BLACKROCK INSURED MUNICIPAL TERM TRUST INC, N-30D, 1999-03-04

BLACKROCK INSURED MUNICIPAL TERM TRUST INC
N-30D, 1999-03-04

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- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------

January 31, 1999

Dear Shareholders:

Over the past twelve months, U.S. Treasury securities have experienced a
strong rally, as investors sought a safe haven from global market turmoil and
the Federal Reserve continued to cut interest rates. Other segments of the fixed
income market have lagged behind Treasuries, but still produced generally
positive returns since our last report. We anticipate that the Federal Reserve
will remain prepared to combat any signs of a credit crunch through interest
rate cuts, and given the unstable economic situation in Brazil, the Fed likely
will retain an easing bias.

Despite previous worries of a second half slowdown in 1998, the U.S. economy
continues to expand rapidly, supported by strong consumer spending. This
momentum, however, may not continue as briskly into the new year, based on
weaker corporate profits and a loosening of the labor markets. Already, major
corporations have warned of slower profit growth and announced major layoffs.

This report contains detailed market and portfolio strategy by your Trust's
managers in addition to the Trust's audited financial statements and a detailed
list of the portfolio's holdings. We thank you for your continued investment in
the Trust and look forward to serving your investment needs in the future.

Sincerely,

/s/Laurence D. Fink /s/Ralph L. Schlosstein
- ------------------- -----------------------
Laurence D. Fink Ralph L. Schlosstein
Chairman President

<PAGE>

January 31, 1999

Dear Shareholder:

We are pleased to present the annual report for The BlackRock Insured
Municipal Term Trust Inc. ("the Trust") for the year ended December 31, 1998. We
would like to take this opportunity to review the Trust's stock price and net
asset value (NAV) performance, summarize developments in the fixed income
markets and discuss recent portfolio management activity.

The Trust is a diversified, actively managed closed-end bond fund whose
shares are traded on the New York Stock Exchange under the symbol "BMT". The
Trust's investment objective is to manage a portfolio of municipal debt
securities that will return $10 per share (an amount equal to the Trust's
initial public offering price) to investors on or about December 31, 2010, while
providing high current income exempt from regular federal income tax. The Trust
seeks to achieve this objective by investing in high credit quality ("AAA" or
insured to "AAA") tax-exempt general obligation and revenue bonds issued by
city, county and state municipalities throughout the United States.

The table below summarizes the changes in the Trust's stock price and net
asset value over the past year:

- --------------------------------------------------------------------------------
12/31/98 12/31/97 CHANGE HIGH LOW
- --------------------------------------------------------------------------------
STOCK PRICE $11.50 $11.00 4.55% $11.875 $10.5625
- --------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $11.22 $11.20 0.18% $11.37 $11.08
- --------------------------------------------------------------------------------

THE FIXED INCOME MARKETS

The first half of the Trust's fiscal year saw Treasury yields decline
towards historic lows. These lows were the result of budget surplus projections
as well as the Federal Reserve's decision to move from a tightening bias to a
neutral interest rate policy. The positive economic momentum throughout the
first half of the fiscal year was strengthened by unseasonably warm weather that
led to increased consumer spending and job gains, which softened the negative
impact on trade from the Asian financial crisis.

The second half of the Trust's fiscal year witnessed virtually
unparalleled market turbulence. Although consumers continued their spending
domestically, demand for U.S. goods abroad faltered, as the strong dollar and
overseas weakness, especially in Asia, drove prices for U.S. goods higher
relative to foreign goods.

Toward year-end, U.S. GDP growth rebounded; however, the instability in
global financial markets began to rattle investor confidence. The devaluation of
the Russian ruble and the fear of a possible devaluation of the Brazilian
currency caused a flight-to-quality to U.S. Treasuries. Corporate yield spreads
to Treasuries widened dramatically as a result of the sell-off. In addition, the
global financial markets witnessed a credit crunch which affected even
higher-grade securities. This dramatic shift of investor sentiment culminated in
the near collapse of a prominent hedge fund.

The Treasury market rally pushed Treasury yields to historic levels below
the 5% barrier. In response to the financial fragility in the third quarter of
1998, the Fed eased interest rates on September 29, 1998 by 25bps and again on
October 15, in an unusual between-meetings move. On November 17, the Fed eased
interest rates again by 25bps.

<PAGE>

These rate cuts seem to have had their desired effect as the US
economy--which finished the year with a 3.5% growth rate. Growth in 1999,
however, may decrease significantly and further easing of interest rates by the
Federal Reserve is possible as the Western economies will need to provide
support for the global economy. With economic growth and labor markets expected
to soften during the first half of 1999, we expect inflation to remain under
control.

Rapidly declining Treasury yields and significant supply of new municipal
issues were responsible for the underperformance of municipals versus treasuries
in 1998. However, on a historical basis, municipals remain attractive,
particularly those with longer maturities. Also, retail investors, who have been
focused on the equity markets have begun to migrate back to the municipal
market. These factors may enable municipals to outperform Treasuries in the
coming year.

THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY

The Trust's portfolio is actively managed to diversify exposure across
various sectors, issuers, revenue sources and types of bonds. BlackRock's
investment strategy emphasizes a relative value approach, which allows the Trust
to capitalize upon changing market conditions by rotating municipal sectors,
credits and coupons. Portfolio trading activity was very low during 1998, as a
majority of the bonds in the portfolio are trading at prices which, if sold,
would result in a taxable capital gain. Additionally, as these bonds were
purchased in higher interest rate environments. If they were sold, the Trust
would be forced to reinvest the proceeds in lower yielding securities. These
factors led us to decide that the most prudent investment strategy for 1998 was
to maintain the current portfolio structure.

The Trust employs leverage to enhance its income by borrowing at
short-term municipal rates and investing the proceeds in longer maturity issues
that have higher yields. The degree to which the Trust can benefit from its use
of leverage may affect its ability to pay high monthly income. The Trust has
experienced favorable short-term municipal rates over the past year, providing
for profitable leverage.

The following chart compares the Trust's current and December 31, 1997
asset composition:

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THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
- --------------------------------------------------------------------------------
SECTOR DECEMBER 31, 1998 DECEMBER 31, 1997
- --------------------------------------------------------------------------------
City, County and State 26% 28%
- --------------------------------------------------------------------------------
Hospital 17% 17%
- --------------------------------------------------------------------------------
Water & Sewer 15% 15%
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Utility/Power 11% 11%
- --------------------------------------------------------------------------------
Tax Revenue 8% 8%
- --------------------------------------------------------------------------------
Education 7% 5%
- --------------------------------------------------------------------------------
Lease Revenue 6% 6%
- --------------------------------------------------------------------------------
Miscellaneous Revenue 4% 4%
- --------------------------------------------------------------------------------
Housing 3% 3%
- --------------------------------------------------------------------------------
Transportation 3% 3%
- --------------------------------------------------------------------------------

<PAGE>

We appreciate your continued confidence and look forward to managing The
BlackRock Insured Municipal Term Trust Inc. in the coming years to realize its
investment objectives. Please feel free to contact the mutual fund specialists
at BlackRock's marketing center at (800) 227-7BFM (7236) if you have any
questions that weren't answered in this report.

