PROVIDIAN LIFE & HEALTH INSURANCE CO SEPARATE ACCOUNT V, 497, 1997-03-31

PROVIDIAN LIFE & HEALTH INSURANCE CO SEPARATE ACCOUNT V
497, 1997-03-31

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PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY SEPARATE ACCOUNT V
PROSPECTUS
FOR THE
PROVIDIAN ADVISOR'S EDGE VARIABLE ANNUITY
OFFERED BY
PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
(A MISSOURI STOCK COMPANY)
ADMINISTRATIVE OFFICES
P.O. BOX 32700
LOUISVILLE, KENTUCKY 40232

The Providian Advisor's Edge variable annuity contract (the "Contract"),
offered through Providian Life and Health Insurance Company (the "Company",
"us", "we" or "our"), provides a vehicle for investing on a tax-deferred basis
in 15 investment company Portfolios and our General Account. The Contract is an
individual variable annuity contract and is intended for retirement savings or
other long-term investment purposes.

The minimum initial Purchase Payment for Non-Qualified Contracts is $5,000. The
minimum initial purchase payment for Qualified Contracts is $2,000 (or $50
monthly by payroll deduction). The Contract is a flexible-premium deferred
variable annuity that provides for a Right to Cancel Period of 10 days (30 days
or more in some instances) plus a 5 day grace period to allow for mail delivery
during which you may cancel your investment in the Contract.

Your Net Purchase Payments for the Contract may be allocated among 15
Subaccounts of Providian Life and Health Insurance Company's Separate Account V
and three fixed options available under the Company's General Account. Assets
of each Subaccount are invested in one of the following Portfolios (which are
contained within seven open-end, diversified investment companies):

.FEDERATED AMERICAN LEADERS
FUND II .STEINROE CAPITAL APPRECIATION
FUND
.FEDERATED UTILITY FUND II
.FEDERATED PRIME MONEY FUND .STRONG INTERNATIONAL STOCK FUND
II II
.WANGER U.S. SMALL CAP ADVISOR
.FEDERATED HIGH INCOME BOND .WANGER INTERNATIONAL SMALL CAP
FUND II ADVISOR
.FEDERATED FUND FOR U.S.
GOVERNMENT SECURITIES II .WARBURG PINCUS INTERNATIONAL
EQUITY PORTFOLIO
.MONTGOMERY GROWTH
PORTFOLIO .WARBURG PINCUS SMALL COMPANY
GROWTH PORTFOLIO
.WEISS, PECK & GREER'S CORE LARGE-
.MONTGOMERY EMERGING CAP STOCK FUND
MARKETS PORTFOLIO
.WEISS, PECK & GREER'S CORE SMALL-
CAP STOCK FUND

Depending upon the state of issue and provisions of your Contract, your initial
Net Purchase Payment(s) will, when your Contract is issued, either be (i)
invested in the Federated Prime Money Fund II during your Right to Cancel
Period and/or invested immediately in your chosen Guaranteed Rate Options or
(ii) invested immediately in your chosen Portfolios and fixed options (other
than the Guaranteed Equity Option).

The Contract's Accumulated Value varies with the investment performance of the
Portfolios you select. You bear all investment risk associated with the
Portfolios. Investment results for your Contract are not guaranteed except to
the extent a portion of the Accumulated Value is allocated to the General
Account.

The Contract offers a number of ways of withdrawing monies at a future date,
including a lump sum payment and several Annuity Payment Options. Full or
partial withdrawals of the Contract's Surrender Value may be made at any time,
although in many instances withdrawals made prior to age 59 1/2 are subject to
a 10% penalty tax (and a portion may be subject to ordinary income taxes). If
you elect an Annuity Payment Option, Annuity Payments may be received on a
fixed and/or variable basis. You also have significant flexibility in choosing
the Annuity Date on which Annuity Payments begin.

This Prospectus sets forth the information you should know before investing in
the Contract. It must be accompanied by a current Prospectus for each Fund.
Please read the Prospectuses carefully and retain them for future reference. A
Statement of Additional Information for the Contract Prospectus, which has the
same date as this Prospectus, has also been filed with the Securities and
Exchange Commission, is incorporated herein by reference and is available free
by calling our Administrative Offices at 1-800-866-6007. The Table of Contents
of the Statement of Additional Information is included at the end of this
Prospectus.

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

The Contract is not available in all States.

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

The date of this Prospectus is March 31, 1997

FM-0989
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TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
GLOSSARY................................................................... 3
HIGHLIGHTS................................................................. 6
FEE TABLE.................................................................. 8
Condensed Financial Information............................................ 11
Financial Statements....................................................... 11
Performance Measures....................................................... 11
Additional Performance Measures............................................ 12
Yield and Effective Yield.................................................. 12
The Company and the Separate Account....................................... 13
The Federated Insurance Series............................................. 13
The Montgomery Funds III................................................... 13
SteinRoe Variable Investment Trust......................................... 14
Strong Variable Insurance Funds, Inc. ..................................... 14
Wanger Advisors Trust...................................................... 14
Warburg Pincus Trust....................................................... 14
Tomorrow Funds Retirement Trust............................................ 14
The Portfolios............................................................. 14
CONTRACT FEATURES.......................................................... 17
Right to Cancel Period................................................... 17
Contract Purchase and Purchase Payments.................................. 17
Purchasing by Wire....................................................... 18
Allocation of Purchase Payments.......................................... 18
Charges and Deductions................................................... 18
Accumulated Value........................................................ 20
Exchanges Among the Portfolios........................................... 20
Full and Partial Withdrawals............................................. 21
Systematic Withdrawal Option............................................. 21
Dollar Cost Averaging Option............................................. 21
IRS-Required Distributions............................................... 22
Minimum Balance Requirement.............................................. 22
Designation of an Annuitant's Beneficiary................................ 22
Death of Annuitant Prior to Annuity Date................................. 23
Annuity Date............................................................. 23
Lump Sum Payment Option.................................................. 23
Annuity Payment Options.................................................. 23
Deferment of Payment..................................................... 25
FEDERAL TAX CONSIDERATIONS................................................. 25
GENERAL INFORMATION........................................................ 30
APPENDIX A--The General Account............................................ A-1
</TABLE>

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GLOSSARY

Accumulation Unit - A measure of your ownership interest in the Contract prior
to the Annuity Date.

Accumulation Unit Value - The value of each Accumulation Unit which is
calculated each Valuation Period.

Accumulated Value - The value of all amounts accumulated under the Contract
prior to the Annuity Date.

Adjusted Death Benefit - The sum of all Net Purchase Payments made during the
first six Contract Years, less any partial withdrawals taken. During each
subsequent six-year period, the Adjusted Death Benefit will be the Death
Benefit on the last day of the previous six-year period plus any Net Purchase
Payments made, less any partial withdrawals taken during the current six-year
period. After the Annuitant attains age 75, the Adjusted Death Benefit will
remain equal to the Death Benefit on the last day of the six-year period before
age 75 occurs plus any Net Purchase Payments subsequently made, less any
partial withdrawals subsequently taken.

Annual Contract Fee - The $30 annual fee charged by the Company to cover the
cost of administering each Contract. The Annual Contract Fee will be deducted
on each Contract Anniversary and upon surrender, on a pro rata basis, from each
Subaccount.

Annuitant - The person whose life is used to determine the duration of any
Annuity Payments and upon whose death, prior to the Annuity Date, benefits
under the Contract are paid.

Annuitant's Beneficiary - The person(s) to whom any benefits are due upon the
Annuitant's death prior to the Annuity Date.

Annuity Date - The date on which Annuity Payments begin. The Annuity Date is
always the first day of the month you specify.

Annuity Payment - One of a series of payments made under an Annuity Payment
Option.

Annuity Payment Option - One of several ways in which withdrawals from the
Contract may be made. Under a Fixed Annuity Option (see "Annuity Payment
Options," page 23), the dollar amount of each Annuity Payment does not change
over time. Under a Variable Annuity Option (see "Annuity Payment Options," page
23), the dollar amount of each Annuity Payment may change over time, depending
upon the investment experience of the Portfolio or Portfolios you choose.
Annuity Payments are based on the Contract's Accumulated Value as of 10
Business Days prior to the Annuity Date.

Annuity Unit - Unit of measure used to calculate Variable Annuity Payments (see
"Annuity Payment Options," page 23).

Annuity Unit Value - The value of each Annuity Unit which is calculated each
Valuation Period.

Business Day - A day when the New York Stock Exchange is open for trading.

Company ("we", "us", "our") - Providian Life and Health Insurance Company, a
Missouri stock company.

Contract Anniversary - Any anniversary of the Contract Date.

Contract Date - The date of issue of this Contract.

Contract Owner ("you", "your") - The person or persons designated as the
Contract Owner in the Contract. The term shall also include any person named as
Joint Owner. A Joint Owner shares ownership in all respects with the Contract
Owner. Prior to the Annuity Date, the Contract Owner has the right to assign
ownership, designate beneficiaries, make permitted withdrawals and Exchanges
among Subaccounts and Guaranteed Index Rate Options.

Contract Year - A period of 12 months starting with the Contract Date or any
Contract Anniversary.

Death Benefit - The greater of the Contract's Accumulated Value on the date the
Company receives due Proof of Death of the Annuitant or the Adjusted Death
Benefit. If any portion of the Contract's Accumulated Value on the date we

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receive proof of the Annuitant's death is derived from the Multi-Year
Guaranteed Rate Option, that portion of the Accumulated Value will be adjusted
by a positive Market Value Adjustment Factor (see "Multi-Year Guaranteed Rate
Option," at Appendix A), if applicable.

Exchange - One Exchange will be deemed to occur with each voluntary transfer
from any Subaccount or General Account Guaranteed Option.

Funds - Each of (i) Federated Insurance Series (advised by Federated Advisers),
(ii) The Montgomery Funds III (advised by Montgomery Asset Management, L.P.),
(iii) Wanger Advisors Trust (advised by Wanger Asset Management, L.P.), (iv)
Tomorrow Funds Retirement Trust (advised by Weiss, Peck & Greer, L.L.C.), (v)
SteinRoe Variable Investment Trust (advised by Stein Roe & Farnham,
Incorporated), (vi) Strong Variable Insurance Funds, Inc. (advised by Strong
Capital Management, Inc.) and (vii) Warburg Pincus Trust (advised by Warburg
Pincus Counsellors, Inc.

General Account - The account which contains all of our assets other than those
held in our separate accounts.

General Account Guaranteed Option - Any of the following three General Account
options offered by your Contract and to which you may allocate your Net
Purchase Payments: the One-Year Guaranteed Rate Option, the Multi-Year
Guaranteed Rate Option, and the Guaranteed Equity Option. The General Account
Guaranteed Options are available for sale in most, but not all, states. (See
"The General Account," at Appendix A.)

Guaranteed Rate Options - The One-Year Guaranteed Rate Option and the Multi-
Year Guaranteed Rate Option.

Market Value Adjustment Factor - The formula applied to the Accumulated Value
in order to determine the net amount of any transfer or surrender under the
Multi-Year Guaranteed Rate Option (see "Multi-Year Guaranteed Rate Option," at
Appendix A).

Net Purchase Payment - Any Purchase Payment less the applicable Premium Tax, if
any.

Non-Qualified Contract - Any Contract other than those described under the
Qualified Contract reference in this Glossary.

Owner's Designated Beneficiary - The person to whom ownership of this Contract
passes upon the Contract Owner's death, unless the Contract Owner was also the
Annuitant--in which case the Annuitant's Beneficiary is entitled to the Death
Benefit. (Note: this transfer of ownership to the Owner's Designated
Beneficiary will generally not be subject to probate, but will be subject to
estate and inheritance taxes. Consult with your tax and estate adviser to be
sure which rules will apply to you.)

Payee - The Contract Owner, Annuitant, Annuitant's Beneficiary, or any other
person, estate, or legal entity to whom benefits are to be paid.

Portfolio - A separate investment series of the Funds. The Funds currently
offer 15 Portfolios in the Dimensional Variable Annuity: Federated American
Leaders Fund II ("Federated American Leaders Portfolio"), Federated Utility
Fund II ("Federated Utility Portfolio"), Federated Prime Money Fund II
("Federated Prime Money Portfolio"), Federated Fund for U.S. Government
Securities II ("Federated U.S. Government Securities Portfolio") and Federated
High Income Bond Fund II ("Federated High Income Bond Portfolio") of Federated
Insurance Series; the Montgomery Variable Series: Growth Fund (the "Montgomery
Growth Portfolio") and the Montgomery Variable Series: Emerging Markets Fund
(the "Montgomery Emerging Markets Portfolio") of The Montgomery Funds III; the
Capital Appreciation Fund (the "SteinRoe Capital Appreciation Portfolio") of
the SteinRoe Variable Investment Trust; the Strong International Stock Fund II
(the "Strong International Stock Portfolio") of the Strong Variable Insurance
Funds, Inc.; the Wanger U.S. Small Cap Advisor (the "Wanger U.S. Small Cap
Advisor Portfolio"), the Wanger International Small Cap Advisor (the "Wanger
International Small Cap Advisor Portfolio") of Wanger Advisors Trust; the
Warburg Pincus International Equity Portfolio (the "Warburg Pincus
International Equity Portfolio") and the Warburg Pincus Small Company Growth
Portfolio (the "Warburg Pincus Small Company Growth Portfolio") of the Warburg
Pincus Trust and the Core Large-Cap Stock Fund (the "Weiss, Peck & Greer Core
Large-Cap Stock Portfolio") and the Core Small-Cap Stock Fund (the "Weiss, Peck
& Greer Small-Cap Stock Portfolio") of the Tomorrow Funds Retirement Trust;
(each, a "Portfolio" and collectively, the "Portfolios"). In this Prospectus,
Portfolio will also be used to refer to the Subaccount that invests in the
corresponding Portfolio.

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Premium Tax - A regulatory tax that may be assessed by certain states on the
Purchase Payments you make to this Contract. The amount which we must pay as
Premium Tax will be deducted from each Purchase Payment or from your
Accumulated Value as it is incurred by us.

Proof of Death - (a) A certified death certificate; (b) a certified decree of a
court of competent jurisdiction as to the finding of death; (c) a written
statement by a medical doctor who attended the deceased; or (d) any other proof
of death satisfactory to the Company.

Purchase Payment - Any premium payment. The minimum initial Purchase Payment is
$5,000 for Non-Qualified Contracts and $2,000 for Qualified Contracts (or $50
monthly by payroll deduction for Qualified Contracts); each additional Purchase
Payment must be at least $500 for Non-Qualified Contracts or $50 for Qualified
Contracts. Purchase Payments may be made at any time prior to the Annuity Date
as long as the Annuitant is living.

Right to Cancel Period - The period during which the Contract can be canceled
and treated as void from the Contract Date.

Separate Account - That portion of Providian Life and Health Insurance
Company's Separate Account V dedicated to the Contract. The Separate Account
consists of assets that are segregated by Providian Life and Health Insurance
Company and, for Contract Owners, invested in the Portfolios. The Separate
Account is independent of the general assets of the Company. The Separate
Account invests in the Portfolios.

Subaccount - That portion of the Separate Account that invests in shares of the
Funds' Portfolios. Each Subaccount will only invest in a single Portfolio. The
investment performance of each Subaccount is linked directly to the investment
performance of one of the 15 Portfolios.

Surrender Value - The Accumulated Value, adjusted to reflect any applicable
Market Value Adjustment (see "Multi-Year Guaranteed Rate Option," at Appendix
A) for amounts allocated to the Multi-Year Guaranteed Rate Option, less any
early withdrawal charges for amounts allocated to the One-Year Guaranteed Rate
Option, less any amount allocated to the Guaranteed Equity Option, less any
Premium Taxes incurred but not yet deducted.

Valuation Period - The relative performance of your Contract is measured by the
Accumulation Unit Value. This value is calculated each Valuation Period. A
Valuation Period is defined as the period of time between the close of business
on one Business Day and the close of business on the following Business Day.

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HIGHLIGHTS

YOU CAN FIND DEFINITIONS OF IMPORTANT TERMS IN THE GLOSSARY (PAGE 3).

PROVIDIAN ADVISOR'S EDGE

The Contract provides a vehicle for investing on a tax-deferred basis in 15
investment company Portfolios offered by the Funds and three General Account
Guaranteed Options offered by the Company. Monies may be subsequently withdrawn
from the Contract either as a lump sum or as annuity income as permitted under
the Contract. Accumulated Values and Annuity Payments depend on the investment
experience of the selected Portfolios and/or the guarantees of the General
Account Guaranteed Options. The investment performance of the Portfolios is not
guaranteed. Thus, you bear all investment risk for monies invested under the
Contract except to the extent of the portion of your Accumulated Value
allocated to the General Account. The General Account Guaranteed Options are
available for sale in most, but not all, states.

WHO SHOULD INVEST

The Contract is designed for investors seeking long term, tax-deferred
accumulation of funds, generally for retirement but also for other long-term
investment purposes. The tax-deferred feature of the Contract is most
attractive to investors in high federal and state marginal income tax brackets.
The Contract is offered as both a Qualified Contract and a Non-Qualified
Contract. Both Qualified and Non-Qualified Contracts offer tax-deferral on
increases in the Contract's value prior to withdrawal or distribution; however,
Purchase Payments made by Contract Owners of Qualified Contracts may be
excludible or deductible from gross income in the year such payments are made,
subject to certain statutory restrictions and limitations. (See "Federal Tax
Considerations," page 26)................................................Page 26

INVESTMENT CHOICES

Your investment in the Contract may be allocated among 15 Subaccounts of the
Separate Account and/or the General Account Guaranteed Options. The Subaccounts
in turn invest exclusively in the following 15 Portfolios offered by the Funds:
the Federated American Leaders Portfolio, the Federated Utility Portfolio, the
Federated Prime Money Portfolio, the Federated U.S. Government Securities
Portfolio, the Federated High Income Bond Portfolio, the Montgomery Growth
Portfolio, the Montgomery Emerging Markets Portfolio, the Stein Roe Capital
Appreciation Portfolio, the Strong International Stock Portfolio, the Wanger
U.S. Small Cap Advisor Portfolio, the Wanger International Small Cap Advisor
Portfolio, the Warburg Pincus International Equity Portfolio, the Warburg
Pincus Small Company Growth Portfolio, the Weiss, Peck & Greer Core Large-Cap
Stock Portfolio and the Weiss, Peck & Greer Core Small-Cap Stock Portfolio. The
assets of each Portfolio are separate, and each Portfolio has distinct
investment objectives and policies as described in the corresponding Fund
Prospectus. The General Account Guaranteed Options are available for sale in
most, but not all, states...........................................Page 14

CONTRACT OWNER

The Contract Owner is the person designated as the owner of the Contract in the
Contract. The Contract Owner may designate any person as a Joint Owner. A Joint
Owner shares ownership in all respects with the Contract Owner. Prior to the
Annuity Date, the Contract Owner has the right to assign ownership, designate
beneficiaries, and make permitted withdrawals and Exchanges among the
Subaccounts and General Account Guaranteed Options.

ANNUITANT

The Annuitant is a person whose life is used to determine the duration of any
Annuity Payments and upon whose death, prior to the Annuity Date, benefits
under the Contract are paid. The Annuitant may not be older than age 75.

ANNUITANT'S BENEFICIARY

The Contract Owner may designate any person to receive benefits under the
Contract which are payable upon the death of the Annuitant prior to the Annuity
Date.

HOW TO INVEST

To invest in the Contract, please consult your advisor who will provide the
necessary information to us in a customer order form. You will need to select
an Annuitant. The Annuitant may not be older than age 75. The minimum initial
Purchase Payment is $5,000 for Non-Qualified Contracts, and $2,000 for
Qualified Contracts (or $50 monthly by payroll

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deduction for Qualified Contracts); subsequent Purchase Payments must be at
least $500 for Non-Qualified Contracts or $50 for Qualified Contracts. You may
make subsequent Purchase Payments at any time before the Contract's Annuity
Date, as long as the Annuitant specified in the Contract is living.......Page 17

ALLOCATION OF PURCHASE PAYMENTS

If the state of issue of your Contract is CA, GA, ID, LA, MI, MO, NE, NH, NC,
OK, OR, SC, UT, VA or WV, then your initial Net Purchase Payment(s) will, when
your Contract is issued, be invested in the Federated Prime Money Portfolio
until the expiration of the Right to Cancel Period of 10 to 30 days, or more in
some instances as specified in your contract when issued (plus a 5 day grace
period to allow for mail delivery) and then invested according to your initial
allocation instructions (except that any accrued interest will remain in the
Federated Prime Money Portfolio if it is selected as an initial allocation
option), provided that portions of your initial Net Purchase Payment(s)
allocated to the Guaranteed Rate Options will be invested immediately upon our
receipt thereof in order to lock in the rates then applicable to such options.
(Please note that immediate investment is not applicable with respect to any
amounts allocated to the Guaranteed Equity Option.)

