PEOPLES BENEFIT LIFE INSURANCE CO SEPARATE ACCOUNT V, 485APOS, 2000-09-05

PEOPLES BENEFIT LIFE INSURANCE CO SEPARATE ACCOUNT V
485APOS, 2000-09-05

Previous: W&R FUNDS INC, 497, 2000-09-05

Next: PEOPLES BENEFIT LIFE INSURANCE CO SEPARATE ACCOUNT V, 485APOS, EX-4.D, 2000-09-05

<PAGE>

As Filed With The Securities And Exchange Commission On September 5, 2000

Registration No. 33-80958

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 12

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 23

PEOPLES BENEFIT LIFE INSURANCE COMPANY SEPARATE ACCOUNT V
(Exact Name of Registrant)

PEOPLES BENEFIT LIFE INSURANCE COMPANY
(Name of Depositor)

4333 Edgewood Road NE
Cedar Rapids, Iowa 52499
(Address of Depositor's Principal Executive Office)

Depositor's Telephone Number (319) 297-8121

Brenda Sneed, Esquire
PEOPLES BENEFIT LIFE INSURANCE COMPANY
4333 Edgewood Road NE
Cedar Rapids, Iowa 52499
(Name and Address of Agent for Service)

Copies to:
Michael Berenson, Esquire
Jorden Burt Boros Cicchetti Berenson & Johnson LLP
1025 Thomas Jefferson Street, N.W., Suite 400 East
Washington, D.C. 20007-0805

Approximate Date of Proposed Offering:
As soon as practicable after the effective date of this Registration Statement.

It is proposed that this filing will become effective (check appropriate box):
[_] Immediately upon filing pursuant to paragraph (b) of Rule 485.
[_] On ___________, pursuant to paragraph (b) of Rule 485.
[_] 60 Days after filing pursuant to paragraph (a)(1) of Rule 485.
[X] On November 6, 2000, pursuant to paragraph (a)(1) of Rule 485.
If appropriate, check the following box:
[_] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>

THE ADVISOR'S EDGE
VARIABLE ANNUITY

Issued Through

Peoples Benefit Life Insurance Company
Separate Account V
By
Peoples Benefit Life Insurance Company

Prospectus
(DATE)

The Advisor's Edge Variable Annuity (the "Policy") provides a means of investing
on a tax-deferred basis in 35 portfolios of underlying mutual funds (the
"Portfolios") and a fixed account which offers interest at rates that are
guaranteed by Peoples Benefit Life Insurance Company. The Policy is an
individual variable annuity policy and is intended for retirement savings or
other long-term investment purposes. For investments in the Subaccounts, you
bear all investment risk (including the possible loss of principal), and
investment results are not guaranteed. The Policy provides a Right to Cancel
period of at least 20 days (30 days or more in some instances) during which the
Policy may be cancelled.

Before investing you should carefully read this prospectus and the accompanying
prospectuses for the Portfolios of the underlying mutual funds. These
prospectuses give you important information about the Policy and the Portfolios,
including the objectives, risks, and strategies of the Portfolios. A Statement
of Additional Information for the Policy prospectus has been filed with the
Securities and Exchange Commission, is incorporated by reference, and is
available free by calling our Administrative Offices at 800-866-6007. The Table
of Contents of the Statement of Additional Information is included at the end of
this prospectus.

The Policy is not available in all states.

This prospectus does not constitute an offering in any jurisdiction where it
would be unlawful to make an offering like this. We have not authorized anyone
to give any information or make any representations about this offering other
than those contained in this prospectus. You should not rely on any other
information or representations.

Neither the Securities and Exchange Commission nor any state securities
regulator has approved or disapproved these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.

Alliance Variable Products Series Fund, Inc.
Alliance Growth
Alliance Premier Growth
Alliance Technology
DFA Investment Dimensions Group, Inc.
DFA Small Value
DFA Large Value
DFA International Value
DFA International Small
DFA Short-Term Fixed
DFA Global Bond
The Dreyfus Socially Responsible Growth Fund, Inc.
Dreyfus Socially Responsible Growth
Endeavor Series Trust
Dreyfus Small Cap Value
Endeavor Enhanced Index
T. Rowe Price International Stock
The Federated Insurance Series
Federated American Leaders
Federated High Income Bond
Federated Prime Money
Federated U.S. Government Securities
Federated Utility
The Montgomery Funds III
Montgomery Growth
Montgomery Emerging Markets
Seligman Portfolios, Inc.
Seligman Capital
Seligman Communications and Information
Seligman Global Technology
SteinRoe Variable Investment Trust
Stein Roe Small Company Growth
Strong Variable Insurance Funds, Inc.
Strong International Stock
Strong Schafer Value
Transamerica Variable Insurance Fund, Inc.
Transamerica VIF Growth
Wanger Advisors Trust
Wanger U.S. Small Cap Advisor
Wanger International Small Cap Advisor
Warburg Pincus Trust
Warburg Pincus International Equity
Warburg Pincus Small Company Growth
WRL Series Fund, Inc.
WRL Alger Aggressive Growth
WRL J.P. Morgan Real Estate Securities
WRL Janus Growth
WRL LKCM Strategic Total Return
<PAGE>

Contents

1 Cross Reference to Definitions 23 Taxes

2 Summary 26 Access to Your Money

6 Fee Table 28 Performance

9 Example 30 Death Benefit

11 The Annuity Policy 33 Other Information

12 Annuity Payments 36 Table of Contents of
Statement of Additional
15 Purchase Information

17 Investment Options

22 Expenses

CROSS REFERENCE TO DEFINITIONS

We have generally defined the technical terms associated with the Policy where
they are used in the prospectus. The following list shows where certain of the
more technical and more frequently used terms are defined in the prospectus. In
the text you can easily locate the defined word because it will appear in bold
type or its definition will be covered in a space on the page set aside
specifically for discussion of the term.

Accumulation Phase........................................................ 11
Adjusted Policy Value..................................................... 26
Annuitant................................................................. 33
Annuity Commencement Date................................................. 12
Annuity Payment Options................................................... 12
Business Day.............................................................. 15
Cash Value................................................................ 26
Excess Interest Adjustment................................................ 27
Guaranteed Period Options................................................. 11
Income Phase.............................................................. 12
Initial Premium Payment................................................... 15
Net Premium Payment....................................................... 15
Policy.................................................................... 11
Policy Anniversary........................................................ 16
Policy Date............................................................... 16
Policy Owner.............................................................. 33
Policy Value.............................................................. 26
Policy Year............................................................... 16
Portfolios................................................................ 17
Premium Payment........................................................... 15
Qualified Policy.......................................................... 15
Right to Cancel Period.................................................... 34
Tax Deferral.............................................................. 23

1
<PAGE>

SUMMARY

The numbered sections in this Summary provide you with a concise discussion of
the major topics covered in this prospectus. Each section of the Summary is
discussed in greater detail in the main body of the prospectus at corresponding
numbered headings. Please read the full prospectus carefully.

1. THE ANNUITY POLICY

The Advisor's Edge Variable Annuity

Advisor's Edge is a flexible-premium multi-funded variable annuity offered by
Peoples Benefit Life Insurance Company ("Peoples Benefit"). The Policy provides
a means of investing on a tax-deferred basis in thirty-five portfolios of the
underlying funds and a fixed account offered by Peoples Benefit.

Who Should Invest

The Policy is intended for long-term investors who want tax-deferred
accumulations of funds, generally for retirement but also for other long-term
purposes.

The Policy provides benefits in two distinct phases: accumulation and income.

The Accumulation Phase

During the Accumulation Phase, you choose to allocate your investment in the
Policy among the thirty-five Portfolios and the fixed account available under
the Policy. You can contribute additional amounts to the Policy and you can take
withdrawals from the Policy during the Accumulation Phase. The value of your
investment depends on the investment performance of the Portfolios of the
underlying funds that you choose. Your earnings are generally not taxed during
this phase unless you withdraw them.

The Income Phase

During the Income Phase, you can receive regular annuity payments on a fixed or
variable basis and for various periods of time depending on your need for income
and the choices available under the Policy. See ANNUITY PAYMENTS, page 12, for
more information about Annuity Payment Options.

2. ANNUITY PAYMENTS

During the Income Phase, you receive regular annuity payments under a wide range
of Annuity Payment Options. The Policy allows you to receive an income
guaranteed for as long as you live or until the second of two people dies. You
may also choose to receive a guaranteed number of payments over a number of
years. Most Annuity Payment Options are available on either a variable basis
(where the amount of the payment rises or falls depending on the investment
performance of the Portfolios of the underlying funds you have chosen) or a
fixed basis (where the payment is guaranteed).

3. PURCHASE

You can buy the Policy with a minimum investment of $10,000 for Non-Qualified
Policies and $1,000 for Qualified Policies. You can add $500 or more to
Non-Qualified Policies and $25 or more to Qualified Policies at any time during
the Accumulation Phase. Your Policy may not exceed $1,000,000 in total Premium
Payments without our prior approval.

2
<PAGE>

4. INVESTMENT OPTIONS

When you purchase the Policy, your Premium Payments are deposited into the
Peoples Benefit Separate Account V (the "Separate Account"). The Separate
Account contains a number of Subaccounts that invest exclusively in shares of
the corresponding Portfolios of the underlying mutual funds (the "Subaccounts").
The investment performance of each Subaccount is linked directly to the
investment performance of one of the Portfolios. Assets in the Separate Account
belong to Peoples Benefit, but are accounted for separately from the Company's
other assets and can be used only to satisfy its obligations to the Policy
Owners.

You can allocate your Premium Payments to one or more Subaccounts that invest
exclusively in shares of the following Portfolios described in the twelve Funds'
prospectuses and to the fixed account. The fixed account offers an interest rate
that Peoples Benefit guarantees.

The Portfolios

Alliance Variable Products Series Fund, Inc.
Advised by Alliance Capital Management L.P.
Alliance Growth Portfolio
Alliance Premier Growth Portfolio
Alliance Technology Portfolio

DFA Investment Dimensions Group, Inc.
Advised by Dimensional Fund Advisors, Inc.
VA Small Value Portfolio ("DFA Small Value Portfolio")
VA Large Value Portfolio ("DFA Large Value Portfolio")
VA International Value Portfolio ("DFA International Value Portfolio")
VA International Small Portfolio ("DFA International Small Portfolio")
VA Short-Term Fixed Portfolio ("DFA Short-Term Fixed Portfolio")
VA Global Bond Portfolio ("DFA Global Bond Portfolio")

The Dreyfus Socially Responsible Growth Fund, Inc.
Advised by The Dreyfus Corporation
Dreyfus Socially Responsible Growth Portfolio

Endeavor Series Trust
Advised by Endeavor Management Co.
Dreyfus Small Cap Value Portfolio
Endeavor Enhanced Index Portfolio
T. Rowe Price International Stock Portfolio

The Federated Insurance Series
Advised by Federated Investment Management Company
Federated American Leaders Fund II
("Federated American Leaders Portfolio")
Federated High Income Bond Fund II
("Federated High Income Bond Portfolio")
Federated Prime Money Fund II ("Federated Prime Money Portfolio")
Federated Fund for U.S. Government Securities II ("Federated U.S.
Government Securities Portfolio")
Federated Utility Fund II ("Federated Utility Portfolio")

The Montgomery Funds III
Advised by Montgomery Asset Management, LLC
Montgomery Variable Series: Growth Fund
("Montgomery Growth Portfolio")
Montgomery Variable Series: Emerging Markets Fund
("Montgomery Emerging Markets Portfolio")

Seligman Portfolios, Inc.
Advised by J. & W. Seligman & Co. Incorporated
Seligman Capital Portfolio
Seligman Communications and Information Portfolio
Seligman Global Technology Portfolio

3
<PAGE>

SteinRoe Variable Investment Trust
Advised by Stein Roe & Farnham Incorporated
Stein Roe Small Company Growth Fund, Variable Series, formerly Stein
Roe Special Venture Fund ("Stein Roe Small Company
Growth Portfolio")

Strong Variable Insurance Funds, Inc.
Advised by Strong Capital Management, Inc.
Strong International Stock Fund II
("Strong International Stock Portfolio")
Strong Schafer Value Fund II ("Strong Schafer Value Portfolio")

Transamerica Variable Insurance Fund, Inc.
Advised by Transamerica Investment Management, LLC.
Transamerica VIF Growth Portfolio

Wanger Advisors Trust
Advised by Wanger Asset Management, L.P.
Wanger U.S. Small Cap Advisor
("Wanger U.S. Small Cap Advisor Portfolio")
Wanger International Small Cap Advisor
("Wanger International Small Cap Advisor Portfolio")

Warburg Pincus Trust
Advised by Credit Suisse Asset Management
Warburg Pincus International Equity Portfolio
Warburg Pincus Small Company Growth Portfolio

WRL Series Fund, Inc.
Advised by WRL Investment Management, Inc.
Aggressive Growth Portfolio ("WRL Alger Aggressive Growth Portfolio")
Real Estate Securities Portfolio
("WRL J.P. Morgan Real Estate Securities Portfolio")
Growth Portfolio ("WRL Janus Growth Portfolio")
Strategic Total Return Portfolio ("WRL LKCM Strategic Total Portfolio")

You can make or lose money in any of the Subaccounts that invest in these
Portfolios depending on their investment performance.

5. EXPENSES

No sales load is deducted from Premium Payments.

No surrender charge applies to withdrawals. Full surrenders, partial
withdrawals, and transfers from a Guaranteed Period Option of the fixed account
may be subject to an Excess Interest Adjustment, which may increase or decrease
the amount you receive. This adjustment may also apply to amounts applied to an
Annuity Payment Option from a Guaranteed Period Option of the fixed account.

Peoples Benefit will deduct mortality and expense risk fees and administrative
charges at an annual rate of either 0.75%, 0.65% or 0.60% per year from the
assets in each subaccount (depending on the death benefit you select).

On each Policy Anniversary and at the time of surrender during any Policy Year
before the Annuity Commencement Date, we reserve the right to assess a service
charge of up to $30 for policy administration expenses. The Service Charge will
not be deducted on a Policy Anniversary or at the time of surrender if, at
either of these times, (1) the sum of all Premium Payments less the sum of all
withdrawals taken is at least $50,000; (2) the Policy Value equals or exceeds
$50,000 or (3) the Policy is a Qualified Policy.

You will also pay certain expenses associated with the operation of the
Portfolios of the underlying funds.

4
<PAGE>

6. TAXES

In general, you are not taxed on earnings on your investment in the Policy until
you withdraw them or receive Annuity Payments. Earnings are taxed as ordinary
income. During the Accumulation Phase, for tax purposes withdrawals are taken
from earnings first, then from your investment in the Policy. For Annuity
Payments, payments come partially from earnings, partially from your investment.
You are taxed only on the earnings portion of each Annuity Payment. If you
receive money from the Policy before age 59 1/2, you may have to pay a 10%
penalty tax on the earnings portion received.

7. ACCESS TO YOUR MONEY

You can take money out of your Policy at any time during the Accumulation Phase.
Each withdrawal you make must be at least $500. If you have a Policy Value in
the fixed account, you may take up to 10% free of Excess Interest Adjustments.
Amounts withdrawn in excess of the 10% free amount, may be subject to Excess
Interest Adjustments.

You may have to pay income tax and a tax penalty on any money you take out.

8. PERFORMANCE

The investment performance of the Subaccounts you choose directly affects the
value of your Policy. For investments in the Subaccounts, you bear all
investment risk (including the possible loss of principal), and investment
results are not guaranteed.

From time to time, Peoples Benefit may advertise the investment performance of
the Subaccounts. In doing so, it will use standardized methods prescribed by the
Securities and Exchange Commission ("SEC"), as well as certain non-standardized
methods.

Past performance does not indicate or predict future performance.

9. DEATH BENEFIT

If you are both the owner and the annuitant and you die before the Income Phase
begins, then your beneficiary will receive a death benefit.

Naming different persons as owner and annuitant can affect whether the death
benefit is payable and to whom amounts will be paid. Use care when naming
owners, annuitants and beneficiaries, and consult your agent if you have
questions.

You may choose one of the following guaranteed minimum death benefits:

. Return of Premium - available if the owner or annuitant is age 0 to 85 on
the Policy Date

. 6 Year Step-Up To Age 81 - available if the owner or annuitant is age 0 to
75 on the Policy Date

. Double Enhanced Death Benefit - available if the owner or annuitant is age
0 to 79 on the Policy Date

If the guaranteed minimum death benefit is not available because of the age of
the owner or annuitant, the death benefit will be the greater of the Policy
Value or the Cash Value as of the date of death.

If the owner is not the annuitant, no death benefit is paid if the owner dies.

10. OTHER INFORMATION

Additional Features

This Policy has additional features that might interest you. These features are
not available in all states and may not be suitable for your particular
situation. These include the following:

5
<PAGE>

. Under certain medically related circumstances, we will allow you to
surrender or partially withdraw your Policy Value without an Excess
Interest Adjustment. This feature is called the "Nursing Care and Terminal
Condition Withdrawal Option."
. Under certain unemployment circumstances, you may withdraw all or a portion
of the Policy Value free of Excess Interest Adjustments. This feature is
called the "Unemployment Waiver."
. You may make transfers and/or change the allocation of additional Premium
Payments by telephone.
. You can arrange to have a certain amount of money (at least $500)
automatically transferred from the fixed account or the Federated Prime
Money Portfolio either monthly or quarterly, into your choice of
subaccounts. This feature is called "Dollar Cost Averaging."

Right to Cancel Period

The Policy provides for a Right to Cancel Period of 20 days (30 or more days in
some instances as specified in your Policy) plus a 5-day period to allow for
mail delivery. To cancel your investment, please return your Policy to us or to
the agent from whom you purchased the Policy.

Peoples Benefit Life Insurance Company

Peoples Benefit Life Insurance Company is a life insurance company incorporated
under Iowa law. It is principally engaged in offering life insurance and annuity
policies.

Peoples Benefit Life Insurance Company Separate Account V

The Separate Account is a unit investment trust registered with the SEC and
operating under Iowa law. The Separate Account has thirty-five Subaccounts
dedicated to the Policy, each of which invests solely in a corresponding
Portfolio of the underlying Funds.

Other topics

Additional information on the topics summarized above and on other topics not
summarized here can be found at OTHER INFORMATION, page 33.

11. INQUIRIES AND POLICY AND POLICYHOLDER INFORMATION

For more information about the Advisor's Edge variable annuity, call or write:
Peoples Benefit Life Insurance Company, Variable Annuity Department, 4333
Edgewood Road, N.E., Cedar Rapids, Iowa 52499, 800-866-6007.

If you have questions about your Policy, please telephone our Administrative
Offices at 800-866-6007 between the hours of 8 a.m. and 6 p.m. Eastern time.
Please have ready the Policy number and the Policy Owner's name when you call.
As Policy Owner, you will receive periodic statements confirming any
transactions that take place as well as quarterly statements and an annual
statement.

FEE TABLE

Policy Owner Transaction Expenses
Sales Load Imposed on Premiums......................................... None
Contingent Deferred Sales Load (surrender charge)...................... None
Exchange Fees.......................................................... None
Annual Policy Service Charge........................................... None(1)
Separate Account Annual Expenses
(as a percentage of assets in the Separate Account)
Mortality and Expense Risk Fee......................................... 0.60%
Administrative Charge.................................................. 0.15%
-----
Total Annual Separate Account Expenses................................. 0.75%(2)

6
<PAGE>

(1) Peoples Benefit reserves the right to assess a service charge up to $30 for
policy administration expenses. The Service Charge will not be deducted on a
Policy if (1) the sum of all Premium Payments less the sum of all
withdrawals taken is at least $50,000; (2) the Policy Value equals or
exceeds $50,000, or (3) the Policy is a Qualified Policy.

(2) Total Annual Separate Account Expenses shown (0.75%) applies to the Double
Enhanced Death Benefit option. This reflects a fee that is 0.10% and 0.15%
per year higher than the 0.65% and 0.60% corresponding fees for the 6 Year
Step-Up Death Benefit and Return of Premium Death Benefit options,
respectively.