Additionally, you can reach us via e-mail at [email protected].

Sincerely,

/s/Robert S. Kapito /s/Kevin Klingert
- ------------------- -----------------
Robert S. Kapito Kevin Klingert
Vice Chairman and Portfolio Manager Managing Director and Portfolio Manager
BlackRock Financial Management, Inc. BlackRock Financial Management, Inc.

- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
- --------------------------------------------------------------------------------
Symbol on New York Stock Exchange: BMT
- --------------------------------------------------------------------------------
Initial Offering Date: February 20, 1992
- --------------------------------------------------------------------------------
Closing Stock Price as of 12/31/98: $11.50
- --------------------------------------------------------------------------------
Net Asset Value as of 12/31/98: $11.22
- --------------------------------------------------------------------------------
Yield on Closing Stock Price as of 12/31/98 ($11.50)1: 5.43%
- --------------------------------------------------------------------------------
Current Monthly Distribution per Common Share2: $ 0.05208
- --------------------------------------------------------------------------------
Current Annualized Distribution per Common Share2: $ 0.62496
- --------------------------------------------------------------------------------

- ----------
1 Yield on Closing Stock Price is calculated by dividing the current annualized
distribution per share by the closing stock price per share.
2 Dividend is not constant and is subject to change.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1998

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

ARIZONA--1.6%
AAA 4,180 University of Arizona Med. Ctr. Hosp. Rev.,
6.25%, 7/01/10, MBIA ........................................... 7/02 at 102 4,523,220
----------

CALIFORNIA--10.3%
California St., G.0., FGIC,
AAA 4,355 6.80%, 11/01/04+ ............................................... N/A 5,088,556
AAA 145 6.80%, 11/01/10 ................................................ 11/04 at 102 168,416
AAA 3,400 California St. Pub. Wks., 6.60%, 12/01/02+, AMBAC ................. N/A 3,820,682
AAA 6,100 Contra Costa Trans. Auth., 6.50%, 3/01/09, FGIC ................... No Opt. Call 6,543,409
AAA 3,500 Eastern Mun. Wtr. Dist., 6.50%, 7/01/09, FGIC ..................... 7/01 at 101 3,751,440
AAA 3,065 Los Angeles Cnty. Leasing Corp., 6.05%, 12/01/10, AMBAC ........... No Opt. Call 3,562,879
AAA 3,000 San Francisco Bay Area Rapid Trans., 6.75%, 7/01/00+, AMBAC ....... N/A 3,206,040
AAA 3,500 Sonoma Cnty. Correct. Fac., C.O.P., 6.10%, 11/15/12, AMBAC ........ 11/02 at 102 3,836,105
----------
29,977,527
----------

DISTRICT OF COLUMBIA--1.3%
AAA 3,500 District of Columbia, G.O., Ser. A, 6.875%, 6/01/00+, MBIA ........ N/A 3,729,355
----------

FLORIDA--9.1%
AAA 10,750 Broward Cnty. Sch. Bd., 6.50%, 7/01/02+, AMBAC .................... N/A 11,915,192
AAA 12,195 Jacksonville Excise Tax Rev., 6.50%, 10/01/10, AMBAC .............. 10/02 at 102 13,488,646
AAA 1,000 Volusia Cnty. Edl. Fac., 6.50%, 10/15/10, CONNIE LEE .............. 10/02 at 102 1,105,050
----------
26,508,888
----------

GEORGIA--2.6%
AAA 5,000 Henry Cnty. Hosp. Auth. Rev., 6.375%, 7/01/09, FGIC ............... 7/02 at 102 5,440,850
AAA 2,000 Macon-Bibb Cnty. Hosp. Auth. Rev., Georgia Med. Ctr.,
6.75%, 8/01/99+, FGIC .......................................... N/A 2,081,300
----------
7,522,150
----------

ILLINOIS--13.1%
AAA 2,665 Chicago, Res. Mtg. Rev., Zero Coupon, 10/01/09, MBIA .............. No Opt. Call 1,266,621
Cook Cnty., G.O., MBIA,
AAA 7,000 6.50%, 11/15/02+ ............................................... N/A 7,798,350
AAA 4,500 7.00%, 11/01/00+ ............................................... N/A 4,865,310
AAA 5,000 Cook Cnty., Community Schs., 6.50%, 1/01/02+, FGIC ................ N/A 5,380,600
AAA 5,000 ILLINOIS EDL. FAC. AUTH. REV., 5.70%, 7/01/03+, FGIC .............. N/A 5,340,200
Illinois Hlth. Fac. Auth. Rev., FGIC,
AAA 3,000 Ser. A, 6.75%, 1/01/10 ......................................... 1/00 at 102 3,133,680
AAA 1,750 Ser. C, 6.75%, 1/01/00+ ........................................ N/A 1,827,980
AAA 7,980 Kendell Kane & Will Cnty. Sch. Dist., 6.25%, 9/01/11, FGIC ........ 9/01 at 100 8,388,177
----------
38,000,918
----------

INDIANA--3.0%
AAA 1,340 Columbus Sch. Bd., 6.625%, Ser. A, 7/01/11, AMBAC ................. 7/02 at 102 1,467,997
AAA 3,750 Indiana St. Edl. Fac. Auth. Rev., Ser. A, 6.60%, 1/01/11, MBIA .... 1/02 at 102 4,056,412
AAA 3,000 Monroe Cnty. Hosp. Auth. Rev., Bloomington Hosp.,
6.65%, 5/01/02+, MBIA .......................................... N/A 3,295,470
----------
8,819,879
----------
</TABLE>

See Notes to Financial Statements.

