBACCOUNT 1 YEAR YEAR YEAR INCEPTION
- ---------------------------------------------------- ----------- --------- --------- ----------
<S> <C> <C> <C> <C>
Prime Bond 6.30% 4.96% N/A 6.27%
High Current Income -4.48% 4.70% N/A 7.16%
Quality Equity 13.92% 13.69% N/A 12.27%
Special Value Focus
(formerly, Equity Growth) -7.85% 7.28% N/A 6.44%
Natural Resources Focus* -16.52% -2.21% N/A 0.10%
American Balanced* 11.93% 9.46% N/A 9.46%
Global Strategy Focus 7.31% 6.93% N/A 7.95%
Basic Value Focus 7.87% 13.74% N/A 14.11%
Global Bond Focus**
(formerly, World Income Focus) 11.00% 5.21% N/A 5.67%
Global Utility Focus* 22.27% 13.29% N/A 13.20%
International Equity Focus** 6.25% 1.59% N/A 3.12%
Government Bond
(formerly, Intermediate Government Bond) 7.20% N/A N/A 6.35%
Developing Capital Markets Focus -30.40% N/A N/A -9.23%
Index 500 26.43% N/A N/A 28.80%
Capital Focus N/A N/A N/A -5.60%
Global Growth Focus N/A N/A N/A 13.02%
Select Ten Trust N/A N/A N/A 1.90%
AIM V.I. Capital Appreciation 17.59% N/A N/A 14.51%
AIM V.I. Value 30.50% N/A N/A 27.15%
Alliance Premier Growth 45.84% N/A N/A 37.87%
Alliance Quasar N/A N/A N/A -23.80%
MFS Emerging Growth 32.23% N/A N/A 24.45%
MFS Research 21.61% N/A N/A 20.09%
Hotchkis and Wiley International VIP N/A N/A N/A -8.92%
</TABLE>

From time to time, Merrill Lynch Life also may quote in sales literature or
advertisements total returns or other performance information for a hypothetical
Contract assuming the initial premium is allocated to more than one subaccount
or assuming monthly transfers from the Domestic Money Market Subaccount to one
or more designated subaccounts under a dollar cost averaging program. These
returns will reflect the performance of the affected subaccount(s) for the
amount and duration of the allocation to each subaccount for the hypothetical
Contract. They also will reflect the deduction of charges described above except
for the contingent deferred sales charge. For example, total return information
for a Contract with a dollar cost averaging program for a 12-month period will
assume commencement of the program at the beginning of the most recent 12-month
period for which average annual total return information is available. This
information will assume an initial lump-sum investment in the Domestic Money
Market Subaccount at the beginning of that period and monthly transfers of a
portion of the contract value from that subaccount to designated subaccount(s)
during the 12-month period. The total return for the Contract for this 12-month
period therefore will reflect the return on the portion of the contract value
that remains invested in the Domestic Money Market Subaccount for the period it
is assumed to be so invested, as affected by monthly transfers, and the return
on amounts transferred to the designated subaccounts for the period during which
those amounts are assumed to be invested in those subaccounts. The return for an
amount invested in a subaccount will be based on the performance of that
subaccount for the duration of the investment, and will reflect the charges
described above other than the contingent deferred sales charge. Performance
information for a dollar cost-averaging program also may show the returns for
various periods for a designated subaccount assuming monthly transfers to the
subaccount, and may compare those returns to returns assuming an initial
lump-sum investment in that subaccount. This

8
<PAGE>
information also may be compared to various indices, such as the Merrill Lynch
91-day Treasury Bills index or the U.S. Treasury Bills index and may be
illustrated by graphs, charts, or otherwise.

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

* This subaccount was closed to allocations of premiums or contract value
following the close of business on December 6, 1996.

** This subaccount was closed to allocations of premiums or contract value
following the close of business on June 5, 1998.