If the state of issue of your Contract is any other state, your initial Net
Purchase Payment(s) will, unless you indicate otherwise, be invested in your
Portfolios and Guaranteed Rate Options immediately upon our receipt thereof, IN
WHICH CASE YOU WILL BEAR FULL INVESTMENT RISK FOR ANY AMOUNTS ALLOCATED TO THE
PORTFOLIOS DURING THE RIGHT TO CANCEL PERIOD. (Please note that immediate
investment is not available with respect to any amounts allocated to THE
GUARANTEED EQUITY OPTION WHICH IS ILLIQUID FOR THE GUARANTEE PERIOD.) You must
fill out and send us the appropriate form or comply with other designated
Company procedures if you would like to change how subsequent Net Purchase
Payments are allocated..............................................Page 18

RIGHT TO CANCEL PERIOD

The Contract provides for a Right to Cancel Period of 10 days (30 or more days
in some instances as specified in your Contract) plus a 5 day grace period to
allow for mail delivery, during which you may cancel your investment in the
Contract. To cancel your investment, please return your Contract to us or to
the agent from whom you purchased the Contract. When we receive the Contract,
(1) if the state of issue of your Contract is CA, GA, ID, LA, MI, MO, NE, NH,
NC, OK, OR, SC, UT, VA or WV, then for any amount of your initial Purchase
Payment(s) invested in Federated's Prime Money Portfolio, we will return the
Accumulated Value of the amount of your Purchase Payment(s) so invested, or if
greater, the amount of your Purchase Payment(s) so invested, (2) for any amount
of your initial Purchase Payment(s) invested in the Portfolios immediately
following receipt by us, we will return the Accumulated Value of your Purchase
Payment(s) so invested plus any fees and/or Premium Taxes that may have been
subtracted from such amount, and (3) for any amount of your initial Purchase
Payment(s) invested in the Guaranteed Rate Options immediately following
receipt by us, we will refund the Accumulated Value of your Purchase Payment(s)
so invested.........................................................Page 17

EXCHANGES

You may make unlimited Exchanges among the Portfolios or into the General
Account Guaranteed Options, provided you maintain a minimum balance of $1,000
in each Subaccount or General Account Guaranteed Option to which you have
allocated a portion of your Accumulated Value. No fee is currently imposed for
such Exchanges; however, we reserve the right to charge a $15 fee for Exchanges
in excess of 12 per Contract Year. Exchanges must not reduce the value of any
allocation to any Subaccount or General Account Guaranteed Option below $1,000,
or that remaining amount will be transferred to your other Subaccounts or
Guaranteed Rate Options on a pro rata basis. The Multi-Year Guaranteed Equity
Option is illiquid for the entire guarantee period, and transfers from the
General Account Guaranteed Options may be subject to additional limitations and
charges. (See also "Charges and Deductions," page 19, and "The General
Account," at Appendix A)............................................Page 20

DEATH BENEFIT

If the Annuitant specified in your Contract dies prior to the Annuity Date,
your named Annuitant's Beneficiary will receive the Death Benefit under the
Contract. The Death Benefit is the greater of your Accumulated Value (plus any
positive Market Value Adjustment applicable under the Multi-Year Guaranteed
Rate Option) or the Adjusted Death Benefit on the date we receive due proof of
the Annuitant's death. During the first six Contract Years, the Adjusted Death
Benefit will be the sum of all Net Purchase Payments made, less any partial
withdrawals taken. During each subsequent six-year period, the Adjusted Death
Benefit will be the Death Benefit on the last day of the previous six-year
period plus any Net

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Purchase Payments made, less any partial withdrawals taken during the current
six-year period. After the Annuitant attains age 75, the Adjusted Death Benefit
will remain equal to the Death Benefit on the last day of the six-year period
before age 75 occurs plus any Net Purchase Payments subsequently made, less any
partial withdrawals subsequently taken. The Annuitant's Beneficiary may elect
to receive these proceeds as a lump sum or as Annuity Payments. If the
Annuitant dies on or after the Annuity Date, any unpaid payments certain will
be paid, generally to the Annuitant's Beneficiary, in accordance with the
Contract............................................................Page 23

ANNUITY PAYMENT OPTIONS

In addition to the full and partial withdrawal privileges, you may also choose
to create an income stream by requesting an annuity income from us. As the
Contract Owner, you may elect one of several Annuity Payment Options. By
electing an Annuity Payment Option, you are asking us to systematically
liquidate your Contract. We provide you with a variety of options as it relates
to those payments. At your discretion, payments may be either fixed or variable
or both. Fixed payouts are guaranteed for a designated period or for life
(either single or joint). Variable payments will vary depending on the
performance of the underlying Portfolio or Portfolios selected......Page 23

CONTRACT AND POLICYHOLDER INFORMATION

If you have questions about your Contract, please telephone our Administrative
Offices at 1-800-866-6007 between the hours of 8:00 A.M. to 5:00 P.M. Eastern
time. Please have the Contract number and the Contract Owner's name ready when
you call. As Contract Owner you will receive periodic statements confirming any
financial transactions that take place, as well as quarterly statements and an
annual statement.

CHARGES AND DEDUCTIONS UNDER THE CONTRACT

The Contract has no sales charges and has an annual mortality and expense risk
charge of .50%. Contract Owners may withdraw up to 100% of the Accumulated
Value without incurring a surrender charge. The Contract also includes
administrative charges and policy fees which pay for administering the
Contract, and management, advisory and other fees, which reflect the costs of
the Funds...........................................................Page 18

FULL AND PARTIAL WITHDRAWALS

You may withdraw all or part of the Surrender Value of the Contract before the
earlier of the Annuity Date or the Annuitant's death. Withdrawals made prior to
age 59 1/2 may be subject to a 10% penalty tax (and a portion thereof may be
subject to ordinary income taxes)........................................Page 21

FEE TABLE

The following table illustrates all expenses (except for Premium Taxes that may
be assessed by your state) that you would incur as an owner of a Contract (see
page 19). The purpose of this table is to assist you in understanding the
various costs and expenses that you would bear directly or indirectly as a
purchaser of the Contract. The fee table reflects all expenses for both the
Separate Account and the Funds. For a complete discussion of Contract costs and
expenses, including charges applicable to General Account Guaranteed Options,
see "Charges and Deductions," page 19.

<TABLE>
<CAPTION>
CONTRACTOWNER TRANSACTION EXPENSES
<S> <C>
Sales Load Imposed on Purchases......................................... None
Contingent Deferred Sales Load (surrender charge)....................... None
Exchange Fees........................................................... None
ANNUAL CONTRACT FEE..................................................... $30
<CAPTION>
SEPARATE ACCOUNT ANNUAL EXPENSES (as a percentage of assets in the
Separate Account)
<S> <C>
Mortality and Expense Risk Charge....................................... .50%
Administrative Charge................................................... .15%
----
Total Annual Separate Account Expenses.................................. .65%*
</TABLE>
*Separate Account Annual Expenses are not charged against the General
Account Guaranteed Options.

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PORTFOLIO ANNUAL EXPENSES

Except as may be indicated, the figures below are based on actual expenses for
fiscal year 1995 (as a percentage of each Portfolio's average net assets after
fee waiver and/or expense reimbursement, if applicable).

<TABLE>
<CAPTION>
TOTAL
MANAGEMENT PORTFOLIO
AND ADVISORY OTHER ANNUAL
EXPENSES EXPENSES EXPENSES
------------ -------- ---------
<S> <C> <C> <C>
Federated American Leaders Portfolio*.......... 0.00% 0.85% 0.85%
Federated Utility Portfolio*................... 0.00% 0.85% 0.85%
Federated Prime Money Portfolio*............... 0.00% 0.80% 0.80%
Federated U.S. Government Securities Portfolio. 0.00% 0.80% 0.80%
Federated High Income Bond Portfolio........... 0.00% 0.80% 0.80%
Montgomery Growth Portfolio**.................. 1.00% 0.25% 1.25%
Montgomery Emerging Markets Portfolio**........ 1.25% 0.50% 1.75%
SteinRoe Capital Appreciation Portfolio***..... 0.50% 0.23% 0.73%
Strong International Stock Portfolio****....... 1.00% 0.90% 1.90%
Wanger U.S. Small Cap Advisor Portfolio*****... 1.00% 0.35% 1.35%
Wanger International Small Cap Advisor
Portfolio*****................................ 1.30% 0.50% 1.80%
Warburg Pincus International Equity
Portfolio******............................... 0.96% 0.40% 1.36%
Warburg Pincus Small Company Growth
Portfolio******............................... 0.90% 0.26% 1.16%
Weiss, Peck & Greer Core Large-Cap Stock
Portfolio*******.............................. 0.00% 1.50% 1.50%
Weiss, Peck & Greer Core Small-Cap Stock
Portfolio*******.............................. 0.00% 1.50% 1.50%
</TABLE>

*The expense figures shown reflect actual expenses for fiscal year 1995
including voluntary waivers of a portion of the management fees and/or
assumption of expenses. The maximum Management and Advisory Expenses, Other
Expenses, and Total Portfolio Annual Expenses absent the voluntary waivers
would have been as follows: 0.75%, 0.85% and 2.21%, respectively, for the
Federated American Leaders Portfolio; 0.75%, 0.85% and 3.09%, respectively,
for the Federated Utility Portfolio; 0.50%, 2.99% and 3.49%, respectively,
for the Federated Prime Money Portfolio; and 0.60%, 0.80% and 5.61%,
respectively, for the Federated U.S. Government Securities Portfolio and
0.60, 0.80 and 4.20%, respectively, for the Federated High Income Bond
Portfolio.

**The figures above are based on estimated expenses for fiscal year 1996
(as a percentage of each Portfolio's average net assets after fee waiver
and/or expense reimbursement). The expense figures shown reflect
anticipated voluntary waivers of a portion of the management fees and/or
assumption of expenses. The maximum Management and Advisory Expenses, Other
Expenses, and Total Portfolio Annual Expenses absent the anticipated
voluntary waivers are estimated to be as follows: 1.00%, 0.56%, and 1.56%,
respectively, for the Montgomery Growth Portfolio and 1.25%, 0.95%, and
2.20%, respectively, for the Montgomery Emerging Markets Portfolio.

***The figures shown reflect actual expenses for fiscal year 1996. The
advisor has voluntarily agreed until April 30, 1998 to reimburse all
expenses, including management and administrative fees, incurred by
SteinRoe Capital Appreciation Portfolio in excess of 0.80% of average net
assets.

****The figures shown reflect actual expenses for fiscal year 1996.

*****The figures above are based on estimated expenses for fiscal year 1996
as a percentage of each Portfolio's average net assets. The advisor has
agreed to reimburse the U.S. Small Cap Advisor Portfolio and the
International Small Cap Advisor Portfolio in the event certain fees and
expenses payable by the Portfolios in any fiscal year exceed 1.50% and
1.90%, respectively, of average daily net assets.

******Management and Advisory Expenses, Other Expenses and Total Portfolio
Annual Expenses are based on actual expenses for the fiscal year ended
December 31, 1996, net of any fee waivers or expense reimbursements.
Without such waivers or reimbursements, Management and Advisory Expenses
would have equaled 1.00% and 0.90%, Other Expenses would have equaled 0.40%
and 0.27% and Total Portfolio Annual Expenses would have equaled 1.40% and
1.17% for the Warburg Pincus International Equity and Small Company Growth
Portfolios, respectively. The investment adviser and co-administrator have
undertaken to limit Total Portfolio Annual Expenses to the limits shown in
the table above through December 31, 1997.

9
<PAGE>

*******The figures shown are based on estimated expenses in fiscal year 1996
(after fee waiver and expense reduction). Management and Advisory Expenses,
Other Expenses, and Total Portfolio Annual Expenses absent the voluntary fee
reduction and expense limitation waivers are estimated to be as follows:
0.75%, 3.90% and 4.65%, respectively, for the Weiss, Peck and Greer Core
Large-Cap Stock Portfolio and 0.75%, 4.49% and 5.24%, respectively, for the
Weiss, Peck and Greer Core Small-Cap Stock Portfolio. For each of these
Portfolios, 0.25% of the figure representing Other Expenses is attributable
to a service fee payable by the Portfolios under non-Rule 12b-1 service
plans. For more information, please refer to the section entitled "Service
Plans" in the attached prospectus for the Portfolios.

The following example illustrates the expenses that you would incur on a $1,000
Purchase Payment over various periods, assuming (1) a 5% annual rate of return
and (2) redemption at the end of each period. As noted in the table above, the
Contract imposes no surrender or withdrawal charges of any kind. Your expenses
are identical whether you continue the Contract or withdraw the entire value of
your Contract at the end of the applicable period as a lump sum or under one of
the Contract's Annuity Payment Options.

<TABLE>
<CAPTION>
3
1 YEAR YEARS 5 YEARS 10 YEARS
------ ------ ------- --------
<S> <C> <C> <C> <C>
Federated American Leaders Portfolio...... $15.60 $48.40 $83.47 $182.15
Federated Utility Portfolio............... $15.60 $48.40 $83.47 $182.15
Federated Prime Money Portfolio........... $15.09 $46.85 $80.84 $176.63
Federated U.S. Government Securities
Portfolio................................ $15.09 $46.85 $80.84 $176.63
Federated High Income Bond Portfolio...... $15.09 $46.85 $80.84 $176.63
Montgomery Growth Portfolio............... $19.63 $60.68 $104.25 $225.24
Montgomery Emerging Markets Portfolio..... $24.65 $75.83 $129.63 $276.57
SteinRoe Capital Appreciation Portfolio... $14.39 $44.69 $ 77.15 $168.86
Strong International Stock Portfolio...... $26.15 $80.32 $137.12 $291.44
Wanger U.S. Small Cap Advisor Portfolio... $20.63 $63.73 $109.38 $235.73
Wanger International Small Cap Advisor
Portfolio................................ $25.15 $77.33 $132.14 $281.55
Warburg Pincus International Equity
Portfolio................................ $20.74 $64.03 $109.89 $236.77
Warburg Pincus Small Company Growth
Portfolio................................ $18.72 $57.93 $ 99.61 $215.70
Weiss, Peck & Greer Core Large-Cap Stock
Portfolio................................ $22.14 $68.28 $117.02 $251.25
Weiss, Peck & Greer Core Small-Cap Stock
Portfolio................................ $22.14 $68.28 $117.02 $251.25
</TABLE>

The Annual Contract Fee is reflected in these examples as a percentage equal to
the total amount of fees collected during a calendar year divided by the total
average net assets of the Portfolios during the same calendar year. The fee is
assumed to remain the same in each year of the above periods. (With respect to
partial year periods, if any, in the examples, the Annual Contract Fee is pro-
rated to reflect only the applicable portion of the partial year period.) The
Annual Contract Fee will be deducted on each Contract Anniversary and upon
surrender or annuitization of the Contract, on a pro rata basis, from each
Subaccount. In some states, the Company will deduct Premium Taxes as incurred
by the Company.

This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be higher or lower than those
shown, subject to the guarantees in the Contract.

10
<PAGE>

CONDENSED FINANCIAL INFORMATION

(FOR THE PERIOD JANUARY 1, 1995 THROUGH DECEMBER 31, 1995)

<TABLE>
<CAPTION>
FEDERATED
FEDERATED FEDERATED FEDERATED HIGH MONTGOMERY
AMERICAN FEDERATED PRIME US GOV'T INCOME MONTGOMERY EMERGING
LEADERS UTILITY MONEY SECURITIES BOND GROWTH MARKETS
--------- --------- --------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Accumulation unit value
as of:
Start Date**.......... 10.000 10.000 10.000 10.000 10.000 10.000 10.000
12/31/94.............. N/A N/A 10.026 N/A N/A N/A N/A
12/31/95.............. 12.676 11.354 10.473 10.567 10.257 N/A N/A
Number of units
outstanding as of:
12/31/94.............. N/A N/A 70,223 N/A N/A N/A N/A
12/31/95.............. 10,179 2,024 363,418 7,159 6,320 N/A N/A
</TABLE>
** Date of commencement of operations for Federated American Leaders was
3/10/95; for Federated Utility was 7/20/95; for Federated Prime Money was
12/7/94; for Federated U.S. Government Securities was 6/28/95; for Federated
High Income Bond was 9/18/95; and for Montgomery Growth was 2/12/96.

<TABLE>
<CAPTION>
WARBURG
WANGER WARBURG PINCUS WANGER WPG WPG
STEIN ROE STRONG U.S. PINCUS SMALL INT'L CORE CORE
CAP. INT'L. SMALL INT'L CO. SMALL LARGE SMALL
APPREC. STOCK CAP EQUITY GROWTH CAP CAP CAP
--------- ------ ------ ------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation unit value
as of:
Start Date***......... 10.000 10.000 10.000 10.000 10.000 10.000 10.000 10.000
12/31/94.............. N/A N/A N/A N/A N/A N/A N/A N/A
12/31/95.............. N/A N/A 9.665 N/A N/A 10.913 N/A N/A
Number of units
outstanding as of:
12/31/94.............. N/A N/A N/A N/A N/A N/A N/A N/A
12/31/95.............. N/A N/A 21,864 N/A N/A 4,237 N/A N/A
</TABLE>

*** Date of commencement of operations for Montgomery Emerging Markets was
2/5/96; for Wanger U.S. Small Cap was 9/20/95; for Wanger International
Small Cap was 9/18/95; for WPG Core Large Cap was 2/29/96; and for WPG Core
Small Cap was 2/16/96. The remaining Portfolios had not yet commenced
operations as of 12/31/95.

FINANCIAL STATEMENTS

Certain audited statutory-basis financial statements of the Company and the
financial statements of the Separate Account (as well as the Independent
Auditors' Reports thereon) are contained in the Statement of Additional
Information.

PERFORMANCE MEASURES

Performance for the Subaccounts of the Separate Account, including the yield
and effective yield of Federated's Prime Money Portfolio, the yield of the
other Subaccounts, and the total return of all Subaccounts may appear in
reports and promotional literature to current or prospective Contract Owners.

Please refer to the discussion below and to the Statement of Additional
Information for a more detailed description of the method used to calculate a
Portfolio's yield and total return, and a list of the indexes and other
benchmarks used in evaluating a Portfolio's performance.

STANDARDIZED AVERAGE ANNUAL TOTAL RETURN

When advertising performance of the Subaccounts, the Company will show the
Standardized Average Annual Total Return for a Subaccount which, as prescribed
by the rules of the Securities and Exchange Commission ("SEC"), is the
effective annual compounded rate of return that would have produced the cash
redemption value over the stated period had the performance remained constant
throughout. The Standardized Average Annual Total Return assumes a single
$1,000 payment made at the beginning of the period and full redemption at the
end of the period. It reflects the

11
<PAGE>

deduction of the Annual Contract Fee and all other Portfolio, Separate Account
and Contract level charges except Premium Taxes, if any.

ADDITIONAL PERFORMANCE MEASURES

NON-STANDARDIZED ACTUAL TOTAL RETURN AND NON-STANDARDIZED ACTUAL AVERAGE ANNUAL
TOTAL RETURN

The Company may show actual Total Return (i.e., the percentage change in the
value of an Accumulation Unit) for one or more Subaccounts with respect to one
or more periods, including Total Return Year-to-Date ("YTD") with respect to
certain periods. The Company may also show actual Average Annual Total Return
(i.e., the average annual change in Accumulation Unit Values) with respect to
one or more periods. For one year, the actual Total Return and the actual
Average Annual Total Return are effective annual rates of return and are equal.
For periods greater than one year, the actual Average Annual Total Return is
the effective annual compounded rate of return for the periods stated. Because
the value of an Accumulation Unit reflects the Separate Account and Portfolio
expenses (see "Fee Table"), the actual Total Return and actual Average Annual
Total Return also reflect these expenses. These percentages, however, do not
reflect the Annual Contract Fee or Premium Taxes (if any) which, if included,
would reduce the percentages reported.

NON-STANDARDIZED HYPOTHETICAL TOTAL RETURN AND NON-STANDARDIZED HYPOTHETICAL
AVERAGE ANNUAL TOTAL RETURN

The Company may show Non-Standardized Hypothetical Total Return and Non-
Standardized Hypothetical Average Annual Total Return, calculated on the basis
of the historical performance of the Portfolios, and may assume the Contract
was in existence prior to its inception date (which it was not). After the
Contract's inception date, the calculations will reflect actual Accumulation
Unit Values. These returns are based on specified premium patterns which
produce the resulting Accumulated Values. They reflect a deduction for the
Separate Account expenses and Portfolio expenses. They do not include the
Annual Contract Fee or Premium Taxes (if any) which, if included, would reduce
the percentages reported.