<PAGE>

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

PRINCIPAL OPTION CALL
RATING* AMOUNT PROVISIONS++ VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
- ----------------------------------------------------------------------------------------------------------------------
LOUISIANA--6.6%
<S> <C> <C> <C> <C>
AAA $14,385 Louisiana St., G.O., Ser. A, 6.50%, 5/01/02+, AMBAC ............... N/A $ 15,838,460
AAA 2,905 New Orleans Pub. Impt., G.O., 6.60%, 9/01/02+, FGIC ............... N/A 3,184,984
----------
19,023,444
----------

MASSACHUSETTS--16.1%
AAA 2,100 Boston, G.O., Ser. A, 6.50%, 7/01/12, AMBAC ....................... 7/02 at 102 2,295,741
Massachusetts St. Hlth. &Edl. Fac. Auth. Rev.,
AAA 2,000 Ser. C, 6.50%, 7/01/10, FGIC ................................... 7/02 at 102 2,178,240
AAA 5,000 Ser. D, 6.50%, 7/01/10, MBIA ................................... 7/02 at 102 5,445,600
AAA 3,250 Ser. C, 7.25%, 7/01/00+, MBIA .................................. N/A 3,491,637
Massachusetts St. Hsg. Fin. Agcy., FNMA,
AAA 5,000 Ser. H, 6.75%, 11/15/12 ........................................ 11/03 at 102 5,416,450
AAA 5,500 Residential Dev., Ser. A, 6.875%, 11/15/11 ..................... 5/02 at 102 5,995,440
AAA 600 Residential Dev., Ser. C, 6.875%, 11/15/11 ..................... 5/02 at 102 654,048
Massachusetts St., G.O.,
AAA 2,350 Ser. D, 6.00%, 7/01/01+, MBIA .................................. N/A 2,482,072
AAA 7,865 Ser. C, 6.70%, 11/01/04+, FGIC ................................. N/A 9,063,941
AAA 780 Ser. C, 6.75%, 8/01/01+, AMBAC ................................. N/A 853,991
AAA 440 Ser. C, 6.75%, 8/01/09, AMBAC .................................. 8/01 at 102 475,737
AAA 7,630 Massachusetts St. Wtr. Res., Ser. B, 6.25%, 11/01/10, MBIA ........ 11/02 at 102 8,289,385
----------
46,642,282
----------

MICHIGAN--3.9%
AAA 2,375 Chippewa Valley, Sch. Bldg. & Site Rev., 6.375%, 5/01/01+, FGIC ... N/A 2,550,299
Michigan Mun. Bd. Auth. Rev.,
AAA 900 Ser. A, 6.50%, 11/01/12, MBIA .................................. 11/02 at 102 992,349
AAA 2,040 6.45%, 11/01/07, AMBAC ......................................... 11/04 at 102 2,301,875
AAA 2,050 6.65%, 11/01/09, AMBAC ......................................... 11/04 at 102 2,334,109
AAA 3,000 Western Township Util. Auth. Swr. Dist. Sys. Rev.,
6.50%, 1/01/10, FSA ............................................ 1/02 at 100 3,188,280
----------
11,366,912
----------

MISSISSIPPI--0.7%
AAA 1,800 Harrison Cnty. Waste Wtr. Mgmt., 6.75%, 2/01/11, FGIC ............. 2/01 at 102 1,927,494
----------

NEVADA--7.0%
AAA 4,000 Clark Cnty., G.O., 6.50%, 6/01/02+, AMBAC ......................... N/A 4,425,440
AAA 5,215 Clark Cnty. Arpt., 6.25%, 6/01/01+, FGIC .......................... N/A 5,523,989
Clark Cnty. Sch. Dist.,
AAA 4,185 6.75%, 12/15/04+, FGIC ......................................... N/A 4,845,267
AAA 5,175 7.00%, 6/01/01+, MBIA .......................................... N/A 5,617,566
----------
20,412,262
----------

NEW JERSEY--0.8%
AAA 2,000 Hudson Cnty. Correct. Fac., C.O.P., 6.50%, 12/01/11, MBIA ......... 6/02 at 101.5 2,177,700
----------

NEW YORK--11.1%
AAA 4,500 New York City, G.O., Ser. B, 6.95%, 8/15/04+, MBIA ................ N/A 5,209,065
New York St. Env. Fac. Corp. P.C.R.,
AAA 6,155 6.70%, 5/15/09 ................................................. 11/04 at 102 7,083,851
AAA 4,965 6.80%, 5/15/10 ................................................. 11/04 at 102 5,723,007
New York St. Medicare Fac., AMBAC,
AAA 9,715 6.60%, 2/15/05+ ................................................ N/A 11,195,275
AAA 2,695 6.625%, 2/15/05+ ............................................... N/A 3,109,248
----------
32,320,446
----------
</TABLE>

See Notes to Financial Statements.

<PAGE>

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

PRINCIPAL OPTION CALL
RATING* AMOUNT PROVISIONS++ VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
- ----------------------------------------------------------------------------------------------------------------------
OHIO--6.0%
Cleveland Wtrwks. Rev., First Mtg., Ser. F, AMBAC,
<S> <C> <C> <C> <C>
AAA $ 6,495 6.50%, 1/01/11 ................................................. 1/02 at 102 $ 7,121,053
AAA 5,505 6.50%, 1/01/02+ ................................................ N/A 6,035,627
AAA 3,900 Lucas Cnty. Hosp. Impt. Rev., St. Vincent Med. Ctr.,
6.50%, 8/15/02+, MBIA .......................................... N/A 4,276,779
----------
17,433,459
----------

OKLAHOMA--2.1%
AAA 5,725 Oklahoma City Wtr. Util. Tr., Wtr. & Sewer Rev., Ser. B,
6.375%, 7/01/12, MBIA .......................................... 7/02 at 100 6,155,577
----------

PENNSYLVANIA--6.1%
AAA 5,000 Dauphin Cnty. Gen. Auth. Rev., 6.25%, 7/01/08, MBIA ............... 7/02 at 102 5,410,550
AAA 2,100 Philadelphia Wtr. &Waste Rev., Ser. A, 5.625%, 6/15/08, AMBAC ..... No Opt. Call 2,323,398
AAA 6,005 Pittsburgh, G.O., Ser. D, 6.00%, 9/01/02+, AMBAC .................. N/A 6,566,768
AAA 3,000 Pittsburgh Wtr. & Swr., 6.75%, 9/01/01+, FGIC ..................... N/A 3,287,430
----------
17,588,146
----------

RHODE ISLAND--4.5%
AAA 2,390 RHODE ISLAND CLEAN WTR. PROTN. FIN. AGCY., P.C.R., REVOLVING FD.
Pooled Ln., Issue A, 6.70%, 10/01/10, MBIA ..................... 10/02 at 102 2,641,476
AAA 10,000 Rhode Island St. Pub. Bldgs. Auth., St. Pub. Proj. Rev., Ser. A,
6.75%, 2/01/00+, AMBAC ......................................... N/A 10,547,000
----------
13,188,476
----------

SOUTH CAROLINA--8.5%
Piedmont Mun. Pwr. Agcy. Elec. Rev.,
AAA 14,925 6.30%, 1/01/11, MBIA ........................................... 1/03 at 102 16,305,712
AAA 7,900 6.50%, 1/01/11, FGIC ........................................... 1/01 at 102 8,400,702
----------
24,706,414
----------