Portfolio Annual Expenses

Except as indicated, the figures below are based on expenses for fiscal year
1999 (as a percentage of each Portfolio's average net assets after fee waiver
and/or expense reimbursement limitation, if applicable).

<TABLE>
<CAPTION>
Rule
Management and Other 12b-1 Total Portfolio
Advisory Expenses Expenses Fee Annual Expenses
----------------- -------- --- ---------------

<S> <C> <C> <C> <C>
Alliance Growth Portfolio........................................... 0.75% 0.12% 0.25% 1.12%
Alliance Premier Growth Portfolio................................... 1.00% 0.04% 0.25% 1.29%
Alliance Technology Portfolio(7).................................... 1.00% 0.27% 0.25% 1.52%
DFA Small Value Portfolio........................................... 0.50% 0.17% -- 0.67%
DFA Large Value Portfolio........................................... 0.25% 0.18% -- 0.43%
DFA International Value Portfolio................................... 0.40% 0.25% -- 0.65%
DFA International Small Portfolio................................... 0.50% 0.29% -- 0.79%
DFA Short-Term Fixed Portfolio...................................... 0.25% 0.15% -- 0.40%
DFA Global Bond Portfolio........................................... 0.25% 0.24% -- 0.49%
Dreyfus Small Cap Value Portfolio(1)................................ 0.80% 0.10% 0.32% 1.22%
Dreyfus Socially Responsible Growth Portfolio....................... 0.75% 0.04% -- 0.79%
Endeavor Enhanced Index Portfolio................................... 0.75% 0.03% -- 0.78%
Federated American Leaders Portfolio................................ 0.75% 0.13% -- 0.88%
Federated High Income Bond Portfolio................................ 0.60% 0.19% -- 0.79%
Federated Prime Money Portfolio..................................... 0.50% 0.23% -- 0.73%
Federated U.S. Government Securities Portfolio...................... 0.60% 0.24% -- 0.84%
Federated Utility Portfolio......................................... 0.75% 0.19% -- 0.94%
Montgomery Growth Portfolio(2)...................................... 0.52% 0.73% -- 1.25%
Montgomery Emerging Markets Portfolio............................... 1.25% 0.37% -- 1.62%
Seligman Capital Portfolio(8)....................................... 0.40% 0.19% 0.25% 0.84%
Seligman Communication and Information Portfolio(8)................. 0.75% 0.11% 0.25% 1.11%
Seligman Global Technology Portfolio(8)(9).......................... 1.00% 0.40% 0.15% 1.55%
Stein Roe Small Company Growth Portfolio............................ 0.65% 0.02% -- 0.67%
Strong International Stock Portfolio................................ 1.00% 0.16% -- 1.16%
Strong Schafer Value Portfolio...................................... 1.00% 0.20% -- 1.20%
Transamerica VIF Growth Portfolio(6)................................ 0.70% 0.15% -- 0.85%
T. Rowe Price International Stock Portfolio(3)...................... 0.90% 0.10% -- 1.00%
Wanger U.S. Small Cap Advisor Portfolio............................. 0.96% 0.06% -- 1.02%
Wanger International Small Cap Advisor Portfolio.................... 1.25% 0.24% -- 1.49%
Warburg Pincus International Equity Portfolio(4).................... 1.00% 0.32% -- 1.32%
Warburg Pincus Small Company Growth Portfolio(4).................... 0.90% 0.24% -- 1.14%
WRL Alger Aggressive Growth Portfolio(5)............................ 0.80% 0.09% -- 0.89%
WRL J.P. Morgan Real Estate Securities Portfolio(5)................. 0.80% 0.20% -- 1.00%
WRL Janus Global(5)................................................. 0.80% 0.12% -- 0.92%
WRL Janus Growth Portfolio(5)....................................... 0.80% 0.05% -- 0.85%
WRL LKCM Strategic Total Return Portfolio(5)........................ 0.80% 0.07% -- 0.87%
</TABLE>

7
<PAGE>

the Trust's affiliated broker. Under supervision of the Trustees, the
affiliated broker will use the "recaptured commission" to promote marketing
of the Trust's shares. The staff of the SEC believes that, through the use
of these recaptured commissions, the Trust is indirectly paying for
distribution expenses and that such amounts must be shown as 12b-1 fees in
the above table. The use of recaptured commission to promote the sale of
the Trust's shares involves no additional costs to the Trust or any Policy
Owner. Endeavor Series Trust, on the basis of advice of counsel, does not
believe that recaptured brokerage commissions should be treated as 12b-1
fees. For more information on the Trust's Brokerage Enhancement Plan, see
the Trust's prospectus accompanying this prospectus.

2 A 1.0% reimbursement was applied to the management fees. Absent the
reimbursement, the Management and Advisory Expenses, Other Expenses, and
Total Portfolio Annual Expenses would have been 1.52%, 0.73%, and 2.25%
respectively.

3 For the T. Rowe Price International Stock Portfolio, the Management and
Advisory Expenses were 0.90% and Other Expenses were 0.01%. Therefore,
Total Portfolio Annual Expenses (reduced by custodial offset arrangements)
for the period ended December 31, 1999 were 0.91%.

4 Management and Advisory Expenses, Other Expenses, and Total Portfolio
Annual Expenses are based on actual expenses for the fiscal year ending
December 31, 1999. Management and Advisory Expenses were 1.00% for the
Warburg Pincus International Equity and 0.90% for the Warburg Pincus Small
Company Growth portfolios. Other Expenses equaled 0.33% and 0.25%,
respectively, so that the Total Portfolio Annual Expenses were 1.33% for
the Warburg Pincus International Equity and 1.15% Warburg Pincus Small
Company Growth portfolios. This includes transfer agency offsets that
reduced the fees by 0.01% each.

5 WRL Investment Management, Inc. ("WRL Management") has voluntarily
undertaken, until at least April 30, 2001, to pay expenses on behalf of the
portfolios advised by WRL Management to the extent that normal operating
expenses (including investment advisory fees but excluding interest, taxes,
brokerage fees, commissions and extraordinary charges) exceed, as a
percentage of each such portfolio's average daily net assets, 1.00%. For
WRL Janus Growth, WRL Management currently waives 0.025% of its advisory
fee for the first $3 billion of the portfolio's average daily net assets
(net fee: 0.775%); and 0.05% for the portfolio's average daily net assets
above $3 billion (net fee: 0.75%). For WRL Janus Global, WRL Management
currently waives 0.025% of its advisory fee on portfolio average daily net
assets over $2 billion (net fee: 0.775%). The waivers for WRL Janus Growth
and WRL Janus Global are voluntary and will be terminated on June 25, 2000.
In 1999, WRL Management reimbursed WRL J. P. Morgan Real Estate Securities
Portfolio in the amount of $51,924. Without such reimbursement, the total
annual expenses during 1999 for this portfolio would have been 2.69%.

6 For the Transamerica VIF Growth Portfolio, the Management and Advisory
Expenses before waivers were 0.75% and Other Expenses before reimbursements
were 0.15%. Therefore, Total Portfolio Annual Expenses before waivers and
Other Expenses before reimbursements (reduced by custodial offset
arrangements) for the period ended December 31, 1999 were 0.90%

7. Effective May 1, 2000, the Alliance Technology Portfolio will no longer
assume portfolio expenses. Accordingly, the table shows restated total
expenses for the fund without the assumption of expenses as of December 31,
1999.

8. Class 2 shares of each Seligman Portfolio were offered on May 1, 2000.
Expense figures shown for Rule 12b-1 Fees are estimated for the fiscal year
2000.

9. J.& W.Seligman & Co. Incorporated, the Manager, has agreed to reimburse
other expenses which exceed 0.40% per annum of average net assets of
Seligman Global Technology Portfolio. Without such reimbursement, other
expenses for 1999 would have been 0.41%.

8
<PAGE>

EXAMPLE

The following example illustrates the expenses that you would incur on a $1,000
Premium Payment over various periods, assuming (1) a 5% annual rate of return
and (2) full surrender at the end of each period. As noted in the Fee Table, the
Policy imposes no surrender or withdrawal charges of any kind. Your expenses are
identical whether you continue the Policy or withdraw the entire value of your
Policy at the end of the applicable period as a lump sum or under one of the
Policy's Annuity Payment Options. The expenses reflect different mortality and
expense risk fees depending on which death benefit you select:

A = Double Enhance Death Benefit Option (0.60%)
B = Return of Premium Death Benefit Option (0.45%)
C = 6 Year Step-Up To Age 81 Death Benefit Option (0.50%)

----------------------------------------------------------------------
1 3 5 10
Year Years Years Years
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Growth Portfolio A 19 59 101 219
----------------------------------------------------------------------------
B 17 54 93 203
----------------------------------------------------------------------------
C 18 56 96 208
------------------------------------------------------------------------------------------------------------------------------------
Alliance Premier Growth Portfolio A 21 64 110 237
----------------------------------------------------------------------------
B 19 59 102 221
----------------------------------------------------------------------------
C 20 61 105 226
------------------------------------------------------------------------------------------------------------------------------------
Alliance Technology Portfolio A 23 71 122 261
----------------------------------------------------------------------------
B 22 66 114 245
----------------------------------------------------------------------------
C 22 68 116 250
------------------------------------------------------------------------------------------------------------------------------------
DFA Small Value Portfolio A 14 45 78 170
----------------------------------------------------------------------------
B 13 40 70 153
----------------------------------------------------------------------------
C 13 42 72 159
------------------------------------------------------------------------------------------------------------------------------------
DFA Large Value Portfolio A 12 37 65 143
----------------------------------------------------------------------------
B 11 33 57 126
----------------------------------------------------------------------------
C 11 34 60 132
------------------------------------------------------------------------------------------------------------------------------------
DFA International Value Portfolio A 14 44 77 168
----------------------------------------------------------------------------
B 13 40 69 151
----------------------------------------------------------------------------
C 13 41 71 157
------------------------------------------------------------------------------------------------------------------------------------
DFA International Small Portfolio A 16 49 84 183
----------------------------------------------------------------------------
B 14 44 76 167
----------------------------------------------------------------------------
C 15 46 79 172
------------------------------------------------------------------------------------------------------------------------------------
DFA Short-Term Fixed Portfolio A 12 37 63 140
----------------------------------------------------------------------------
B 10 32 55 122
----------------------------------------------------------------------------
C 11 33 58 128
------------------------------------------------------------------------------------------------------------------------------------
DFA Global Bond Portfolio A 13 39 68 150
----------------------------------------------------------------------------
B 11 35 60 133
----------------------------------------------------------------------------
C 12 36 63 139
------------------------------------------------------------------------------------------------------------------------------------
Dreyfus Small Cap Value Portfolio A 20 62 106 230
----------------------------------------------------------------------------
B 18 57 99 214
----------------------------------------------------------------------------
C 19 59 101 219
------------------------------------------------------------------------------------------------------------------------------------
Dreyfus Socially Responsible Growth Portfolio A 16 49 84 183
----------------------------------------------------------------------------
B 14 44 76 167
----------------------------------------------------------------------------
C 15 46 79 172
------------------------------------------------------------------------------------------------------------------------------------
Endeavor Enhanced Index Portfolio A 16 48 83 182
----------------------------------------------------------------------------
B 14 44 76 166
----------------------------------------------------------------------------
C 15 45 78 171
------------------------------------------------------------------------------------------------------------------------------------
Federated American Leaders Portfolio A 17 51 89 193
----------------------------------------------------------------------------
B 15 47 81 177
----------------------------------------------------------------------------
C 16 48 83 182
------------------------------------------------------------------------------------------------------------------------------------
Federated High Income Bond Portfolio A 16 49 84 183
----------------------------------------------------------------------------
B 14 44 76 167
----------------------------------------------------------------------------
C 15 48 79 172
------------------------------------------------------------------------------------------------------------------------------------
Federated Prime Money Portfolio A 15 47 81 177
----------------------------------------------------------------------------
B 14 42 73 160
----------------------------------------------------------------------------
C 14 44 76 166
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

9
<PAGE>

<TABLE>

------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Federated U.S. Government Securities Portfolio A 16 50 87 189
----------------------------------------------------------------------------
B 15 46 79 172
----------------------------------------------------------------------------
C 15 47 81 718
------------------------------------------------------------------------------------------------------------------------------------
Federated Utility Portfolio A 17 53 92 200
----------------------------------------------------------------------------
B 16 49 84 183
----------------------------------------------------------------------------
C 16 50 87 189
------------------------------------------------------------------------------------------------------------------------------------
Montgomery Growth Portfolio A 20 63 108 233
----------------------------------------------------------------------------
B 19 58 100 217
----------------------------------------------------------------------------
C 19 60 103 222
------------------------------------------------------------------------------------------------------------------------------------
Montgomery Emerging Markets Portfolio A 24 74 127 271
----------------------------------------------------------------------------
B 23 69 119 255
----------------------------------------------------------------------------
C 23 71 122 261
------------------------------------------------------------------------------------------------------------------------------------
Seligman Capital Portfolio A 16 50 87 189
----------------------------------------------------------------------------
B 15 46 79 172
----------------------------------------------------------------------------
C 15 47 81 178
------------------------------------------------------------------------------------------------------------------------------------
Seligman Communications and Information Portfolio A 19 58 101 218
----------------------------------------------------------------------------
B 17 54 93 202
----------------------------------------------------------------------------
C 18 55 95 207
------------------------------------------------------------------------------------------------------------------------------------
Seligman Global Technology Portfolio A 23 72 123 264
----------------------------------------------------------------------------
B 22 67 115 248
----------------------------------------------------------------------------
C 22 69 118 253
------------------------------------------------------------------------------------------------------------------------------------
Stein Roe Small Company Growth Portfolio A 14 45 78 170
----------------------------------------------------------------------------
B 13 40 70 153
----------------------------------------------------------------------------
C 13 42 72 159
------------------------------------------------------------------------------------------------------------------------------------
Strong International Stock Portfolio A 19 60 103 223
----------------------------------------------------------------------------
B 18 55 95 207
----------------------------------------------------------------------------
C 18 57 98 213
------------------------------------------------------------------------------------------------------------------------------------
Strong Schafer Value Portfolio A 20 61 105 227
----------------------------------------------------------------------------
B 18 57 97 212
----------------------------------------------------------------------------
C 19 58 100 217
------------------------------------------------------------------------------------------------------------------------------------
Transamerica VIF Growth Portfolio A 16 51 87 190
----------------------------------------------------------------------------
B 15 46 79 174
----------------------------------------------------------------------------
C 15 47 82 179
------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock Portfolio A 18 55 95 206
----------------------------------------------------------------------------
B 16 51 87 190
----------------------------------------------------------------------------
C 17 52 90 195
------------------------------------------------------------------------------------------------------------------------------------
Wanger U.S. Small Cap Advisor Portfolio A 18 56 96 208
----------------------------------------------------------------------------
B 16 51 88 192
----------------------------------------------------------------------------
C 17 53 91 198
------------------------------------------------------------------------------------------------------------------------------------
Wanger International Small Cap Advisor Portfolio A 23 70 120 257
----------------------------------------------------------------------------
B 21 65 112 242
----------------------------------------------------------------------------
C 22 67 115 247
------------------------------------------------------------------------------------------------------------------------------------
Warburg Pincus International Equity Portfolio A 21 65 111 240
----------------------------------------------------------------------------
B 20 60 104 224
----------------------------------------------------------------------------
C 20 62 106 230
------------------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Growth Portfolio A 19 59 102 221
----------------------------------------------------------------------------
B 18 55 94 205
----------------------------------------------------------------------------
C 18 56 97 211
------------------------------------------------------------------------------------------------------------------------------------
WRL Alger Aggressive Growth Portfolio A 17 52 90 197
----------------------------------------------------------------------------
B 15 48 82 180
----------------------------------------------------------------------------
C 16 49 85 186
------------------------------------------------------------------------------------------------------------------------------------
WRL J.P. Morgan Real Estate Securities Portfolio A 18 55 95 206
----------------------------------------------------------------------------
B 16 51 87 190
----------------------------------------------------------------------------
C 17 52 90 195
------------------------------------------------------------------------------------------------------------------------------------
WRL Janus Global Portfolio A 17 54 92 201
----------------------------------------------------------------------------
B 16 49 84 185
----------------------------------------------------------------------------
C 16 51 87 190
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

10
<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
WRL Janus Growth Portfolio A 16 50 86 188
--------------------------------------------------------------------------
B 15 45 78 171
--------------------------------------------------------------------------
C 15 47 81 177
----------------------------------------------------------------------------------------------------------------------------------
WRL LKCM Strategic Total Return Portfolio A 16 51 88 191
--------------------------------------------------------------------------
B 15 46 80 175
--------------------------------------------------------------------------
C 15 48 82 180
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

You should not consider this example to be a representation of past or future
expenses or performance. Actual expenses may be higher than those shown, subject
to the guarantees in the Policy.

1. THE ANNUITY POLICY

The Advisor's Edge variable annuity is a flexible-premium multi-funded variable
annuity offered by Peoples Benefit. The Policy provides a means of investing on
a tax-deferred basis in thirty-five Portfolios of the underlying mutual funds
(the "Portfolios") and a fixed account. The fixed account offers interest rates
that Peoples Benefit guarantees will not decrease during the selected guaranteed
period. There may be a different interest rate for each different guaranteed
period that you select. The Guaranteed Period Options are the various interest
rate periods for the fixed account which Peoples Benefit may offer and into
which Premium Payments may be paid or amounts transferred.

Who Should Invest

The Policy is intended for long-term investors who want tax-deferred
accumulation of funds, generally for retirement but also for other long-term
investment purposes. The tax-deferred feature of the Policy is most attractive
to investors in high federal and state marginal tax brackets who have exhausted
other avenues of tax deferral, such as pre-tax contributions to employer-
sponsored retirement or savings plans. The tax-deferred feature of the Policy is
unnecessary when the Policy is purchased to fund a qualified plan.

About the Policy

The Advisor's Edge variable annuity is a policy between you, the Policy Owner,
and Peoples Benefit, the issuer of the Policy.

The Policy provides benefits in two distinct phases: accumulation and income.

Accumulation Phase

The Accumulation Phase starts when you purchase your Policy and ends immediately
before the Annuity Commencement Date, when the Income Phase starts. During the
Accumulation Phase, you choose to allocate your investment in the Policy among
the thirty-five available Portfolios and the fixed account. The Policy is a
variable annuity because the value of your investment in the Subaccounts can go
up or down depending on the investment performance of the Subaccounts you
choose. The Policy is a flexible-premium annuity because you can make additional
investments of at least $500 until the Income Phase begins. During this phase,
you are generally not taxed on earnings from amounts invested unless you
withdraw them.

Other benefits available during the Accumulation Phase include the ability to:

. Make transfers among your Subaccount choices at no charge and without
current tax consequences. (See Transfers Among the Subaccounts and the
Fixed Account, page 20.)

. Withdraw all or part of your money with no surrender penalty charged by
Peoples Benefit, although you may incur income taxes and a 10% penalty tax.
(See Full and Partial Withdrawals, page 26.)

11
<PAGE>

Income Phase

During the Income Phase, you receive regular annuity payments. The amount of
these payments is based in part on the amount of money accumulated under your
Policy and the Annuity Payment Option you select. The Annuity Payment Options
are explained at ANNUITY PAYMENTS, page 12.

At your election, payments can be either variable or fixed. If variable, the
payments rise or fall depending on the investment performance of the Subaccounts
you choose. If fixed, the payment amounts are guaranteed.

Annuity payments are available in a wide variety of options, including payments
over a specified period or for life (for either a single life or joint lives),
with or without a guaranteed number of payments.

The Separate Account

When you purchase a Policy, money you have allocated to the Subaccounts is
deposited into Peoples Benefit's Separate Account V. The Separate Account
contains a number of Subaccounts that invest exclusively in shares of the
corresponding Portfolios. The investment performance of each Subaccount is
linked directly to the investment performance of one of the Portfolios. Assets
in the Separate Account belong to Peoples Benefit but are accounted for
separately from Peoples Benefit's other assets and can be used only to satisfy
its obligations to Policy Owners.