The Non-Standardized Annual Total Return for a Subaccount is the effective
annual rate of return that would have produced the ending Accumulated Value of
the stated one-year period.

The Non-Standardized Average Annual Total Return for a Subaccount is the
effective annual compounded rate of return that would have produced the ending
Accumulated Value over the stated period had the performance remained constant
throughout.

YIELD AND EFFECTIVE YIELD

The Company may also show yield and effective yield figures for the Subaccount
investing in shares of the Federated Prime Money Portfolio. "Yield" refers to
the income generated by an investment in the Federated Prime Money Portfolio
over a seven-day period, which is then "annualized." That is, the amount of
income generated by the investment during that week is assumed to be generated
each week 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 in the Federated Prime Money Portfolio is assumed to be
reinvested. Therefore the effective yield will be slightly higher than the
yield because of the compounding effect of this assumed reinvestment. These
figures do not reflect the Annual Contract Fee or Premium Taxes (if any) which,
if included, would reduce the yields reported.

From time to time a Portfolio of a Fund may advertise its yield and total
return investment performance. For each Subaccount other than the Federated
Prime Money Market for which the Company advertises yield, the Company shall
furnish a yield quotation referring to the Portfolio computed in the following
manner: the net investment income per Accumulation Unit earned during a recent
one month period is divided by the Accumulation Unit Value on the last day of
the period.

Please refer to the Statement of Additional Information for a description of
the method used to calculate a Portfolio's yield and total return, and a list
of the indexes and other benchmarks used in evaluating a Portfolio's
performance.

The performance measures discussed above reflect results of the Portfolios and
are not intended to indicate or predict future performance. For more detailed
information, see the Statement of Additional Information.

12
<PAGE>

Performance information for the Subaccounts may be contrasted with other
comparable variable annuity separate accounts or other investment products
surveyed by Lipper Analytical Services, a nationally recognized independent
reporting service which ranks mutual funds and other investment companies by
overall performance, investment objectives and assets. Performance may also be
tracked by other ratings services, companies, publications or persons who rank
separate accounts or other investment products on overall performance or other
criteria. Performance figures will be calculated in accordance with
standardized methods established by each reporting service.

THE COMPANY AND THE SEPARATE ACCOUNT

PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY

The Company is a stock life insurance company incorporated under the laws of
Missouri on August 6, 1920. The Company is principally engaged in offering life
insurance, annuity contracts, and accident and health insurance and is admitted
to do business in all states except for New York, as well as the District of
Columbia and Puerto Rico. The Company is wholly-owned, directly and indirectly,
by Providian Corporation, a publicly-held diversified consumer financial
services company whose shares are traded on the New York Stock Exchange with
assets of $26.8 billion as of December 31, 1995.

PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY SEPARATE ACCOUNT V

The Separate Account was established by the Company as a separate account under
the laws of the State of Missouri on February 14, 1992, pursuant to a
resolution of the Company's Board of Directors. The Separate Account is a unit
investment trust registered with the SEC under the Investment Company Act of
1940 (the "1940 Act"). Such registration does not signify that the SEC
supervises the management or the investment practices or policies of the
Separate Account. The Separate Account meets the definition of a "separate
account" under the federal securities laws.

The assets of the Separate Account are owned by the Company and the obligations
under the Contract are obligations of the Company. These assets are held
separately from the other assets of the Company and are not chargeable with
liabilities incurred in any other business operation of the Company (except to
the extent that assets in the Separate Account exceed the reserves and other
liabilities of the Separate Account). Income, gains and losses incurred on the
assets in the Separate Account, whether or not realized, are credited to or
charged against the Separate Account without regard to other income, gains or
losses of the Company. Therefore, the investment performance of the Separate
Account is entirely independent of the investment performance of the General
Account assets or any other separate account maintained by the Company.

The Separate Account has dedicated 15 Subaccounts to the Contract, each of
which invests solely in a corresponding Portfolio of the Funds. Additional
Subaccounts may be established at the discretion of the Company. The Separate
Account also includes other subaccounts which are not available under the
Contract.

THE FEDERATED INSURANCE SERIES (ADVISED BY FEDERATED ADVISERS)

The Federated Insurance Series is an open-end management investment company
organized as a Massachusetts business trust and registered under the 1940 Act.
The Fund consists of five investment portfolios available as part of the
Providian Advisor's Edge: Federated American Leaders Portfolio, the Federated
Utility Portfolio, the Federated Prime Money Portfolio, the Federated U.S.
Government Securities Portfolio and the Federated High Income Bond Portfolio.
Federated Advisers serves as this Fund's investment adviser.

THE MONTGOMERY FUNDS III (ADVISED BY MONTGOMERY ASSET MANAGEMENT, L.P.)

The Montgomery Funds III (the "Montgomery Fund"), an open-end management
investment company, was organized as a Delaware business trust in 1994 and is
registered under the 1940 Act. The Montgomery Fund consists of two
professionally managed investment portfolios available as part of the Providian
Advisor's Edge: the Montgomery Growth Portfolio and the Montgomery Emerging
Markets Portfolio. Montgomery Asset Management, L.P. ("MAM"), a limited partner
of Montgomery Asset Management, Inc., was organized as a California limited
partnership in 1990 and is the

13
<PAGE>

Montgomery Fund's investment advisor. MAM has general oversight responsibility
for the investment advisory services provided to the Montgomery Fund. In
addition, MAM is authorized to make investment decisions for the assets of each
Portfolio.

STEINROE VARIABLE INVESTMENT TRUST (ADVISED BY STEIN ROE & FARNHAM
INCORPORATED)

The SteinRoe Variable Investment Trust is an open-end, diversified management
investment company organized as a Massachusetts business trust and registered
under the 1940 Act. The Fund currently consists of five investment portfolios,
including the SteinRoe Capital Appreciation Portfolio, which is the only
portfolio available as part of the Providian Advisor's Edge. Stein Roe &
Farnham Incorporated serves as the Fund's investment adviser.

STRONG VARIABLE INSURANCE FUNDS, INC. (ADVISED BY STRONG CAPITAL MANAGEMENT,
INC.)

Strong Variable Insurance Funds, Inc. is an open-end management investment
company organized under Wisconsin law and is registered under the 1940 Act. One
series issued by the Fund is available as part of the Providian Advisor's Edge:
the Strong International Stock Portfolio. Strong Capital Management, Inc.
serves as the Fund's investment adviser.

WANGER ADVISORS TRUST (ADVISED BY WANGER ASSET MANAGEMENT, L.P.)

Wanger Advisors Trust, an open-end management investment company, was organized
as a Massachusetts business trust in 1994 and is registered under the 1940 Act.
The Fund consists of two series available as part of the Providian Advisor's
Edge: the Wanger U.S. Small Cap Advisor Portfolio and the Wanger International
Small Cap Advisor Portfolio. Wanger Asset Management, L.P., a limited
partnership managed by its general partner, Wanger Asset Management, Ltd.,
serves as this Fund's investment adviser.

WARBURG PINCUS TRUST (ADVISED BY WARBURG PINCUS COUNSELLORS, INC.)

Warburg Pincus Trust, an open-end management investment company, was organized
as a Massachusetts business trust in 1995 and is registered under the 1940 Act.
The Fund currently offers four investment portfolios, two of which are
available as part of the Providian Advisor's Edge: the Warburg Pincus
International Equity Portfolio and the Warburg Pincus Small Company Growth
Portfolio. Warburg Pincus Counsellors, Inc. serves as the Fund's investment
adviser.

TOMORROW FUNDS RETIREMENT TRUST (ADVISED BY WEISS, PECK & GREER, L.L.C.)

Tomorrow Funds Retirement Trust, an open-end management investment company, was
organized as a Delaware business trust in 1995 and is registered under the 1940
Act. The Fund consists of six series, including the Weiss, Peck & Greer Core
Large-Cap Stock Portfolio and the Weiss, Peck & Greer Core Small-Cap Stock
Portfolio, which are the only series available as part of the Providian
Advisor's Edge. Weiss, Peck & Greer, L.L.C. serves as this Fund's investment
adviser.

THE PORTFOLIOS (SEE ACCOMPANYING PROSPECTUSES)

For more information concerning the risks associated with each Portfolio's
investments, please refer to the applicable underlying Fund prospectus.

FEDERATED AMERICAN LEADERS FUND II ("FEDERATED AMERICAN LEADERS PORTFOLIO")

The primary investment objective of the Federated American Leaders Portfolio is
to achieve long-term growth of capital. The Portfolio's secondary objective is
to provide income. The Portfolio pursues its investment objectives by
investing, under normal circumstances, at least 65% of its total assets in
common stock of "blue-chip" companies. This Portfolio was formerly known as the
Federated Equity Growth & Income Portfolio.

FEDERATED UTILITY FUND II ("FEDERATED UTILITY PORTFOLIO")

The investment objective of the Federated Utility Portfolio is to achieve high
current income and moderate capital appreciation. The Portfolio endeavors to
achieve its objective by investing primarily in a professional managed and
diversified portfolio of equity and debt securities of utility companies.

14
<PAGE>

FEDERATED PRIME MONEY FUND II ("FEDERATED PRIME MONEY PORTFOLIO")

The investment objective of the Federated Prime Money Portfolio is to provide
current income consistent with stability of principal and liquidity. The
Portfolio pursues its investment objective by investing exclusively in a
portfolio of money market instruments maturing in 397 days or less.

FEDERATED FUND FOR U.S. GOVERNMENT SECURITIES II ("FEDERATED U.S. GOVERNMENT
SECURITIES PORTFOLIO")

The investment objective of the Federated U.S. Government Securities Portfolio
is to provide current income. Under normal circumstances, the Portfolio pursues
its investment objective by investing at least 65% of the value of its total
assets in securities issued or guaranteed as to payment of principal and
interest by the U.S. government, its agencies or instrumentalities. This
Portfolio was formerly known as the Federated U.S. Government Bond Portfolio.

FEDERATED HIGH INCOME BOND FUND II ("FEDERATED HIGH INCOME BOND PORTFOLIO")

The investment objective of the Federated High Income Bond Portfolio is to seek
high current income. The Portfolio endeavors to achieve its investment
objective by investing primarily in a diversified portfolio of professionally
managed fixed income securities. The fixed income securities in which the
Portfolio intends to invest are lower-rated corporate debt obligations, which
are commonly referred to as "junk-bonds." Some of these fixed income securities
may involve equity features. Capital growth will be considered, but only when
consistent with the investment objective of high current income. This Portfolio
was formerly known as the Federated Corporate Bond Portfolio.

MONTGOMERY VARIABLE SERIES: GROWTH FUND ("MONTGOMERY GROWTH PORTFOLIO")

The investment objective of the Montgomery Growth Portfolio is capital
appreciation, which, under normal conditions it seeks by investing at least 65%
of its total assets in the equity securities of domestic companies. The
Portfolio emphasizes investments in common stocks but also invests in other
types of equity securities. In addition to capital appreciation, the Portfolio
emphasizes value.

MONTGOMERY VARIABLE SERIES: EMERGING MARKETS FUND ("MONTGOMERY EMERGING MARKETS
PORTFOLIO")

The investment objective of the Montgomery Emerging Markets Portfolio is
capital appreciation, which, under normal conditions it seeks by investing at
least 65% of its total assets in equity securities of companies in countries
having emerging markets. For these purposes, the Portfolio defines an emerging
market country as having an economy that is or would be considered by the World
Bank or the United Nations to be emerging or developing. The Portfolio invests
primarily in common stock but may also invest in other types of equity
securities, and in certain types of debt securities issued by the governments
of emerging market countries that are or may be eligible for conversion into
investments in emerging market companies under debt conversion programs
sponsored by such governments.

CAPITAL APPRECIATION FUND ("STEINROE CAPITAL APPRECIATION PORTFOLIO")

The investment objective of the SteinRoe Capital Appreciation Portfolio is to
achieve growth of capital. This Portfolio seeks to achieve its investment
objective by investing primarily in common stocks, securities convertible into
common stocks and securities having common stock characteristics, including
rights and warrants, selected primarily for prospective capital growth. The
Portfolio invests in both domestic and foreign companies.

STRONG INTERNATIONAL STOCK FUND II ("STRONG INTERNATIONAL STOCK PORTFOLIO")

The investment objective of the Strong International Stock Portfolio is to
achieve capital growth. This Portfolio seeks to achieve its investment
objective by investing primarily in the equity securities of issuers located
outside the United States. This Portfolio will invest at least 65% of its total
assets in foreign equity securities, including common stocks, preferred stocks,
and securities that are convertible into common or preferred stocks, such as
warrants and convertible bonds, that are issued by companies whose principal
headquarters are located outside the United States. Under normal market
conditions, this Portfolio expects to invest at least 90% of its net assets in
foreign equity securities. This Portfolio will normally invest in securities of
issuers located in at least three different countries.

WANGER U.S. SMALL CAP ADVISOR ("WANGER U.S. SMALL CAP ADVISOR PORTFOLIO")

The investment objective of the Wanger U.S. Small Cap Advisor Portfolio is to
seek long-term growth of capital. The Portfolio pursues its investment
objective by investing primarily in stocks of small and medium size United
States companies. The Portfolio may also invest in debt securities, including
lower-rated debt securities, which may be regarded as having speculative
characteristics and are commonly referred to as "junk bonds."

15
<PAGE>

WANGER INTERNATIONAL SMALL CAP ADVISOR ("WANGER INTERNATIONAL SMALL CAP ADVISOR
PORTFOLIO")

The investment objective of the Wanger International Small Cap Advisor
Portfolio is to seek long-term growth of capital. The Portfolio pursues its
investment objective by investing primarily in stocks of small and medium size
foreign companies. The Portfolio may also invest in debt securities, including
lower-rated debt securities, which may be regarded as having speculative
characteristics and are commonly referred to as "junk bonds."

WARBURG PINCUS INTERNATIONAL EQUITY PORTFOLIO ("WARBURG PINCUS INTERNATIONAL
EQUITY PORTFOLIO")

The investment objective of the Warburg Pincus International Equity Portfolio
is to achieve long-term capital appreciation. This Portfolio seeks to achieve
its investment objective by investing primarily in equity securities of
companies, wherever organized, that in the judgment of the Portfolio's adviser,
have their principal business activities and interests outside of the United
States. This Portfolio will ordinarily invest substantially all its assets--but
no less than 65% of its total assets--in common stocks, warrants and securities
convertible into or exchangeable for common stocks. Generally this Portfolio
will hold no less than 65% of its total assets in at least three countries
other than the United States. Investment may be made in equity securities of
companies of any size, whether traded on or off a national securities exchange.

WARBURG PINCUS SMALL COMPANY GROWTH PORTFOLIO ("WARBURG PINCUS SMALL COMPANY
GROWTH PORTFOLIO")

The investment objective of the Warburg Pincus Small Company Growth Portfolio
is to achieve capital growth. This Portfolio seeks to achieve its investment
objective by investing in a portfolio of equity securities of small-sized
domestic companies. This Portfolio will ordinarily invest at least 65% of its
total assets in common stocks or warrants of small-sized companies (i.e.,
companies having stock market capitalizations of between $25 million and $1
billion at the time of purchase) that represent attractive opportunities for
capital growth. It is anticipated that this Portfolio will invest primarily in
companies whose securities are traded on domestic stock exchanges or in the
over-the-counter market. This Portfolio's investment will be made on the basis
of equity characteristics and securities ratings generally will not be a factor
in the selection process.

WEISS, PECK & GREER'S CORE LARGE-CAP STOCK FUND ("WEISS, PECK & GREER CORE
LARGE-CAP STOCK PORTFOLIO") AND WEISS, PECK & GREER'S CORE SMALL-CAP STOCK
FUND ("WEISS, PECK & GREER CORE SMALL-CAP STOCK PORTFOLIO")

The investment objective of the Weiss, Peck & Greer Core Large-Cap Stock
Portfolio is to seek to exceed the performance of publicly traded large
capitalization stocks in the aggregate, as represented by the S&P 500 Composite
Stock Price Index. The S&P 500 Composite Price Stock Index is an unmanaged
index of 500 common stocks. The S&P 500 Composite Stock Price Index represents
approximately 70% of the total domestic U.S. equity market capitalization. The
investment objective of the Weiss, Peck & Greer Core Small-Cap Stock Portfolio
is to seek to exceed the performance of publicly traded small capitalization
stocks in the aggregate, as represented by the Russell 2000 Index. The Russell
2000 Index is an unmanaged index of 2,000 common stocks of small capitalization
companies. Each of these Portfolios pursues its investment objective by
investing in a portfolio of securities that is considered more "efficient" than
the applicable benchmark. An efficient portfolio is one that has the maximum
expected return for any level of risk. While each Portfolio will generally be
substantially fully invested in equity securities which comprise the applicable
benchmark, each Portfolio may invest up to 10% of its total assets in
securities that are issued or guaranteed by the U.S. Government or its
agencies, authorities, instrumentalities or sponsored enterprises.

OTHER PORTFOLIO INFORMATION

There is no assurance that a Portfolio will achieve its stated investment
objective.

Additional information concerning the investment objectives and policies of the
Portfolios and the investment advisory services, total expenses and charges can
be found in the current prospectuses for the corresponding Funds. THE FUNDS'
PROSPECTUSES SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE CONCERNING
THE ALLOCATION OF NET PURCHASE PAYMENTS TO A PORTFOLIO.

16
<PAGE>

of the Code. Although we believe it is unlikely, a material conflict could
arise among the interests of the Separate Account and one or more of the other
participating separate accounts and other qualified persons or plans. In the
event of a material conflict, the affected insurance companies agree to take
any necessary steps, including removing their separate accounts from the Funds
if required by law, to resolve the matter.

CONTRACT FEATURES

The rights and benefits under the Contract are described below and in the
Contract. The Company reserves the right to make any modification to conform
the Contract to, or give the Contract Owner the benefit of, any federal or
state statute or any rule or regulation of the United States Treasury
Department.

RIGHT TO CANCEL PERIOD

A Right to Cancel Period exists for a minimum of 10 days after you receive the
Contract (30 or more days in some instances as set forth in your Contract) plus
a 5 day grace period to allow for mail delivery. The Contract permits you to
cancel the Contract during the Right to Cancel Period by returning the Contract
to our Administrative Offices, P.O. Box 32700, Louisville, Kentucky 40232 or to
the agent from whom you purchased the Contract. Upon cancellation, the Contract
is treated as void from the Contract Date and when we receive the Contract, (1)
if the state of issue of your Contract is CA, GA, ID, LA, MI, MO, NE, NH, NC,
OK, OR, SC, UT, VA or WV, then for any amount of your initial Purchase
Payment(s) invested in the Federated Prime Money Portfolio, we will return the
Accumulated Value of the amount of your Purchase Payment(s) so invested, or if
greater, the amount of your Purchase Payment(s) so invested, (2) for any amount
of your initial Purchase Payment(s) invested in the Portfolios immediately
following receipt by us, we will return the Accumulated Value of your Purchase
Payment(s) so invested plus any fees and/or Premium Taxes that may have been
subtracted from such amount, and (3) for any amount of your initial Purchase
Payment(s) invested in the Guaranteed Rate Options immediately following
receipt by us, we will refund the Accumulated Value of your Purchase Payment(s)
so invested.

CONTRACT PURCHASE AND PURCHASE PAYMENTS

If you wish to purchase a Contract, you should consult your advisor who will
provide the necessary information to the Company in a customer order form and
forward the initial Purchase Payment to such address as the Company may from
time to time designate. If you wish to make personal delivery by hand or
courier to the Company of the initial Purchase Payment (rather than through the
mail), he or she must do so at our Administrative Offices at 400 West Market
Street, Louisville, KY 40202. The initial Purchase Payment for a Non-Qualified
Contract must be equal to or greater than the $5,000 minimum investment
requirement. The Initial Purchase Payment for a Qualified Contract must be
equal to or greater than $2,000 (or you may establish a payment schedule of $50
a month by payroll deduction).

The Contract will be issued and the initial Purchase Payment less any Premium
Taxes will be credited within two Business Days after receipt of the customer
order form and the initial Purchase Payment in good order. The Company reserves
the right to reject any customer order form or initial Purchase Payment.
Following issuance, the Contract will be mailed to you along with a Contract
acknowledgement form, which you should complete, sign and return in accordance
with its instructions. Please note that until the Company receives the
acknowledgement form signed by the Owner and any Joint Owner, the Owner and any
Joint Owner must obtain a signature guarantee on their written signed request
in order to exercise any rights under the Contract.