TEXAS--15.7%
Austin Util. Sys. Rev. Comb., Ser A., FGIC,
AAA 7,475 6.00%, 5/15/00+ ................................................ N/A 7,735,504
AAA 1,055 6.00%, 5/15/10 ................................................. 5/00 at 100 1,081,438
AAA 1,580 Dallas Cnty. Road Imp., G.O., 5.625%, 8/15/10 ..................... 8/01 at 100 1,639,756
AAA 2,500 Dallas Ft. Worth Regl. Arpt. Rev., Ser. A, 7.375%, 11/01/10, FGIC . 5/04 at 102 2,914,225
AAA 8,000 El Paso Impt. Auth. Rev., G.O., Ser. A, 6.375%, 8/15/10, FGIC ..... No Opt. Call 8,584,880
Harris Cnty., Toll Road, FGIC,
AAA 2,585 Ser. B, Zero Coupon, 8/15/08 ................................... No Opt. Call 1,712,795
AAA 6,310 Sr. Lien, Ser. A, 6.50%, 8/15/02+ .............................. N/A 7,000,566
AAA 4,775 Sr. Lien, Ser. A, 6.50%, 8/15/11 ............................... 8/02 at 102 5,216,067
AAA 10,440 Houston Wtr. & Swr. Sys., Ser. C, Zero Coupon, 12/01/10, AMBAC .... No Opt. Call 6,112,515
AAA 1,840 North Texas Mun. Wtr. Dist., 6.50%, 6/01/09, MBIA ................. 6/03 at 100 2,011,525
AAA 1,500 Texas Mun. Pwr. Agcy., Ser. A, 6.75%, 9/01/12, AMBAC .............. 9/01 at 102 1,624,200
----------
45,633,471
----------

UTAH--1.2%
AAA 1,450 Salt Lake City Mun. Bldg. Lease, 6.15%, 10/01/10, MBIA ............ 10/04 at 101 1,588,315
AAA 3,175 Salt Lake City Wtr. Conservancy, Zero Coupon, 10/01/10, AMBAC ..... No Opt. Call 1,883,696
----------
3,472,011
----------

VIRGINIA--3.5%
Peninsula Port. Auth., Riverside Hlth. Sys., MBIA,
AAA 6,000 Proj. A, 6.625%, 7/01/10 ....................................... 7/02 at 102 6,573,120
AAA 3,380 Proj. B, 6.625%, 7/01/10 ....................................... 7/02 at 102 3,702,858
----------
10,275,978
----------
</TABLE>

See Notes to Financial Statements.

<PAGE>

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

PRINCIPAL OPTION CALL
RATING* AMOUNT PROVISIONS++ VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
- ----------------------------------------------------------------------------------------------------------------------
WASHINGTON--5.7%
<S> <C> <C> <C> <C>
AAA $ 4,650 Port of Seattle Rev., 6.60%, 8/01/02+, MBIA ....................... N/A $ 5,170,195
Washington St. Pub. Pwr. Supply Sys. Rev.,
AAA 12,905 Zero Coupon, 7/01/10, MBIA ..................................... No Opt. Call 7,698,349
AAA 3,500 Nuclear Proj. No. 2, Ser. A, 7.00%, 7/01/00+, FGIC ............. N/A 3,747,660
-----------
16,616,204
-----------

WISCONSIN--0.7%
AAA 2,000 Wisconsin St. Hlth. & Edl. Facs. Auth. Rev.,
Wausau Hosp. Inc., Ser. A,
6.625%, 2/15/01+, AMBAC ........................................ N/A 2,156,660
-----------

TOTAL INVESTMENTS--142.3% (cost $372,077,775) ..................... 413,341,383
Other assets in excess of liabilities--2.5% ....................... 7,127,873
Liquidation value of preferred stock--(44.8)% ..................... (130,000,000)
-----------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS--100% ................ $290,469,256
===========
</TABLE>

- ----------
* Rating: Using the higher of Standard & Poor's, Moody's or Fitch's rating.
+ This bond is pre-refunded. See glossary for definition.
++ Option call provisions: date (month/year) and price of the earliest call or
redemption. There may be other call provisions at varying prices at later
dates.

- --------------------------------------------------------------------------------
THE FOLLOWING ABBREVIATIONS ARE USED IN PORTFOLIO DESCRIPTIONS:

AMBAC -- American Municipal Bond Assurance Corporation
CONNIE LEE -- College Construction Loan Insurance Association
C.O.P. -- Certificate of Participation
FGIC -- Financial Guaranty Insurance Company
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance, Inc.
G.O. -- General Obligation Bond
MBIA -- Municipal Bond Insurance Association
P.C.R. -- Pollution Control Revenuen
- --------------------------------------------------------------------------------

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL TERM TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
- --------------------------------------------------------------------------------

ASSETS
Investments, at value (cost $372,077,775)
(Note 1) ............................... $413,341,383
Interest receivable ...................... 7,607,712
Prepaid assets ........................... 9,730
------------
420,958,825
------------

LIABILITIES
Due to custodian ......................... 140,318
Investment Advisory fee payable (Note 2) . 125,542
Dividends payable--preferred stock ....... 45,541
Administration fee payable (Note 2) ...... 35,869
Other accrued expenses ................... 142,299
------------
489,569
------------
NET INVESTMENT ASSETS .................... $420,469,256
============
Net investment assets were comprised of:
Common stock:
Par value (Note 4) ................... $ 258,856
Paid-in capital in excess of par ..... 239,833,688
Preferred stock (Note 4) ............... 130,000,000
------------
370,092,544
Undistributed net investment income .... 9,464,998
Accumulated net realized loss .......... (351,894)
Net unrealized appreciation ............ 41,263,608
------------
Net investment assets, December 31, 1998 $420,469,256
============
Net assets applicable to common
shareholders ......................... $290,469,256
============
Net asset value per common share:
($290,469,256 / 25,885,639 shares of
common stock issued and outstanding) ... $11.22
======

- --------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL TERM TRUST INC.
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------

NET INVESTMENT INCOME
Income
Interest and discount earned ........... $24,626,712
-----------
Expenses
Investment advisory .................... 1,474,052
Administration ......................... 421,158
Auction agent .......................... 325,000
Custodian .............................. 114,500
Reports to shareholders ................ 72,000
Directors .............................. 64,500
Audit .................................. 42,000
Transfer agent ......................... 35,000
Legal .................................. 10,000
Miscellaneous .......................... 144,115
-----------
Total expenses ......................... 2,702,325
-----------
Net investment income .................... 21,924,387
-----------

REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 3)
Net realized gain on investments ......... 16,839
Net change in unrealized appreciation on
investments ............................ (813,183)
-----------
Net loss on investments .................. (796,344)
-----------

NET INCREASE IN NET INVESTMENT
ASSETS RESULTING FROM OPERATIONS ....... $21,128,043
===========

See Notes to Financial Statements.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
STATEMENTS OF CHANGES IN NET INVESTMENT ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