2. ANNUITY PAYMENTS

During the Income Phase, you receive regular annuity payments under a wide range
of Annuity Payment Options.

Starting the Income Phase

As Policy Owner, you exercise control over when the Income Phase begins by
specifying an Annuity Commencement Date on the customer order form when you
purchase the Policy. The Annuity Commencement Date is the date on which annuity
payments begin and is always the first day of the month you specify. You may
also change the Annuity Commencement Date at any time in writing, as long as the
Annuitant or Joint Annuitant is living and Peoples Benefit receives the request
at least 30 days before the then-scheduled Annuity Commencement Date. Any
Annuity Commencement Date you request must be at least 30 days from the day
Peoples Benefit receives written notice of it. The latest possible Annuity
Commencement Date Peoples Benefit will accept without prior approval is the
first day of the month after the Annuitant's 85th birthday.

The Annuity Commencement Date for Qualified Policies may also be controlled by
endorsements, the plan, or applicable law.

Annuity Payment Options

The Policy provides five Annuity Payment Options that are described below. You
may choose any combination of Annuity Payment Options. Peoples Benefit will use
your Adjusted Policy Value to provide these annuity payments. The Adjusted
Policy Value is the Policy Value increased or decreased by any applicable Excess
Interest Adjustment. If the Adjusted Policy Value on the Annuity Commencement
Date is less than $2,000, Peoples Benefit reserves the right to pay it in one
lump sum in lieu of applying it under an Annuity Payment Option. You can receive
annuity payments monthly, quarterly, semi-annually, or annually. (Peoples
Benefit reserves the right to change the frequency if payments would be less
than $50.)

Unless you choose to receive variable payments under Annuity Payment Options 3-V
or 5-V, the amount of each payment will be set on the Annuity Commencement Date
and will not change. You may, however, choose to receive variable payments under
Annuity Payment Options 3-V and 5-V. The dollar amount of the first variable
payment will be determined in accordance with the annuity payment rates set
forth in the applicable table contained in your Policy. The dollar amount of
additional variable payments will vary based on the investment performance of
the subaccount(s). The dollar amount of each variable payment after the first
may increase, decrease, or remain constant. If the actual investment performance
exactly matched the assumed investment return of 5% at all times, the amount of
each variable annuity payment would remain equal. If actual investment
performance exceeds the assumed investment return, the amount of the variable
annuity payments would increase. Conversely, if actual investment performance is
lower than the assumed investment return, the amount of the variable annuity
payments would decrease.

12
<PAGE>

A charge for Premium Taxes and an Excess Interest Adjustment may be made when
annuity payments begin.

The Annuity Payment Options are explained below. Options 1, 2, and 4 are fixed
only. Options 3 and 5 can be fixed or variable.

. Payment Option 1 - Interest Payments. We will pay the interest on the
amount we use to provide annuity payments in equal payments, or this amount
may be left to accumulate for a period of time to which you and Peoples
Benefit agree. You and Peoples Benefit will agree on withdrawal rights when
you elect this option.

. Payment Option 2 - Income for a Specified Period. We will make level
payments only for a fixed period you choose. No funds will remain at the
end.

. Payment Option 3 - Life Income. You may choose between:

Fixed Payments
. No Period Certain - We will make level payments only during the
annuitant's lifetime.
. 10 Years Certain - We will make level payments for the longer of the
annuitant's lifetime or ten years.
. Guaranteed Return of Policy Proceeds - We will make level payments for
the longer of the annuitant's lifetime or until the total dollar
amount of payments we make to you equals the amount applied to this
option.

Variable Payments
. No Period Certain - Payments will be made only during the lifetime of
the annuitant.
. 10 Years Certain - Payments will be made for the longer of the
annuitant's lifetime or ten years.

. Payment Option 4 - Income of a Specified Amount. Payments are made for any
specified amount until the amount applied to this option, with interest, is
exhausted. This will be a series of level payments followed by a smaller
final payment.

. Payment Option 5 - Joint and Survivor Annuity. You may choose between:

Fixed Payments
. Payments are made during the joint lifetime of the annuitant and a
joint annuitant of your selection. Payments will be made as long as
either person is living.
Variable Payments
. Payments are made during the joint lifetime of the annuitant and a
joint annuitant of your selection. Payments will be made as long as
either person is living.

Other annuity payment options may be arranged by agreement with Peoples Benefit.
Certain annuity payment options may not be available in all states.

NOTE CAREFULLY:

IF:

. you choose Life Income with No Period Certain or a Joint and Survivor
Annuity; and
. the annuitant(s) dies before the due date of the second (third, fourth,
etc.) annuity payment;

THEN:
. we may make only one (two, three, etc.) annuity payments.

IF:
. you choose Income for a Specified Period, Life Income with 10 years
Certain, Life Income with Guaranteed Return of Policy Proceeds, or Income
of a Specified Amount; and
. the person receiving payments dies prior to the end of the guaranteed
period;

THEN:
. the remaining guaranteed payments will be continued to that person's
beneficiary, or their present value may be paid in a single sum.

13
<PAGE>

We will not pay interest on amounts represented by uncashed annuity payment
checks if the postal or other delivery service is unable to deliver checks to
the payee's address of record. The person receiving payments is responsible for
keeping Peoples Benefit informed of their current address.

Calculating Annuity Payments

Fixed Annuity Payments. Each fixed Annuity Payment is guaranteed to be at least
the amount shown in the Policy's Annuity Tables corresponding to the Annuity
Payment Option selected.

Variable Annuity Payments. To calculate variable Annuity Payments, Peoples
Benefit determines the amount of the first variable Annuity Payment. The first
variable Annuity Payment will equal the amount shown in the applicable Annuity
Table in the Policy. This amount depends on the value of your Policy on the
Annuity Commencement Date, the sex and age of the Annuitant (and Joint Annuitant
where there is one), the Annuity Payment Option selected, and any applicable
Premium Taxes.

Impact of Annuitant's Age on Annuity Payments. For either fixed or variable
Annuity Payments involving life income, the actual ages of the Annuitant and
Joint Annuitant will affect the amount of each payment. Since payments based on
the lives of older Annuitants and Joint Annuitants are expected to be fewer in
number, the amount of each Annuity Payment will be greater.

Impact of Annuitant's Sex on Annuity Payments. For either fixed or variable
Annuity Payments involving life income, the sex of the Annuitant and Joint
Annuitant will affect the amount of each payment. Since payments based on the
lives of male Annuitants and Joint Annuitants are expected to be fewer in
number, in most states the amount of each Annuity Payment will be greater than
for female Annuitants and Joint Annuitants.

Impact of Length of Payment Periods on Annuity Payments. The value of all
payments, both fixed and variable, will be greater for shorter guaranteed
periods than for longer guaranteed periods, and greater for single-life
annuities than for joint and survivor annuities, because they are expected to be
made for a shorter period.

A Few Things to Keep in Mind Regarding Annuity Payments

. If an Annuity Payment Option is not selected, Peoples Benefit will assume
that you chose the Payment Option 3 - Life Income (with 10 years of
payments guaranteed). Any amounts in a Subaccount immediately before the
Income Phase begins will be applied under a variable Annuity Payment Option
based on the performance of that Subaccount.

. Peoples Benefit reserves the right to change the frequency if payments
would be less than $50. If on the Annuity Commencement Date, the Adjusted
Policy Value is less than $2,000, Peoples Benefit reserves the right to pay
it in one lump sum in lieu of applying it under an annuity payment option.

. From time to time, Peoples Benefit may require proof that the Annuitant,
Joint Annuitant, or Policy Owner is living.

. If someone has assigned ownership of a Policy to you, or if a non-natural
person (e.g., a corporation) owns a Policy, you may not start the Income
Phase of the Policy without Peoples Benefit's consent.

. At the time Peoples Benefit calculates your fixed Annuity Payments, Peoples
Benefit may offer more favorable rates than those guaranteed in the Annuity
Tables found in the Policy.

. Once Annuity Payments begin, you may not select a different Annuity Payment
Option. Nor may you cancel an Annuity Payment Option after Annuity Payments
have begun.

. If you have selected a variable Annuity Payment Option, you may
change the Subaccount funding the variable Annuity Payments by written
request or by calling 800-866-6007.

. You may select an Annuity Payment Option and allocate a portion of the
value of your Policy to a fixed version of that Annuity Payment Option and
a portion to a variable version of that Annuity Payment Option (assuming
the Annuity Payment Option is available on both a fixed and variable
basis). You may not select more than one Annuity Payment Option.

. If you choose an Annuity Payment Option and the postal or other delivery
service is unable to deliver checks to the Payee's address of record, no
interest will accrue on amounts represented by uncashed Annuity Payment
checks. It is the Payee's responsibility to keep Peoples Benefit informed
of the Payee's most current address of record.

14
<PAGE>

3. PURCHASE

Customer Order Form and Issuance of Policies

To invest in the Advisor's Edge variable annuity, you should send a completed
customer order form and your Initial Premium Payment to the address indicated on
the customer order form. If you wish to make a personal delivery by hand or
courier to Peoples Benefit of your completed customer order form and Initial
Premium Payment (rather than through the mail), do so at our Administrative
Offices, 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499. Peoples Benefit
will issue a Policy only if the Annuitant and Joint Annuitant are 85 years of
age or less.

If the customer order form and any other required documents are received in good
order, Peoples Benefit will issue the Policy and will credit the Initial Premium
Payment within two Business Days after receipt. (A Business Day is any day that
the New York Stock Exchange is open for trading.) Along with the Policy, Peoples
Benefit will also send a Policy acknowledgment form, which you should complete,
sign, and return in accordance with its instructions. Please note that until
Peoples Benefit receives the acknowledgment 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 Policy.

If Peoples Benefit cannot credit the Initial Premium Payment because the
customer order form or other required documentation is incomplete, Peoples
Benefit will contact the applicant in writing, explain the reason for the delay,
and refund the Initial Premium Payment within five Business Days unless the
applicant consents to Peoples Benefit's retaining the Initial Premium Payment
and crediting it as soon as the necessary requirements are fulfilled.

In addition to Non-Qualified Policies, Peoples Benefit also offers the Advisor's
Edge as a Qualified Policy. Note that Qualified Policies contain certain other
restrictive provisions limiting the timing of payments to and distributions from
the Qualified Policy. (See QUALIFIED INDIVIDUAL RETIREMENT ANNUITIES, page 26.)

DEFINITION

Qualified Policy

When the term "Qualified Policy" is used in this prospectus we mean a Policy
that qualifies as an individual retirement annuity under either Section
403(b), 408(b), or 408A of the Internal Revenue Code.

Premium Payments

A Premium Payment is any amount you use to buy or add to the Policy. A Premium
Payment may be reduced by any applicable premium tax. In that case, the
resulting amount is called a Net Premium Payment.

A Few Things to Keep in Mind Regarding Premium Payments

. The minimum Initial Premium Payment for a Non-Qualified Policy is $10,000.

. The minimum Initial Premium Payment for a Qualified Policy is $1,000 (or
$50 if by payroll deduction).

. You may make additional Premium Payments at any time during the
Accumulation Phase and while the Annuitant or Joint Annuitant, if
applicable, is living. Additional Premium Payments must be at least $500
for Non-Qualified Policies. Additional Premium Payments must be at least
$25 for Qualified Policies.

. Additional Premium Payments received before the close of the New York Stock
Exchange (usually 4:00 p.m. Eastern time) are credited to the Policy as of
the close of business that same day.

. The total of all Premium Payments may not exceed $1,000,000 without our
prior approval.

. Your Initial Net Premium Payment will be immediately invested among the
Subaccounts selected in your customer order form. See Allocation of Premium
Payments, page 16, for more information.

15
<PAGE>

The date on which the Policy is issued is called the Policy Date. A Policy
Anniversary is any anniversary of the Policy Date. A Policy Year is a period of
twelve months starting with the Policy Date or any Policy Anniversary.

DEFINITION

Premium Tax

A Premium Tax is a regulatory tax some states assess on the Premium Payments
made into a Policy. If we should have to pay any Premium Tax, we will deduct it
from the Policy Value on the Annuity Commencement Date, date of death, or date
of full Surrender.

As of the date of this Prospectus, the following state assesses a Premium Tax on
all initial and subsequent Premium Payments:

Non-
Qualified Qualified
South Dakota.................................. 0.00% 1.25%

As of the date of this Prospectus, the following states assess a Premium Tax
against the Adjusted Policy Value if the Owner chooses an Annuity Payment
Option instead of receiving a lump sum distribution:

Non-
Qualified Qualified
California.................................... 0.50% 2.35%
Maine......................................... 0.00 2.00
Nevada........................................ 0.00 3.50
West Virginia................................. 1.00 1.00
Wyoming....................................... 0.00 1.00

Purchasing by Wire

For wiring instructions, please contact our Administrative Office at
800-866-6007.

Allocation of Premium Payments

You specify on the customer order form what portion of your Premium Payments you
want to be allocated among which Subaccounts and which Guaranteed Period
Options. You may allocate your Premium Payments to one or more Subaccounts or to
any of the Guaranteed Period Options. All allocations you make to the
Subaccounts must be in whole-number percentages totaling 100%.

Should your investment goals change, you may change the allocation percentages
for additional Net Premium Payments by sending written notice to or by calling
Peoples Benefit. Requests for Transfers received before the close of the New
York Stock Exchange (generally 4 p.m. Eastern time) are processed as of that
day. Requests received after the close of the New York Stock Exchange are
processed the next Business Day.

16
<PAGE>

WHAT'S MY POLICY WORTH TODAY?

Policy Value

The Policy Value of your Policy is the value of all amounts accumulated under
the Policy during the Accumulation Phase (similar to the current market value of
a mutual fund account). When the Policy is opened, the Policy Value is equal to
your Initial Net Premium Payment. On any Business Day thereafter, the Policy
Value equals the Policy Value from the previous Business Day,

plus -

. any additional Net Premium Payments credited

. any increase in the Policy Value due to investment results of the
Portfolio(s) you selected and the interest credited to the Guaranteed
Period Options

. Positive Excess Interest Adjustment, if applicable

minus -

. any decrease in the Policy Value due to investment results of the
Subaccounts you selected

. the daily Mortality and Expense Risk Fee

. the daily Administrative Expense Charge

. the Annual Policy Service Charge, if applicable

. any withdrawals

. any charges for Transfers made after the first twelve in a Policy Year

. Negative Excess Interest Adjustment, if applicable

. any Premium Taxes that occur during the Valuation Period.

The Valuation Period is any period between two successive Business Days
beginning at the close of business of the first Business Day and ending at the
close of business of the next Business Day.

You should expect the Policy Value of your Policy to change from Valuation
Period to Valuation Period, reflecting the investment experience of the
Portfolios you have selected as well as the daily deduction of charges.

An Accumulation Unit is a measure of your ownership interest in the Policy
during the Accumulation Phase. When you allocate your Net Premium Payments to a
selected Portfolio, Peoples Benefit will credit a certain number of Accumulation
Units to your Policy. Peoples Benefit determines the number of Accumulation
Units it credits by dividing the dollar amount you have allocated to a
Subaccount by the Accumulation Unit Value for that Subaccount as of the end of
the Valuation Period in which the payment is received. Each Subaccount has its
own Accumulation Unit Value (similar to the share price (net asset value) of a
mutual fund). The Accumulation Unit Value varies each Valuation Period with the
net rate of return of the Subaccount. The net rate of return reflects the
performance of the Subaccount for the Valuation Period and is net of asset
charges to the Subaccount. Per Subaccount, the Policy Value equals the number of
Accumulation Units multiplied by the Accumulation Unit Value for that
Subaccount.

All dividends and capital gains earned will be reinvested and reflected in the
Accumulation Unit Value. Only in this way can these earnings remain
tax-deferred.

4. INVESTMENT OPTIONS

The Advisor's Edge variable annuity offers you a means of investing in
thirty-five Portfolios offered by twelve different investment companies (each
investment company a "Fund") and a fixed account. The companies that provide
investment advice and administrative services for the underlying fund portfolios
offered through this Policy are listed below. More detailed information,
including an explanation of the Portfolio's investment objectives, may be found
in the current prospectuses for the underlying funds, which are attached to this
prospectus. You should read the prospectuses for the underlying funds carefully
before you invest. For information about the fixed account and the Guaranteed
Period Options, see The Fixed Account, page 19.

17
<PAGE>

The general public may invest in the Portfolios only through certain insurance
policies and qualified plans. The investment objectives and policies of the
Portfolios may be similar to those of certain publicly available funds or
portfolios. However, you should not expect that the investment results of any
publicly available funds or portfolios will be comparable to those of the
Portfolios.

The Policy was not designed for professional market timing organizations or
other persons that use programmed, large, or frequent transfers. The use of such
exchanges may be disruptive to an underlying fund portfolio. The Company
reserves the right to reject any Premium Payment or exchange request from any
person, if, in the Company's judgment, an underlying fund portfolio would be
unable to invest effectively in accordance with its investment objectives and
policies or would otherwise be potentially adversely affected or if an
underlying portfolio would reject the Company's purchase order.

Alliance Variable Products Series Fund, Inc.
Advised by Alliance Capital Management L.P.
Alliance Growth Portfolio
Alliance Premier Growth Portfolio
Alliance Technology Portfolio

DFA Investment Dimensions Group, Inc.
Advised by Dimensional Fund Advisors, Inc.
DFA Small Value Portfolio
DFA Large Value Portfolio
DFA International Value Portfolio
DFA International Small Portfolio
DFA Short-Term Fixed Portfolio
DFA Global Bond Portfolio

The Dreyfus Socially Responsible Growth Fund, Inc.
Advised by The Dreyfus Corporation
Dreyfus Socially Responsible Growth Portfolio

Endeavor Series Trust
Advised by Endeavor Management Co.
Dreyfus Small Cap Value Portfolio
Endeavor Enhanced Index Portfolio
T. Rowe Price International Stock Portfolio

The Federated Insurance Series
Advised by Federated Investment Management Company
Federated American Leaders Portfolio
Federated High Income Bond Portfolio
Federated Prime Money Portfolio
Federated U.S. Government Securities Portfolio
Federated Utility Portfolio

The Montgomery Funds III
Advised by Montgomery Asset Management, LLC
Montgomery Growth Portfolio
Montgomery Emerging Markets Portfolio

Seligman Portfolios, Inc.
Advised by J. & W. Seligman & Co.
Seligman Capital Portfolio
Seligman Communications and Information Portfolio
Seligman Global Technology Portfolio

SteinRoe Variable Investment Trust
Advised by Stein Roe & Farnham Incorporated
Stein Roe Small Company Growth Portfolio

18
<PAGE>

Strong Variable Insurance Funds, Inc.
Advised by Strong Capital Management, Inc.
Strong International Stock Portfolio
Strong Schafer Value Portfolio

Transamerica Variable Insurance Fund, Inc.
Advised by Transamerica Investment Management, LLC
Transamerica VIF Growth Portfolio

Wanger Advisors Trust
Advised by Wanger Asset Management, L.P.
Wanger U.S. Small Cap Advisor Portfolio
Wanger International Small Cap Advisor Portfolio

Warburg Pincus Trust
Advised by Credit Suisse Asset Management
Warburg Pincus International Equity Portfolio
Warburg Pincus Small Company Growth Portfolio

WRL Series Fund, Inc.
Advised by WRL Investment Management, Inc.
WRL Alger Aggressive Growth Portfolio
WRL J.P. Morgan Real Estate Securities Portfolio
WRL Janus Growth Portfolio
WRL LKCM Strategic Total Return Portfolio

The following Subaccount is only available to Owner's who held an investment in
this Subaccount on September 1, 2000. However, if you withdraw all of your money
from this Subaccount after September 1, 2000, you may not reinvest your money
into this Subaccount.

WRL Series Fund, Inc.
Advised by WRL Investment Management, Inc.
WRL Janus Global Portfolio

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

Additional information regarding 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 investment
advisors to some of the Funds may compensate Peoples Benefit for providing
administrative services in connection with some of the Portfolios. Such
compensation will be paid from the assets of the investment advisors.