If the initial Purchase Payment cannot be credited because the customer order
form is incomplete, we will contact the applicant, explain the reason for the
delay and will refund the initial Purchase Payment within five Business Days,
unless the applicant instructs us to retain the initial Purchase Payment and
credit it as soon as the necessary requirements are fulfilled.

Additional Purchase Payments may be made at any time prior to the Annuity Date,
as long as the Annuitant is living. Additional Purchase Payments must be for at
least $500 for Non-Qualified Contracts, or $50 for Qualified Contracts.
Additional Purchase Payments received prior to the close of the New York Stock
Exchange (generally 4:00 P.M. Eastern time) are credited to the Accumulated
Value at the close of business that same day. Additional Purchase Payments
received after the close of the New York Stock Exchange are processed the next
Business Day.

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<PAGE>

The Company reserves the right to refuse to issue this Contract in cases
involving an exchange for another Contract.

Total Purchase Payments may not exceed $1,000,000 without our prior approval.

PURCHASING BY WIRE

For wiring instructions please contact our Administrative Offices at 1-800-866-
6007.

ALLOCATION OF PURCHASE PAYMENTS

You instruct your advisor how your Net Purchase Payments will be allocated. You
may allocate each Net Purchase Payment to one or more of the Portfolios or
General Account Guaranteed Options as long as such portions are whole number
percentages provided that each allocation to a General Account Guaranteed
Option is at least $1,000 and that no Portfolio or General Account Guaranteed
Option may contain a balance less than $1,000. You may choose not to allocate
any monies to a particular Portfolio. You may change allocation instructions
for future Net Purchase Payments by sending us the appropriate Company form or
by complying with other designated Company procedures. The General Account
Guaranteed Options are available for sale in most, but not all, states.

If the state of issue of your Contract is CA, GA, ID, LA, MI, MO, NE, NH, NC,
OK, OR, SC, UT, VA or WV, then your initial Net Purchase Payment(s) will, when
your Contract is issued, be invested in the Federated Prime Money Portfolio
until the expiration of the Right to Cancel Period of 10 to 30 days (plus a
five day grace period to allow for mail delivery) or more in some instances as
specified in your Contract after the issuance of your Contract and then
invested according to your initial allocation instructions (except that any
accrued interest will remain in the Federated Prime Money Portfolio if it is
selected as an initial allocation option), provided that portions of your
initial Net Purchase Payment(s) allocated to the Guaranteed Rate Options will
be invested immediately upon our receipt thereof in order to lock in the rates
then applicable to such options. (Please note that immediate investment is not
applicable to amounts allocated to the Guaranteed Equity Option.)

CHARGES AND DEDUCTIONS

There are no sales charges for the Contracts (although certain charges or
restrictions may apply to your Contract's General Account Guaranteed Options).

MORTALITY AND EXPENSE RISK CHARGE

We impose a charge as compensation for bearing certain mortality and expense
risks under the Contracts. The annual charge is assessed daily based on the net
asset value of the Separate Account. The annual mortality and expense risk
charge is .50% of the net asset value of the Separate Account.

We guarantee that this annual charge will never increase. If this charge is
insufficient to cover actual costs and assumed risks, the loss will fall on us.
Conversely, if the charge proves more than sufficient, any excess will be added
to the Company surplus and will be used for any lawful purpose, including any
shortfall on the costs of distributing the Contracts.

The mortality risk borne by us under the Contracts, where one of the life
Annuity Payment Options is selected, is to make monthly Annuity Payments
(determined in accordance with the annuity tables and other provisions
contained in the Contract) regardless of how long all Annuitants may live. We
also assume mortality risk as a result of our guarantee of a Death Benefit in
the event the Annuitant dies prior to the Annuity Date.

The expense risk borne by us under the Contracts is the risk that the charges
for administrative expenses which are guaranteed for the life of the Contract
may be insufficient to cover the actual costs of issuing and administering the
Contract.

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<PAGE>

ADMINISTRATIVE CHARGE AND ANNUAL CONTRACT FEE

An administrative charge equal to .15% annually of the net asset value of the
Separate Account is assessed daily along with the Annual Contract Fee of $30.
The Annual Contract Fee is deducted proportionately from the Subaccounts. For
any Contract with amounts allocated to the Subaccounts, the $30 fee is assessed
per Contract, not per Portfolio chosen. The Annual Contract Fee will be
deducted on each Contract Anniversary and upon surrender, on a pro rata basis,
from each Subaccount. These deductions represent reimbursement for the costs
expected to be incurred over the life of the Contract for issuing and
maintaining each Contract and the Separate Account.

EXCHANGES

Each Contract Year you may make an unlimited number of Exchanges between
Portfolios and/or General Account Guaranteed Options, provided that after an
Exchange no Portfolio or General Account Guaranteed Option may contain a
balance less than $1,000. No fee is currently imposed for such Exchanges;
however, we reserve the right to charge a $15 fee for Exchanges in excess of 12
per Contract Year.

EXCEPTIONS TO CHARGES AND TO TRANSACTION OR BALANCE REQUIREMENTS

The administrative charges or fees may be reduced for sales of Contracts to a
trustee, employer or similar entity representing a group where the Company
determines that such sales result in savings of administrative expenses. In
addition, directors, officers and bona fide full-time employees (and their
spouses and minor children) of the Company, its ultimate parent company,
Providian Corporation and certain of their affiliates are permitted to purchase
Contracts with substantial reduction of administrative charges or fees or with
a waiver or modification of certain minimum or maximum purchase and transaction
amounts or balance requirements. Contracts so purchased are for investment
purposes only and may not be resold except to the Company.

In no event will reduction or elimination of fees or charges or waiver or
modification of transaction or balance requirements be permitted where such
reduction, elimination, waiver or modification will be unfairly discriminatory
to any person. Additional information about reductions in charges is contained
in the Statement of Additional Information.

TAXES

We will, where such taxes are imposed on the Company by state law, deduct
Premium Taxes that currently range up to 3.5%. These taxes will be deducted
from the Accumulated Value or Purchase Payments in accordance with applicable
law.

As of the date of this Prospectus, the following state assesses a Premium Tax
on all initial and additional Purchase Payments on Non-Qualified Contracts:

<TABLE>
<CAPTION>
PERCENTAGE
----------
<S> <C>
South Dakota................................ 1.25%
</TABLE>

In addition, a number of states currently impose Premium Taxes at the time an
Annuity Payment Option (other than a Lump Sum Payment Option) is selected. As
of the date of this Prospectus, the following states assess a Premium Tax
against the Accumulated Value if the Contract Owner chooses an Annuity Payment
Option instead of receiving a lump sum distribution:

<TABLE>
<CAPTION>
NON-
QUALIFIED QUALIFIED
--------- ---------
<S> <C> <C>
Alabama..................................................... 1.00% 1.00%
California.................................................. .50% 2.35%
District of Columbia........................................ 2.25% 2.25%
Kansas...................................................... 0% 2.00%
Kentucky.................................................... 2.00% 2.00%
Maine....................................................... 0% 2.00%
Nevada...................................................... 0% 3.50%
West Virginia............................................... 1.00% 1.00%
Wyoming..................................................... 0% 1.00%
</TABLE>

19
<PAGE>

state or local tax laws, charges for such taxes may be made. The Company does
not expect to incur any federal income tax liability attributable to investment
income or capital gains retained as part of the reserves under the Contracts.
(See "Federal Tax Considerations," page 26.) Based upon these expectations, no
charge is currently being made to the Separate Account for corporate federal
income taxes that may be attributable to the Separate Account.

The Company will periodically review the question of a charge to the Separate
Account for federal income taxes related to the Separate Account. Such a charge
may be made in future years for any federal income taxes incurred by the
Company. This might become necessary if the tax treatment of the Company is
ultimately determined to be other than what the Company currently believes it
to be, if there are changes made in the federal income tax treatment of
annuities at the corporate level, or if there is a change in the Company's tax
status. In the event that the Company should incur federal income taxes
attributable to investment income or capital gains retained as part of the
reserves under the Contracts, the Accumulated Value of the Contract would be
correspondingly adjusted by any provision or charge for such taxes.

PORTFOLIO EXPENSES

The value of the assets in the Separate Account reflect the fees and expenses
paid by the Portfolios. A complete description of these expenses is found in
the "Fee Table" section of this Prospectus and in each Fund's Prospectus and
Statement of Additional Information.

ACCUMULATED VALUE

At the commencement of the Contract, the Accumulated Value equals the initial
Net Purchase Payment. Thereafter, the Accumulated Value equals the Accumulated
Value from the previous Business Day increased by: (i) any additional Net
Purchase Payments received by the Company and (ii) any increase in the
Accumulated Value due to investment results of the selected Portfolio(s) and
the interest credited to the General Account Guaranteed Options during the
Valuation Period; and reduced by: (i) any decrease in the Accumulated Value due
to investment results of the selected Portfolio(s), (ii) a daily charge to
cover the mortality and expense risks assumed by the Company, (iii) any charge
to cover the cost of administering the Contract, (iv) any partial withdrawals,
(v) any Market Value Adjustment or other deduction due to early Exchanges from
the Guaranteed Rate Options and, if exercised by the Company, (vi) any charges
for any Exchanges made after the first 12 in any Contract Year.

EXCHANGES AMONG THE PORTFOLIOS

Should your investment goals change, you may exchange Accumulated Value among
the Portfolios of the Funds and, as permitted, the General Account Guaranteed
Options. Requests for Exchanges, received by mail or by telephone, prior to the
close of the New York Stock Exchange (generally 4:00 P.M. Eastern time) are
processed at the close of business that same day. Requests received after the
close of the New York Stock Exchange are processed the next Business Day. If
you experience difficulty in making a telephone Exchange your Exchange request
may be made by regular or express mail. It will be processed on the date
received.

To take advantage of the privilege of initiating transactions by telephone, you
must first elect the privilege by completing the appropriate section of the
Contract acknowledgement form, which you will receive with your Contract. You
may also complete a separate telephone authorization form at a later date. To
take advantage of the privilege of authorizing a third party to initiate
transactions by telephone, you must first complete a third party authorization
form or the appropriate section of the Contract acknowledgement form.

The Company will undertake reasonable procedures to confirm that instructions
communicated by telephone are genuine. Prior to the acceptance of any request,
the caller will be asked by a customer service representative for his or her
Contract number and social security number. In addition, telephone
communications from a third party authorized to transact in an account will
undergo reasonable procedures to confirm that instructions are genuine. The
third party caller will be asked for his or her name, company affiliation (if
appropriate), the Contract number to which he or she is referring, and the
social security number of the Contract Owner. All calls will be recorded, and
this information will be verified with the Contract Owner's records prior to
processing a transaction. Furthermore, all transactions performed by a customer
service representative will be verified with the Contract Owner through a
written confirmation statement. Neither the Company nor the Funds shall be
liable for any loss, cost or expense for action on telephone instructions that
are believed to be genuine in accordance with these procedures.

20
<PAGE>

For information concerning Exchanges to and from the General Account Guaranteed
Options, see "The General Account," at Appendix A.

FULL AND PARTIAL WITHDRAWALS

At any time before the Annuity Date and while the Annuitant is living, you may
make a partial or full withdrawal of the Contract to receive all or part of the
Surrender Value by sending a written request to our Administrative Offices.
Full or partial withdrawals may only be made before the Annuity Date and all
partial withdrawal requests must be for at least $500. The amount available for
full or partial withdrawal is the Surrender Value at the end of the Valuation
Period during which the written request for withdrawal is received. The
Surrender Value is an amount equal to the Accumulated Value, adjusted to
reflect any applicable Market Value Adjustment for amounts allocated to the
Multi-Year Guaranteed Rate Option, less any early withdrawal charges for
amounts allocated to the One-Year Guaranteed Index Rate Option, less any amount
allocated to the Guaranteed Equity Option less any Premium Taxes incurred but
not yet deducted. The withdrawal amount may be paid in a lump sum to you, or if
elected, all or any part may be paid out under an Annuity Payment Option. (See
"Annuity Payment Options," page 23.)

You can make a withdrawal by sending the appropriate Company form to our
Administrative Offices. You may not make any full or partial withdrawals from
the Guaranteed Equity Option before the end of the guarantee period. Your
proceeds will normally be processed and mailed to you within two Business Days
after the receipt of the request but in no event will it be later than seven
calendar days, subject to postponement in certain circumstances. (See
"Deferment of Payment," page 25.)

Payments under the Contract of any amounts derived from premiums paid by check
may be delayed until such time as the check has cleared your bank. If, at the
time the Contract Owner requests a full or partial withdrawal, he has not
provided the Company with a written election not to have federal income taxes
withheld, the Company must by law withhold such taxes from the taxable portion
of any full or partial withdrawal and remit that amount to the federal
government. Moreover, the Code provides that a 10% penalty tax may be imposed
on certain early withdrawals. (See "Federal Tax Considerations," page 25.)

Since the Contract Owner assumes the investment risk with respect to amounts
allocated to the Separate Account, the total amount paid upon withdrawal of the
Contract (taking into account any prior withdrawals) may be more or less than
the total Net Purchase Payments made.

SYSTEMATIC WITHDRAWAL OPTION

You may choose to have a specified dollar amount provided to you on a regular
basis from the portion of your Contract's Accumulated Value that is allocated
to the Portfolios. By electing the Systematic Withdrawal Option, withdrawals
may be made on a monthly, quarterly, semi-annual or annual basis. The minimum
amount for each withdrawal is $250.

This option may be elected by completing the Systematic Withdrawal Request
Form. This form must be received by us at least 30 days prior to the date
systematic withdrawals will begin. Each withdrawal will be processed on the day
and at the frequency indicated on the Systematic Withdrawal Request Form. The
start date for the systematic withdrawals must be between the first and twenty-
eighth day of the month. You may discontinue the Systematic Withdrawal Option
at any time by notifying us in writing at least 30 days prior to your next
scheduled withdrawal date.

Each systematic withdrawal is subject to federal income taxes on the taxable
portion, and may be subject to a 10% federal tax penalty if you are under age
59 1/2. You may elect to have federal income taxes withheld from each
withdrawal at a 10% rate on the Systematic Withdrawal Request Form. For a
discussion of the tax consequences of withdrawals, see "Federal Tax
Considerations" on page 26 of the Prospectus. You may wish to consult a tax
advisor regarding any tax consequences that might result prior to electing the
Systematic Withdrawal Option.

We reserve the right to discontinue offering the Systematic Withdrawal Option
upon 30 days written notice. We also reserve the right to charge a fee for such
service.

DOLLAR COST AVERAGING OPTION

21
<PAGE>

investment from short term price fluctuations. Since the same dollar amount is
transferred to other Portfolios each month, more units are purchased in a
Portfolio if the value per unit is low and less units are purchased if the
value per unit is high. Therefore, a lower average cost per unit may be
achieved over the long term. This plan of investing allows investors to take
advantage of market fluctuations but does not assure a profit or protect
against a loss in declining markets.

This Dollar Cost Averaging Option may be elected on the customer order form or
at a later date. The minimum amount that may be transferred each month into any
Portfolio or General Account Guaranteed Option is $250. The maximum amount
which may be transferred is equal to the Accumulated Value in the Federated
Prime Money Portfolio when elected, divided by 12.

The transfer date will be the same calendar day each month as the Contract
Date. The dollar amount will be allocated to the Portfolios in the proportions
you specify on the appropriate Company form, or, if none are specified, in
accordance with your original investment allocation. If, on any transfer date,
the Accumulated Value is equal to or less than the amount you have elected to
have transferred, the entire amount will be transferred and the option will
end. You may change the transfer amount once each Contract Year, or cancel this
option by sending the appropriate Company form to our Administrative Offices
which must be received at least seven days before the next transfer date.

IRS-REQUIRED DISTRIBUTIONS

Prior to the Annuity Date, if you or, if applicable, a Joint Owner dies before
the entire interest in the Contract is distributed, the value of the Contract
must be distributed to the Owner's Designated Beneficiary (unless the Contract
Owner was also the Annuitant--in which case the Annuitant's Beneficiary is
entitled to the Death Benefit) as described in this section so that the
Contract qualifies as an annuity under the Code. If the death occurs on or
after the Annuity Date, the remaining portions of such interest will be
distributed at least as rapidly as under the method of distribution being used
as of the date of death. If the death occurs before the Annuity Date, the
entire interest in the Contract will be distributed within five years after
date of death or be paid under an Annuity Payment Option under which payments
will begin within one year of the Contract Owner's death and will be made for
the life of the Owner's Designated Beneficiary or for a period not extending
beyond the life expectancy of that beneficiary. The Owner's Designated
Beneficiary is the person to whom ownership of the Contract passes by reason of
death.

If any portion of the Contract Owner's interest is payable to (or for the
benefit of) the surviving spouse of the Contract Owner, the Contract may be
continued with the surviving spouse as the new Contract Owner.

MINIMUM BALANCE REQUIREMENT

We will transfer the balance in any Portfolio that falls below $1,000, due to a
partial withdrawal or Exchange, to the remaining Portfolios held under that
Contract on a pro rata basis. In the event that the entire value of the
Contract falls below $1,000, you may be notified that the Accumulated Value of
your account is below the Contract's minimum requirement. You would then be
allowed 60 days to make an additional investment before the account is
liquidated. Proceeds would be promptly paid to the Contract Owner. The full
proceeds would be taxable as a withdrawal. We will not exercise this right with
respect to Qualified Contracts.

DESIGNATION OF AN ANNUITANT'S BENEFICIARY

The Contract Owner may select one or more Annuitant's Beneficiaries and name
them in the customer order form. Thereafter, while the Annuitant is living, the
Contract Owner may change the Annuitant's Beneficiary by sending us the
appropriate Company form. Such change will take effect on the date such form is
signed by the Contract Owner but will not affect any payment made or other
action taken before the Company acknowledges such form. You may also make the
designation of Annuitant's Beneficiary irrevocable by sending us the
appropriate Company form and obtaining approval from the Company. Changes in
the Annuitant's Beneficiary may then be made only with the consent of the
designated irrevocable Annuitant's Beneficiary.

If the Annuitant dies prior to the Annuity Date, the following will apply
unless the Contract Owner has made other provisions.

(a) If there is more than one Annuitant's Beneficiary, each will share in
the Death Benefits equally;

(b) If one or two or more Annuitant's Beneficiaries have already died, that
share of the Death Benefit will be paid equally to the survivor(s);

22
<PAGE>

(d) If an Annuitant's Beneficiary dies at the same time as the Annuitant,
the proceeds will be paid as though the Annuitant's Beneficiary had
died first. If an Annuitant's Beneficiary dies within 15 days after the
Annuitant's death and before the Company receives due proof of the
Annuitant's death, proceeds will be paid as though the Annuitant's
Beneficiary had died first.

If an Annuitant's Beneficiary who is receiving Annuity Payments dies, any
remaining payments certain will be paid to that Annuitant's Beneficiary's named
beneficiary(ies) when due. If no Annuitant's Beneficiary survives the
Annuitant, the right to any amount payable will pass to the Contract Owner. If
the Contract Owner is the Annuitant, this right will pass to his or her estate.
If a Life Annuity with Period Certain option was elected, and if the Annuitant
dies on or after the Annuity Date, any unpaid payments certain will be paid to
the Annuitant's Beneficiary or your designated Payee.

DEATH OF ANNUITANT PRIOR TO ANNUITY DATE

If the Annuitant dies prior to the Annuity Date, an amount will be paid as
proceeds to the Annuitant's Beneficiary. The Death Benefit is calculated and is
payable upon receipt of due Proof of Death of the Annuitant as well as proof
that the Annuitant died prior to the Annuity Date. Upon receipt of this proof,
the Death Benefit will be paid within seven days, or as soon thereafter as the
Company has sufficient information about the Annuitant's Beneficiary to make
the payment. The Annuitant's Beneficiary may receive the amount payable in a
lump sum cash benefit or under one of the Annuity Payment Options.

The Death Benefit is the greater of:

(1) The Accumulated Value on the date we receive due Proof of Death; or

(2) The Adjusted Death Benefit.

During the first six Contract Years, the Adjusted Death Benefit will be the sum
of all Net Purchase Payments made, less any partial withdrawals taken. During
each subsequent six-year period, the Adjusted Death Benefit will be the Death
Benefit on the last day of the previous six-year period plus any Net Purchase
Payments made, less any partial withdrawals taken during the current six-year
period. After the Annuitant attains age 75, the Adjusted Death Benefit will
remain equal to the Death Benefit on the last day of the six-year period before
age 75 occurs plus any Net Purchase Payments subsequently made, less any
partial withdrawals subsequently taken.

ANNUITY DATE

You may specify an Annuity Date, which can be no later than the first day of
the month after the Annuitant's 85th birthday, without the Company's prior
approval. The Annuity Date is the date that Annuity Payments are scheduled to
commence under the Contract unless the Contract has been surrendered or an
amount has been paid as proceeds to the designated Annuitant's Beneficiary
prior to that date.