YEAR ENDED DECEMBER 31,
----------------------------
1998 1997
----------- -----------
INCREASE IN NET INVESTMENT ASSETS
Operations:
<S> <C> <C>
Net investment income .............................................. $ 21,924,387 $ 21,724,960
Net realized gain (loss) on investments ............................ 16,839 (45,924)
Net change in unrealized appreciation on investments ............... (813,183) 7,582,696
----------- -----------
Net increase in net investment assets resulting from operations .... 21,128,043 29,261,732
----------- -----------
Dividends:
To common shareholders from net investment income .................. (16,177,201) (16,177,257)
To preferred shareholders from net investment income ............... (4,443,277) (4,592,916)
----------- -----------
..................................................................... (20,620,478) (20,770,173)
----------- -----------
Total increase ................................................... 507,565 8,491,559
----------- -----------
NET INVESTMENT ASSETS
Beginning of year .................................................... 419,961,691 411,470,132
----------- -----------
End of year .......................................................... $420,469,256 $419,961,691
=========== ===========
</TABLE>

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ......... $11.20 $10.87 $11.02 $9.73 $11.18
----------- ----------- ----------- ----------- -----------
Net investment income .................... 0.85 0.84 0.83 0.84 0.82
Net realized and unrealized
gain (loss) on investments ............. (0.03) 0.29 (0.18) 1.27 (1.48)
----------- ----------- ----------- ----------- -----------
Net increase (decrease) from investment
operations ............................... 0.82 1.13 0.65 2.11 (0.66)
----------- ----------- ----------- ----------- -----------
Dividends from net investment income to:
Preferred shareholders ................... (0.18) (0.18) (0.18) (0.20) (0.14)
Common shareholders ...................... (0.62) (0.62) (0.62) (0.62) (0.62)
Distributions from net realized gain
on investments to:
Preferred shareholders ................... -- -- -- -- (0.01)
Common shareholders ...................... -- -- -- -- (0.02)
----------- ----------- ----------- ----------- -----------
Total dividends and distributions .......... (0.80) (0.80) (0.80) (0.82) (0.79)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year* .............. $11.22 $11.20 $10.87 $11.02 $9.73
=========== =========== =========== =========== ===========
Market value, end of year* ................. $11.50 $11.00 $10.13 $10.00 $8.50
=========== =========== =========== =========== ===========
TOTAL INVESTMENT RETURN+ ................... 10.53% 15.22% 7.59% 25.31% (13.38%)
=========== =========== =========== =========== ===========
RATIOSTOAVERAGENETASSETS OF
COMMON SHAREHOLDERS:++
Expenses ................................... 0.93% 0.94% 0.97% 0.96% 1.04%
Net investment income before preferred
stock dividends .......................... 7.56% 7.66% 7.66% 7.97% 7.99%
Preferred stock dividends .................. 1.53% 1.62% 1.61% 1.87% 1.44%
Net investment income available to
common shareholders ...................... 6.03% 6.04% 6.05% 6.10% 6.55%

SUPPLEMENTAL DATA:
Average net assets of common shareholders
(in thousands) ........................... $290,004 $283,531 $281,521 $272,868 $265,851
Portfolio turnover ......................... 0% 1% 1% 1% 31%
Net assets of common shareholders,
end of year (in thousands) ............... $290,469 $289,962 $281,470 $285,226 $251,856
Preferred stock outstanding (in thousands) . $130,000 $130,000 $130,000 $130,000 $130,000
Asset coverage per share of preferred stock,
end of year# ............................. $80,859 $80,762 $79,129 $79,851 $146,868
</TABLE>

- ----------
* Net asset value and market value are published in THE WALL STREET JOURNAL
each Monday. # A stock split occurred on July 24, 1995 (Note 4).
+ Total investment return is calculated assuming a purchase of common stock at
the current market price on the first day and a sale at the current market
price on the last day of each year reported. Dividends and distributions, if
any, are assumed, for purposes of this calculation, to be reinvested at
prices obtained under the Trust's dividend reinvestment plan. Total
investment returns do not reflect brokerage commissions.
++ Ratios calculated on the basis of income and expenses applicable to both the
common and preferred shares, and preferred stock dividends, relative to the
average net assets of common shareholders.

The information above represents the audited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for each of the years indicated. This
information has been determined based upon financial information provided in the
financial statements and market value data for the Trust's common shares.

See Notes to Financial Statements.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL TERM TRUST INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

NOTE 1. ORGANIZATION & ACCOUNTING POLICIES

The BlackRock Insured Municipal Term Trust Inc. (the "Trust"), was organized in
Maryland on December 23, 1991 as a diversified, closed-end management investment
company. The Trust's investment objective is to manage a diversified portfolio
of high quality securities that will return $10 per share to investors on or
about December 31, 2010 while providing current income exempt from regular
federal income tax. The ability of issuers of debt securities held by the Trust
to meet their obligations may be affected by economic developments in a specific
state, industry or region. No assurance can be given that the Trust's investment
objective will be achieved. The following is a summary of significant accounting
policies followed by the Trust:

SECURITIES VALUATION: Municipal securities (including commitments to purchase
such securities on a "when-issued" basis) are valued on the basis of prices
provided by a pricing service which uses information with respect to
transactions in bonds, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities in
determining values. Any securities or other assets for which such current market
quotations are not readily available are valued at fair value as determined in
good faith under procedures established by and under the general supervision and
responsibility of the Trust's Board of Directors.

Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost if their term to maturity from date of purchase is 60
days or less, or by amortizing their value on the 61st day prior to maturity, if
their original term to maturity from date of purchase exceeded 60 days.

SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Realized and unrealized gains and losses are
calculated on the identified cost basis. Interest income is recorded on the
accrual basis and the Trust accretes original issue discount or amortizes
premium on securities purchased using the interest method.

FEDERAL INCOME TAXES: For federal income tax purposes, the Trust is treated as a
separate taxpaying entity. It is the intent of the Trust to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its net income to shareholders. For this
reason and because substantially all of the Trust's gross income consists of
tax-exempt interest, no federal income tax provision is required.

DIVIDENDS AND DISTRIBUTIONS: The Trust declares and pays dividends and
distributions to common shareholders monthly from net investment income, net
realized short-term capital gains and other sources, if necessary. Net long-term
capital gains if any, in excess of loss carryforwards may be distributed
annually. Dividends and distributions are recorded on the ex-dividend date.
Dividends and distributions to preferred shareholders are accrued and determined
as described in Note 4.

ESTIMATES: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

NOTE 2. AGREEMENTS

The Trust has an Investment Advisory Agreement with BlackRock Financial
Management, Inc. (the "Adviser"), a wholly-owned corporate subsidiary of
BlackRock Advisors, Inc., which is an indirect majority-owned subsidiary of PNC
Bank, N.A., and an Administration Agreement with Mitchell Hutchins Asset
Management Inc. (the "Administrator"), which is a wholly-owned subsidiary of
PaineWebber Incorporated.