The Fixed Account

Premium Payments allocated and amounts transferred to the fixed account become
part of Peoples Benefit's general account. Interests in the general account have
not been registered under the Securities Act of 1933, nor is the general account
registered as an investment company under the 1940 Act. Accordingly, neither the
general account nor any interests therein are generally subject to the
provisions of the 1933 and 1940 Acts. Peoples Benefit has been advised that the
staff of the SEC has not reviewed the disclosures in this prospectus which
relate to the fixed account.

We guarantee that the interest credited to the fixed account will not be less
than 3% per year. At the end of the Guaranteed Period Option you selected, the
value in the Guaranteed Period Option will automatically be transferred into a
new Guaranteed Period Option of the same length (or the next shorter period if
the same period is no longer offered) at the current interest rate for that
period. You can transfer to another investment choice by giving us notice within
30 days before the end of the expiring guaranteed period.

19
<PAGE>

Surrenders or partial withdrawals from a Guaranteed Period Option of the fixed
account are subject to an Excess Interest Adjustment. This adjustment may
increase or decrease the amount of interest credited to your policy. The Excess
Interest Adjustment will not decrease the interest credited to your policy below
3% per year, however. You bear the risk that we will not credit interest greater
than 3% per year. We determine credited rates, which are guaranteed for at least
one year, in our sole discretion.

If you select the fixed account, your money will be placed with Peoples
Benefit's other general assets. The amount of money you are able to accumulate
in the fixed account during the Accumulation Phase depends upon the total
interest credited. The amount of annuity payments you receive during the income
phase from the fixed portion of your policy will remain level for the entire
income phase.

Transfers Among the Subaccounts and the Fixed Account

Should your investment goals change, you may make unlimited transfers of money
among the Subaccounts at no cost, subject to the following conditions:

. The minimum amount you may transfer from a Subaccount is $500 (unless the
Policy Value in a Subaccount is less than $500).

. Peoples Benefit does not currently charge a fee for transfers among the
Subaccounts, although it reserves the right to charge a $10 fee for
Transfers in excess of 12 per Policy Year.

. Transfers out of a Guaranteed Period Option of the fixed account are
limited to the following:

+ Within 30 days prior to the end of the guaranteed period you must
notify us that you wish to transfer the amount in that Guaranteed
Period Option to another investment choice. No Excess Interest
Adjustment will apply.

+ Transfers of amounts equal to interest credited. This may affect your
overall interest-crediting rate, because transfers are deemed to come
from the oldest Premium Payment first.

+ Other than at the end of a guaranteed period, transfers of amounts
from the Guaranteed Period Option (in excess of interest credited),
are subject to an Excess Interest Adjustment. If the adjustment is
negative, then the maximum amount you can transfer is 25% of the
amount in that Guaranteed Period Option, less any previous transfers
during the current policy year. If the adjustment is positive, then we
do not limit the amount that you can transfer.

+ Transfers of the Guaranteed Period Option amounts equal to interest
credited must be at least $50.

. There are no transfers permitted out of the Dollar Cost Averaging Fixed
Account Option except through the dollar cost averaging program.

Telephone Transactions

You may establish the telephone transfer privilege on your Policy by completing
the appropriate section of the Policy acknowledgment form you will receive with
your Policy or by completing a separate telephone authorization form at a later
date. You may also authorize a third party to initiate transactions by telephone
by completing a third party authorization form or the appropriate section of the
Policy acknowledgment form.

Peoples Benefit will take reasonable steps to confirm that instructions
communicated by telephone are genuine. Before we act on any request, we will ask
the caller for his or her Policy number and Social Security Number. In addition,
we will take reasonable steps to confirm that instructions communicated by
telephone from a third party are genuine. The third party caller will be asked
for his or her name, company affiliation (if appropriate), the Policy number to
which he or she is referring, and the Social Security number of the Policy
Owner. This information will be verified with the Policy Owner's records prior
to processing a transaction, and all transactions performed will be verified
with the Policy Owner through a written confirmation statement. We will record
all calls. 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>

Asset Rebalancing

During the Accumulation Phase, you may instruct us to make automatic transfers
of amounts among the Subaccounts in order to maintain a desired allocation of
Policy Value among those Subaccounts. We will "rebalance" monthly, quarterly,
semi-annually, or annually, beginning on the date you select. You must select
the percentage of the Policy Value you desire in each of the various Subaccounts
offered (totaling 100%). Rebalancing can be started, stopped, or changed at any
time, except that rebalancing will not be available when Dollar-Cost Averaging
is in effect or when any other transfer is requested.

Dollar Cost Averaging Program

During the Accumulation Phase, you may instruct us to automatically transfer
money from the Dollar Cost Averaging Fixed Account Option or the Federated Prime
Money Portfolio into any other subaccounts. There is no charge for this program.

Complete and clear instructions must be received before a dollar cost averaging
program will begin. The instructions must include:

. the subaccounts into which money from the Dollar Cost Averaging Fixed
Account (or other subaccount(s) used for dollar cost averaging) is to be
transferred; and
. either the dollar amount to transfer monthly or quarterly (each transfer
must be at least $500) or the number of transfers (minimum of 6 monthly or
4 quarterly and maximum of 24 monthly or 8 quarterly).

Transfers must begin within 30 days. We will make the transfers on the 28th day
of the applicable month. You may change your allocations at anytime.

Only one dollar cost averaging program can run at one time. This means that any
addition to a dollar cost averaging program must change either the length of the
program or the dollar amount of the transfers. New instructions must be received
each time there is an addition to a dollar cost averaging program.

Any amount in the Dollar Cost Averaging Fixed Account (or other subaccount(s)
used for dollar cost averaging) for which we have not received complete and
clear instructions will remain in the Dollar Cost Averaging Fixed Account (or
other such subaccount) until we receive the instructions. If we have not
received complete and clear instructions within 30 days, the interest credited
in the Dollar Cost Averaging Fixed Account may be adjusted downward, but not
below the guaranteed effective annual interest rate of 3%.

We may credit different interest rates for dollar cost averaging programs of
varying time periods. If you discontinue the dollar cost averaging program
before its completion, then the interest credited on amounts in the Dollar Cost
Averaging Fixed Account may be adjusted downward, but not below the minimum
guaranteed effective annual interest rate of 3%.

A CLOSER LOOK AT

Dollar-Cost Averaging

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 Subaccounts each month, more Accumulation Units are credited to a
Subaccount if the value per Accumulation Unit is low, while fewer Accumulation
Units are credited if the value per Accumulation Unit is high. Therefore, it is
possible to achieve a lower average cost per Accumulation Unit over the long
term if the Accumulation Unit Value declines over that period. 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.

21
<PAGE>

5. EXPENSES

There are charges and expenses associated with the Policy that reduce the return
on your investment in the Policy.

Excess Interest Adjustment

Withdrawals of Cash Value from the fixed account may be subject to an Excess
Interest Adjustment. This adjustment could retroactively reduce (or increase)
the interest credited in the fixed account to the guaranteed minimum of 3% per
year. See "Excess Interest Adjustment" in Section 7 of this prospectus.

Mortality and Expense Risk Fee

Peoples Benefit charges a fee as compensation for bearing certain mortality and
expense risks under the Policy. The annual charge is assessed daily based on the
net assets of the Separate Account. The annual Mortality and Expense Risk Fee is
dependent on the death benefit option you select on the customer order form. For
the Return of Premium Death Benefit Option the mortality and expense risk fee is
at an annual rate of 0.45%. For the 6 Year Step-Up Death Benefit Option the
mortality and expense risk fee is at an annual rate of 0.50%. For the Double
Enhanced Death Benefit Option the mortality and expense risk fee is at an annual
rate of 0.60%.

We guarantee that this annual charge will not increase. If the charge is more
than sufficient to cover actual costs or assumed risks, any excess will be added
to Peoples Benefit's surplus. If the charges collected under the Policy are not
enough to cover actual costs or assumed risks, then Peoples Benefit will bear
the loss.

A CLOSER LOOK AT

The Mortality and Expense Risk Fee

Peoples Benefit assumes mortality risk in two ways. First, where Policy Owners
elect an Annuity Payment Option under which Peoples Benefit guarantees a number
of payments over a life or joint lives, Peoples Benefit assumes the risk of
making monthly annuity payments regardless of how long all Annuitants may live.
Second, Peoples Benefit assumes mortality risk in guaranteeing a minimum Death
Benefit in the event the Annuitant dies during the Accumulation Phase.

The expense risk that Peoples Benefit assumes is that the charges for
administrative expenses, which are guaranteed not to increase beyond the rates
shown for the life of the Policy, may not be great enough to cover the actual
costs of issuing and administering the Policy.

Administrative Expense Charge

Peoples Benefit assesses each Policy an annual Administrative Expense Charge to
cover the cost of issuing and administering each Policy and of maintaining the
Separate Account. The Administrative Expense Charge is assessed daily at a rate
equal to 0.15% annually of the net asset value of the Separate Account.

Transfer Fee

You are allowed to make 12 free transfers per year before the Annuity
Commencement Date. If you make more than 12 transfers per year, we reserve the
right to charge $10 for each additional transfer. Premium Payments, asset
rebalancing and dollar cost averaging transfers are not considered transfers.
All transfer requests made at the same time are treated as a single request.

Portfolio Expenses

The value of the assets in the Separate Account will 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.

22
<PAGE>

6. TAXES

INTRODUCTION

The following discussion of annuity taxation is general in nature and is based
on Peoples Benefit's understanding of the treatment of annuity policies under
current federal income tax law, particularly Section 72 of the Internal Revenue
Code and various Treasury Regulations and Internal Revenue Service
interpretations dealing with Section 72. The discussion does not touch upon
state or local taxes. It is not tax advice. You should consult with a qualified
tax adviser about your particular situation to ensure that your purchase of a
Policy results in the tax treatment you desire. Additional discussion of tax
matters is included in the Statement of Additional Information.

TAXATION OF ANNUITIES IN GENERAL

Tax Deferral

Special rules in the Internal Revenue Code for annuity taxation exist today. In
general, those rules provide that you are not currently taxed on increases in
value under a Policy until you take some form of withdrawal or distribution from
it. However, it is important to note that, under certain circumstances, you
might not get the advantage of tax deferral, meaning that the increase in value
would be subject to current federal income tax. (See ANNUITY POLICIES OWNED BY
NON-NATURAL PERSONS, page 25, and DIVERSIFICATION STANDARDS, page 25.)

A CLOSER LOOK AT

Tax Deferral

Tax deferral means no current tax on earnings in your Policy. The amount you
would have paid in income taxes can be left in the Policy and earn money for
you.

One tradeoff of tax deferral is that there are certain restrictions on your
ability to access your money, including penalty taxes for early withdrawals.
This is one reason why a variable annuity is intended as a long-term investment.

Another tradeoff is that, when funds are withdrawn, they are taxed at ordinary
income rates instead of capital gains rates, which apply to certain other sorts
of investments.

Taxation of Full and Partial Withdrawals

If you make a full or partial withdrawal (including a Systematic Payout Option)
from a Non-Qualified Policy during the Accumulation Phase, you as Policy Owner
will be taxed at ordinary income rates on earnings you withdraw at that time.
For purposes of this rule, withdrawals are taken first from earnings on the
Policy and then from the money you invested in the Policy. This "investment in
the Policy" can generally be described as the cost of the Policy, and it
generally includes all Premium Payments minus any amounts you have already
received under the Policy that represented the return of invested money. Also
for purposes of this rule, a pledge or assignment of a Policy is treated as a
partial withdrawal from a Policy. (If you are contemplating using your Policy as
collateral for a loan, you may be asked to pledge or assign it.)

Taxation of Annuity Payments

When you take Annuity Payments in the Income Phase of a Non-Qualified Policy,
for tax purposes each payment is deemed to return to you a portion of your
investment in the Policy. Since with a Non-Qualified Policy you have already
paid taxes on those amounts (the Policy was funded with after-tax dollars), you
will not be taxed again on your investment only on your earnings.

For fixed Annuity Payments from a Non-Qualified Policy, in general, Peoples
Benefit calculates the taxable portion of each payment using a formula known as
the "exclusion ratio." This formula establishes the ratio that the investment in
the Policy bears to the total expected amount of Annuity Payments for the term
of the Policy. Peoples Benefit then applies that ratio to each payment to
determine the non-taxable portion of the payment. The remaining portion of each
payment is taxable at ordinary income tax rates.

23
<PAGE>

For variable Annuity Payments from a Non-Qualified Policy, in general, Peoples
Benefit calculates the taxable portion of each payment using a formula that
establishes a specific dollar amount of each payment that is not taxed. To find
the dollar amount, Peoples Benefit divides the investment in the Policy by the
total number of expected periodic payments. The remaining portion of each
payment is taxable at ordinary income tax rates.

Once your investment in the Policy has been returned, the balance of the Annuity
Payments represent earnings only and therefore are fully taxable.

Taxation of Withdrawals and Distributions From Qualified Policies

Generally, the entire amount distributed from a Qualified Policy is taxable to
the Policy Owner. In the case of Qualified Policies with after-tax
contributions, you may exclude the portion of each withdrawal or Annuity Payment
constituting a return of after-tax contributions. Once all of your after-tax
contributions have been returned to you on a non-taxable basis, subsequent
withdrawals or annuity payments are fully taxable as ordinary income. Since
Peoples Benefit has no knowledge of the amount of after-tax contributions you
have made, you will need to make this computation in the preparation of your
federal income tax return.

Tax Withholding

Federal tax law requires that Peoples Benefit withhold federal income taxes on
all distributions unless the recipient elects not to have any amounts withheld
and properly notifies Peoples Benefit of that election. In certain situations,
Peoples Benefit will withhold taxes on distributions to non-resident aliens at a
flat 30% rate unless an exemption from withholding applies under an applicable
tax treaty.

Penalty Taxes on Certain Early Withdrawals

The Internal Revenue Code provides for a penalty tax in connection with certain
withdrawals or distributions that are includible in income. The penalty amount
is 10% of the amount includible in income that is received under the deferred
annuity. However, there are exceptions to the penalty tax. For instance, it does
not apply to withdrawals: (i) made after the taxpayer reaches age 59 1/2; (ii)
made on or after the death of the Policy Owner or, where the Policy Owner is not
an individual, on or after the death of the primary Annuitant (who is defined as
the individual the events in whose life are of primary importance in affecting
the timing and payment under the Policies); (iii) attributable to the disability
of the taxpayer which occurred after the purchase of the Policy (as defined in
the Internal Revenue Code); (iv) 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; (v) from a Qualified Policy (note, however, that other
penalties may apply); (vi) under an immediate annuity policy (as defined in the
Internal Revenue Code); (vii) that can be traced to an investment in the Policy
prior to August 14, 1982; or (viii) under a Policy that an employer purchases on
termination of certain types of qualified plans and that the employer holds
until the employee separates from service.

If the penalty tax does not apply to a withdrawal as a result of the application
of item (iv) above, and the series of payments is subsequently modified (for
some reason other than 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 penalty tax that would have been imposed but for item
(iv) 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.

For Qualified Policies, other tax penalties may apply to certain distributions
as well as to certain contributions and other transactions.

The penalty tax may not apply to distributions from Qualified Policies issued
under Section 408(b) or 408A of the Internal Revenue Code that you use to pay
qualified higher education expenses, the acquisition costs (up to $10,000)
involved in the purchase of a principal residence by a first-time homebuyer, or
a distribution made on account of an Internal Revenue Service levy.

24
<PAGE>

ANNUITY POLICIES OWNED BY NON-NATURAL PERSONS

Where a non-natural person (for example, a corporation) holds a Policy, that
Policy is generally not treated as an annuity policy for federal income tax
purposes, and the income on that Policy (generally the increase in the net
Policy Value less the payments) is considered taxable income each year. This
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. The rule also
does not apply where the estate of a decedent acquires a Policy, where an
employer purchases a Policy on behalf of an employee upon termination of a
qualified plan, or to an immediate annuity (as defined in the Internal Revenue
Code).

MULTIPLE-POLICIES RULE

All non-qualified annuity policies issued by the same company (or affiliate) to
the same Policy Owner during any calendar year are to be aggregated and treated
as one policy for purposes of determining the amount includible in the
taxpayer's gross income. Thus, any amount received under any Policy prior to the
Policy's Annuity Commencement 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 policies. The Treasury Department has specific
authority to issue regulations that prevent the avoidance of the
multiple-policies rules through the serial purchase of annuity policies 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
Policies purchased by the same Policy Owner. Accordingly, a Policy Owner should
consult a tax adviser before purchasing more than one Policy or other annuity
policies. (The aggregation rules do not apply to immediate annuities (as defined
in the Internal Revenue Code).)

TRANSFERS OF ANNUITY POLICIES

Any transfer of a Non-Qualified Policy during the Accumulation Phase for less
than full and adequate consideration will generally trigger income tax (and
possibly the 10% federal penalty tax) on the gain in the Policy to the Policy
Owner at the time of such transfer. The transferee's investment in the Policy
will be increased by any amount included in the Policy Owner's income. This
provision, however, does not apply to transfers between spouses or former
spouses incident to a divorce that are governed by Internal Revenue Code Section
1041(a).

ASSIGNMENTS OF ANNUITY POLICIES

A transfer of ownership in a Policy, a collateral assignment, or the designation
of an Annuitant or other beneficiary who is not also the Policy Owner may result
in tax consequences to the Policy Owner, Annuitant, or beneficiary that this
prospectus does not discuss. A Policy Owner considering such a transfer or
assignment of a Policy should contact a tax adviser about the potential tax
effects of such a transaction.

DIVERSIFICATION STANDARDS

To comply with certain regulations under Internal Revenue Code Section 817(h),
after a start-up period, each Subaccount of the Separate Account will be
required to diversify its investments in accordance with certain diversification
standards. A "look-through" rule applies that suggests that each Subaccount of
the Separate Account will be tested for compliance with the diversification
standards by looking through to the assets of the Portfolios in which each
Subaccount invests.

In connection with the issuance of temporary diversification regulations in
1986, the Treasury Department announced that such regulations did not provide
guidance on the extent to which Policy Owners may direct their investments to
particular subaccounts 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 rulings are issued, the Policy may need to
be modified in order to remain in compliance. For these reasons, Peoples Benefit
reserves the right to modify the Policy, as necessary, to maintain the
tax-deferred status of the Policy.

We intend to comply with the diversification regulations to assure that the
Policy continues to be treated as an annuity policy for federal income tax
purposes.

25
<PAGE>

QUALIFIED INDIVIDUAL RETIREMENT ANNUITIES

Qualified Policies contain special provisions and are subject to limitations on
contributions and the timing of when distributions can and must be made. Tax
penalties may apply to contributions greater than specified limits, loans,
reassignments, distributions that do not meet specified requirements, or in
other circumstances. Anyone desiring to purchase a Qualified Policy should
consult a personal tax adviser.

403(b) Policies

Peoples Benefit will offer Policies in connection with retirement plans adopted
by public school systems and certain tax-exempt organizations for their
employees under Section 403(b) of the Internal Revenue Code. More detailed
information on 403(b) Policies may be found in the Statement of Additional
Information.

7. ACCESS TO YOUR MONEY

The value of your Policy can be accessed during the Accumulation Phase

. by making a full or partial withdrawal

. by electing an Annuity Payment Option

. by your beneficiary in the form of a Death Benefit

. by taking systematic payouts

On or before the Annuity Commencement Date, the Policy Value is equal to the
owner's:

. Premium Payments; minus
. partial withdrawals (including the net effect of any applicable Excess
Interest Adjustments on such withdrawals); plus
. interest credited in the fixed account; plus or minus
. accumulated gains or losses in the separate account; minus
. service charges, rider fees, Premium Taxes, and transfer fees, if any.

On or before the Annuity Commencement Date, the Cash Value is equal to the
Adjusted Policy Value. The Adjusted Policy Value is the Policy Value increased
or decreased by any Excess Interest Adjustment.

Full and Partial Withdrawals

You may withdraw all or part of your money at any time during the Accumulation
Phase of your Policy. All partial withdrawals must be for at least $500.