You may advance or defer the Annuity Date. However, the Annuity Date may not be
advanced to a date prior to 30 days after the date of receipt of a written
request or, without the Company's prior approval, deferred to a date beyond the
first day of the month after the Annuitant's 85th birthday. The Annuity Date
may only be changed by written request during the Annuitant's lifetime and must
be made at least 30 days before the then-scheduled Annuity Date. The Annuity
Date and the Annuity Payment options available for Qualified Contracts may also
be controlled by endorsements, the plan or applicable law.

LUMP SUM PAYMENT OPTION

You may surrender the Contract at any time while the Annuitant is living and
before the Annuity Date. The Surrender Value is equal to the Accumulated Value,
adjusted for any Market Value Adjustment or other deductions applicable to
amounts allocated to a General Account Guaranteed Option, less any amount
allocated to the Guaranteed Equity Option, less any Premium Taxes incurred but
not yet deducted.

ANNUITY PAYMENT OPTIONS

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<PAGE>

Portfolio or Portfolios you have chosen. All Annuity Payment Options are also
offered as "Fixed Annuity Options." This means that the amount of each payment
will be set on the Annuity Date and will not change. The following Annuity
Payment Options are available under the Contract:

Life Annuity--Monthly Annuity Payments are paid for the life of an Annuitant,
ceasing with the last Annuity Payment due prior to the Annuitant's death.

Joint and Last Survivor Annuity--Monthly Annuity Payments are paid for the life
of two Annuitants and thereafter for the life of the survivor, ceasing with the
last Annuity Payment due prior to the survivor's death.

Life Annuity with Period Certain--Monthly Annuity Payments are paid for the
life of an Annuitant, with a Period Certain of not less than 120, 180, or 240
months, as elected.

Installment or Unit Refund Life Annuity--Available as either a Fixed
(Installment Refund) or Variable (Unit Refund) Annuity Option. Monthly Annuity
Payments are paid for the life of an Annuitant, with a Period Certain
determined by dividing the Accumulated Value by the first Annuity Payment.

Designated Period Annuity--Only available as a Fixed Annuity Option. Monthly
Annuity Payments are paid for a Period Certain as elected, which may be from 10
to 30 years.

Before the Annuity Date and while the Annuitant is living, you may change the
Annuity Payment Option by written request. The request for change must be made
at least 30 days prior to the Annuity Date and is subject to the approval of
the Company. If an Annuity Payment Option is chosen that depends on the
continuation of the life of the Annuitant, proof of birth date may be required
before Annuity Payments begin. For Annuity Payment Options involving life
income, the actual age of the Annuitant will affect the amount of each payment.
Since payments to older Annuitants are expected to be fewer in number, the
amount of each Annuity Payment will generally be greater.

All or part of the Accumulated Value may be placed under one or more Annuity
Payment Options. If Annuity Payments are to be paid under more than one option,
the Company must be told what part of the Accumulated Value is to be paid under
each option.

If at the time of any Annuity Payment you have not provided the Company with a
written election not to have federal income taxes withheld, the Company must by
law withhold such taxes from the taxable portions of such Annuity Payment and
remit that amount to the federal government.

In the event that an Annuity Payment Option is not selected, the Company will
make monthly Annuity Payments that will go on for as long as the Annuitant
lives (120 payments guaranteed) in accordance with the Life Annuity with Period
Certain Option and the annuity benefit sections of the Contract. That portion
of the Accumulated Value that has been held in a Portfolio prior to the Annuity
Date will be applied under a Variable Annuity Option based on the performance
of that Portfolio. Subject to approval by the Company, you may select any other
Annuity Payment Option then being offered by the Company. All Fixed Annuity
Payments and the initial Variable Annuity Payment are guaranteed to be not less
than as provided by the Annuity Tables and the Annuity Payment Option elected
by the Contract Owner. The minimum payment, however, is $100. If the
Accumulated Value is less than $5,000, or less than $2,000 for Texas Contract
Owners, the Company has the right to pay that amount in a lump sum. From time
to time, the Company may require proof that the Annuitant or Contract Owner is
living. Annuity Payment Options are not available to: (1) an assignee; or (2)
any other than a natural person, except with the consent of the Company.

We may, at the time of election of an Annuity Payment Option, offer more
favorable rates in lieu of the guaranteed rates specified in the Annuity Tables
found in the Contract.

The value of Variable Annuity Payments will reflect the investment experience
of the chosen Portfolio. Only one Variable Annuity Option may be chosen from
among those made available by the Company for each Portfolio. The Annuity
Tables, which are contained in the Contract and are used to calculate the value
of the initial Variable Annuity Payment, are based on an assumed interest rate
of 4%. If the actual net investment experience exactly equals the assumed
interest rate, then the Variable Annuity Payments will remain the same (equal
to the first Annuity Payment). However, if actual investment experience exceeds
the assumed interest rate, the Variable Annuity Payments will increase;
conversely, they will decrease if the actual experience is lower. The method of
computation of Variable Annuity Payments is described in more detail in the
Statement of Additional Information.

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The value of all payments, both fixed and variable, will be greater for shorter
guaranteed periods than for longer guaranteed periods, and greater for life
annuities than for joint and survivor annuities, because they are expected to
be made for a shorter period.

After the Annuity Date, you may change the Portfolio funding the Variable
Annuity Payments on the appropriate Company form or by calling our
Administrative Offices at 1-800-866-6007.

DEFERMENT OF PAYMENT

Payment of any cash withdrawal or lump sum Death Benefit due from the Separate
Account will occur within seven days from the date the election becomes
effective except that the Company may be permitted to defer such payment if:
(1) the New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on the New York Stock Exchange is otherwise restricted; or
(2) an emergency exists as defined by the SEC, or the SEC requires that trading
be restricted; or (3) the SEC permits a delay for the protection of Contract
Owners.

As to amounts allocated to the General Account, we may, at any time, defer
payment of the Surrender Value for up to six months after we receive a request
for it. We will allow interest of at least 4% annually on any Surrender Value
payment derived from the General Account that we defer 30 days or more.

FEDERAL TAX CONSIDERATIONS

INTRODUCTION

The ultimate effect of federal income taxes on the amounts paid for the
Contract, on the investment return on assets held under a Contract, on Annuity
Payments, and on the economic benefits to the Contract Owner, Annuitant or
Annuitant's Beneficiary, depends on the terms of the Contract, the Company's
tax status and upon the tax status of the individuals concerned. The following
discussion is general in nature and is not intended as tax advice. You should
consult a tax adviser regarding the tax consequences of purchasing a Contract.
No attempt is made to consider any applicable state or other tax laws.
Moreover, the discussion is based upon the Company's understanding of the
federal income tax laws as they are currently interpreted. No representation is
made regarding the likelihood of continuation of the federal income tax laws,
the Treasury regulations or the current interpretations by the Internal Revenue
Service. We reserve the right to make uniform changes in the Contract to the
extent necessary to continue to qualify the Contract as an annuity. For a
discussion of federal income taxes as they relate to the Funds, please see the
accompanying Prospectuses for the Funds.

TAXATION OF ANNUITIES IN GENERAL

Section 72 of the Code governs taxation of annuities. In general, a Contract
Owner is not taxed on increases in value under a Contract until some form of
withdrawal or distribution is made under it. However, under certain
circumstances, the increase in value may be subject to current federal income
tax. (See "Contracts Owned by Non-Natural Persons," page 27, and
"Diversification Standards," page 27.)

Section 72 provides that the proceeds of a full or partial withdrawal from a
Contract prior to the Annuity Date will be treated as taxable income to the
extent the amounts held under the Contract exceed the "investment in the
Contract," as that term is defined in the Code. The "investment in the
Contract" can generally be described as the cost of the Contract, and generally
constitutes all Purchase Payments paid for the Contract less any amounts
received under the Contract that are excluded from the individual's gross
income. The taxable portion is taxed at ordinary income tax rates. For purposes
of this rule, a pledge or assignment of a Contract is treated as a payment
received on account of a partial withdrawal of a Contract.

Upon receipt of a full or partial withdrawal or an Annuity Payment under the
Contract, you will be taxed if the value of the Contract exceeds the investment
in the Contract. Ordinarily, the taxable portion of such payments will be taxed
at ordinary income tax rates.

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amount of each payment that is not taxed. The dollar amount is determined by
dividing the investment in the Contract by the total number of expected
periodic payments. The remaining portion of each payment is taxed at ordinary
income tax rates. Once the excludible portion of Annuity Payments to date
equals the investment in the Contract, the balance of the Annuity Payments will
be fully taxable.

Withholding of federal income taxes on all distributions may be required unless
the recipient elects not to have any amounts withheld and properly notifies the
Company of that election.

With respect to amounts withdrawn or distributed before the taxpayer reaches
age 59 1/2, a penalty tax is imposed equal to 10% of the taxable portion of
amounts withdrawn or distributed. However, the penalty tax will not apply to
withdrawals (i) made on or after the death of the Contract Owner or, where the
Contract Owner is not an individual, the death of the Annuitant, who is defined
as the individual the events in whose life are of primary importance in
affecting the timing and payment under the Contracts; (ii) attributable to the
taxpayer's becoming disabled within the meaning of Code Section 72(m)(7); (iii)
that are part of a series of substantially equal periodic payments made at
least annually for the life (or life expectancy) of the taxpayer, or joint
lives (or joint life expectancies) of the taxpayer and his or her beneficiary;
(iv) from a qualified plan (note, however, other penalties may apply); (v)
under a qualified funding asset (as defined in Code Section 130(d)); (vi) under
an immediate annuity contract as defined in Section 72(u)(4); or (vii) that are
purchased by an employer on termination of certain types of qualified plans and
that are held by the employer until the employee separates from service. Other
tax penalties may apply to certain distributions as well as to certain
contributions and other transactions under Qualified Contracts.

If the penalty tax does not apply to a withdrawal as a result of the
application of item (iii) above, and the series of payments are subsequently
modified (other than by reason of death or disability), the tax for the year in
which the modification occurs will be increased by an amount (as determined
under Treasury Regulations) equal to the tax that would have been imposed but
for item (iii) above, plus interest for the deferral period. The foregoing rule
applies if the modification takes place (a) before the close of the period that
is five years from the date of the first payment and after the taxpayer attains
age 59 1/2, or (b) before the taxpayer reaches age 59 1/2.

THE COMPANY'S TAX STATUS

The Company is taxed as a life insurance company under Part I of Subchapter L
of the Code. Since the Separate Account is not a separate entity from the
Company and its operations form a part of the Company, it will not be taxed
separately as a "regulated investment company" under Subchapter M of the Code.

Investment income and realized capital gains on the assets of the Separate
Account are reinvested and taken into account in determining the Accumulated
Value. Under existing federal income tax law, the Separate Account's investment
income, including realized net capital gains, is not taxed to the Company. The
Company reserves the right to make a deduction for taxes should they be imposed
with respect to such items in the future.

DISTRIBUTION-AT-DEATH RULES

In order to be treated as an annuity contract, a Contract must generally
provide the following two distribution rules: (a) if any Contract Owner dies on
or after the Annuity Date and before the entire interest in the Contract has
been distributed, the remaining portion of such interest must be distributed at
least as quickly as the method in effect on the Contract Owner's death; and (b)
if any Contract Owner dies before the Annuity Date, the entire interest must
generally be distributed within five years after the date of death. To the
extent such interest is payable to the Owner's Designated Beneficiary, however,
such interests may be annuitized over the life of that Owner's Designated
Beneficiary or over a period not extending beyond the life expectancy of that
Owner's Designated Beneficiary, so long as distributions commence within one
year after the Contract Owner's death. If the Owner's Designated Beneficiary is
the spouse of the Contract Owner, the Contract (together with the deferral on
tax on the accrued and future income thereunder) may be continued unchanged in
the name of the spouse as Contract Owner. The term Owner's Designated
Beneficiary means the natural person named by the Contract Owner as a
beneficiary and to whom ownership of the Contract passes by reason of the
Contract Owner's death (unless the Contract Owner was also the Annuitant--in
which case the Annuitant's Beneficiary is entitled to the Death Benefit).

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amount of payout under a Contract. In addition, when the Contract Owner is not
an individual, a change in the primary Annuitant is treated as the death of the
Contract Owner. Finally, in the case of joint Contract Owners, the distribution
will be required at the death of the first of the Contract Owners.

TRANSFERS OF ANNUITY CONTRACTS

Any transfer of a Non-Qualified Contract prior to the Annuity Date for less
than full and adequate consideration will generally trigger tax on the gain in
the Contract to the Contract Owner at the time of such transfer. The investment
in the Contract of the transferee will be increased by any amount included in
the Contract Owner's income. This provision, however, does not apply to those
transfers between spouses or incident to a divorce which are governed by Code
Section 1041(a).

CONTRACTS OWNED BY NON-NATURAL PERSONS

Where the Contract is held by a non-natural person (for example, a
corporation), the Contract is generally not treated as an annuity contract for
federal income tax purposes, and the income on that Contract (generally the
increase in the net Accumulated Value less the payments) is includible in
taxable income each year. The rule does not apply where the non-natural person
is only a nominal owner such as a trust or other entity acting as an agent for
a natural person. If an employer is the nominal owner of a Contract, and the
beneficial owners are employees, then the Contract is not treated as being held
by a non-natural person. The rule also does not apply where the Contract is
acquired by the estate of a decedent, where the Contract is a qualified funding
asset for structured settlements, where the Contract is purchased on behalf of
an employee upon termination of a qualified plan, and in the case of an
immediate annuity.

ASSIGNMENTS

A transfer of ownership of a Contract, a collateral assignment or the
designation of an Annuitant or other beneficiary who is not also the Contract
Owner may result in tax consequences to the Contract Owner, Annuitant or
beneficiary that are not discussed herein. A Contract Owner contemplating such
a transfer or assignment of a Contract should contact a tax advisor with
respect to the potential tax effects of such a transaction.

MULTIPLE CONTRACTS RULE

All non-qualified annuity contracts issued by the same company (or affiliate)
to the same Contract Owner during any calendar year are to be aggregated and
treated as one contract for purposes of determining the amount includible in
the taxpayer's gross income. Thus, any amount received under any Contract prior
to the Contract's Annuity Date, such as a partial withdrawal, will be taxable
(and possibly subject to the 10% federal penalty tax) to the extent of the
combined income in all such contracts. The Treasury Department has specific
authority to issue regulations that prevent the avoidance of Code Section 72(e)
through the serial purchase of annuity contracts or otherwise. In addition,
there may be other situations in which the Treasury Department may conclude
that it would be appropriate to aggregate two or more Contracts purchased by
the same Contract Owner. Accordingly, a Contract Owner should consult a tax
advisor before purchasing more than one Contract or other annuity contracts.

DIVERSIFICATION STANDARDS

To comply with certain diversification regulations (the "Regulations") under
Code Section 817(h), after a start up period, the Separate Account will be
required to diversify its investments. The Regulations generally require that
on the last day of each quarter of a calendar year, no more than 55% of the
value of the Separate Account is represented by any one investment, no more
than 70% is represented by any two investments, no more than 80% is represented
by any three investments, and no more than 90% is represented by any four
investments. A "look-through" rule applies that suggests that each Subaccount
of the Separate Account will be tested for compliance with the percentage
limitations by looking through to the assets of the Portfolios in which each
such Subaccount invests. All securities of the same issuer are treated as a
single investment. Each government agency or instrumentality will be treated as
a separate issuer for purposes of those limitations.

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in this area at some time in the future. It is not clear, at this time, what
these regulations or rulings would provide. It is possible that when the
regulations or ruling are issued, the Contracts may need to be modified in
order to remain in compliance. For these reasons, the Company reserves the
right to modify the Contracts, as necessary, to prevent the Contract Owner from
being considered the owner of assets of the Separate Account.

We intend to comply with the Regulations to assure that the Contracts continue
to be treated as annuity contracts for federal income tax purposes.

403(B) CONTRACTS

Contracts will be offered in connection with retirement plans adopted by public
school systems and certain tax-exempt organizations (Code Section 501(c)(3)
organizations) for their employees under Section 403(b) of the Code except, as
discussed below and subject to any conditions in an employer's plan, a Contract
used in connection with a Section 403(b) Plan offers the same benefits and is
subject to the same charges described in this Prospectus.

The Code imposes a maximum limit on annual Purchase Payments which may be
excluded from your gross income. Such limit must be calculated in accordance
with Sections 403(b), 415 and 402(g) of the Code. In addition, Purchase
Payments will be excluded from your gross income only if the 403(b) Plan meets
certain Code non-discrimination requirements.

The Code imposes restrictions on full or partial surrenders from 403(b)
individual accounts attributable to Purchase Payments under a salary reduction
agreement and to any earnings on the entire 403(b) individual account credited
on and after January 1, 1989. Surrenders of these amounts are allowed only if
the Contract Owner (a) has died, (b) has become disabled, as defined in the
Code, (c) has attained age 59 1/2, or (d) has separated from service.
Surrenders are also allowed if the Contract Owner can show "hardship," as
defined by the Internal Revenue Service, but the surrender is limited to the
lesser of Purchase Payments made on or after January 1, 1989 or the amount
necessary to relieve the hardship. Even if a surrender is permitted under these
provisions, a 10% federal tax penalty may be assessed on the withdrawn amount
if it does not otherwise meet the exceptions to the penalty tax provisions.
(See "Taxation of Annuities in General," page 26).

Under the Code, you may request a full or partial surrender of an amount equal
to the individual account cash value as of December 31, 1988 (the
"grandfathered" amount), subject to the terms of the 403(b) Plan. Although the
Code surrender restrictions do not apply to this amount, a 10% federal penalty
tax may be assessed on the withdrawn amount if it does not otherwise meet the
exceptions to the penalty tax provisions. (See "Taxation of Annuities in
General," page 26).

The Company believes that the Code surrender restrictions do not apply to tax-
free transfers pursuant to Revenue Ruling 90-24. The Company further believes
that the surrender restrictions will not apply to any "grandfathered" amount
transferred pursuant to Revenue Ruling 90-24 into another 403(b) Contract.

LOANS UNDER 403(B) CONTRACTS

Under your 403(b) Contract, you may borrow against your Contract's Surrender
Value after the first Contract Year. No additional loans will be extended until
prior loan balances are paid in full. The loan amount must be at least $1,000
with a minimum vested Accumulated Value of $2,000. The loan amount may not
exceed the lesser of (a) or (b), where (a) is 50% of the Contract's vested
Accumulated Value on the date on which the loan is made, and (b) is $50,000
reduced by the highest outstanding balance of any loan within the preceding 12
months ending on the day before the current loan is made. If you are married,
your spouse must consent in writing to a loan request. This consent must be
given within the 90-day period before the loan is to be made.

On the first Business Day of each calendar month, the Company will determine a
loan interest rate. The loan interest rate for the calendar month in which the
loan is effective will apply for one year from the loan effective date.
Annually on the anniversary of the loan effective date, the rate will be
adjusted to equal the loan interest rate determined for the month in which the
loan anniversary occurs.

Principal and interest on loans must be amortized in quarterly installments
over a five year term except for certain loans for the purchase of a principal
residence. If the loan interest rate is adjusted, future payments will be
adjusted so that the outstanding loan balance is amortized in equal quarterly
installments over the remaining term. A $40 processing fee is charged for each
loan. The remainder of each repayment will be credited to the individual
account.

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If a loan payment is not made when due, interest will continue to accrue. The
defaulted payment plus accrued interest will be deducted from any future
distributions under the Contract and paid to us. Any loan payment which is not
made when due, plus interest, will be treated as a distribution, as permitted
by law. The loan payment may be taxable to the borrower, and may be subject to
the early withdrawal tax penalty. When a loan is made, the number of
Accumulation Units equal to the loan amount will be withdrawn from the
individual account and placed in the Collateral Fixed Account. Accumulation
Units taken from the individual account to provide a loan do not participate in
the investment experience of the related Portfolios or the guarantees of the
General Account Guaranteed Options. The loan amount will be withdrawn on a pro
rata basis first from the Portfolios to which Accumulated Value has been
allocated, and if that amount is insufficient, collateral will then be
transferred from the General Account Guaranteed Options--except the Guaranteed
Equity Option. As with any withdrawal, Market Value Adjustments or other
deductions applicable to amounts allocated to General Account Guaranteed
Options may be applied and no amounts may be withdrawn from the Guaranteed
Equity Option. Until the loan is repaid in full, that portion of the Collateral
Fixed Account shall be credited with interest at a rate of 2% less than the
loan interest rate applicable to the loan--however, the interest rate credited
will never be less than the General Account Guaranteed Option's guaranteed rate
of 3%.