The investment fee paid to the Adviser is computed weekly and payable monthly
at an annual rate of 0.35% of the Trust's average weekly net investment assets.
The administration fee paid to the Administrator is also computed weekly and
payable monthly at an annual rate of 0.10% of the Trust's average weekly net
investment assets.

Pursuant to the agreements, the Adviser provides continuous supervision of
the investment portfolio and pays the compensation of officers of the Trust who
are affiliated persons of the Adviser. The Administrator pays occupancy and
certain clerical and accounting costs of the Trust. The Trust bears all other
costs and expenses.

NOTE 3. PORTFOLIO SECURITIES

Purchases and sales of investment securities, other than short-term investments,
for the year ended December 31, 1998 aggregated $1,611,045 and $1,627,995,
respectively.

<PAGE>

The federal income tax basis of the Trust's investments at December 31, 1998
was substantially the same as the basis for financial reporting, and
accordingly, gross and net unrealized appreciation for federal income tax
purposes was $41,263,608.

For federal income tax purposes, the Trust had a capital loss carryforward at
December 31, 1998 of $351,951 of which $306,027 will expire in 2003 and $45,924
will expire in 2005. Accordingly, no capital gain distribution is expected to be
paid to shareholders until net gains have been realized in excess of such
amount.

NOTE 4. CAPITAL

There are 200 million shares of $.01 par value common stock authorized. Of the
25,885,639 common shares outstanding at December 31, 1998, the Adviser owned
10,583 shares. As of December 31, 1998, there were 5,200 preferred shares
outstanding as follows: 2,600 shares of Series M7 and M28, respectively.

The Trust may classify or reclassify any unissued shares of common stock into
one or more series of preferred stock. On April 27, 1992, the Trust reclassified
2,600 shares of common stock and issued two series of Auction Market Preferred
Stock ("Preferred Stock") as follows: Series M7--1,300 shares and Series
M28--1,300 shares. The Preferred Stock has a liquidation value of $25,000 per
share plus any accumulated but unpaid dividends. On May 16, 1995, shareholders
approved a proposal to split each share of the Trust's Auction Rate Municipal
Preferred Stock into two shares and simultaneously reduce each share's
liquidation preference from $50,000 to $25,000 plus any accumulated but unpaid
dividends. The stock split occurred on July 24, 1995.

Dividends on Series M7 are cumulative at a rate which is reset every 7 days
based on the results of an auction. Dividends on Series M28 are also cumulative
at a rate which is reset every 28 days based on the results of an auction.
Dividend rates ranged from 2.40% to 5.025% for the year ended December 31, 1998.

The Trust may not declare dividends or make other distributions on shares of
common stock or purchase any such shares if, at the time of the declaration,
distribution or purchase, asset coverage with respect to the outstanding
Preferred Stock would be less than 200%.

The Preferred Stock is redeemable at the option of the Trust, in whole or in
part, on any dividend payment date at $25,000 per share plus any accumulated or
unpaid dividends whether or not declared. The Preferred Stock is also subject to
mandatory redemption at $25,000 per share plus any accumulated or unpaid
dividends, whether or not declared, if certain requirements relating to the
composition of the assets and liabilities of the Trust as set forth in the
Articles of Incorporation are not satisfied.

The holders of Preferred Stock have voting rights equal to the holders of
common stock (one vote per share) and will vote together with holders of shares
of common stock as a single class. However, holders of Preferred Stock are also
entitled to elect two of the Trust's directors. In addition, the Investment
Company Act of 1940 requires that along with approval by stockholders that might
otherwise be required, the approval of the holders of a majority of any
outstanding preferred shares, voting separately as a class would be required to
(a) adopt any plan of reorganization that would adversely affect the preferred
shares, and (b) take any action requiring a vote of security holders including,
among other things, changes in the Trust's subclassification as a closed-end
investment company or changes in its fundamental investment restrictions.

NOTE 5. DIVIDENDS

Subsequent to December 31, 1998, the Board of Directors of the Trust declared
dividends from undistributed earnings of $0.05208 per common share payable
January 29, 1999 to shareholders of record on January 15, 1999.

For the period January 1, 1999 through January 31, 1999, dividends declared
on preferred shares totalled $300,820 in aggregate for the two outstanding
preferred share series.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------

The Shareholders and Board of Directors of
The BlackRock Insured Municipal Term Trust Inc.:

We have audited the accompanying statement of assets and liabilities including
the portfolio of investments, of The BlackRock Insured Municipal Term Trust
Inc., as of December 31, 1998, and the related statements of operations, and of
changes in net investment assets for each of the two years in the period then
ended and the financial highlights for each of the five years in the period then
ended. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at December
31, 1998 by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by Management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of The BlackRock
Insured Municipal Term Trust Inc. as of December 31, 1998, the results of its
operations, the changes in its net investment assets and the financial
highlights for the respective stated periods in conformity with generally
accepted accounting principles.

/s/Deloitte & Touche LLP
- ------------------------
Deloitte & Touche LLP

New York, New York
February 12, 1999

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
TAX INFORMATION
- --------------------------------------------------------------------------------

We are required by the Internal Revenue Code to advise you within 60 days
of the Trust's fiscal year end (December 31, 1998) as to the federally
tax-exempt interest dividends received by you during such fiscal year.
Accordingly, we are advising you that all dividends paid by the Trust during the
fiscal year were federally tax-exempt interest dividends.

- --------------------------------------------------------------------------------
DIVIDEND REINVESTMENT PLAN
- --------------------------------------------------------------------------------

Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"),
shareholders will have all distributions of dividends and capital gains
reinvested by State Street Bank and Trust Company (the "Plan Agent") in Trust
shares pursuant to the Plan unless an election is made to receive such amounts
in cash. The Plan Agent will affect purchases of shares under the Plan in the
open market. Shareholders who elect not to participate in the Plan will receive
all distributions in cash paid by check in United States dollars mailed directly
to the shareholders of record (or if the shares are held in street or other
nominee name, then to the nominee) by the transfer agent, as dividend disbursing
agent.

The Plan Agent serves as agent for the shareholders in administering the
Plan. After the Trust declares a dividend or determines to make a capital gain
distribution, the Plan Agent will, as agent for the participants, receive the
cash payment and use it to buy Trust shares in the open market, on the American
Stock Exchange or elsewhere, for the participants' accounts. The Trust will not
issue any new shares in connection with the Plan.

Participants in the Plan may withdraw from the Plan upon written notice to
the Plan Agent and will receive certificates for whole Trust shares and a cash
payment for any fraction of a Trust share.