On the date Peoples Benefit receives your request for a full withdrawal, the
amount payable is the Cash Value. You will receive:

. the value of your policy; plus or minus
. any Excess Interest Adjustment; minus
. any applicable Premium Taxes and service charges

To make a withdrawal, send your written request on the appropriate Peoples
Benefit form to our Administrative Offices.

--------------------------------------------------------------------------------
Because you assume the investment risk for amounts allocated to the Portfolios
under the Policy, the total amount paid upon a full withdrawal of the Policy may
be more or less than the total Premium Payments made (taking prior withdrawals
into account).
--------------------------------------------------------------------------------

26
<PAGE>

Excess Interest Adjustment

Money that you withdraw from a Guaranteed Period Option of the fixed account
before the end of its guaranteed period (the number of years you specified the
money would remain in the Guaranteed Period Option) may be subject to an Excess
Interest Adjustment. At the time you request a withdrawal, if interest rates set
by Peoples Benefit have risen since the date of the initial guarantee, the
Excess Interest Adjustment will result in a lower Cash Value on surrender.
However, if interest rates have fallen since the date of the initial guarantee,
the Excess Interest Adjustment will result in a higher Cash Value on surrender.

Generally, all withdrawals from a Guaranteed Payment Option in excess of 10% of
your cumulative Premium Payment is subject to an Excess Interest Adjustment.
Beginning in the first Policy Year you can withdraw up to 10% of your cumulative
Premium Payments each Policy Year, in one or more withdrawals, without an Excess
Interest Adjustment. This is referred to as the "free percentage."

There will be no Excess Interest Adjustment on any of the following:

. lump sum withdrawals of the free percentage available;
. nursing care and terminal condition withdrawals
. unemployment withdrawals;
. withdrawals to satisfy the minimum distribution requirements; and
. Systematic Payout Option payments, which do not exceed 10% of your
cumulative Premium Payments divided by the number of payouts made per year.

Please note that under these circumstances you will not receive a higher Cash
Value if interest rates have fallen nor will you receive a lower Cash Value if
interest rates have risen.

Systematic Payout Option

You may elect to have a specified dollar amount provided to you from the portion
of your Policy's value allocated to the Portfolios on a monthly, quarterly,
semi-annual, or annual basis. The minimum amount for each Systematic Payout is
$50. If payments are from the fixed account, then they cannot exceed the free
percentage divided by the number of payments per year. Monthly and quarterly
payments must be made by electronic funds transfer directly to your checking or
savings account. There is no charge for this benefit.

You may elect this option by completing a Systematic Payout Option Request Form.

Peoples Benefit must receive your Form at least 30 days before the date you want
Systematic Payouts to begin. Peoples Benefit will process each Systematic Payout
on the date and at the frequency you specified in your Systematic Payout Option
Application Form. The start date for Systematic Payouts must be between the
first and the twenty-eighth day of the month. You may discontinue the Systematic
Payout Option at any time by notifying us in writing at least 30 days prior to
your next scheduled withdrawal date.

We reserve the right to discontinue offering this option upon 30 days' notice,
and we also reserve the right to charge a fee for the option.

Payment of Full or Partial Withdrawal Proceeds

Peoples Benefit will pay cash withdrawals within seven days after receipt of
your written request for withdrawal except in one of the following situations,
in which Peoples Benefit may delay the payment beyond seven days:

. the New York Stock Exchange is closed on a day that is not a weekend or a
holiday, or trading on the New York Stock Exchange is otherwise restricted
. an emergency exists as defined by the SEC, or the SEC requires that trading
be restricted
. the SEC permits a delay for your protection as a Policy Owner
. the payment is derived from premiums paid by check, in which case Peoples
Benefit may delay payment until the check has cleared your bank

27
<PAGE>

Taxation of Withdrawals

For important information on the tax consequences of withdrawals, see Taxation
of Full and Partial Withdrawals, page 23, and Penalty Taxes on Certain Early
Withdrawals, page 24.

Tax Withholding on Withdrawals

If you do not provide Peoples Benefit with a written request not to have federal
income taxes withheld when you request a full or partial withdrawal, federal tax
law requires Peoples Benefit to withhold federal income taxes from the taxable
portion of any withdrawal and send that amount to the federal government.

Nursing Care and Terminal Condition

No Excess Interest Adjustment will apply if you or your spouse has been:

. Confined in a hospital or nursing facility for 30 days in a row; or
. Diagnosed with a terminal condition (usually a life expectancy of 12 months
or less).

This benefit is also available to the annuitant or annuitant's spouse if the
owner is not a natural person.

You may exercise this benefit at any time (during the Accumulation Phase) and
there is no charge for this benefit.

This benefit may not be available in all states. See the Policy or endorsement
for details and conditions.

Unemployment Waiver

No Excess Interest Adjustment will apply to withdrawals if you or your spouse is
unemployed. In order to qualify, you (or your spouse, which is applicable) must
have been:

. employed full time for at least two years prior to becoming unemployed; and
. employed full time on the Policy Date; and
. unemployed for at least 60 days in a row at the time of the withdrawal; and
. must have a minimum Cash Value at the time of withdrawal of $5,000

You must provide written proof from your State's Department of Labor, which
verifies that you qualify for and are receiving unemployment benefits at the
time of withdrawal.

You may exercise this benefit at any time (during the Accumulation Phase) and
there is no charge for this benefit.

This benefit is also available to the annuitant or annuitant's spouse if the
owner is not a natural person. This benefit may not be available in all states.
See the Policy for details.

8. PERFORMANCE

PERFORMANCE MEASURES

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

28
<PAGE>

Standardized Average Annual Total Return

When advertising performance of the Subaccounts, Peoples Benefit will show the
Standardized Average Annual Total Return for a Subaccount which, as prescribed
by the rules of the 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 deduction of all
applicable charges, including the Annual Policy Service Charge and all other
Portfolio, Separate Account and Policy level charges except Premium Taxes, if
any.

ADDITIONAL PERFORMANCE MEASURES

Non-Standardized Cumulative Total Return and Non-Standardized Average Annual
Total Return

Peoples Benefit may show Non-Standardized Cumulative 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. Peoples Benefit may also show
Non-Standardized 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
Non-Standardized Cumulative Total Return and the Non-Standardized Average Annual
Total Return are effective annual rates of return and are equal. For periods
greater than one year, the Non-Standardized 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 Non-Standardized Cumulative Total Return and
Non-Standardized Average Annual Total Return also reflect these expenses. These
returns do not reflect the Annual Policy Service Charge, any sales loads or
Premium Taxes (if any), which, if included, would reduce the percentages
reported.

Non-Standardized Total Return Year-To-Date

Peoples Benefit may show Non-Standardized Total Return Year-to-Date as of a
particular date, or simply Total Return YTD, for one or more subaccounts with
respect to one or more non-standardized base periods commencing at the beginning
of a calendar year. Total Return YTD figures reflect the percentage change in
actual Accumulation Unit Values during the relevant period. These returns
reflect a deduction for the Separate Account and Portfolio expenses, but do not
include the Annual Policy Service Charge, any sales loads or Premium Taxes (if
any), which, if included, would reduce the percentages reported by Peoples
Benefit.

Non-Standardized One Year Return

Peoples Benefit may show Non-Standardized One Year Return for one or more
Subaccounts with respect to one or more non-standardized base periods commencing
at the beginning of a calendar year (or date of Portfolio inception, if during
the relevant year) and ending at the end of such calendar year. One Year Return
figures reflect the historical performance of the Subaccounts as if the Policy
were in existence before its inception date (which it was not). After the
Policy's inception date, the figures reflect the percentage change in actual
Accumulation Unit Values during the relevant period. These returns reflect a
deduction for the Separate Account and Portfolio expenses, but do not include
the Annual Policy Service Charge, any sales loads or Premium Taxes (if any),
which, if included, would reduce the percentage reported by Peoples Benefit.

Non-Standardized Adjusted Historical Cumulative Return and Non-Standardized
Adjusted Historical Average Annual Total Return

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

The Non-Standardized Adjusted Historical Cumulative Return for a Subaccount is
the effective annual rate of return that would have produced the ending Policy
Value of the stated one-year period.

29
<PAGE>

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

YIELD AND EFFECTIVE YIELD

Peoples Benefit 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 Policy Service Charge, any sales loads
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 Subaccount that
invests in the Federated Prime Money Portfolio for which Peoples Benefit
advertises yield, Peoples Benefit shall furnish a yield quotation referring to
the Subaccount computed in the following manner: the net investment income per
Accumulation Unit earned during a recent one month period 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 Subaccount's yield and total return, and a list of
the indexes and other benchmarks used in evaluating a Subaccount's performance.

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

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 that 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.

9. DEATH BENEFIT

Peoples Benefit will pay a death benefit to your beneficiary, under certain
circumstances, if the Annuitant dies before the Annuity Commencement Date and
the Annuitant was also the Policy Owner. (If the Annuitant was not an owner, a
death benefit may or may not be paid. See below.) The beneficiary may choose an
Annuity Payment Option, or may choose to receive a lump sum.

When We Pay a Death Benefit

Before the Annuity Commencement Date
------------------------------------
We will pay a death benefit to your beneficiary IF:
. you are both the Annuitant and an owner of the Policy; and
. you die before the Annuity Commencement Date.

If the only beneficiary is your surviving spouse, then he or she may elect to
continue the Policy as the new annuitant and owner, instead of receiving the
death benefit.

We will also pay a death benefit to your beneficiary IF:
. you are not the Annuitant; and
. the Annuitant dies before the Annuity Commencement Date; and
. you specifically requested that the death benefit be paid upon the
Annuitant's death.

30
<PAGE>

Distribution requirements apply to the Policy Value upon the death of any owner.
These requirements are detailed in the Statement of Additional Information.

After the Annuity Commencement Date
-----------------------------------
The death benefit payable, if any, on or after the Annuity Commencement Date
depends on the Annuity Payment Option selected.

IF:
. you are not the Annuitant; and
. you die on or after the Annuity Commencement Date; and
. the entire interest in the Policy has not been paid to you;

THEN:
. the remaining portion of such interest in the Policy will be distributed at
least as rapidly as under the method of distribution being used as of the
date of your death.

When We Do Not Pay A Death Benefit

No death benefit is paid in the following cases:

IF:
. you are not the Annuitant; and
. the Annuitant dies prior to the Annuity Commencement Date; and
. you did not specifically request that the death benefit be paid upon the
Annuitant's death;

THEN:
. you will become the new Annuitant and the Policy will continue.

IF:
. you are not the Annuitant; and
. you die prior to the Annuity Commencement Date;

THEN:
. the new owner (unless it is your spouse) must generally surrender the
Policy within five years of your death for the Policy Value increased or
decreased by an Excess Interest Adjustment (if applicable).

Note carefully. If the Policy Owner does not name an Owner's designated
--------------
beneficiary, the Policy Owner's estate will become the new owner. If no probate
estate is opened (because, for example, the Policy Owner has precluded the
opening of a probate estate by means of a trust or other instrument), and
Peoples Benefit has not received written notice of the trust as a successor
owner signed prior to the Policy Owner's death, then that trust may not exercise
ownership rights to the Policy. It may be necessary to open a probate estate in
order to exercise ownership rights to the Policy if no Owner's designated
beneficiary is named in the written notice received by Peoples Benefit.

Amount of Death Benefit

Death benefit provisions may differ from state to state. The death benefit may
be paid as lump sum or as annuity payments. The death benefit will be the
greater of:

. Policy Value on the date we receive the required information; or
. Cash Value on the date we receive the required information (this will be
more than the Policy Value if there is a positive Excess Interest
Adjustment); or
. Guaranteed Minimum Death Benefit, if any (discussed below).

31
<PAGE>

Guaranteed Minimum Death Benefit Options

On the Policy customer order form, you generally may choose one of the three
Guaranteed Minimum Death Benefit Options listed below. After the Policy is
issued, you cannot make an election and the death benefit cannot be changed.

If the Guaranteed Minimum Death Benefit is not available because of the age of
the Policy Owner or Annuitant, the death benefit will be the greater of the
Policy Value or Cash Value as of the date of death.

A. Return of Premium Death Benefit
-------------------------------

The Return of Premium Death Benefit is:

. the total Premium Payments;
. less any adjusted partial withdrawals (discussed below) as of the date
of death.
. available if the Policy Owner or Annuitant is age 0 to 85 on the
Policy Date.

The Return of Premium Death Benefit is not available if the Policy Owner or
Annuitant is 85 or older on the Policy Date.

B. 6 Year Step-Up To Age 81 Death Benefit
--------------------------------------

The 6 Year Step-Up Death Benefit is:

. the higher of the initial premium or the Adjusted Policy Value on the
6th, 12th, 18th, etc., Policy Anniversary prior to the earlier date of
death or the Annuitant's 81st birthday;
. plus premiums paid
. less partial withdrawals subsequent to the date of the 6th anniversary
with the largest Policy Value.
. available if the Policy Owner or Annuitant is age 0 to 75 on the
Policy Date.

C. Double Enhanced Death Benefit
-----------------------------

The Double Enhance Death Benefit is the greater of (1) or (2) where:

(1) is a 5% Annually Compounding Death Benefit, equal to the Cumulative
Premium Payments, minus Adjusted Partial Withdrawals, plus interest
accumulated at 5% per annum from the payment or withdrawal date to the
earlier of the Annuitant's date of death or the Annuitant's 81st
birthday; and
(2) is a Step-Up Death Benefit, equal to the largest Policy Value on the
Policy Date or on any Policy Anniversary prior to the earlier of the
Annuitant's date of death or the Annuitant's 81st birthday, plus any
Premium Payments since the date of the Policy Anniversary with the
largest Policy Value, minus any Adjusted Partial Withdrawals since the
date of the Policy Anniversary with the largest Policy Value.

The Double Enhanced Death Benefit is available if the Policy Owner or
Annuitant is 0 to 79 on the Policy Date.

Adjusted Partial Withdrawal

When you request a partial withdrawal, your Guaranteed Minimum Death Benefit
will be reduced by an amount called the Adjusted Partial Withdrawal. Under
certain circumstances, the adjusted partial withdrawal may be more than the
amount of your withdrawal request. It is also possible that if a death benefit
is paid after you have made a partial withdrawal, then the total amount paid
could be less than the total Premium Payments. We have included a detailed
explanation of this adjustment in the Statement of Additional Information.

32
<PAGE>

10. OTHER INFORMATION

Peoples Benefit Life Insurance Company ("Peoples Benefit," "We," "Us," "Our")

Peoples Benefit Life Insurance Company is an Iowa stock life insurance company
incorporated on August 6, 1920, with Administrative Offices at 4333 Edgewood
Road, N.E., Cedar Rapids, Iowa 52499. It is principally engaged in offering life
insurance and annuity policies, and is licensed in 49 states, the District of
Columbia, and Puerto Rico.

As of December 31, 1999, Peoples Benefit had statutory-basis assets of
approximately $13.2 billion. It is a wholly owned indirect subsidiary of AEGON
USA, Inc., which conducts substantially all of its operations through subsidiary
companies engaged in the insurance business or in providing non-insurance
financial services. AEGON N.V. of The Netherlands indirectly owns all of the
stock of AEGON USA, Inc. AEGON N.V., a holding company, conducts its business
through subsidiary companies engaged primarily in the insurance business.

Peoples Benefit is a member of the Insurance Marketplace Standards Association
("IMSA"). IMSA is an independent, voluntary organization of life insurance
companies. It promotes high ethical standards in the sales and advertising of
individual life insurance and annuity products. Companies must undergo a
rigorous self- and independent assessment of their practices to become a member
of IMSA. The IMSA logo in our sales literature shows our ongoing commitment to
these standards.

Peoples Benefit Life Insurance Company Separate Account V

The Separate Account was established by Peoples Benefit on February 1, 1992, and
operates under Iowa law.

The Separate Account is a unit investment trust registered with the SEC under
the 1940 Act. Such registration does not signify that the SEC supervises the
management or the investment practices or policies of the Separate Account.

Peoples Benefit owns the assets of the Separate Account, and the obligations
under the Policy are obligations of Peoples Benefit. These assets are held
separately from the other assets of Peoples Benefit and are not chargeable with
liabilities incurred in any other business operation of Peoples Benefit (except
to the extent that assets in the Separate Account exceed the reserves and other
liabilities of the Separate Account). Peoples Benefit will always keep assets in
the Separate Account with a value at least equal to the total Policy Value under
the Policies. 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 Peoples
Benefit. Therefore, the investment performance of the Separate Account is
entirely independent of the investment performance of Peoples Benefit's general
account assets or any other separate account Peoples Benefit maintains.

The Separate Account has thirty-five Subaccounts dedicated to the Policy, each
of which invests solely in a corresponding Portfolio of the underlying Funds.
Additional Subaccounts may be established at Peoples Benefit's discretion. The
Separate Account meets the definition of a "separate account" under Section
2(a)(37) of the 1940 Act.

Policy Owner ("You," "Your")

The Policy Owner is the person or persons designated as the Policy Owner in the
customer order form to participate in the Policy. The term shall also include
any person named as Joint Owner. A Joint Owner shares ownership in all respects
with the Owner. The Owner has the right to assign ownership to a person or party
other than himself.

Annuitant

The person during whose life any annuity payments involving life contingencies
will continue.

Payee

The Payee is the Policy Owner, Annuitant, beneficiary, or any other person,
estate, or legal entity to whom benefits are to be paid.

33
<PAGE>

Right to Cancel Period

The period during which the Policy Owner may cancel the Policy can be canceled
and treated as void from the Policy Date. The period ranges in length from 20 to
30 days (or more in some cases), as specified in your Policy.

Voting Rights

The underlying Funds do not hold regular meetings of shareholders. The
directors/trustees of the Funds may call special meetings of shareholders as the
1940 Act or other applicable law may require. To the extent required by law,
Peoples Benefit will vote the Portfolio shares held in the Separate Account at
shareholder meetings of the Funds in accordance with instructions received from
persons having voting interests in the corresponding Subaccount. Peoples Benefit
will vote Fund shares as to which no timely instructions are received and those
shares held by Peoples Benefit as to which Policy Owners have no beneficial
interest in proportion to the voting instructions that are received with respect
to all Policies 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.

Prior to the Annuity Commencement Date, the Policy Owner holds a voting interest
in each Portfolio to which the Policy Value is allocated. The number of votes
which are available to a Policy Owner will be determined by dividing the Policy
Value attributable to a Portfolio by the net asset value per share of the
applicable Portfolio. After the Annuity Commencement Date, the person receiving
Annuity Payments under any variable Annuity Payment Option has the voting
interest. The number of votes after the Annuity Commencement Date will be
determined by dividing the reserve for such Policy allocated to the Portfolio by
the net asset value per share of the corresponding Portfolio. After the Annuity
Commencement Date, the votes attributable to a Policy 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 established by that Portfolio for determining shareholders eligible to
vote at the meeting of the Fund. Voting instructions will be solicited by
written communication prior to such meeting in accordance with procedures
established by the Fund.

Additions, deletions, or substitutions of investments

Peoples Benefit retains the right, subject to any applicable law, to make
certain changes. Peoples Benefit 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 Peoples
Benefit's judgment, investment in any Portfolio would be inappropriate in view
of the purposes of the Separate Account. To the extent the 1940 Act requires,
substitutions of shares attributable to a Policy Owner's interest in a Portfolio
will not be made until SEC approval has been obtained and the Policy Owner has
been notified of the change.

Peoples Benefit may establish new Portfolios when marketing, tax, investment, or
other conditions so warrant. Peoples Benefit will make any new Portfolios
available to existing Policy Owners on a basis Peoples Benefit will determine.
Peoples Benefit 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, Peoples Benefit may, by
appropriate endorsement, make whatever changes in the Policies may be necessary
or appropriate to reflect such substitution or change. Furthermore, if deemed to
be in the best interests of persons having voting rights under the Policies,
Peoples Benefit may operate the Separate Account as a management company under
the 1940 Act or any other form permitted by law, may deregister the Separate
Account under the 1940 Act in the event such registration is no longer required,
or may combine the Separate Account with one or more other separate accounts.