When a loan is made, the number of Accumulation Units equal to the loan amount
will be withdrawn from the individual account and placed in the Collateral
Fixed Account. Accumulation Units taken from the individual account to provide
a loan do not participate in the investment experience of the related
Portfolios or the guarantees of the General Account Guaranteed Options. The
loan amount will be withdrawn on a pro rata basis first from the Portfolios to
which Accumulated Value has been allocated, and if that amount is insufficient,
collateral will then be transferred from the General Account Guaranteed
Options--except the Guaranteed Equity Option. As with any withdrawal, Market
Value Adjustments or other deductions applicable to amounts allocated to
General Account Guaranteed Options may be applied and no amounts may be
withdrawn from the Guaranteed Equity Option. Until the loan is repaid in full,
that portion of the Collateral Fixed Account shall be credited with interest at
a rate of 2% less than the loan interest rate applicable to the loan--however,
the interest rate credited will never be less than the General Account
Guaranteed Option's guaranteed rate of 3%.

A bill in the amount of the quarterly principal and interest will be mailed
directly to you in advance of the payment due date. The initial quarterly
repayment will be due three months from the loan date. The loan date will be
the date that the Company receives the loan request form in good order. Payment
is due within 30 calendar days after the due date. Subsequent quarterly
installments are based on the first due date.

When repayment of principal is made, Accumulation Units will be reallocated on
a current value basis among the same investment Portfolios and/or General
Account Guaranteed Options and in the same proportion as when the loan was
initially made. If a repayment in excess of a billed amount is received, the
excess will be applied towards the principal portion of the outstanding loan.
Payments received which are less than the billed amount will not be accepted
and will be returned to you.

If a partial surrender is taken from your individual account due to nonpayment
of a billed quarterly installment, the date of the surrender will be the first
Business Day following the 30 calendar day period in which the repayment was
due.

Prepayment of the entire loan is allowed. At the time of prepayment, the
Company will bill you for any accrued interest. The Company will consider the
loan paid when the loan balance and accrued interest are paid.

If the individual account is surrendered with an outstanding loan balance, the
outstanding loan balance and accrued interest will be deducted from the
Surrender Value. If the individual account is surrendered, with an outstanding
loan balance, due to the Contract Owner's death or the election of an Annuity
Payment Option, the outstanding loan balance and accrued interest will be
deducted.

The Company may require that any outstanding loan be paid if the individual
account value falls below an amount equal to 25% of total loans outstanding.

The Code requires the aggregation of all loans made to an individual employee
under a single employer-sponsored 403(b) Plan. However, since the Company has
no information concerning the outstanding loans that you may have with other
companies, if will only use the information available under Contracts issued by
the Company.

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GENERAL INFORMATION

ADDITIONS, DELETIONS, OR SUBSTITUTIONS OF INVESTMENTS

The Company retains the right, subject to any applicable law, to make certain
changes. The Company reserves the right to eliminate the shares of any of the
Portfolios and to substitute shares of another Portfolio of the Funds, or of
another registered, open-end management investment company, if the shares of
the Portfolios are no longer available for investment, or, if in the Company's
judgment, investment in any Portfolio would be inappropriate in view of the
purposes of the Separate Account. To the extent required by the 1940 Act,
substitutions of shares attributable to a Contract Owner's interest in a
Portfolio will not be made until SEC approval has been obtained and the
Contract Owner has been notified of the change.

New Portfolios may be established at the discretion of the Company. Any new
Portfolios will be made available to existing Contract Owners on a basis to be
determined by the Company. The Company may also eliminate one or more
Portfolios if marketing, tax, investment or other conditions so warrant.

In the event of any such substitution or change, the Company may, by
appropriate endorsement, make such changes in the Contracts as may be necessary
or appropriate to reflect such substitution or change. Furthermore, if deemed
to be in the best interests of persons having voting rights under the
Contracts, the Separate Account may be operated as a management company under
the 1940 Act or any other form permitted by law, may be deregistered under the
1940 Act in the event such registration is no longer required, or may be
combined with one or more other separate accounts.

VOTING RIGHTS

The Funds do not hold regular meetings of shareholders. The Directors/Trustees
of each Fund may call special meetings of shareholders as may be required by
the 1940 Act or other applicable law. To the extent required by law, the
Portfolio shares held in the Separate Account will be voted by the Company at
shareholder meetings of each Fund in accordance with instructions received from
persons having voting interests in the corresponding Portfolio. Fund shares as
to which no timely instructions are received or shares held by the Company as
to which Contract Owners have no beneficial interest will be voted in
proportion to the voting instructions that are received with respect to all
Contracts participating in that Portfolio. Voting instructions to abstain on
any item to be voted upon will be applied on a pro rata basis to reduce the
votes eligible to be cast.

The number of votes that are available to a Contract Owner will be calculated
separately for each Portfolio. That number will be determined by applying his
or her percentage interest, if any, in a particular Portfolio to the total
number of votes attributable to the Portfolio.

Prior to the Annuity Date, a Contract Owner holds a voting interest in each
Portfolio to which the Accumulated Value is allocated. The number of votes
which are available to a Contract Owner will be determined by dividing the
Accumulated Value attributable to a Portfolio by the net asset value per share
of the applicable Portfolio. After the Annuity Date, the person receiving
Annuity Payments has the voting interest. The number of votes after the Annuity
Date will be determined by dividing the reserve for such Contract allocated to
the Portfolio by the net asset value per share of the corresponding Portfolio.
After the Annuity Date, the votes attributable to a Contract decrease as the
reserves allocated to the Portfolio decrease. In determining the number of
votes, fractional shares will be recognized.

The number of votes of the Portfolio that are available will be determined as
of the date coincident with the date established by that Portfolio for
determining shareholders eligible to vote at the meeting of the corresponding
Fund. Voting instructions will be solicited by written communication prior to
such meeting in accordance with procedures established by such Fund.

AUDITORS

Ernst & Young LLP serves as independent auditors for the Separate Account and
the Company and will audit their financial statements annually.

LEGAL MATTERS

Jorden Burt Berenson & Johnson LLP of Washington, D.C. has provided legal
advice relating to the federal securities laws applicable to the issue and sale
of the Contracts. All matters of Missouri law pertaining to the validity of the
Contract and the Company's right to issue such Contracts have been passed upon
by Kimberly A. Scouller, Esquire, on behalf of the Company.

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TABLE OF CONTENTS FOR THE PROVIDIAN ADVISOR'S EDGE

VARIABLE ANNUITY

STATEMENT OF ADDITIONAL INFORMATION

<TABLE>
<CAPTION>
PAGE
<S> <C>
THE CONTRACT.............................................................. 2
Computation of Variable Annuity Income Payments......................... 2
Exchanges............................................................... 3
Exceptions to Charges and to Transaction or Balance Requirements........ 3
GENERAL MATTERS........................................................... 3
Non-Participating....................................................... 3
Misstatement of Age or Sex.............................................. 3
Assignment.............................................................. 4
Annuity Data............................................................ 4
Annual Statement........................................................ 4
Incontestability........................................................ 4
Ownership............................................................... 4
PERFORMANCE INFORMATION................................................... 5
Federated Prime Money and Money Market Portfolio Yields................. 5
30-Day Yield for Non-Money Market Subaccounts........................... 5
Standardized Average Annual Total Return for Subaccounts................ 5
ADDITIONAL PERFORMANCE MEASURES........................................... 7
Non-Standardized Actual Total Return and Non-Standardized Actual Average
Annual Total Return.................................................... 7
Non-Standardized Total Return Year-to-Date.............................. 8
Non-Standardized One Year Return........................................ 9
Non-Standardized Hypothetical Total Return and Non-Standardized
Hypothetical Average Annual Total Return............................... 9
Individualized Computer Generated Illustrations......................... 10
PERFORMANCE COMPARISONS................................................... 10
SAFEKEEPING OF ACCOUNT ASSETS............................................. 12
THE COMPANY............................................................... 12
STATE REGULATION.......................................................... 12
RECORDS AND REPORTS....................................................... 13
DISTRIBUTION OF THE CONTRACTS............................................. 13
LEGAL PROCEEDINGS......................................................... 13
OTHER INFORMATION......................................................... 13
FINANCIAL STATEMENTS...................................................... 13
Audited Financial Statements............................................ 13
</TABLE>

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APPENDIX A

THE GENERAL ACCOUNT

Because of applicable exemptive and exclusionary provisions, interests in the
General Account have not been registered under the Securities Act of 1933
("1933 Act"), nor under the 1940 Act. Thus, neither our General Account, nor
any interest therein are generally subject to regulation under the provisions
of the 1933 Act or the 1940 Act. Accordingly, the Company has been advised that
the staff of the SEC has not reviewed the disclosure in this Appendix relating
to the General Account. These disclosures regarding the General Account may,
however, be subject to certain generally applicable provisions of the federal
securities laws relating to the accuracy and completeness of statements made in
prospectuses.

Note: The General Account Guaranteed Options, or certain of them, are currently
available for sale in most, but not all, states. Please check with your sales
representative for details of the availability of these features before
purchasing.

Note: The following descriptions of the General Account Guaranteed Options
apply to Contracts issued on or after March 31, 1997. Contract Holders with
Contracts issued before that date should refer to the discussion of the General
Account Guaranteed Options in the prospectus which preceded or accompanied
their purchase of the Contract.

The General Account contains all of the assets of the Company other than those
in the separate accounts we establish. The Company has sole discretion to
invest the assets of the General Account, subject to applicable law. Allocation
of any amounts to the General Account does not entitle you to share directly in
the investment experience of these assets.

There are three fixed options under the General Account: the One-Year
Guaranteed Rate Option, the Multi-Year Guaranteed Rate Option, and the
Guaranteed Equity Option, each described below:

One-Year Guaranteed Rate Option

You may allocate your Accumulated Value to this option at any time. Any
allocations you make to a guarantee period must be at least $1,000 and you must
maintain a minimum balance of $1,000 in each guarantee period. The Accumulated
Value you allocate under this option earns interest at a rate declared by the
Company at the time your allocation is made with a guarantee that the
Accumulated Value in this General Account Guaranteed Option will not be less
than the amounts allocated, plus 3% annually.

You may allocate any or all of your Accumulated Value from this General Account
Guaranteed Option to any of the Subaccounts or other General Account Guaranteed
Options at any time before the end of the one-year guarantee period. However,
for any amounts so transferred and for full and partial withdrawals of amounts
allocated to this General Account Guaranteed Option prior to the end of the
one-year guarantee period, we will deduct an amount equal to the interest
earned on the amount transferred or withdrawn during the previous 90 days at
the applicable one-year rate, subject to a guarantee that any amounts allocated
to this General Account Guaranteed Option will earn interest of at least 3%
annually.

At the of the one-year guarantee period, you may, without loss of interest,
elect to transfer all or part of your Accumulated Value under this option to
any of the Subaccounts or transfer to another General Account Guaranteed Option
or renew your participation in this option. Notice of such an election must be
provided to the Company by phone or in writing no later than 10 days after the
end of the one-year guarantee period (and each subsequent one-year guarantee
period). If no such election is made, your Accumulated Value will automatically
be renewed under this option for the next one-year guarantee period.

Multi-Year Guaranteed Rate Option

You may allocate your Accumulated Value to this option at any time. You may
select any guarantee period then offered. The Company currently expects to
offer guarantee periods of two to ten years, inclusive but reserves the right
to change such offerings in its discretion. Any allocations you make to a
guarantee period must be at least $1,000 and you must maintain a minimum
balance of $1,000 in each guarantee period. The Accumulated Value you allocate
under this option earns interest at a rate declared by the Company applicable
to the guarantee period you select at the time your allocation is made with a
guarantee that the Accumulated Value in this General Account Guaranteed Option
will not be less than the amount initially allocated, plus 3%, compounded
annually.

A-1
<PAGE>

such amounts. For full and partial withdrawals of amounts allocated to this
General Account Guaranteed Option prior to the end of the selected guarantee
period, we will apply a Market Value Adjustment (as described below) against
such amounts withdrawn.

The Market Value Adjustment ("MVA") Factor for the Multi-Year Guaranteed Rate
Option will be as follows:

N X (B--E)
12

where N=the number of months left in the guarantee period at the time of the
transfer or surrender (including any partial months which will count as
full months for purposes of this calculation).

B=the interest rate in effect for the applicable guarantee period which was
declared on the date of the applicable allocation.

E=the constant maturity Treasury rate for the duration equal to that of the
applicable guarantee period (or, if not published, the published constant
maturity rate of the next longest maturity).

The MVA is applied to the Accumulated Value in order to determine the net
amount of the transfer or surrender under this option. Generally, if the
declared interest rate at the beginning of the guarantee period is lower than
the applicable constant maturity Treasury rate prevailing at the time of the
transfer or surrender, then the application of the MVA will result in a lower
payment upon transfer or surrender. Similarly, if the declared rate at the
beginning of the guarantee period is higher than the prevailing applicable
constant maturity Treasury rate at the time of transfer or surrender, then the
application of the MVA will result in a higher payment upon transfer or
surrender.

The following is an example of how your Accumulated Value under the Multi-Year
Guaranteed Rate Option with a five-year guarantee period is affected by a
positive Market Value Adjustment:

Assume an initial allocation of $100,000 when the declared interest rate of a
five-year guarantee period is 8%. At the end of 12 months, your Accumulated
Value is $108,000. Assume also you surrender at the end of one year with 48
months of the guarantee period remaining and the five-year constant maturity
Treasury rate is 7%.

Accumulated Value = $108,000

MVA Factor = 48 X 08 - .07 = 4 X .01 = .04
12

Adjustment = $108,000 x .04 = $4,320

= $108,000 + $4,320 = $112,320 = Net amount of transfer or
surrender

The following is an example of how your Accumulated Value under the Multi-Year
Guaranteed Rate Option with a five year guarantee period is affected by a
negative Market Value Adjustment:

Assume an initial allocation of $100,000 when the declared interest rate for a
five-year guarantee period is 8%. At the end of 12 months, your Accumulated
Value is $108,000. Assume also you surrender at the end of one year with 48
months remaining in the guarantee period and the five-year constant maturity
Treasury rate is 9%.

Accumulated Value = $108,000

MVA Factor = 48 X 08 - .09 = 4 X .01 = -.04
12

Adjustment = $108,000 x -.04 = -$4,320

= $108,000 - $4,320 = $103,650 = Net amount of transfer or
surrender

Notwithstanding application of a negative Market Value Adjustment, any Net
Purchase Payments allocated to this General Account Guaranteed Option will
earn interest of at least 3%, compounded annually.

If you have more than one allocation in this option, you may choose which
allocation or allocations any exchanges or surrenders are to be made from. If
you do not specify which allocation or allocations to take the exchanges or
surrenders from, we will first take from the allocation with the shortest time
remaining until the end of its guarantee period and then from the allocation
or allocations with the next shortest time remaining until the amount of the
exchange or withdrawal is reached.

A-2
<PAGE>

At the end of the selected guarantee period and within a ten-day period
starting on the first day of any automatic renewal (as described below), you
may, without loss of interest, elect to transfer any or all of your Accumulated
Value under this option to any of the Subaccounts or transfer to another
General Account Guaranteed Option or renew your participation in this option
for any guarantee period then available whose ending date is not later than the
Annuity Date at a rate the Company declares at the time of renewal. Such
election may also be provided in writing to the Company before the end of the
guarantee period (and each subsequent guarantee period). If no election is
made, your Accumulated Value will automatically be renewed under this option
for another guarantee period of the same duration as the one just ended at a
rate we declare at the time of the renewal. In cases where such a renewal would
result in a guarantee period whose ending date is later than the Annuity Date,
we will transfer the value of that allocation to the Federated Money Market
Portfolio.

Guaranteed Equity Option

You may allocate your Accumulated Value to this option as of the first business
day of each month. Any allocations you make must be at least $1,000.

On the date you make an allocation to this option the Company will declare: (a)
the duration of the guarantee period applicable to the allocation; (b) the
duration of the Averaging Period and (c) the Participation Rate. (The Averaging
Period and the Participation Rate are described below.) Each allocation will
have its own guarantee period, Averaging Period and Participation Rate.

During the guarantee period applicable to Accumulated Value allocated to this
option, the Company will credit interest at a guaranteed annual effective rate
of 3%, compounded annually. At the end of the guarantee period we will credit
additional interest in an amount equal to the amount by which (x) exceeds (y),
where (x) equals a declared portion of the percentage change in the S&P 500
Composite Stock Price Index ("S&P 500 Index") from its value on the date
Accumulated Value is allocated to a value determined at the end of the
guarantee period multiplied by the amount allocated (all calculated as
described below); and (y) equals the total amount of interest credited during
the guarantee period.

The amount (x) in the preceding paragraph is equal to the amount allocated to
the applicable guarantee period multiplied by the following factor:

PR x [(EV//SV)-1]

where PR = the Participation Rate;

EV= the average closing values of the S&P 500 Index on the last business
day of each month during the Averaging Period; and

SV = the closing value of the S&P 500 Index on the date Accumulated Value
is allocated to this option.

The "Participation Rate" is the rate at which you participate in the percentage
change of the S&P 500 Index for an allocation as used in the calculation above.
It will be declared by the Company with respect to each allocation to this
option. In no event will the Participation Rate be less than 0%.

The "Averaging Period" is the number of months prior to the end of an
allocation's guarantee period that we will use to determine the ending value of
the S&P 500 Index for that allocation's guarantee period for purposes of this
option as used in the calculation above. It will be declared by the Company
with respect to each allocation to this option. In no event will the Averaging
Period be less than one.

("S&P" is a trademark of The McGraw-Hill Companies, Inc. and has been licensed
for use by Providian Corporation.)

THIS OPTION IS ILLIQUID FOR THE ENTIRE GUARANTEE PERIOD AND, ACCORDINGLY, DOES
NOT PERMIT ANY EXCHANGES OR REALLOCATIONS OF ACCUMULATED VALUE TO THE
SUBACCOUNTS OR OTHER GENERAL ACCOUNT GUARANTEED OPTIONS OR FULL OR PARTIAL
WITHDRAWALS DURING SUCH GUARANTEE PERIOD. However, during such guarantee
period, the Accumulated Value allocated under this option may be annuitized
under any of the Annuity Payment Options.

(The S&P 500 Index is a stock price index. Its composition and calculation does
not include dividends, if any, paid upon component stocks of the index nor
reinvestment, if any, or such dividends.)

At the end of the guarantee period, you may, without loss of earnings, elect to
transfer all or part of your Accumulated Value under this option to any of the
Subaccounts, transfer into another General Account Guaranteed Option or renew
your participation in this option. Such election must be received by the
Company no later than 30 days prior to the end of the guarantee period. If no
election is received, your Accumulated Value will automatically be transferred
to the Federated Prime Money Portfolio. This option may not be available at all
times.

A-3
<PAGE>

DISCLAIMER REGARDING STANDARD & POOR'S 500 INDEX

The Guaranteed Equity Option (the "GEO") is not sponsored, endorsed, sold or
promoted by Standard & Poor's Corporation ("S&P"). S&P makes no representation
or warranty, express or implied, to investors in the GEO or any member of the
public regarding the advisability of investing in securities generally or in
the GEO particularly or the ability of the S&P 500 Index to track general stock
market performance. S&P's only relationship to Providian Life and Health
Insurance Company is the licensing of certain trademarks and trade names of S&P
and the S&P 500 Index which is determined, composed and calculated by S&P
without regard to Providian Life and Health Insurance Company or the GEO. S&P
has no obligation to take the needs of Providian Life and Health Insurance
Company or the Investors in the GEO into consideration in determining,
composing or calculating the S&P 500 Index. S&P is not responsible for and has
not participated in the determination of the timing of, prices at, or
quantities of the GEO to be issued or in the determination or calculation of
the equation by which the GEO is to be converted into cash. S&P has no
obligation or liability in connection with the administration, marketing or
trading of the GEO.

S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500
INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED,
AS TO RESULTS TO BE OBTAINED BY PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY,
INVESTORS IN THE GEO, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED BY
PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY OR FOR ANY OTHER USE. S&P MAKES NO
EXPRESS OR IMPLIED WARRANTIES, AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED
OF THE POSSIBILITY OF SUCH DAMAGES.

A-4
<PAGE>

PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY SEPARATE ACCOUNT V
PROSPECTUS
FOR THE

DIMENSIONAL VARIABLE ANNUITY
OFFERED BY
PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
(A MISSOURI STOCK COMPANY)
ADMINISTRATIVE OFFICES
P.O. BOX 32700
LOUISVILLE, KENTUCKY 40232

The Dimensional Variable Annuity contract (the "Contract"), offered through
Providian Life and Health Insurance Company (the "Company", "us", "we" or
"our"), provides a vehicle for investing on a tax-deferred basis in 7
investment company Portfolios and our General Account. The Contract is an
individual variable annuity contract and is intended for retirement savings or
other long-term investment purposes.