The Plan Agent's fees for the handling of the reinvestment of dividends
and distributions will be paid by the Trust. However, each participant will pay
a pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. The automatic reinvestment of dividends and distributions
will not relieve participants of any federal, state or local income taxes that
may be payable on such dividends or distributions.

The Trust reserves the right to amend or terminate the Plan as applied to
any dividend or distribution paid subsequent to written notice of the change
sent to all shareholders of the Trust at least 90 days before the record date
for the dividend or distribution. The Plan also may be amended by the Plan Agent
upon at least 90 days' written notice to all shareholders of the Trust. The Plan
may be terminated by the Plan Agent or the Trust upon at least 30 days written
notice to all shareholders of the Trust. All correspondence concerning the Plan
should be directed to the Plan Agent at (800) 699-1BFM. The addresses are on the
front of this report.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

There have been no material changes in the Trust's investment objectives
or policies that have not been approved by the shareholders or to its charter or
by-laws or in the principal risk factors associated with investment in the
Trust. There have been no changes in the persons who are primarily responsible
for the day-to-day management of the Trust's portfolio.

YEAR 2000 READINESS DISCLOSURE. The Trust is currently in the process of
evaluating its information technology infrastructure for Year 2000 compliance.
Substantially all of the Trust's information systems are supplied by the
Adviser. The Adviser has advised the Trust that it is currently evaluating
whether such systems are year 2000 compliant and that it expects to incur costs
of up to approximately five hundred thousand dollars to complete such evaluation
and to make any modifications to its systems as may be necessary to achieve Year
2000 compliance. The Adviser has advised the Trust that it has fully tested its
systems for Year 2000 compliance. The Trust may be required to bear a portion of
such cost incurred by the Adviser in this regard. The Adviser has advised the
Trust that it does not anticipate any material disruption in the operations of
the Trust as a result of any failure by the Adviser to achieve Year 2000
compliance. There can be no assurance that the costs will not exceed the amount
referred to above or that the Trust will not experience a disruption in
operations.

The Adviser has advised the Trust that it is in the process of evaluating
the Year 2000 compliance of various suppliers of the Adviser and the Trust. The
Adviser has advised the Trust that it intends to communicate with such suppliers
to determine their Year 2000 compliance status and the extent to which the
Adviser or the Trust could be affected by any supplier's Year 2000 compliance
issues. To date, however, the Adviser has not received responses from all such
suppliers with respect to their Year 2000 compliance, and there can be no
assurance that the systems of such suppliers, who are beyond the Trust's
control, will be Year 2000 compliant. In the event that any of the Trust's
significant suppliers do not successfully and timely achieve Year 2000
compliance, the Trust's business or operations could be adversely affected. The
Adviser has advised the Trust that it is in the process of preparing a
contingency plan for Year 2000 compliance by its suppliers. There can be no
assurance that such contingency plan will be successful in preventing a
disruption of the Trust's operations.

The Trust is designating this disclosure as its Year 2000 readiness
disclosure for all purposes under the Year 2000 Information and Readiness
Disclosure Act and the foregoing information shall constitute a Year 2000
statement for purposes of that Act.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
INVESTMENT SUMMARY
- --------------------------------------------------------------------------------

THE TRUST'S INVESTMENT OBJECTIVE

The BlackRock Insured Municipal Term Trust's investment objective is to provide
current income exempt from regular Federal income tax and to return $10 per
share (the initial public offering price per share) to investors on or about
December 31, 2010.

WHO MANAGES THE TRUST?

BlackRock Financial Management, Inc. ("BlackRock" or the "Adviser") is an
SEC-registered investment adviser. BlackRock and its affiliates currently manage
over $132 billion on behalf of taxable and tax-exempt clients worldwide.
Strategies include fixed income, equity and cash and may incorporate both
domestic and international securities. Domestic fixed-income strategies utilize
the government, mortgage, corporate and municipal bond sectors. BlackRock
manages twenty-one closed-end funds that are traded on either the New York or
American stock exchanges, and a $24 billion family of open-end and equity bond
funds. Current institutional clients number 425, domiciled in the United States
and overseas.

WHAT CAN THE TRUST INVEST IN?

The Trust intends to invest at least 80% of its total assets in municipal
obligations insured as to the timely payment of both principal and interest. The
Trust may invest up to 20% of its total assets in uninsured municipal
obligations which are rated Aaa by Moody's or AAA by S&P, or are determined by
the Adviser to be of comparable credit quality (guaranteed, escrowed, or backed
in trust).

WHAT IS THE ADVISER'S INVESTMENT STRATEGY?

The Adviser will seek to meet the Trust's investment objective by managing the
assets of the Trust so as to return the initial offering price ($10 per share)
at maturity. The Trust will implement a conservative strategy that will seek to
closely match the maturity of the assets of the portfolio with the future return
of the initial investment at the end of 2010. At the Trust's termination,
BlackRock expects that the value of the securities which have matured, combined
with the value of the securities that are sold will be sufficient to return the
initial offering price to investors. On a continuous basis, the Trust will seek
its objective by actively managing its portfolio of municipal obligations and
retaining a small amount of income each year.

In addition to seeking the return of the initial offering price, the Adviser
also seeks to provide current income exempt from Federal income tax to
investors. The portfolio managers will attempt to achieve this objective by
investing in securities that provide competitive income. In addition, leverage
will be used (in an amount up to 35% of total assets) to enhance the income of
the portfolio. In order to maintain competitive yields as the Trust approaches
maturity and depending on market conditions, the Adviser will attempt to
purchase securities with call protection or maturities as close to the Trust's
maturity date as possible. Securities with call protection should provide the
portfolio with some degree of protection against reinvestment risk during times
of lower prevailing interest rates. Since the Trust's primary goal is to return
the initial offering price at maturity, any cash that the Trust receives prior
to its maturity date will be reinvested in securities with maturities which
coincide with the remaining term of the Trust. Since shorter-term securities
typically yield less than longer-term securities, this strategy will likely
result in a decline in the Trust's income over time. It is important to note
that the Trust will be managed so as to preserve the integrity of the return of
the initial offering price. If market conditions such as high interest rate
volatility, force a choice between current income and risking the return of the
initial offering price, it is likely that the return of the initial offering
price will be emphasized.

HOW ARE THE TRUST'S SHARES PURCHASED AND SOLD? DOES THE TRUST PAY DIVIDENDS
REGULARLY?

The Trust's shares are traded on the New York Stock Exchange which provides
investors with liquidity on a daily basis. Orders to buy or sell shares of the
Trust must be placed through a registered broker or financial adviser. The Trust
pays monthly dividends which are typically paid on the last business day of the
month. For shares held in the shareholder's name, dividends may be reinvested in
additional shares of the fund through the Trust's transfer agent, State Street
Bank and Trust Company. Investors who wish to hold shares in a brokerage account
should check with their financial adviser to determine whether their brokerage
firm offers dividend reinvestment services.