Financial Statements

The audited statutory-basis financial statements of Peoples Benefit and the
audited financial statements of certain Subaccounts of the Separate Account
which are available for investment by Advisor's Edge Policy Owners (as well as
the Independent Auditors' Reports on them) are contained in the Statement of
Additional Information.

34
<PAGE>

Auditors

Ernst & Young LLP serves as independent auditors for Peoples Benefit and certain
Subaccounts of the Separate Account which are available for investment by
Advisor's Edge Policy Owners and audits their financial statements annually.

Legal Matters

The law firm of Jorden Burt Boros Cicchetti Berenson & Johnson LLP, of
Washington, D.C., has provided legal advice concerning the issue and sale of the
Policy under the applicable federal securities laws. On behalf of Peoples
Benefit, Brenda Sneed, Esquire, has passed upon all matters of Iowa law
pertaining to the validity of the Policy and Peoples Benefit's right to issue
the Policy.

35
<PAGE>

TABLE OF CONTENTS FOR THE ADVISOR'S EDGE VARIABLE ANNUITY
STATEMENT OF ADDITIONAL INFORMATION

Page
----
<S> <C>
GLOSSARY OF TERMS...................................................................................................
THE POLICY -- GENERAL PROVISIONS....................................................................................
Owner..........................................................................................................
Entire Policy..................................................................................................
Non-Participating..............................................................................................
Misstatement of Age or Sex.....................................................................................
Assignment.....................................................................................................
Addition, Deletion or Substitution of Investments..............................................................
Excess Interest Adjustment.....................................................................................
Computation of Variable Annuity Income Payments................................................................
Exchanges......................................................................................................
PERFORMANCE INFORMATION.............................................................................................
Money Market Subaccount Yields.................................................................................
30-Day Yield for Non-Money Market Subaccounts..................................................................
Standardized Average Annual Total Return for Subaccounts.......................................................
ADDITIONAL PERFORMANCE MEASURES.....................................................................................
Non-Standardized Cumulative Total Return.......................................................................
Non-Standardized Average Annual Total Return...................................................................
Non-Standardized Total Return Year-to-Date.....................................................................
Non-Standardized One Year Return...............................................................................
Non-Standardized Adjusted Historical Cumulative Return and Non-Standardized Adjusted Historical
Average Annual Total Return
Individual Computer Generated Illustrations....................................................................
PERFORMANCE COMPARISONS.............................................................................................
SAFEKEEPING OF ACCOUNT ASSETS.......................................................................................
CONFLICTS OF INTEREST WITH OTHER SEPARATE ACCOUNTS..................................................................
PEOPLES BENEFIT LIFE INSURANCE COMPANY..............................................................................
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Tax Status of the Policy.........................................................................................
Distribution Requirements........................................................................................
Diversification Requirements.....................................................................................
Owner Control....................................................................................................
Withholding......................................................................................................
Qualified Policies...............................................................................................
Individual Retirement Annuities..................................................................................
Roth Individual Retirement Annuities (Roth IRA)..................................................................
Section 403(b) Plans.............................................................................................
Corporate Pension and Profit-Sharing Plans and H.R. 10 Plans.....................................................
Deferred Compensation Plans......................................................................................
Non-Natural Persons..............................................................................................
TAXATION OF PEOPLES BENEFIT.........................................................................................
STATE REGULATION OF PEOPLES BENEFIT.................................................................................
RECORDS AND REPORTS.................................................................................................
DISTRIBUTION OF THE POLICIES........................................................................................
LEGAL PROCEEDINGS...................................................................................................
OTHER INFORMATION...................................................................................................
FINANCIAL STATEMENTS................................................................................................
</TABLE>
36
<PAGE>

APPENDIX A

CONDENSED FINANCIAL INFORMATION

(For the period January 1, 1994 through December 31, 1999)

<TABLE>
<CAPTION>
Alliance DFA DFA
Alliance Premier Alliance DFA Small DFA Large International International
Growth Growth Technology Value Value Value Small
------ ------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Accumulation unit value as of:
Start Date*............ N/A N/A N/A 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
12/31/95............... N/A N/A N/A 9.948 12.034 10.524 10.145
12/31/96............... N/A N/A N/A 12.063 14.165 11.214 10.106
12/31/97............... N/A N/A N/A 15.633 18.187 10.893 7.708
12/31/98............... N/A N/A N/A 14.506 20.013 12.092 8.054
12/31/99............... N/A N/A N/A 15.832 20.831 14.660 9.484
Number of units Outstanding as of
12/31/94............... N/A N/A N/A N/A N/A N/A N/A
12/31/95............... N/A N/A N/A 163,078 358,553 271,242 188,597
12/31/96............... N/A N/A N/A 711,634 983,458 983,425 617,388
12/31/97............... N/A N/A N/A 864,489 1,062,867 1,228,043 869,388
12/31/98............... N/A N/A N/A 746,000 859,894 1,023,764 825,132
12/31/99............... N/A N/A N/A 764,208 942,056 1,072,798 784,305

Dreyfus
DFA Socially Endeavor Federated
DFA Short- Global Responsible Dreyfus Small Enhanced TRP American
Term Fixed Bond Growth Cap Value Index International Leaders
---------- ---- ------ --------- ----- ------------- -------
Accumulation unit value as of:
Start Date*............ 10.000 10.000 N/A 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
12/31/95............... 10.104 11.300 N/A N/A N/A N/A 12.676
12/31/96............... 10.560 12.235 N/A N/A N/A N/A 15.311
12/31/97............... 11.089 13.103 N/A 9.284 10.002 9.191 20.130
12/31/98............... 11.620 14.091 N/A 9.024 13.057 10.541 23.524
12/31/99............... 12.039 14.565 N/A 11.600 15.328 13.862 24.931
Number of units Outstanding as of
12/31/94............... N/A N/A N/A N/A N/A N/A N/A
12/31/95............... 101,709 152,950 N/A N/A N/A N/A 10,179
12/31/96............... 821,351 317,470 N/A N/A N/A N/A 67,853
12/31/97............... 862,087 346,747 N/A 585 34,587 24,827 181,634
12/31/98............... 752,441 368,039 N/A 317,784 272,747 145,782 255,419
12/31/99............... 1,002,680 518,872 N/A 201,694 434,242 366,345 327,212

Federated Federated Montgomery
High Federated U.S. Gov't Federated Montgomery Emerging Seligman
Income Bond Prime Money Securities Utility Growth Markets Capital
----------- ----------- ---------- ------- ------ ------- -------
Accumulation unit value as of:
Start Date*............ 10.000 10.000 10.000 10.000 10.000 10.000 N/A
12/31/94............... N/A 10.026 N/A N/A N/A N/A N/A
12/31/95............... 10.257 10.473 10.567 11.354 N/A N/A N/A
12/31/96............... 11.648 10.900 10.940 12.584 12.649 10.616 N/A
12/31/97............... 13.174 11.365 11.801 15.833 16.157 10.486 N/A
12/31/98............... 13.442 11.835 12.623 17.924 16.523 6.508 N/A
12/31/99............... 13.663 12.304 12.466 18.110 19.829 10.658 N/A
Number of units outstanding as of
12/31/94............... N/A 70,223 N/A N/A N/A N/A N/A
12/31/95............... 6,320 363,418 7,159 2,024 N/A N/A N/A
12/31/96............... 146,709 512,275 117,323 24,080 28,618 135,913 N/A
12/31/97............... 424,673 312,343 249,634 20,024 76,471 252,354 N/A
12/31/98............... 532,325 651,890 422,127 74,288 68,852 301,041 N/A
12/31/99............... 589,780 952,527 547,797 97,673 89,026 227,382 N/A
</TABLE>

37
<PAGE>

Seligman
Communications Seligman Stein Roe Strong Strong Wanger Wanger Int'l
and Global Small Co. Int'l Schafer U.S. Small Small Cap
Information Technology Growth Stock Value Cap Advisor Advisor
----------- ---------- -------- ----- ----- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Accumulation unit value as of:
Start Date*............ N/A N/A 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
12/31/95............... N/A N/A N/A N/A N/A 9.665 10.913
12/31/96............... N/A N/A N/A N/A N/A 14.076 14.312
12/31/97............... N/A N/A 11.571 8.384 10.067 18.098 14.011
12/31/98............... N/A N/A 9.507 7.931 10.220 19.542 16.194
12/31/99............... N/A N/A 13.988 14.752 9.863 24.283 36.429
Number of units outstanding as of
12/31/94............... N/A N/A N/A N/A N/A N/A N/A
12/31/95............... N/A N/A N/A N/A N/A 21,864 4,237
12/31/96............... N/A N/A N/A N/A N/A 110,551 80,108
12/31/97............... N/A N/A 7,407 7,004 20,688 275,517 149,792
12/31/98............... N/A N/A 11,989 17,678 61,989 181,215 193,817
12/31/99............... N/A N/A 12,554 57,878 53,258 164,471 182,333

WRL J.P.
Warburg Warburg WRL Alger Morgan Real
Transamerica Pincus Int'l Pincus Small Aggressive Estate WRL Janus WRL Janus
VIF Growth Equity Co. Growth Growth Securities Global Growth
---------- ------ ---------- ------ ---------- ------ ------
Accumulation unit value as of:
Start Date*............ N/A 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
12/31/95............... N/A N/A N/A N/A N/A N/A N/A
12/31/96............... N/A N/A N/A N/A N/A N/A N/A
12/31/97............... N/A 9.601 13.183 N/A N/A N/A N/A
12/31/98............... N/A 10.049 12.724 N/A N/A N/A N/A
12/31/99............... N/A 15.319 21.375 14.961 8.998 15.620 13.662
Number of units outstanding as of
12/31/94............... N/A N/A N/A N/A N/A N/A N/A
12/31/95............... N/A N/A N/A N/A N/A N/A N/A
12/31/96............... N/A N/A N/A N/A N/A N/A N/A
12/31/97............... N/A 106,212 48,791 N/A N/A N/A N/A
12/31/98............... N/A 230,381 89,528 N/A N/A N/A N/A
12/31/99............... N/A 141,359 275,865 64,889 54,834 155,589 239,345

WRL LKCM
Strategic
Total
Return
------
Accumulation unit value as of:
Start Date*............ 10.000
12/31/94............... N/A
12/31/95............... N/A
12/31/96............... N/A
12/31/97............... N/A
12/31/98............... N/A
12/31/99............... 10.592
Number of units outstanding as of
12/31/94............... N/A
12/31/95............... N/A
12/31/96............... N/A
12/31/97............... N/A
12/31/98............... N/A
12/31/99............... 14,628
</TABLE>

* Date of commencement of operations for the Subaccounts was as follows:
10/6/95 for DFA Small Value; 1/18/95 for DFA Large Value; 10/3/95 for DFA
International Value; 10/6/95 for DFA International Small; 10/9/95 for DFA
Short-Term Fixed; 1/18/95 for DFA Global Bond; 10/13/97 for Dreyfus Small
Cap Value, Endeavor Enhanced Index and T. Rowe Price International; 3/10/95
for Federated American Leaders; 9/18/95 for Federated High Income; 12/7/94
for Federated Prime Money; 6/28/95 for Federated U.S. Government
Securities; 7/20/95 for Federated Utility; 2/12/96 for Montgomery Growth;
2/5/96 for Montgomery Emerging Markets; 10/13/97 for Strong Schafer Value;
9/20/95 for Wanger U.S. Small Cap Advisor; 9/18/95 for Wanger International
Small Cap Advisor; 3/31/97 for Stein Roe Small Company Growth, Strong
International Stock, Warburg Pincus International Equity and Warburg Pincus
Small Company Growth; and 5/3/99 for WRL Alger Aggressive Growth; WRL J.P.
Morgan Real Estate Securities; WRL Janus Global; WRL Janus Growth; and WRL
LKCM Strategic Total Return. As of December 31, 1999, the following
Subaccounts had not commenced operations: Alliance Growth, Alliance Premier
Growth, Alliance Technology, Dreyfus Socially Responsible Growth, Seligman
Capital, Seligman Communications and Information, Seligman Global
Technology and Transamerica VIF Growth.

38
<PAGE>

PEOPLES BENEFIT LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V

STATEMENT OF ADDITIONAL INFORMATION

for the

ADVISOR'S EDGE VARIABLE ANNUITY

Offered by
Peoples Benefit Life Insurance Company
(An Iowa Stock Company)
Home Office
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499

This Statement of Additional Information expands upon subjects discussed in the
current Prospectus for the Advisor's Edge variable annuity policy (the "Policy")
offered by Peoples Benefit Life Insurance Company (the "Company" or "Peoples
Benefit"). You may obtain a copy of the Prospectus dated _____, 2000, by calling
800-866-6007 or by writing to our Administrative Offices, at 4333 Edgewood Road,
N.E., Cedar Rapids, Iowa 52499. Terms used in the current Prospectus for the
Policy are incorporated in this Statement of Additional Information.

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

_____, 2000

1
<PAGE>

TABLE OF CONTENTS

Page Number
-----------
<S> <C>

GLOSSARY OF TERMS 3
THE POLICY - GENERAL PROVISIONS 5
Owner 5
Entire Policy 5
Non-Participating 5
Misstatement of Age or Sex 6
Assignment 6
Addition, Deletion or Substitution of Investments 6
Excess Interest Adjustment 6
Computation of Variable Annuity Income Payments 7
Exchanges 8
PERFORMANCE INFORMATION 8
Money Market Subaccount Yields 9
30-Day Yield for Non-Money Market Subaccounts 10
Standardized Average Annual Total Return for Subaccounts 10
ADDITIONAL PERFORMANCE MEASURES 12
Non-Standardized Cumulative Total Return 12
Non-Standardized Average Annual Total Return 12
Non-Standardized Total Return Year-to-Date 14
Non-Standardized One Year Return 15
Non-Standardized Adjusted Historical Cumulative Return and Non-Standardized 16
Adjusted Historical Average Annual Total Return
Individualized Computer Generated Illustrations 27
PERFORMANCE COMPARISONS 27
SAFEKEEPING OF ACCOUNT ASSETS 29
CONFLICTS OF INTEREST WITH OTHER SEPARATE ACCOUNTS 29
PEOPLES BENEFIT LIFE INSURANCE COMPANY 30
CERTAIN FEDERAL INCOME TAX CONSEQUENCES 30
Tax Status of the Policy 30
Distribution Requirements 30
Diversification Requirements 31
Owner Control 31
Withholding 31
Qualified Policies 31
Individual Retirement Annuities 32
Roth Individual Retirement Annuities (Roth IRA) 32
Section 403(b) Plans 33
Corporate Pension and Profit-Sharing Plans and H.R. 10 Plans 33
Deferred Compensation Plans 33
Non-Natural Persons 33
TAXATION OF PEOPLES BENEFIT 34
STATE REGULATION OF PEOPLES BENEFIT 34
RECORDS AND REPORTS 34
DISTRIBUTION OF THE POLICIES 34
LEGAL PROCEEDINGS 35
OTHER INFORMATION 35
FINANCIAL STATEMENTS 35
</TABLE>

2
<PAGE>

GLOSSARY OF TERMS

Accumulation Unit - An accounting unit of measure used in calculating the policy
value in the separate account before the annuity commencement date.

Adjusted Policy Value - An amount equal to the policy value increased or
decreased by any excess interest adjustments.

Administrative and Service Office -- Financial Markets Division - Variable
Annuity Department, Peoples Benefit Life Insurance Company, 4333 Edgewood Road,
N.E., Cedar Rapids, Iowa 52499.

Annuitant - The person during whose life, annuity payments involving life
contingencies will continue.

Annuity Commencement Date - The date upon which annuity payments are to
commence. This date may be any date at least thirty days after the policy date
and may not be later than the last day of the policy month starting after the
annuitant attains age 85, except expressly allowed by Peoples Benefit.

Annuity Payment Option - A method of receiving a stream of annuity payments
selected by the owner.

Annuity Unit - An accounting unit of measure used in the calculation of the
amount of the second and each subsequent variable annuity payment.

Beneficiary - The person who has the right to the death benefit set forth in the
policy.

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

Cash Value - The policy value increased or decreased by an excess interest
adjustment, less the annual service charge, and less any applicable premium
taxes and any rider fees.

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

Enrollment form - A written application, order form, or any other information
received electronically or otherwise upon which the policy is issued and/or is
reflected on the data or specifications page.

Excess Interest Adjustment - A positive or negative adjustment to amounts
withdrawn upon partial withdrawals, full surrenders or transfers from the
guaranteed period options, or to amounts applied to annuity payment options. The
adjustment reflects changes in the interest rates declared by Peoples Benefit
since the date any payment was received by, or an amount was transferred to, the
guaranteed period option. The excess interest adjustment can either decrease or
increase the amount to be received by the owner upon full surrender or
commencement of annuity payments, depending upon whether there has been an
increase or decrease in interest rates, respectively.

Fixed Account - One or more investment choices under the policy that are part of
Peoples Benefit general assets and which are not in the separate account.

Guaranteed Period Options - The various guaranteed interest rate periods of the
fixed account, which Peoples Benefit may offer, into which purchase payments may
be paid or amounts may be transferred.

Nonqualified Policy - A policy other than a qualified policy.

Owner - The individual or entity that owns an individual policy.

Policy - The individual policy.

3
<PAGE>

Policy Value - On or before the annuity commencement date, the policy value is
equal to the owner's:

. Purchase Payments; minus
. Partial withdrawals (including any applicable excess interest adjustments
on such withdrawals); plus
. Interest credited in the fixed account; plus or minus
. Accumulated gains or losses in the separate account; minus
. Services charges, premium taxes, rider fees, and transfer fees, if any.

Policy Year - A policy year begins on the date in which the policy becomes
effective and on each anniversary thereof.

Purchase Payment - An amount paid to Peoples Benefit by the owner or on the
owner's behalf as consideration for the benefits provided by the policy.

Qualified Policy - A policy issued in connection with retirement plans that
qualify for special federal income tax treatment under the Code.

Separate Account - Peoples Benefit Life Insurance Company Separate Account V, a
separate account established and registered as a unit investment trust under the
Investment Company Act of 1940, as amended (the "1940 Act"), to which Purchase
Payments under the policies may be allocated.

Service Charge -- An annual charge on each policy anniversary (and a charge at
the time of surrender during any policy year) for policy maintenance and related
administrative expenses.

Subaccount - subdivision within the separate account, the assets of which are
invested in specified portfolios of the underlying funds.

Successor Owner - A person appointed by the owner to succeed to ownership of the
policy in the event of the death of the owner who is not the annuitant before
the annuity commencement date.

Valuation Period - The period of time from one determination of accumulation
unit values and annuity unit values to the next subsequent determination of
values. Such determination shall be made on each business day.

Variable Annuity Payments - Payments made pursuant to an annuity payment option
which fluctuate as to dollar amount or payment term in relation to the
investment performance of the specified subaccounts within the separate account.

Written Notice or Written Request - Written notice, signed by the owner, that
gives Peoples Benefit the information it requires and is received at the
administrative and service office. For some transactions, Peoples Benefit may
accept an electronic notice such as telephone instructions. Such electronic
notice must meet the requirements Peoples Benefit establishes for such notices.

4
<PAGE>

THE POLICY - GENERAL PROVISIONS

OWNER

The Policy shall belong to the owner upon issuance of the Policy after
completion of an enrollment form and delivery of the initial purchase payment.
While the annuitant is living, the owner may: (1) assign the Policy; (2)
surrender the policy; (3) amend or modify the Policy with the consent of Peoples
Benefit; (4) receive annuity payments or name a payee to receive the payments;
and (5) exercise, receive and enjoy every other right and benefit contained in
the policy. The exercise of these rights may be subject to the consent of any
assignee or irrevocable beneficiary, and of your spouse in a community or
marital property state.

Unless Peoples Benefit has been notified of a community or marital property
interest in the policy, it will rely on its good faith belief that no such
interest exists and will assume no responsibility for inquiry.

A successor owner can be named in the enrollment form, information provided in
lieu thereof, or in a written notice. The successor owner will become the new
owner upon your death, if you predecease the annuitant. If no successor owner
survives you and you predecease the annuitant, your estate will become the
owner.