Your Net Purchase Payments for the Contract may be allocated among 7
Subaccounts of Providian Life and Health Insurance Company's Separate Account V
and three fixed options available under the Company's General Account. Assets
of each Subaccount are invested in one of the following Portfolios (which are
contained within two open-end, diversified investment companies):

.DFA SMALL VALUE PORTFOLIO .DFA SHORT-TERM FIXED
.DFA LARGE VALUE PORTFOLIO PORTFOLIO
.DFA INTERNATIONAL VALUE .DFA GLOBAL BOND PORTFOLIO
PORTFOLIO
.DFA INTERNATIONAL SMALL .FEDERATED PRIME MONEY FUND II
PORTFOLIO

The Contract is not available in all States.

The date of this Prospectus is March 31, 1997

FM-1206
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
GLOSSARY................................................................... 3
HIGHLIGHTS................................................................. 6
FEE TABLE.................................................................. 8
Condensed Financial Information............................................ 10
Financial Statements....................................................... 10
Performance Measures....................................................... 10
Additional Performance Measures............................................ 10
Yield and Effective Yield.................................................. 11
The Company and the Separate Account....................................... 11
DFA Investment Dimensions Group Inc........................................ 12
The Federated Insurance Series............................................. 12
The Portfolios............................................................. 13
CONTRACT FEATURES.......................................................... 14
Right to Cancel Period................................................... 14
Contract Purchase and Purchase Payments.................................. 14
Purchasing by Wire....................................................... 15
Allocation of Purchase Payments.......................................... 15
Charges and Deductions................................................... 15
Accumulated Value........................................................ 17
Exchanges Among the Portfolios........................................... 17
Full and Partial Withdrawals............................................. 18
Systematic Withdrawal Option............................................. 18
Dollar Cost Averaging Option............................................. 19
IRS-Required Distributions............................................... 19
Minimum Balance Requirement.............................................. 19
Designation of an Annuitant's Beneficiary................................ 19
Death of Annuitant Prior to Annuity Date................................. 20
Annuity Date............................................................. 20
Lump Sum Payment Option.................................................. 20
Annuity Payment Options.................................................. 21
Deferment of Payment..................................................... 22
FEDERAL TAX CONSIDERATIONS................................................. 22
GENERAL INFORMATION........................................................ 27
APPENDIX A--The General Account............................................ A-1
</TABLE>

2
<PAGE>

GLOSSARY

Accumulation Unit - A measure of your ownership interest in the Contract prior
to the Annuity Date.

Accumulation Unit Value - The value of each Accumulation Unit which is
calculated each Valuation Period.

Accumulated Value - The value of all amounts accumulated under the Contract
prior to the Annuity Date.

Annuitant - The person whose life is used to determine the duration of any
Annuity Payments and upon whose death, prior to the Annuity Date, benefits
under the Contract are paid.

Annuitant's Beneficiary - The person(s) to whom any benefits are due upon the
Annuitant's death prior to the Annuity Date.

Annuity Date - The date on which Annuity Payments begin. The Annuity Date is
always the first day of the month you specify.

Annuity Payment - One of a series of payments made under an Annuity Payment
Option.

Annuity Payment Option - One of several ways in which withdrawals from the
Contract may be made. Under a Fixed Annuity Option (see "Annuity Payment
Options," page 21), the dollar amount of each Annuity Payment does not change
over time. Under a Variable Annuity Option (see "Annuity Payment Options," page
21), the dollar amount of each Annuity Payment may change over time, depending
upon the investment experience of the Portfolio or Portfolios you choose.
Annuity Payments are based on the Contract's Accumulated Value as of 10
Business Days prior to the Annuity Date.

Annuity Unit - Unit of measure used to calculate Variable Annuity Payments (see
"Annuity Payment Options," page 21).

Annuity Unit Value - The value of each Annuity Unit which is calculated each
Valuation Period.

Business Day - A day when the New York Stock Exchange is open for trading.

Company ("we", "us", "our") - Providian Life and Health Insurance Company, a
Missouri stock company.

Contract Anniversary - Any anniversary of the Contract Date.

Contract Date - The date of issue of this Contract.

Contract Year - A period of 12 months starting with the Contract Date or any
Contract Anniversary.

3
<PAGE>

receive proof of the Annuitant's death is derived from the Five-Year Guaranteed
Index Rate Option, that portion of the Accumulated Value will be adjusted by a
positive Market Value Adjustment Factor (see "Five-Year Guaranteed Index Rate
Option," at Appendix A), if applicable.

Exchange - One Exchange will be deemed to occur with each voluntary transfer
from any Subaccount or General Account Guaranteed Option.

Funds - Each of (i) DFA Investment Dimensions Group Inc., and (ii) Federated
Insurance Series (advised by Federated Advisers).

General Account - The account which contains all of our assets other than those
held in our separate accounts.

Guaranteed Rate Options - The One-Year Guaranteed Rate Option and the Multi-
Year Guaranteed Rate Option.

Net Purchase Payment - Any Purchase Payment less the applicable Premium Tax, if
any.

Non-Qualified Contract - Any Contract other than those described under the
Qualified Contract reference in this Glossary.

Payee - The Contract Owner, Annuitant, Annuitant's Beneficiary, or any other
person, estate, or legal entity to whom benefits are to be paid.

Portfolio - A separate investment series of the Funds. The Funds currently
offer 7 Portfolios in the Dimensional Variable Annuity: the VA Small Value
Portfolio (the "DFA Small Value Portfolio") the VA Large Value Portfolio (the
"DFA Large Value Portfolio") (formerly, the DFA Global Value Portfolio), the VA
International Value Portfolio (the "DFA International Value Portfolio"), the VA
International Small Portfolio (the "DFA International Small Portfolio"), the VA
Short-Term Fixed Portfolio (the "DFA Short-Term Fixed Portfolio") and the VA
Global Bond Portfolio (the "DFA Global Bond Portfolio") of DFA Investment
Dimensions Group Inc.; and the Federated Prime Money Fund II ("Federated Prime
Money Portfolio") of Federated Insurance Series; (each, a "Portfolio" and
collectively, the "Portfolios"). In this Prospectus, Portfolio will also be
used to refer to the Subaccount that invests in the corresponding Portfolio.

4
<PAGE>

Right to Cancel Period - The period during which the Contract can be canceled
and treated as void from the Contract Date.

5
<PAGE>

HIGHLIGHTS

YOU CAN FIND DEFINITIONS OF IMPORTANT TERMS IN THE GLOSSARY (PAGE 3).

DIMENSIONAL VARIABLE ANNUITY

The Contract provides a vehicle for investing on a tax-deferred basis in 7
investment company Portfolios offered by the Funds and three General Account
Guaranteed Options offered by the Company. Monies may be subsequently withdrawn
from the Contract either as a lump sum or as annuity income as permitted under
the Contract. Accumulated Values and Annuity Payments depend on the investment
experience of the selected Portfolios and/or the guarantees of the General
Account Guaranteed Options. The investment performance of the Portfolios is not
guaranteed. Thus, you bear all investment risk for monies invested under the
Contract except to the extent of the portion of your Accumulated Value
allocated to the General Account. The General Account Guaranteed Options are
available for sale in most, but not all, states.

WHO SHOULD INVEST

The Contract is designed for investors seeking long term, tax-deferred
accumulation of funds, generally for retirement but also for other long-term
investment purposes. The tax-deferred feature of the Contract is most
attractive to investors in high federal and state marginal income tax brackets.
The Contract is offered as both a Qualified Contract and a Non-Qualified
Contract. Both Qualified and Non-Qualified Contracts offer tax-deferral on
increases in the Contract's value prior to withdrawal or distribution; however,
Purchase Payments made by Contract Owners of Qualified Contracts may be
excludible or deductible from gross income in the year such payments are made,
subject to certain statutory restrictions and limitations. (See "Federal Tax
Considerations," page 22)...........................................Page 14

INVESTMENT CHOICES

Your investment in the Contract may be allocated among 7 Subaccounts of the
Separate Account and/or the General Account Guaranteed Options. The Subaccounts
in turn invest exclusively in the following 7 Portfolios offered by the Funds:
the DFA Small Value Portfolio, the DFA Large Value Portfolio, the DFA
International Value Portfolio, the DFA International Small Portfolio, the DFA
Short-Term Fixed Portfolio, the DFA Global Bond Portfolio, and the Federated
Prime Money Portfolio. The assets of each Portfolio are separate, and each
Portfolio has distinct investment objectives and policies as described in the
corresponding Fund Prospectus. The General Account Guaranteed Options are
available for sale in most, but not all, states.....................Page 12

CONTRACT OWNER

ANNUITANT

ANNUITANT'S BENEFICIARY

The Contract Owner may designate any person to receive benefits under the
Contract which are payable upon the death of the Annuitant prior to the Annuity
Date.

HOW TO INVEST

6
<PAGE>

ALLOCATION OF PURCHASE PAYMENTS

If the state of issue of your Contract is CA, GA, ID, LA, MI, MO, NE, NH, NC,
OK, OR, SC, UT, VA or WV, then your initial Net Purchase Payment(s) will, when
your Contract is issued, be invested in the Federated Prime Money Portfolio
until the expiration of the Right to Cancel Period of 10 to 30 days, or more in
some instances as specified in your contract when issued (plus a 5 day grace
period to allow for mail delivery) and then invested according to your initial
allocation instructions (except that any accrued interest will remain in the
Federated Prime Money Portfolio if it is selected as an initial allocation
option), provided that portions of your initial Net Purchase Payment(s)
allocated to the Guaranteed Rate Options will be invested immediately upon our
receipt thereof in order to lock in the rates then applicable to such options.
(Please note that immediate investment is not applicable with respect to
amounts allocated to the Guaranteed Equity Option.)

RIGHT TO CANCEL PERIOD

EXCHANGES

You may make unlimited Exchanges among the Portfolios or into the General
Account Guaranteed Options, provided you maintain a minimum balance of $1,000
in each Subaccount or General Account Guaranteed Option to which you have
allocated a portion of your Accumulated Value. No fee is currently imposed for
such Exchanges, however, we reserve the right to charge a $15 fee for Exchanges
in excess of 12 per Contract Year. Exchanges must not reduce the value of any
allocation to any Subaccount or General Account Guaranteed Option below $1,000,
or that remaining amount will be transferred to your other Subaccounts or
Guaranteed Rate Options on a pro rata basis. The Guaranteed Equity Option is
illiquid for the entire guarantee period, and transfers from the General
Account Guaranteed Options may be subject to additional limitations and
charges. (See also "Charges and Deductions," page 15, and "The General
Account," at Appendix A)............................................Page 17

DEATH BENEFIT

7
<PAGE>

ANNUITY PAYMENT OPTIONS

CONTRACT AND POLICYHOLDER INFORMATION

CHARGES AND DEDUCTIONS UNDER THE CONTRACT

FULL AND PARTIAL WITHDRAWALS

FEE TABLE

The following table illustrates all expenses (except for Premium Taxes that may
be assessed by your state) that you would incur as an owner of a Contract (see
page 16). The purpose of this table is to assist you in understanding the
various costs and expenses that you would bear directly or indirectly as a
purchaser of the Contract. The fee table reflects all expenses for both the
Separate Account and the Funds. For a complete discussion of Contract costs and
expenses, including charges applicable to General Account Guaranteed Options,
see "Charges and Deductions," page 15.

8
<PAGE>

PORTFOLIO ANNUAL EXPENSES

<TABLE>
<CAPTION>
TOTAL
MANAGEMENT PORTFOLIO
AND ADVISORY OTHER ANNUAL
EXPENSES EXPENSES EXPENSES
------------ -------- ---------
<S> <C> <C> <C>
DFA Small Value Portfolio....................... 0.50% 0.70% 1.20%
DFA Large Value Portfolio....................... 0.25% 0.95% 1.20%
DFA International Value Portfolio*.............. 0.40% 0.93% 1.33%
DFA International Small Portfolio............... 0.50% 0.91% 1.41%
DFA Short-Term Fixed Portfolio.................. 0.25% 0.59% 0.84%
DFA Global Bond Portfolio*...................... 0.25% 1.06% 1.31%
Federated Prime Money Portfolio**............... 0.00% 0.80% 0.80%
</TABLE>

* Based on actual expenses for the period January 13, 1995 (commencement of
operations) to November 30, 1995 (end of fiscal year) for these
Portfolios.

** The expense figures shown reflect actual expenses for fiscal year 1995
including voluntary waivers of a portion of the management fees and/or
assumption of expenses. The maximum Management and Advisory Expenses,
Other Expenses, and Total Portfolio Annual Expenses absent the voluntary
waivers would have been as follows: 0.50%, 2.99% and 3.49%, respectively,
for the Federated Prime Money Portfolio.

<TABLE>
<CAPTION>
3
1 YEAR YEARS 5 YEARS 10 YEARS
------ ------ ------- --------
<S> <C> <C> <C> <C>
DFA Small Value Portfolio.................. $19.13 $59.15 $101.67 $219.95
DFA Large Value Portfolio.................. $19.13 $59.15 $101.67 $219.95
DFA International Value Portfolio.......... $20.43 $63.12 $108.35 $233.64
DFA International Small Portfolio.......... $21.24 $65.55 $112.44 $241.97
DFA Short-Term Fixed Portfolio............. $15.50 $48.09 $82.94 $181.05
DFA Global Bond Portfolio.................. $20.23 $62.51 $107.33 $231.55
Federated Prime Money Portfolio............ $15.09 $46.85 $80.84 $176.63
</TABLE>

This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be higher or lower than those
shown, subject to the guarantees in the Contract.

9
<PAGE>

CONDENSED FINANCIAL INFORMATION

(FOR THE PERIOD JANUARY 1, 1995 THROUGH DECEMBER 31, 1995)

<TABLE>
<CAPTION>
DFA
DFA DFA DFA DFA SHORT DFA FEDERATED
SMALL LARGE INT'L INT'L TERM GLOBAL PRIME
VALUE VALUE VALUE SMALL FIXED BOND MONEY
------- ------- ------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Accumulation unit value
as of:
Start Date*........... 10.000 10.000 10.000 10.000 10.000 10.000 10.000
12/31/94.............. N/A N/A N/A N/A N/A N/A 10.026
12/31/95.............. 9.948 12.034 10.524 10.145 10.104 11.300 10.473
Number of units
outstanding as of:
12/31/94.............. N/A N/A N/A N/A N/A N/A 70,223
12/31/95.............. 163,078 358,553 271,242 188,597 101,709 152,950 363,418
</TABLE>

* Date of commencement of operations for DFA Small Value was 10/6/95; for DFA
Large Value was 1/18/95; for DFA International was 10/3/95; for DFA
International Small was 10/6/95; for DFA Short-Term Fixed was 10/9/95; and
for DFA Global Bond was 1/18/95. Date of commencement of operations for
Federated Prime Money was 12/7/94.

FINANCIAL STATEMENTS

PERFORMANCE MEASURES

Until October 1995, the DFA Large Value Portfolio (formerly DFA Global Value
Portfolio) invested its assets in both U.S. and international securities.
Depending on the period presented, total return and performance information
presented for the DFA Large Value Portfolio may reflect the performance of the
Portfolio when it invested in the stocks of both U.S. and international
companies. Total return and performance information for the DFA Large Value
Portfolio which include the period prior to October 1995 should not be
considered indicative of the Portfolio's future performance. (See also "VA
Large Value Portfolio," page 13.)

STANDARDIZED AVERAGE ANNUAL TOTAL RETURN

ADDITIONAL PERFORMANCE MEASURES

NON-STANDARDIZED ACTUAL TOTAL RETURN AND NON-STANDARDIZED ACTUAL AVERAGE ANNUAL
TOTAL RETURN

10
<PAGE>

actual Average Annual Total Return is the effective annual compounded rate of
return for the periods stated. Because the value of an Accumulation Unit
reflects the Separate Account and Portfolio expenses (see "Fee Table"), the
actual Total Return and actual Average Annual Total Return also reflect these
expenses. These percentages, however, do not reflect the Annual Contract Fee or
Premium Taxes (if any) which, if included, would reduce the percentages
reported.

NON-STANDARDIZED HYPOTHETICAL TOTAL RETURN AND NON-STANDARDIZED HYPOTHETICAL
AVERAGE ANNUAL TOTAL RETURN

The Non-Standardized Annual Total Return for a Subaccount is the effective
annual rate of return that would have produced the ending Accumulated Value of
the stated one-year period.

YIELD AND EFFECTIVE YIELD

THE COMPANY AND THE SEPARATE ACCOUNT

PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY

11
<PAGE>

Company is wholly-owned, directly and indirectly, by Providian Corporation, a
publicly-held diversified consumer financial services company whose shares are
traded on the New York Stock Exchange with assets of $26.8 billion as of
December 31, 1995.

PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY SEPARATE ACCOUNT V

The Separate Account has dedicated 7 Subaccounts to the Contract, each of which
invests solely in a corresponding Portfolio of the Funds. Additional
Subaccounts may be established at the discretion of the Company. The Separate
Account also includes other subaccounts which are not available under the
Contract.

DFA INVESTMENT DIMENSIONS GROUP INC.

DFA Investment Dimensions Group Inc. is an open-end management investment
company organized under Maryland law in 1981, and is registered under the 1940
Act. The Fund issues 28 series of shares, including the DFA Small Value
Portfolio, the DFA Large Value Portfolio (formerly, the DFA Global Value
Portfolio), the DFA International Value Portfolio, the DFA International Small
Portfolio, DFA Short-Term Fixed Portfolio and the DFA Global Bond Portfolio,
which are the only portfolios available as part of the Dimensional Variable
Annuity. Dimensional Fund Advisors Inc. serves as this Fund's investment
adviser.

THE FEDERATED INSURANCE SERIES (ADVISED BY FEDERATED ADVISERS)

The Federated Insurance Series is an open-end management investment company
organized as a Massachusetts business trust and registered under the 1940 Act.
The Fund consists of five investment portfolios one of which is available as
part of the Dimensional Variable Annuity: the Federated Prime Money Portfolio.
Federated Advisers serves as this Fund's investment adviser.

THE PORTFOLIOS (SEE ACCOMPANYING PROSPECTUSES)

For more information concerning the risks associated with each Portfolio's
investments, please refer to the applicable underlying Fund prospectus.

VA SMALL VALUE PORTFOLIO ("DFA SMALL VALUE PORTFOLIO")

The investment objective of the DFA Small Value Portfolio is to achieve long-
term capital appreciation. This Portfolio seeks to achieve its investment
objective by investing in common stocks of U.S. companies that have a high book
value in relation to their market value (a "book to market ratio") and whose
market capitalizations are smaller than that of the company having the median
market capitalization of companies whose shares are listed on the NYSE. A
company's shares will be considered to have a high book to market ratio if the
ratio equals or exceeds the ratios of any of the 30% of companies with the
highest positive book to market ratios whose shares are listed on the NYSE.

12
<PAGE>

VA LARGE VALUE PORTFOLIO ("DFA LARGE VALUE PORTFOLIO")

The investment objective of the DFA Large Value Portfolio is to achieve long-
term capital appreciation. This Portfolio seeks to achieve its investment
objective by investing in common stocks of U.S. companies that have a high book
to market ratio and whose market capitalizations equal or exceed that of the
company having the median market capitalization of companies whose shares are
listed on the NYSE. Pursuant to a special meeting of this Portfolio's
shareholders held on September 15, 1995, the DFA Large Value Portfolio's
investment policy was changed to permit the Portfolio to achieve its investment
objective by investing substantially all of its assets in the stock of U.S.
companies and the sale of the Portfolio's non-U.S. securities to another series
of shares of DFA Investment Dimensions Group Inc.

VA INTERNATIONAL VALUE PORTFOLIO ("DFA INTERNATIONAL VALUE PORTFOLIO")

The investment objective of the DFA International Portfolio is to achieve long-
term capital appreciation. This Portfolio seeks to achieve its investment
objective by investing in the stocks of large non-U.S. companies that have a
high book to market ratio in countries with developed markets.

VA INTERNATIONAL SMALL PORTFOLIO ("DFA INTERNATIONAL SMALL PORTFOLIO")

The investment objective of the DFA International Small Portfolio is to achieve
long-term capital appreciation. This Portfolio provides investors with access
to securities portfolios consisting of small Japanese, United Kingdom,
Continental and Pacific Rim companies. The Portfolio seeks to achieve its
investment objective by investing its assets in a broad and diverse group of
marketable stocks of (1) Japanese small companies which are traded in the
Japanese securities markets; (2) United Kingdom small companies which are
traded principally on the International Stock Exchange of the United Kingdom
and the Republic of Ireland; (3) small companies organized under the laws of
certain European countries; and (4) small companies located in Australia, New
Zealand and Asian countries whose shares are traded principally on the
securities markets located in those countries.