<PAGE>

LEVERAGE CONSIDERATIONS IN A TERM TRUST

Under current market conditions, leverage increases the income earned by the
Trust. The Trust employs leverage primarily through the issuance of preferred
stock. Leverage permits the Trust to borrow money at short-term rates and
reinvest that money in longer-term assets which typically offer higher interest
rates. The difference between the cost of the borrowed funds and the income
earned on the proceeds that are invested in longer term assets is the benefit to
the Trust from leverage. In general, the portfolio is typically leveraged at
approximately 35% of total assets.

Leverage also increases the duration (or price volatility of the net assets) of
the Trust, which can improve the performance of the fund in a declining rate
environment, but can cause net assets to decline faster than the market in a
rising rate environment. BlackRock's portfolio managers continuously monitor and
regularly review the Trust's use of leverage and the Trust may reduce, or
unwind, the amount of leverage employed should BlackRock consider that reduction
to be in the best interests of the shareholders.

SPECIAL CONSIDERATIONS AND RISK FACTORS RELEVANT TO TERM TRUSTS

THE TRUST IS INTENDED TO BE A LONG-TERM INVESTMENT AND IS NOT A SHORT-TERM
TRADING VEHICLE.

RETURN OF INITIAL INVESTMENT. Although the objective of the Trust is to return
its initial offering price upon termination, there can be no assurance that this
objective will be achieved.

DIVIDEND CONSIDERATIONS. The income and dividends paid by the Trust are likely
to decline to some extent over the term of the Trust due to the anticipated
shortening of the dollar-weighted average maturity of the Trust's assets.

LEVERAGE. The Trust utilizes leverage through the issuance of preferred stock
which involves special risks. The Trust's net asset value and market value may
be more volatile due to its use of leverage.

MARKET PRICE OF SHARES. The shares of closed-end investment companies such as
the Trust trade on the New York Stock Exchange (NYSE symbol: BMT) and as such
are subject to supply and demand influences. As a result, shares may trade at a
discount or a premium to their net asset value.

MUNICIPAL OBLIGATIONS. Municipal obligations include debt obligations issued by
states, cities, and local authorities, and possessions and certain territories
of the United States to obtain funds for various public purposes including the
construction of public facilities, the refinancing of outstanding obligations
and the obtaining of funds for general operating expenses and for loans to other
public institutions and facilities. The value of municipal debt securities
generally varies inversely with changes in prevailing market interest rates.
Depending on the amount of call protection that the securities in the Trust
have, the Trust may be subject to certain reinvestment risks in environments of
declining interest rates.

INVESTMENT GRADE MUNICIPAL OBLIGATIONS. The value of municipal debt securities
generally varies inversely with changes in prevailing market interest rates.
Depending on the amount of call protection that the securities in the Trust
have, the Trust may be subject to certain reinvestment risks in environments of
declining interest rates.

ILLIQUID SECURITIES. The Trust may invest in securities that are illiquid,
although under current market conditions the Trust expects to do so to only a
limited extent. Investing in these securities involves special risks.

ANTITAKEOVER PROVISIONS. Certain antitakeover provisions will make a change in
the Trust's business or management more difficult without the approval of the
Trust's Board of Directors and may have the effect of depriving shareholders of
an opportunity to sell their shares at a premium above the prevailing market
price.

ALTERNATIVE MINIMUM TAX (AMT). The Trust may invest in securities subject to
alternative minimum tax. The Trust currently holds no AMT securities.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INSUREDMUNICIPAL TERM TRUST INC.
GLOSSARY
- --------------------------------------------------------------------------------

CLOSED-END FUND: Investment vehicle which initially offers a fixed
number of shares and trades on a stock exchange. The
fund invests in a portfolio of securities in accordance
with its stated investment objectives and policies.

DISCOUNT: When a fund's net asset value is greater than its stock
price, the fund is said to be trading at a discount.

DIVIDEND: Income generated by securities in a portfolio and
distributed to shareholders after the deduction of
expenses. This Trust declares and pays dividends on a
monthly basis.

DIVIDEND REINVESTMENT: Shareholders may elect to have all dividends and
distributions of capital gains automatically reinvested
into additional shares of the Trust.

MARKET PRICE: Price per share of a security trading in the secondary
market. For a closed-end fund, this is the price at
which one share of the fund trades on the stock
exchange. If you were to buy or sell shares, you would
pay or receive the market price.

NET ASSET VALUE (NAV): Net asset value is the total market value of all
securities and other assets held by the Trust, plus
income accrued on its investment, minus any liabilities
including accrued expenses, dividend by the total
number of outstanding shares. It is the underlying
value of a single share on a given day. Net asset value
for the Trust is calculated weekly and published in
BARRON'S on Saturday and THE WALL STREET JOURNAL on
Monday.

PREMIUM: When a fund's stock price is greater than its net asset
value, the fund is said to be trading at a premium.

PRE-REFUNDED BONDS: These securities are collateralized by the U.S.
Government securities which are held in escrow and are
used to pay principal and interest on the tax-exempt
issue and to retire the bond in full at the date
indicated, typically at a premium to par.

<PAGE>

BlackRock

DIRECTORS
Laurence D. Fink, CHAIRMAN
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Grosfeld
James Clayburn La Force, Jr.
Walter F. Mondale
Ralph L. Schlosstein

OFFICERS
Ralph L. Schlosstein, PRESIDENT The BlackRock
Keith T. Anderson, VICE PRESIDENT Insured Municipal
Michael C. Huebsch, VICE PRESIDENT Term Trust Inc.
Robert S. Kapito, VICE PRESIDENT -----------------
Kevin Klingert, VICE PRESIDENT Annual Report
Richard M. Shea, VICE PRESIDENT/TAX December 31, 1998
Henry Gabbay, TREASURER
James Kong, ASSISTANT TREASURER
Karen H. Sabath, SECRETARY

INVESTMENT ADVISER
BlackRock Financial Management, Inc.
345 Park Avenue
New York, NY 10154
(800) 227-7BFM

ADMINISTRATOR
Mitchell Hutchins Asset Management Inc.
1285 Avenue of the Americas
New York, NY 10019

CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
(800) 699-1BFM

AUCTION AGENT
Bankers Trust Company
Four Albany Street
New York, NY 10006

INDEPENDENT AUDITORS
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281-1434

LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022

This report is for shareholder information. This is not a prospectus intended
for use in the purchase or sale of Trust shares.

THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
c/o Mitchell Hutchins Asset Management Inc.
1285 Avenue of the Americas
New York, NY10019
(800) 227-7BFM

092474 10 5
092474 20 4
092474 30 3

Printed on recycled paper

The BlackRock
Insured Municipal
Term Trust Inc.
- -----------------
Annual Report
December 31, 1998