Note Carefully. If the owner does not name a contingent owner, the owner's
--------------
estate will become the new owner. If no probate estate is opened because the
owner has precluded the opening of a probate estate by means of a trust or other
instrument, unless Peoples Benefit has received written notice of the trust as a
successor owner signed prior to the owner's death, that trust may not exercise
ownership rights to the policy. It may be necessary to open a probate estate in
order to exercise ownership rights to the policy if no contingent owner is named
in a written notice received by Peoples Benefit.

The owner may change the ownership of the policy in a written notice. When the
change takes effect, all rights of ownership in the policy will pass to the new
owner. A change of ownership may have tax consequences.

When there is a change of owner or successor owner, the change will not be
effective until it is recorded in our records. Once recorded, it will take
effect as of the date the owner signs the written notice, subject to any payment
Peoples Benefit has made or action Peoples Benefit has taken before recording
the change. Changing the owner or naming a new successor owner cancels any prior
choice of successor owner, but does not change the designation of the
beneficiary or the annuitant.

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

ENTIRE POLICY

The policy, any endorsements thereon, the enrollment form, or information
provided in lieu thereof constitute the entire Policy between Peoples Benefit
and the owner. All statements in the enrollment form are representations and not
warranties. No statement will cause the policy to be void or to be used in
defense of a claim unless contained in the enrollment form or information
provided in lieu thereof. No registered representative has authority to change
or waive any provision of the policy.

NON-PARTICIPATING

The Policies are non-participating. No dividends are payable and the Policies
will not share in the profits or surplus earnings of Peoples Benefit.

5
<PAGE>

MISSTATEMENT OF AGE OR SEX

Peoples Benefit may require proof of age and sex before making Annuity Payments.
If the Annuitant's stated age, sex or both in the Policy are incorrect, Peoples
Benefit will change the annuity benefits payable to those benefits which the
Purchase Payments would have purchased for the correct age and sex. In the case
of correction of the stated age and/or sex after payments have commenced,
Peoples Benefit will: (1) in the case of underpayment, pay the full amount due
with the next payment; and (2) in the case of overpayment, deduct the amount due
from one or more future payments.

ASSIGNMENT

Any Non-Qualified Policy may be assigned by you prior to the Annuity Date and
during the Annuitant's lifetime. Peoples Benefit is not responsible for the
validity of any assignment. No assignment will be recognized until Peoples
Benefit receives the appropriate Peoples Benefit form notifying Peoples Benefit
of such assignment. The interest of any beneficiary which the assignor has the
right to change shall be subordinate to the interest of an assignee. Any amount
paid to the assignee shall be paid in one sum notwithstanding any settlement
agreement in effect at the time assignment was executed. Peoples Benefit shall
not be liable as to any payment or other settlement made by Peoples Benefit
before receipt of the appropriate Peoples Benefit form.

ADDITION, DELETION OR SUBSTITUTUION OF INVESTMENTS

Peoples Benefit cannot and does not guarantee that any of the subaccounts will
always be available for purchase payments, allocations or transfers. Peoples
Benefit retains the right, subject to any applicable law, to make certain
changes in the separate account and its investments. Peoples Benefit reserves
the right to eliminate the shares of any portfolio held by a subaccount and to
substitute shares of another portfolio of the underlying funds, or of another
registered open-end management investment company for the shares of any
portfolio, if the shares of the portfolio are no longer available for investment
or if, in the judgment of Peoples Benefit, 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 your interest
in a subaccount will not be made without prior notice to you and the prior
approval of the Securities and Exchange Commission ("SEC"). Nothing contained
herein shall prevent the separate account from purchasing other securities for
other series or classes of variable annuities, or from effecting an exchange
between series or classes of variable annuities on the basis of your requests.

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

In the event of any such substitution or change, Peoples Benefit may, by
appropriate endorsement, make such changes in the policy as may be necessary or
appropriate to reflect such substitution or change. Furthermore, if deemed to be
in the best interests of persons having voting rights under the policies, the
separate account may be (i) operated as a management company under the 1940 Act
or any other form permitted by law, (ii) deregistered under the 1940 Act in the
event such registration is no longer required or (iii) combined with one or more
other separate accounts.
To the extent permitted by applicable law, Peoples Benefit also may transfer the
assets of the separate account associated with the policies to another account
or accounts.

EXCESS INTEREST ADJUSTMENT

Money that you withdraw from, transfer out of, or apply to an annuity payment
option from a guaranteed period option of the fixed account before the end of
its guaranteed period (the number of years you specified the money would remain
in the guaranteed period option, may be subject to any excess interest
adjustment. At the time you request a withdrawal, if the interest rates Peoples
Benefits sets have risen since the date of the initial guarantee, the excess

6
<PAGE>

interest adjustment will result in a lower policy value. However, if interest
rates have fallen since the date of the initial guarantee, the excess interest
adjustment will result in a higher policy value.

Excess interest adjustments will not reduce the adjusted policy value for a
guaranteed period option below the purchase payments and transfers to that
guaranteed period option, less any prior partial withdrawals and transfers from
the guaranteed period option, plus interest at the policy's minimum guaranteed
effect annual interest rate of 3%. This is referred to as the excess interest
adjustment floor.

The formula that will be used to determine the excess interest adjustment
("EIA") is:

EIA = S* (G-C)* (M/12)

Where
S = the gross amount being surrendered, withdrawn, transferred or
applied to a Payment Option that is subject to the EIA.

G = the guaranteed interest rate applicable to S.

C = the current guaranteed interest rate then being offered on new
purchase payments for the next longer Guaranteed Period than "M". If
this form, or such a Guaranteed Period is no longer offered, "C" will
be the U.S. Treasury rate for the next longer maturity (in whole years)
than "M" on the 25th day of the previous calendar month, plus up to 2%.

M = the number of months remaining in the Guaranteed Period for S,
rounded up to the next higher whole number of months.

No cap on positive EIA adjustment. Floor on negative EIA is effective
on full surrender.

On full surrender, each Guaranteed Period Option's ("GPO") contribution
to the adjusted Policy Value will never fall below the sum of purchase
payments, less any prior withdrawals and transfers from that GPO, plus
interest at the 3% guaranteed effective annual interest rate.

Some states may not allow an EIA.

COMPUTATION OF VARIABLE ANNUITY INCOME PAYMENTS

In order to supplement the description in the Prospectus and Appendixes A and B
thereto, the following provides additional information about the Policy which
may be of interest to Policy Owners.

The amounts shown in the Annuity Tables contained in your Policy represent the
guaranteed minimum for each Annuity Payment under a Fixed Payment Option.
Variable annuity income payments are computed as follows. First, the Accumulated
Value (or the portion of the Accumulated Value used to provide variable
payments) is applied under the Annuity Tables contained in your Policy
corresponding to the Annuity Payment Option elected by the Policy Owner and
based on an assumed interest rate of 4%. This will produce a dollar amount which
is the first monthly payment.

The amount of each Annuity Payment after the first is determined by means of
Annuity Units. The number of Annuity Units is determined by dividing the first
Annuity Payment by the Annuity Unit Value for the selected Subaccount ten
Business Days prior to the Annuity Date. The number of Annuity Units for the
Subaccount then remains fixed, unless an Exchange of Annuity Units (as set forth
below) is made. After the first Annuity Payment, the dollar amount of each
subsequent Annuity Payment is equal to the number of Annuity Units multiplied by
the Annuity Unit Value for the Subaccount ten Business Days before the due date
of the Annuity Payment.

7
<PAGE>

The Annuity Unit Value for each Subaccount was initially established at $10.00
on the date money was first deposited in that Subaccount. The Annuity Unit Value
for any subsequent Business Day is equal to (a) times (b) times (c), where

(a) = the Annuity Unit Value for the immediately preceding Business Day;

(b) = the Net Investment Factor for the day;

(c) = the investment result adjustment factor (.99989255 per day), which
recognizes an assumed interest rate of 4% per year used in
determining the Annuity Payment amounts.

The Net Investment Factor is a factor applied to a Subaccount that reflects
daily changes in the value of the Subaccount due to:

(a) = any increase or decrease in the value of the Subaccount due to
investment results;

(b) = a daily charge assessed at an annual rate of 1.25% for the mortality
and expense risks assumed by Peoples Benefit;

(c) = a daily charge for the cost of administering the Policy
corresponding to an annual charge of .15% of the value of the
Subaccount.

The Annuity Tables contained in the Policy are based on the 1983 Table "A"
Mortality Table projected for mortality improvement to the year 2000 using
Projection Scale G and an interest rate of 4% a year; except that in
Massachusetts and Montana, the Annuity Tables contained in the Policy are based
on a 60% female/40% male blending of the above for all annuitants of either
gender.

EXCHANGES

After the Annuity Date you may, by making a written request, exchange the
current value of an existing subaccount to Annuity Units of any other
subaccount(s) then available. The written request for an exchange must be
received by us, however, at least 10 Business Days prior to the first payment
date on which the exchange is to take effect. An exchange shall result in the
same dollar amount as that of the Annuity Payment on the date of exchange (the
"Exchange Date"). Each year you may make an unlimited number of free exchanges
between Subaccounts. We reserve the right to charge a $15 fee in the future for
exchanges in excess of twelve per Policy Year.

Exchanges will be made using the Annuity Unit Value for the subaccounts on the
date the written request for exchange is received. On the Exchange Date, Peoples
Benefit will establish a value for the current subaccounts by multiplying the
Annuity Unit Value by the number of Annuity Units in the existing subaccounts
and compute the number of Annuity Units for the new subaccounts by dividing the
Annuity Unit Value of the new subaccounts into the value previously calculated
for the existing subaccounts.

PERFORMANCE INFORMATION

Performance information for the subaccounts including the yield and effective
yield of the Federated Prime Money subaccount, the yield of the remaining
subaccounts, and the total return of all subaccounts, may appear in reports or
promotional literature to current or prospective Policy Owners.

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 includes the period prior to October 1995 should not be
considered indicative of the Portfolio's future performance.

8
<PAGE>

Where applicable, the following Subaccount inception dates are used in the
calculation of performance figures. 10/6/95 for the DFA Small Value and
International Small Value Portfolios; 1/18/95 for the DFA Large Value and DFA
Global Bond Portfolios; 10/3/95 for the DFA International; 10/9/95 for DFA
Short-Term Fixed Portfolios; 3/10/95 for the Federated American Leaders
Portfolio; 7/20/95 for the Federated Utility Portfolio; 12/7/94 for the
Federated Prime Money Portfolio; 6/28/95 for the Federated U.S. Government
Securities Portfolio; 9/18/95 for the Federated High Income Bond Portfolio;
2/12/96 for the Montgomery Growth Portfolio; 2/5/96 for the Montgomery Emerging
Markets Portfolio; 9/20/95 for the Wanger U.S. Small Cap Portfolio; 9/18/95 for
the Wanger International Small Cap Portfolio; 3/31/97 for Stein Roe Small
Company Growth Portfolio; 3/31/97 for Strong International Stock Portfolio;
3/31/97 for Warburg Pincus International Equity Portfolio; 3/31/97 for Warburg
Pincus Small Company Growth Portfolio; 10/13/97 for Strong Schafer Value
Portfolio; 10/31/97 for T. Rowe Price International Stock Portfolio; 10/31/97
for Dreyfus Small Cap Value Portfolio; 10/13/97 for Endeavor Enhanced Index
Portfolio; and 5/3/99 for the WRL Alger Aggressive Growth, WRL J.P. Morgan Real
Estate Securities, WRL Janus Global, WRL Janus Growth, and WRL LKCM Strategic
Total Return Portfolios.As of the date of this Statement of Additional
Information, the Alliance Growth, Alliance Premier Growth, Alliance Technology,
Dreyfus Socially Responsible Growth, Seligman Capital, Seligman Communications
and Information, Seligman Global Technology and Transamerica VIF Growth
Subaccounts had not commenced operation.

Where applicable, the following Fund inception dates are used in the calculation
of performance figures: for Alliance Growth Portfolio, for
-------- ----------
Alliance Premier Growth Portfolio, for Alliance Technology Portfolio,
----------
9/29/95 for the DFA Small Value and International Small Value Portfolios;
1/12/95 for the DFA Large Value and DFA Global Bond Portfolios; 9/29/95 for the
DFA International; 9/29/95 for DFA Short-Term Fixed Portfolios; for
-----------
Dreyfus Socially Responsible Growth Portfolio, 11/18/94 for Federated Prime
Money Portfolio; 2/10/94 for Federated American Leaders Portfolio; 2/10/94 for
Federated Utility Portfolio; 3/28/94 for Federated U.S. Government Securities
Portfolio; 3/1/94 for Federated High Income Bond Portfolio; 2/9/96 for
Montgomery Growth Portfolio; 2/2/96 for Montgomery Emerging Markets Portfolio;
5/3/95 for Wanger U.S. Small Cap Advisor Portfolio; 5/3/95 for Wanger
International Small Cap Advisor Portfolio; 10/20/95 for Strong International
Stock Portfolio; 6/30/95 for Warburg Pincus International Equity Portfolio;
6/30/95 for Warburg Pincus Small Company Growth Portfolio; 10/10/97 for Strong
Schafer Value Portfolio; 4/8/91 for T. Rowe Price International Stock Portfolio;
5/4/93 for Dreyfus Small Cap Value Portfolio; 5/1/97 for Endeavor Enhanced Index
Portfolio; for Seligman Capital Portfolio, for Seligman
------------ -----------
Communication and Information Portfolio, for Seligman Global
-------------
Technology, for Transamerica VIF Growth Portfolio, 3/1/94 for WRL
----------
Alger Aggressive Growth Portfolio; 5/1/98 for WRL J.P. Morgan Real Estate
Securities Portfolio; 12/3/92 for WRL Janus Global Portfolio; 10/2/86 for WRL
Janus Growth Portfolio; and 3/1/93 for WRL LKCM Strategic Total Return
Portfolio.

MONEY MARKET SUBACCOUNT YIELDS

Current yield for the Federated Prime Money Subaccount will be based on the
change in the value of a hypothetical investment (exclusive of capital changes)
over a particular 7-day period, less a pro-rata share of Subaccount expenses
accrued over that period (the "base period"), and stated as a percentage of the
investment at the start of the base period (the "base period return"). The base
period return is then annualized by multiplying by /365/7/, with the resulting
yield figure carried to at least the nearest hundredth of one percent.

Calculation of "effective yield" begins with the same "base period return" used
in the calculation of yield, which is then annualized to reflect weekly
compounding pursuant to the following formula:
365/7
Effective Yield = [((Base Period Return)+1) ]-1

The current yield of the Money Market Subaccount for the 7-day period ended
December 31, 1999 was 4.48%. The effective yield of the Money Market Subaccount
for the period ended December 31, 1999 was 4.59%.

9
<PAGE>

30-DAY YIELD FOR NON-MONEY MARKET SUBACCOUNTS

Quotations of yield for the remaining subaccounts will be based on all
investment income per Unit earned during a particular 30-day period, less
expenses accrued during the period ("net investment income"), and will be
computed by dividing net investment income by the value of a Unit on the last
day of the period, according to the following formula:

6
YIELD = 2[(a-b + 1) -1]
---
cd

Where:

[a] equals the net investment income earned during the period by the
Portfolio attributable to shares owned by a subaccount;
[b] equals the expenses accrued for the period (net of reimbursement);
[c] equals the average daily number of Units outstanding during the
period; and
[d] equals the maximum offering price per Accumulation Unit on the last
day of the period.

Yield on a subaccount is earned from the increase in net asset value of shares
of the Portfolio in which the subaccount invests and from dividends declared and
paid by the Portfolio, which are automatically reinvested in shares of the
Portfolio.

STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FOR SUBACCOUNTS

When advertising performance of the subaccounts, Peoples Benefit will show the
"Standardized Average Annual Total Return," calculated as prescribed by the
rules of the SEC, for each Subaccount. The Standardized Average Annual Total
Return 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 calculation 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 deduction of all applicable sales loads (including the
contingent deferred sales load), the Annual Policy Fee and all other Portfolio,
Separate Account and Policy level charges except Premium Taxes, if any.

Quotations of average annual total return for any Subaccount will be expressed
in terms of the average annual compounded rate of return of a hypothetical
investment in a Policy over a period of one, five and ten years (or, if less, up
to the life of the Subaccount), calculated pursuant to the formula:
n
P(1+T) =ERV

Where:

(1) [P] equals a hypothetical initial Purchase Payment of $1,000;

(2) [T] equals an average annual total return;

(3) [n] equals the number of years; and

(4) [ERV] equals the ending redeemable value of a hypothetical $1,000 Purchase
Payment made at the beginning of the period (or fractional portion
thereof).

The following table show the Standardized Average Annual Total Return for the
subaccounts for the period beginning at the inception of each subaccount and
ending on December 31, 1999.

10
<PAGE>

STANDARDIZED AVERAGE ANNUAL TOTAL RETURN
FOR PERIOD ENDING DECEMBER 31, 1999

Since
Subaccount
Subaccount 1 Year Inception
---------- ------ ---------

Alliance Growth....................................... N/A N/A
Alliance Premier Growth............................... N/A N/A
Alliance Technology................................... N/A N/A
Dreyfus Socially Responsible Growth................... N/A N/A
DFA Small Value....................................... 9.12% 11.43%
DFA Large Value....................................... 4.07% 15.96%
DFA International Value............................... 21.21% 9.41%
DFA International Small............................... 17.73% -1.27%
DFA Short-Term Fixed.................................. 3.58% 4.46%
DFA Global Bond....................................... 3.34% 7.87%
Federated Prime Money................................. 3.92% 4.15%
Federated American Leaders............................ 5.96% 20.89%
Federated US Gov't Securities......................... -1.27% 4.99%
Federated Utility..................................... 1.01% 14.25%
Federated High Income Bond............................ 1.62% 7.53%
Wanger Int'l Small Cap................................ 124.93% 35.18%
Wanger US Small Cap................................... 24.23% 23.01%
Montgomery Emerg Mkt.................................. 63.73% 1.62%
Montgomery Growth..................................... 19.98% 19.25%
Seligman Capital...................................... N/A N/A
Seligman Communications and Information............... N/A N/A
Seligman Global Technology............................ N/A N/A
Stein Roe Small Company Growth........................ 47.11% 12.94%
Strong Int'l Stock.................................... 85.97% 15.15%
Transamerica VIF Growth............................... N/A N/A
Warburg Pincus Int'l Equity........................... 52.42% 16.74%
Warburg Pincus Small Co Growth........................ 67.96% 31.75%
Dreyfus Small Cap Value............................... 28.53% 6.90%
Endeavor Enhanced Index............................... 17.37% 21.23%
Strong Schafer Value.................................. -3.52% -0.65%
T. Rowe Price Int'l................................... 31.48% 15.85%
WRL Alger Agg Growth.................................. N/A 49.59%
WRL JP Morgan Real Est................................ N/A -10.03%
WRL Janus Global...................................... N/A 56.19%
WRL Janus Growth...................................... N/A 36.60%
WRL LKCM Strategic Tot Rtn............................ N/A 5.90%

11
<PAGE>

ADDITIONAL PERFORMANCE MEASURES

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

Peoples Benefit may show Non-Standardized Cumulative 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. Peoples Benefit may also show
Non-Standardized Average Annual Total Return (i.e., the average annual change in
Accumulation Unit Value) with respect to one or more periods. For one year, the
Non-Standardized Cumulative Total Return and the Non-Standardized Average Annual
Total Return are effective annual rates of return and are equal. For periods
greater than one year, the Non-Standardized 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 in the Prospectus), the Non-Standardized Cumulative
Total Return and Non-Standardized Average Annual Total Return also reflect these
expenses. However, these percentages do not reflect the Annual Policy Fee, any
sales loads or Premium Taxes (if any), which, if included, would reduce the
percentages reported by Peoples Benefit.