VA SHORT-TERM FIXED PORTFOLIO ("DFA SHORT-TERM FIXED PORTFOLIO")

This investment objective of the DFA Short-Term Fixed Portfolio is to achieve a
stable real value (i.e., a return in excess of the rate of inflation) of
invested capital with a minimum of risk. This Portfolio seeks to achieve its
investment objective by investing in U.S. government obligations, U.S.
government agency obligations, dollar denominated obligations of foreign
issuers issued in the U.S., bank obligations, including U.S. subsidiaries and
branches of foreign banks, corporate obligations, commercial paper, repurchase
agreements and obligations of supranational organizations. Generally, this
Portfolio will acquire obligations which mature within one year from the date
of settlement, but substantial investments may be made in obligations maturing
within two years from the date of settlement when greater returns are
available.

VA GLOBAL BOND PORTFOLIO ("DFA GLOBAL BOND PORTFOLIO")

The DFA Global Bond Portfolio seeks to provide a market rate of return for a
global fixed income portfolio with low relative volatility of returns. This
Portfolio will invest primarily in obligations issued or guaranteed by the U.S.
and foreign governments, their agencies and instrumentalities, obligations of
other foreign issuers rated AA or better and supranational organizations, such
as the World Bank, the European Investment Bank, European Economic Community,
and European Coal and Steel Community and corporate debt obligations.

FEDERATED PRIME MONEY FUND II ("FEDERATED PRIME MONEY PORTFOLIO")

OTHER PORTFOLIO INFORMATION

There is no assurance that a Portfolio will achieve its stated investment
objective.

13
<PAGE>

The Portfolios may be made available to registered separate accounts offering
variable annuity and variable life products of the Company as well as other
insurance companies or to a person or plan, including a pension or retirement
plan receiving favorable tax treatment under the Code, that qualifies to
purchase shares of the Funds under Section 817(h) of the Code. Although we
believe it is unlikely, a material conflict could arise among the interests of
the Separate Account and one or more of the other participating separate
accounts and other qualified persons or plans. In the event of a material
conflict, the affected insurance companies agree to take any necessary steps,
including removing their separate accounts from the Funds if required by law,
to resolve the matter.

CONTRACT FEATURES

RIGHT TO CANCEL PERIOD

CONTRACT PURCHASE AND PURCHASE PAYMENTS

14
<PAGE>

Additional Purchase Payments received prior to the close of the New York Stock
Exchange (generally 4:00 P.M. Eastern time) are credited to the Accumulated
Value at the close of business that same day. Additional Purchase Payments
received after the close of the New York Stock Exchange are processed the next
Business Day.

Total Purchase Payments may not exceed $1,000,000 without our prior approval.
The Company reserves the right to refuse to issue this Contract in cases
involving an exchange for another Contract.

PURCHASING BY WIRE

For wiring instructions please contact our Administrative Offices at 1-800-866-
6007.

ALLOCATION OF PURCHASE PAYMENTS

If the state of issue of your Contract is CA, GA, ID, LA, MI, MO, NE, NH, NC,
OK, OR, SC, UT, VA or WV, then your initial Net Purchase Payment(s) will, when
your Contract is issued, be invested in the Federated Prime Money Portfolio
until the expiration of the Right to Cancel Period of 10 to 30 days (plus a
five day grace period to allow for mail delivery) or more in some instances as
specified in your Contract after the issuance of your Contract and then
invested according to your initial allocation instructions (except that any
accrued interest will remain in the Federated Prime Money Portfolio if it is
selected as an initial allocation option), provided that portions of your
initial Net Purchase Payment(s) allocated to the Guaranteed Rate Options will
be invested immediately upon our receipt thereof in order to lock in the rates
then applicable to such options. (Please note that immediate investment is not
applicable with respect to amounts allocated to the Guaranteed Equity Option.)

CHARGES AND DEDUCTIONS

There are no sales charges for the Contracts (although certain charges or
restrictions may apply to your Contract's General Account Guaranteed Options).

MORTALITY AND EXPENSE RISK CHARGE

15
<PAGE>

ADMINISTRATIVE CHARGE AND ANNUAL CONTRACT FEE

EXCHANGES

Each Contract Year you may make an unlimited number of Exchanges between
Portfolios and/or General Account Guaranteed Options, provided that after an
Exchange no Portfolio or General Account Guaranteed Option may contain a
balance less than $1,000. No fee is currently imposed for such Exchanges,
however, we reserve the right to charge a $15 fee for Exchanges in excess of 12
per Contract Year.

EXCEPTIONS TO CHARGES AND TO TRANSACTION OR BALANCE REQUIREMENTS

TAXES

As of the date of this Prospectus, the following state assesses a Premium Tax
on all initial and additional Purchase Payments on Non-Qualified Contracts:

<TABLE>
<CAPTION>
PERCENTAGE
----------
<S> <C>
South Dakota................................ 1.25%
</TABLE>

16
<PAGE>

Under present laws, the Company will incur state or local taxes (in addition to
the Premium Taxes described above) in several states. At present, the Company
does not charge the Contract Owner for these taxes. If there is a change in
state or local tax laws, charges for such taxes may be made. The Company does
not expect to incur any federal income tax liability attributable to investment
income or capital gains retained as part of the reserves under the Contracts.
(See "Federal Tax Considerations," page .) Based upon these expectations, no
charge is currently being made to the Separate Account for corporate federal
income taxes that may be attributable to the Separate Account.

PORTFOLIO EXPENSES

ACCUMULATED VALUE

EXCHANGES AMONG THE PORTFOLIOS

17
<PAGE>

verified with the Contract Owner's records prior to processing a transaction.
Furthermore, all transactions performed by a customer service representative
will be verified with the Contract Owner through a written confirmation
statement. Neither the Company nor the Funds shall be liable for any loss, cost
or expense for action on telephone instructions that are believed to be genuine
in accordance with these procedures.

For information concerning Exchanges to and from the General Account Guaranteed
Options, see "The General Account," at Appendix A.

FULL AND PARTIAL WITHDRAWALS

At any time before the Annuity Date and while the Annuitant is living, you may
make a partial or full withdrawal of the Contract to receive all or part of the
Surrender Value by sending a written request to our Administrative Offices.
Full or partial withdrawals may only be made before the Annuity Date and all
partial withdrawal requests must be for at least $500. The amount available for
full or partial withdrawal is the Surrender Value at the end of the Valuation
Period during which the written request for withdrawal is received. The
Surrender Value is an amount equal to the Accumulated Value, adjusted to
reflect any applicable Market Value Adjustment for amounts allocated to the
Multi-Year Guaranteed Rate Option, less any early withdrawal charges for
amounts allocated to the One-Year Guaranteed Rate Option, less any amount
allocated to the Guaranteed Equity Option less any Premium Taxes incurred but
not yet deducted. The withdrawal amount may be paid in a lump sum to you, or if
elected, all or any part may be paid out under an Annuity Payment Option. (See
"Annuity Payment Options," page 21.)

SYSTEMATIC WITHDRAWAL OPTION

Each systematic withdrawal is subject to federal income taxes on the taxable
portion, and may be subject to a 10% federal tax penalty if you are under age
59 1/2. You may elect to have federal income taxes withheld from each
withdrawal at a 10% rate on the Systematic Withdrawal Request Form. For a
discussion of the tax consequences of withdrawals, see "Federal Tax
Considerations" on page 22 of the Prospectus. You may wish to consult a tax
advisor regarding any tax consequences that might result prior to electing the
Systematic Withdrawal Option.

We reserve the right to discontinue offering the Systematic Withdrawal Option
upon 30 days written notice. We also reserve the right to charge a fee for such
service.

18
<PAGE>

DOLLAR COST AVERAGING OPTION

If you have at least $5,000 of Accumulated Value in the Federated Prime Money
Portfolio, you may choose to have a specified dollar amount transferred from
this Portfolio to other Portfolios in the Separate Account or to the General
Account Guaranteed Options on a monthly basis. The main objective of Dollar
Cost Averaging is to shield your investment from short term price fluctuations.
Since the same dollar amount is transferred to other Portfolios each month,
more units are purchased in a Portfolio if the value per unit is low and less
units are purchased if the value per unit is high. Therefore, a lower average
cost per unit may be achieved over the long term. This plan of investing allows
investors to take advantage of market fluctuations but does not assure a profit
or protect against a loss in declining markets.

IRS-REQUIRED DISTRIBUTIONS

MINIMUM BALANCE REQUIREMENT

DESIGNATION OF AN ANNUITANT'S BENEFICIARY

19
<PAGE>

If the Annuitant dies prior to the Annuity Date, the following will apply
unless the Contract Owner has made other provisions.

(a) If there is more than one Annuitant's Beneficiary, each will share in
the Death Benefits equally;

(b) If one or two or more Annuitant's Beneficiaries have already died, that
share of the Death Benefit will be paid equally to the survivor(s);

DEATH OF ANNUITANT PRIOR TO ANNUITY DATE

The Death Benefit is the greater of:

(1) The Accumulated Value on the date we receive due Proof of Death; or

(2) The Adjusted Death Benefit.

ANNUITY DATE

LUMP SUM PAYMENT OPTION

20
<PAGE>

ANNUITY PAYMENT OPTIONS

All Annuity Payment Options (except for the Designated Period Annuity Option)
are offered as "Variable Annuity Options." This means that Annuity Payments,
after the initial payment, will reflect the investment experience of the
Portfolio or Portfolios you have chosen. All Annuity Payment Options are also
offered as "Fixed Annuity Options." This means that the amount of each payment
will be set on the Annuity Date and will not change. The following Annuity
Payment Options are available under the Contract:

Life Annuity--Monthly Annuity Payments are paid for the life of an Annuitant,
ceasing with the last Annuity Payment due prior to the Annuitant's death.

Life Annuity with Period Certain--Monthly Annuity Payments are paid for the
life of an Annuitant, with a Period Certain of not less than 120, 180, or 240
months, as elected.

Designated Period Annuity--Only available as a Fixed Annuity Option. Monthly
Annuity Payments are paid for a Period Certain as elected, which may be from 10
to 30 years.

We may, at the time of election of an Annuity Payment Option, offer more
favorable rates in lieu of the guaranteed rates specified in the Annuity Tables
found in the Contract.

21
<PAGE>

conversely, they will decrease if the actual experience is lower. The method of
computation of Variable Annuity Payments is described in more detail in the
Statement of Additional Information.

After the Annuity Date, you may change the Portfolio funding the Variable
Annuity Payments on the appropriate Company form or by calling our
Administrative Offices at 1-800-866-6007.

DEFERMENT OF PAYMENT

FEDERAL TAX CONSIDERATIONS

INTRODUCTION

TAXATION OF ANNUITIES IN GENERAL

22
<PAGE>

For Fixed Annuity Payments, in general, the taxable portion of each payment is
determined by using a formula known as the "exclusion ratio," which establishes
the ratio that the investment in the Contract bears to the total expected
amount of Annuity Payments for the term of the Contract. That ratio is then
applied to each payment to determine the non-taxable portion of the payment.
The remaining portion of each payment is taxed at ordinary income tax rates.
For Variable Annuity Payments, in general, the taxable portion is determined by
a formula that establishes a specific dollar amount of each payment that is not
taxed. The dollar amount is determined by dividing the investment in the
Contract by the total number of expected periodic payments. The remaining
portion of each payment is taxed at ordinary income tax rates. Once the
excludible portion of Annuity Payments to date equals the investment in the
Contract, the balance of the Annuity Payments will be fully taxable.

Withholding of federal income taxes on all distributions may be required unless
the recipient elects not to have any amounts withheld and properly notifies the
Company of that election.

THE COMPANY'S TAX STATUS

DISTRIBUTION-AT-DEATH RULES

23
<PAGE>

If the Contract Owner is not an individual, the "primary Annuitant" (as defined
under the Code) is considered the Contract Owner. The primary Annuitant is the
individual who is of primary importance in affecting the timing or the amount
of payout under a Contract. In addition, when the Contract Owner is not an
individual, a change in the primary Annuitant is treated as the death of the
Contract Owner. Finally, in the case of joint Contract Owners, the distribution
will be required at the death of the first of the Contract Owners.

TRANSFERS OF ANNUITY CONTRACTS

CONTRACTS OWNED BY NON-NATURAL PERSONS

ASSIGNMENTS

MULTIPLE CONTRACTS RULE

DIVERSIFICATION STANDARDS

24
<PAGE>

In connection with the issuance of temporary diversification regulations in
1986, the Treasury Department announced that such regulations did not provide
guidance concerning the extent to which Contract Owners may direct their
investments to particular divisions of a separate account. It is possible that
regulations or revenue rulings may be issued in this area at some time in the
future. It is not clear, at this time, what these regulations or rulings would
provide. It is possible that when the regulations or ruling are issued, the
Contracts may need to be modified in order to remain in compliance. For these
reasons, the Company reserves the right to modify the Contracts, as necessary,
to prevent the Contract Owner from being considered the owner of assets of the
Separate Account.

We intend to comply with the Regulations to assure that the Contracts continue
to be treated as annuity contracts for federal income tax purposes.

403(B) CONTRACTS

LOANS UNDER 403(B) CONTRACTS

25
<PAGE>

the outstanding loan balance is amortized in equal quarterly installments over
the remaining term. A $40 processing fee is charged for each loan. The
remainder of each repayment will be credited to the individual account.

The Company may require that any outstanding loan be paid if the individual
account value falls below an amount equal to 25% of total loans outstanding.

26
<PAGE>

GENERAL INFORMATION

ADDITIONS, DELETIONS, OR SUBSTITUTIONS OF INVESTMENTS

VOTING RIGHTS

AUDITORS

Ernst & Young LLP serves as independent auditors for the Separate Account and
the Company and will audit their financial statements annually.

LEGAL MATTERS

27
<PAGE>

TABLE OF CONTENTS FOR THE DIMENSIONAL VARIABLE ANNUITY

STATEMENT OF ADDITIONAL INFORMATION

28
<PAGE>

APPENDIX A

THE GENERAL ACCOUNT

There are three fixed options under the General Account: the One-Year
Guaranteed Rate Option, the Multi-Year Guaranteed Rate Option, and the
Guaranteed Equity Option, each described below:

One-Year Guaranteed Rate Option

Multi-Year Guaranteed Rate Option

You may allocate your Accumulated Value to this option at any time. You may
select any guarantee period then offered. The Company currently expects to
offer guarantee periods of two to ten years, inclusive, but reserves the right
to change such offerings, in its discretion. Any allocations you make to a
guarantee period must be at least $1,000 and you must maintain a minimum
balance of $1,000 in each guarantee period. The Accumulated Value you allocate
under this option earns interest at a rate declared by the Company applicable
to the guarantee period you select at the time your allocation is made with a
guarantee that the Accumulated Value in this General Account Guaranteed Option
will not be less than the amount initially allocated, plus 3%, compounded
annually.

A-1
<PAGE>

The Market Value Adjustment ("MVA") Factor for the Multi-Year Guaranteed Rate
Option will be as follows:

N X (B--E)
12

where N=the number of months left in the guarantee period at the time of the
transfer or surrender (including any partial months which will count as
full months for purposes of this calculation).

B=the interest rate in effect for the applicable guarantee period which was
declared on the date of the applicable allocation.

E=the constant maturity Treasury rate for the duration equal to that of the
applicable guarantee period (or, if not published, the published constant
maturity rate of the next longest maturity).

The following is an example of how your Accumulated Value under the Multi-Year
Guaranteed Rate Option with a five-year guarantee period is affected by a
positive Market Value Adjustment:

Accumulated Value = $108,000

MVA Factor = 48 X 08 - .07 = 4 X .01 = .04
12

Adjustment = $108,000 x .04 = $4,320

= $108,000 + $4,320 = $112,320 = Net amount of transfer or
surrender

The following is an example of how your Accumulated Value under the Multi-Year
Guaranteed Rate Option with a five year guarantee period is affected by a
negative Market Value Adjustment:

Accumulated Value = $108,000

MVA Factor = 48 X 08 - .09 = 4 X .01 = -.04
12

Adjustment = $108,000 x -.04 = -$4,320

= $108,000 - $4,320 = $103,650 = Net amount of transfer or
surrender

A-2
<PAGE>

Guaranteed Equity Option

You may allocate your Accumulated Value to this option as of the first business
day of each month. Any allocations you make must be at least $1,000.

The amount (x) in the preceding paragraph is equal to the amount allocated to
the applicable guarantee period multiplied by the following factor:

PR X [(EV/SV)-1]

where PR = the Participation Rate;

EV= the average closing values of the S&P 500 Index on the last business
day of each month during the Averaging Period; and

SV = the closing value of the S&P 500 Index on the date Accumulated Value
is allocated to this option.

("S&P" is a trademark of The McGraw-Hill Companies, Inc. and has been licensed
for use by Providian Corporation.)

(The S&P 500 Index is a stock price index. Its composition and calculation does
not include dividends, if any, paid upon component stocks of the index nor
reinvestment, if any, of such dividends.)

At the end of the guarantee period, you may, without loss of earnings, elect to
transfer all or part of your Accumulated Value under this option to any of the
Subaccounts, transfer into another General Account Guaranteed Option or renew
your participation in this option. Such election must be received by the
Company no later than 30 days prior to the end of the guarantee period. If no
election is received, your Accumulated Value will automatically be transferred
to The Federated Prime Money Portfolio. This option may not be available at all
times.

A-3
<PAGE>

DISCLAIMER REGARDING STANDARD & POOR'S 500 INDEX

A-4
<PAGE>

PROVIDIAN LIFE AND HEALTH INSURANCE COMPANY
SEPARATE ACCOUNT V

SUPPLEMENT
DATED MARCH 31, 1997
TO THE
STATEMENT OF ADDITIONAL INFORMATION
DATED APRIL 30, 1996
FOR THE
PROVIDIAN ADVISOR'S EDGE VARIABLE ANNUITY

The following information supplements and should be read in conjunction with the
Statement of Additional Information dated April 30, 1996 for the Providian
Advisor's Edge variable annuity contract regarding such contract and regarding
the Dimensional Variable Annuity contract.

The Statement of Additional Information, as supplemented, expands upon subjects
discussed in the current Prospectuses for the Providian Advisor's Edge variable
annuity contract and for the Dimensional Variable Annuity contract.

On and after March 31, 1997, the following portfolios are available through the
Dimensional Variable Annuity contract (and no longer offered through the
Providian Advisor's Edge variable annuity contract):

DFA Small Value Portfolio DFA International Small Portfolio
DFA Large Value Portfolio DFA Short-term Fixed Portfolio
DFA International Value Portfolio DFA Global Bond Portfolio

On and after the same date, the following portfolios are available through the
Providian Advisor's Edge variable annuity contract:

Federated American Leaders Portfolio Wanger International Small Cap
Federated Utility Portfolio Advisor Portfolio
Federated High Income Bond Warburg Pincus International
Portfolio Equity Portfolio
Federated U.S. Government Warburg Pincus Small Company
Securities Portfolio Growth Portfolio
Montgomery Growth Portfolio Weiss, Peck & Greer Core Large-
Montgomery Emerging Markets Portfolio Cap Stock Portfolio
SteinRoe Capital Appreciation Portfolio Weiss, Peck & Greer Core Small-
Strong International Stock Portfolio Cap Stock Portfolio
Wanger U.S. Small Cap Advisor Portfolio

<PAGE>

On and after such date the following portfolio is available through both the
Providian Advisor's Edge and Dimensional Variable Annuity contracts:

Federated Prime Money Portfolio

Information presented in the Statement of Additional Information regarding, and
references in such Statement of Additional Information to, the Providian
Advisor's Edge variable annuity contract and its portfolios are, and should be,
considered references to the Dimensional Variable Annuity contract and its
portfolios, where applicable.

Other terms used in the current Prospectuses are incorporated in the Statement
of Additional Information. Both contracts are offered by Providian Life and
Health Insurance Company.

You may obtain a copy of either or both Prospectuses dated March 31, 1997 by
calling 1-800-866-6007 or by writing to our Administrative Offices, P.O. Box
32700, Louisville, Kentucky 40232.

THIS STATEMENT OF ADDITIONAL INFORMATION AS SUPPLEMENTED IS NOT A PROSPECTUS AND
SHOULD BE READ ONLY IN CONJUNCTION WITH THE APPLICABLE PROSPECTUS FOR THE
CONTRACT.