NON-STANDARDIZED CUMULATIVE TOTAL RETURN
FOR PERIOD ENDING DECEMBER 31, 1999

Since
Subaccount
Subaccount 1 Year Inception
---------- ------ ---------

Alliance Growth....................................... N/A N/A
Alliance Premier Growth............................... N/A N/A
Alliance Technology................................... N/A N/A
Dreyfus Socially Responsible Growth................... N/A N/A
DFA Small Value....................................... 9.14% 58.32%
DFA Large Value....................................... 4.09% 108.31%
DFA International Value............................... 21.23% 46.60%
DFA International Small............................... 17.76% -5.16%
DFA Short-Term Fixed.................................. 3.60% 20.39%
DFA Global Bond....................................... 3.36% 45.65%
Federated Prime Money................................. 3.94% 23.02%
Federated American Leaders............................ 5.98% 149.31%
Federated US Gov't Securities......................... -1.24% 24.66%
Federated Utility..................................... 1.04% 81.10%
Federated High Income Bond............................ 1.64% 36.63%
Wanger Int'l Small Cap................................ 124.96% 264.29%
Wanger US Small Cap................................... 24.26% 142.83%
Montgomery Emerg Mkt.................................. 63.75% 6.58%
Montgomery Growth..................................... 20.01% 98.29%
Seligman Capital...................................... N/A N/A
Seligman Communications and Information............... N/A N/A
Seligman Global Technology............................ N/A N/A
Stein Roe Small Company Growth........................ 47.14% 39.88%
Strong Int'l Stock.................................... 85.99% 47.52%
Transamerica VIF Growth............................... N/A N/A
Warburg Pincus Int'l Equity........................... 52.44% 53.19%
Warburg Pincus Small Co Growth........................ 67.99% 113.75%
Dreyfus Small Cap Value............................... 28.55% 16.00%
Endeavor Enhanced Index............................... 17.40% 53.28%
Strong Schafer Value.................................. -3.49% -1.37%
T. Rowe Price Int'l................................... 31.50% 38.62%
WRL Alger Agg Growth.................................. N/A 49.61%

12
<PAGE>

WRL JP Morgan Real Est................................ N/A -10.02%
WRL Janus Global...................................... N/A 56.20%
WRL Janus Growth...................................... N/A 36.62%
WRL LKCM Strategic Tot Rtn............................ N/A 5.92%

NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN
FOR PERIOD ENDING DECEMBER 31, 1999

Since
Subaccount
Subaccount 1 Year Inception
---------- ------ ---------

Alliance Growth....................................... N/A N/A
Alliance Premier Growth............................... N/A N/A
Alliance Technology................................... N/A N/A
Dreyfus Socially Responsible Growth................... N/A N/A
DFA Small Value....................................... 9.14% 11.45%
DFA Large Value....................................... 4.09% 15.97%
DFA International Value............................... 21.23% 9.43%
DFA International Small............................... 17.76% -1.24%
DFA Short-Term Fixed.................................. 3.60% 4.48%
DFA Global Bond....................................... 3.36% 7.89%
Federated Prime Money................................. 3.94% 4.17%
Federated American Leaders............................ 5.98% 20.90%
Federated US Gov't Securities......................... -1.24% 5.01%
Federated Utility..................................... 1.04% 14.27%
Federated High Income Bond............................ 1.64% 7.55%
Wanger Int'l Small Cap................................ 124.96% 35.19%
Wanger US Small Cap................................... 24.26% 23.02%
Montgomery Emerg Mkt.................................. 63.75% 1.64%
Montgomery Growth..................................... 20.01% 19.27%
Seligman Capital...................................... N/A N/A
Seligman Communications and Information............... N/A N/A
Seligman Global Technology............................ N/A N/A
Stein Roe Small Company Growth........................ 47.14% 12.96%
Strong Int'l Stock.................................... 85.99% 15.17%
Transamerica VIF Growth............................... N/A N/A
Warburg Pincus Int'l Equity........................... 52.44% 16.75%
Warburg Pincus Small Co Growth........................ 67.99% 31.77%
Dreyfus Small Cap Value............................... 28.55% 6.93%
Endeavor Enhanced Index............................... 17.40% 21.25%
Strong Schafer Value.................................. -3.49% -0.62%
T. Rowe Price Int'l................................... 31.50% 15.88%
WRL Alger Agg Growth.................................. N/A 49.61%
WRL JP Morgan Real Est................................ N/A -10.02%
WRL Janus Global...................................... N/A 56.20%
WRL Janus Growth...................................... N/A 36.62%
WRL LKCM Strategic Tot Rtn............................ N/A 5.92%

13
<PAGE>

NON-STANDARDIZED TOTAL RETURN YEAR-TO-DATE

Peoples Benefit may show Non-Standardized Total Return Year-to-Date as of a
particular date, or simply Total Return YTD, for one or more subaccounts with
respect to one or more non-standardized base periods commencing at the beginning
of a calendar year. Total Return YTD figures reflect the percentage change in
actual Accumulation Unit Values during the relevant period. These percentages
reflect a deduction for the Separate Account and Portfolio expenses, but do not
include the Annual Policy Fee, any sales loads or Premium Taxes (if any), which,
if included, would reduce the percentages reported by Peoples Benefit.

NON-STANDARDIZED TOTAL RETURN YEAR-TO-DATE

Total Return
YTD as of
Subaccount 12/31/99
---------- --------

Alliance Growth....................................... N/A
Alliance Premier Growth............................... N/A
Alliance Technology................................... NA/
Dreyfus Socially Responsible Growth................... N/A
DFA Small Value....................................... 9.14%
DFA Large Value....................................... 4.09%
DFA International Value............................... 21.23%
DFA International Small............................... 17.76%
DFA Short-Term Fixed.................................. 3.60%
DFA Global Bond....................................... 3.36%
Federated Prime Money................................. 3.94%
Federated American Leaders............................ 5.98%
Federated US Gov't Securities......................... -1.24%
Federated Utility..................................... 1.04%
Federated High Income Bond............................ 1.64%
Wanger Int'l Small Cap................................ 124.96%
Wanger US Small Cap................................... 24.26%
Montgomery Emerg Mkt.................................. 63.75%
Montgomery Growth..................................... 20.01%
Seligman Capital...................................... N/A
Seligman Communications and Information............... N/A
Seligman Global Technology............................ N/A
Stein Roe Small Company Growth........................ 47.14%
Strong Int'l Stock.................................... 85.99%
Transamerica VIF Growth............................... N/A
Warburg Pincus Int'l Equity........................... 52.44%
Warburg Pincus Small Co Growth........................ 67.99%
Dreyfus Small Cap Value............................... 28.55%
Endeavor Enhanced Index............................... 17.40%
Strong Schafer Value.................................. -3.49%
T. Rowe Price Int'l................................... 31.50%
WRL Alger Agg Growth.................................. N/A
WRL JP Morgan Real Est................................ N/A
WRL Janus Global...................................... N/A
WRL Janus Growth...................................... N/A
WRL LKCM Strategic Tot Rtn............................ N/A

14
<PAGE>

NON-STANDARDIZED ONE YEAR RETURN

Peoples Benefit may show Non-Standardized One Year Return, for one or more
Subaccounts with respect to one or more non-standardized base periods commencing
at the beginning of a calendar year (or date of Portfolio inception, if during
the relevant year) and ending at the end of such calendar year. One Year Return
figures reflect the historical performance of the Portfolios as if the Policy
were in existence before its inception date (which it was not). After the
Policy's inception date, the figures reflect the percentage change in actual
Accumulation Unit Values during the relevant period. These percentages reflect a
deduction for the Separate Account and Portfolio expenses, but do not include
the Annual Policy Fee, any sales loads or Premium Taxes (if any), which, if
included, would reduce the percentages reported by Peoples Benefit.

NON-STANDARDIZED ONE YEAR RETURN

1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>

Alliance Growth..................................
Alliance Premier Growth..........................
Alliance Technology..............................
Dreyfus Socially Responsible Growth..............
DFA Small Value.................................. 9.14% -7.21% 29.60% 21.26% N/A
DFA Large Value.................................. 4.09% 10.04% 28.39% 17.72% N/A
DFA International Value.......................... 21.23% 11.01% -2.86% 6.41% N/A
DFA International Small.......................... 17.76% 7.07% -25.56% -0.39% N/A
DFA Short-Term Fixed............................. 3.60% 4.80% 5.00% 4.51% N/A
DFA Global Bond.................................. 3.36% 7.54% 7.09% 8.27% N/A
Federated Prime Money............................ 3.94% 4.13% 4.26% 4.08% 4.46%
Federated American Leaders....................... 5.98% 16.86% 31.48% 20.78% 34.02%
Federated US Gov't Securities.................... -1.24% 6.96% 7.88% 3.52% 7.53%
Federated Utility................................ 1.04% 13.21% 25.81% 10.84% 23.88%
Federated High Income Bond....................... 1.64% 2.03% 13.09% 13.57% 17.95%
Wanger Int'l Small Cap........................... 124.96% 15.58% -2.10% 31.15% N/A
Wanger US Small Cap.............................. 24.26% 7.98% 28.57% 45.63% N/A
Montgomery Emerg Mkt............................. 63.75% -37.93% -1.22% N/A N/A
Montgomery Growth................................ 20.01% 2.26% 27.74% N/A N/A
Seligman Capital.................................
Seligman Communications and Information..........
Seligman Global Technology.......................
Stein Roe Small Company Growth................... 47.14% -17.84% N/A N/A N/A
Strong Int'l Stock............................... -3.49% -5.39% -14.08% 9.67% N/A
Transamerica VIF Growth..........................
Warburg Pincus Int'l Equity...................... 52.44% 4.67% -2.89% 9.32% N/A
Warburg Pincus Small Co Growth................... 67.99% -3.48% 14.89% 13.18% N/A
Dreyfus Small Cap Value.......................... 28.55% -2.81% 24.76% 24.83% 13.32%
Endeavor Enhanced Index.......................... 17.40% 30.54% N/A N/A N/A
Strong Schafer Value............................. -3.49% 1.50% N/A N/A N/A
T. Rowe Price Int'l.............................. 31.50% 14.69% 1.95% 14.49% 9.66%
WRL Alger Agg Growth............................. 67.94% 47.75% 23.12% 9.73% 37.15%
WRL JP Morgan Real Est........................... -4.44% N/A N/A N/A N/A
WRL Janus Global................................. 70.01% 29.19% 17.99% 26.92% 22.28%
WRL Janus Growth................................. 58.65% 63.45% 16.79% 17.21% 46.20%
WRL LKCM Strategic Tot Rtn....................... 11.35% 8.93% 21.08% 14.26% 23.86%

</TABLE>

15
<PAGE>

NON-STANDARDIZED ADJUSTED HISTORICAL CUMULATIVE RETURN AND NON-STANDARDIZED
ADJUSTED HISTORICAL AVERAGE ANNUAL TOTAL RETURN

Peoples Benefit may show Non-Standardized Adjusted Historical Cumulative Return
and Non-Standardized Adjusted Historical Average Annual Total Return, calculated
on the basis of the historical performance of the Portfolios (calculated
beginning from the end of the year of inception for each Portfolio) and may
assume the Policy was in existence prior to its inception date (which it was
not). After the Policy's inception date, the calculations will reflect actual
Accumulation Unit Values. These returns are based on specified purchase payment
patterns which produce the resulting Accumulated Values. They reflect a
deduction for the Separate Account expenses and Portfolio expenses. However,
they do not include the Annual Policy Fee, any sales loads or Premium Taxes (if
any), which, if included, would reduce the percentages reported.

The Non-Standardized Adjusted Historical Cumulative 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 Adjusted Historical 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.

ADJUSTED HISTORICAL CUMULATIVE RETURNS FOR PERIODS ENDING 12/31/99
(BASED ON SINGLE INITIAL PURCHASE)

Total
Since Fund
1 Year 3 Year Inception Year-End
------ ------ ------------------
<S> <C> <C> <C>
Alliance Growth............................................
Alliance Premier Growth....................................
Alliance Technology........................................
Dreyfus Socially Responsible Growth........................
DFA Small Value........................................... 9.14% 31.25% 56.40%
DFA Large Value........................................... 4.09% 47.06% 108.08%
DFA International Value................................... 21.23% 30.72% 46.58%
DFA International Small................................... 17.76% -6.15% -5.83%
DFA Short-Term Fixed...................................... 3.60% 14.00% 20.51%
DFA Global Bond........................................... 3.36% 19.04% 45.44%
Federated Prime Money..................................... 3.94% 12.86% 23.15%
Federated American Leaders................................ 5.98% 62.84% 160.25%
Federated US Gov't Securities............................. -1.24% 13.95% 29.40%
Federated Utility......................................... 1.04% 43.92% 89.89%
Federated High Income Bond................................ 1.64% 17.29% 50.62%
Wanger Int'l Small Cap.................................... 124.96% 154.54% 355.02%
Wanger US Small Cap....................................... 24.26% 72.51% 190.94%
Montgomery Emerg Mkt...................................... 63.75% 0.39% 5.50%
Montgomery Growth......................................... 20.01% 56.77% 98.48%
Seligman Capital...........................................
Seligman Communication and Information.....................
Seligman Global Technology.................................
Strong Int'l Stock........................................ 85.99% 51.19% 69.93%
Transamerica VIF Growth....................................
Warburg Pincus Int'l Equity............................... 52.44% 54.94% 81.21%
Warburg Pincus Small Co Growth............................ 67.99% 86.29% 162.92%
Dreyfus Small Cap Value................................... 28.55% 55.88% 139.51%
Endeavor Enhanced Index................................... 17.40% N/A 87.54%

</TABLE>

16
<PAGE>

Strong Schafer Value...................................... -3.49% N/A -1.37%
T. Rowe Price Int'l....................................... 31.50% 53.77% 113.55%
WRL Alger Agg Growth...................................... 67.94% 205.50% 351.51%
WRL JP Morgan Real Est.................................... -4.44% N/A -19.03%
WRL Janus Global.......................................... 70.01% 159.14% 446.03%
WRL Janus Growth.......................................... 58.65% 202.85% 1402.24%
WRL LKCM Strategic Tot Rtn................................ 11.35% 46.72% 131.64%

</TABLE>

ADJUSTED HISTORICAL AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/99
(BASED ON SINGLE INITIAL PURCHASE)

Total
Since Fund
1 Year 3 Year Inception Year-End
------ ------ ------------------
<S> <C> <C> <C>

Alliance Growth............................................
Alliance Premier Growth....................................
Alliance Technology........................................
Dreyfus Socially Responsible Growth........................
DFA Small Value........................................... 9.14% 9.49% 11.08%
DFA Large Value........................................... 4.09% 13.72% 15.89%
DFA International Value................................... 21.23% 9.34% 9.40%
DFA International Small................................... 17.76% -2.09% -1.40%
DFA Short-Term Fixed...................................... 3.60% 4.47% 4.48%
DFA Global Bond........................................... 3.36% 5.98% 7.83%
Federated Prime Money..................................... 3.94% 4.11% 4.15%
Federated American Leaders................................ 5.98% 17.65% 17.63%
Federated US Gov't Securities............................. -1.24% 4.45% 4.57%
Federated Utility......................................... 1.04% 12.90% 11.50%
Federated High Income Bond................................ 1.64% 5.46% 7.27%
Wanger Int'l Small Cap.................................... 124.96% 36.54% 38.37%
Wanger US Small Cap....................................... 24.26% 19.93% 25.72%
Montgomery Emerg Mkt...................................... 63.75% 0.13% 1.38%
Montgomery Growth......................................... 20.01% 16.17% 19.25%
Seligman Capital...........................................
Seligman Communications and Information....................
Seligman Global Technology.................................
Strong Int'l Stock........................................ 85.99% 14.77% 13.46%
Transamerica VIF Global....................................
Warburg Pincus Int'l Equity............................... 52.44% 15.72% 14.10%
Warburg Pincus Small Co Growth............................ 67.99% 23.04% 23.92%
Dreyfus Small Cap Value................................... 28.55% 15.95% 14.01%
Endeavor Enhanced Index................................... 17.40% N/A 26.57%
Strong Schafer Value...................................... -3.49% N/A -0.62%
T. Rowe Price Int'l....................................... 31.50% 15.42% 9.07%
WRL Alger Agg Growth...................................... 67.94% 45.10% 29.46%
WRL JP Morgan Real Est.................................... -4.44% N/A -11.88%
WRL Janus Global.......................................... 70.01% 37.36% 27.10%
WRL Janus Growth.......................................... 58.65% 44.68% 22.68%
WRL LKCM Strategic Tot Rtn................................ 11.35% 13.63% 13.07%
</TABLE>

17
<PAGE>

Note: Advertisements and other sales literature for the Portfolios may quote
total returns which are calculated on non-standardized base periods. These total
returns also represent the historic change in the value of an investment in the
Portfolios based on monthly reinvestment of dividends over a specific period of
time.

HYPOTHETICAL ILLUSTRATIONS
<TABLE>
<CAPTION>

DFA Small Value

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1995 $ 2,000 $ 2,000 N/A N/A
12/31/1996 $ 50,000 $ 60,630 21.26% 21.26% 21.26% 12/31/1996 $ 4,000 $ 4,425 21.26% 21.26%
12/31/1997 $ 50,000 $ 78,578 29.60% 25.36% 57.16% 12/31/1997 $ 6,000 $ 7,735 29.60% 26.57%
12/31/1998 $ 50,000 $ 72,910 -7.21% 13.40% 45.82% 12/31/1998 $ 8,000 $ 9,177 -7.21% 9.23%

<CAPTION>
DFA Large Value

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1995 $ 2,000 $ 2,000 N/A N/A
12/31/1996 $ 50,000 $ 58,858 17.72% 17.72% 17.72% 12/31/1996 $ 4,000 $ 4,354 17.72% 17.72%

12/31/1997 $ 50,000 $ 75,568 28.39% 22.94% 51.14% 12/31/1997 $ 6,000 $ 7,591 28.39% 24.51%
12/31/1998 $ 50,000 $ 83,153 10.04% 18.48% 66.31% 12/31/1998 $ 8,000 $ 10,352 10.04% 17.48%

<CAPTION>
DFA International Value

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1995 $ 2,000 $ 2,000 N/A N/A
12/31/1996 $ 50,000 $ 53,206 6.41% 6.41% 6.41% 12/31/1996 $ 4,000 $ 4,128 6.41% 6.41%
12/31/1997 $ 50,000 $ 51,681 -2.86% 1.67% 3.36% 12/31/1997 $ 6,000 $ 6,010 -2.86% 0.17%
12/31/1998 $ 50,000 $ 57,372 11.01% 4.69% 14.74% 12/31/1998 $ 8,000 $ 8,672 11.01% 5.40%
</TABLE>

18
<PAGE>

DFA International Small

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1995 $ 2,000 $ 2,000 N/A N/A
12/31/1996 $ 50,000 $ 49,804 -0.39% -0.39% -0.39% 12/31/1996 $ 4,000 $ 3,992 -0.39% -0.39%
12/31/1997 $ 50,000 $ 37,073 -25.56% -13.89% -25.85% 12/31/1997 $ 6,000 $ 4,972 -25.56% -18.25%
12/31/1998 $ 50,000 $ 39,693 7.07% -7.41% -20.61% 12/31/1998 $ 8,000 $ 7,323 7.07% -5.87%

<CAPTION>
DFA Short-Term Fixed

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $ 50,000 $ 50,000 12/31/1995 $ 2,000 $ 2,000
12/31/1996 $ 50,000 $ 52,256 4.51% 4.51% 4.51% 12/31/1996 $ 4,000 $ 4,090 4.51% 4.51%

12/31/1997 $ 50,000 $ 54,871 5.00% 4.76% 9.74% 12/31/1997 $ 6,000 $ 6,295 5.00% 4.84%
12/31/1998 $ 50,000 $ 57,503 4.80% 4.77% 15.01% 12/31/1998 $ 8,000 $ 8,597 4.80% 4.82%

<CAPTION>
DFA Global Bond

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1995 $ 2,000 $ 2,000 N/A N/A
12/31/1996 $ 50,000 $ 54,135 8.27% 8.27% 8.27% 12/31/1996 $ 4,000 $ 4,165 8.27% 8.27%
12/31/1997 $ 50,000 $ 57,974 7.09% 7.68% 15.95% 12/31/1997 $ 6,000 $ 6,461 7.09% 7.49%
12/31/1998 $ 50,000 $ 62,346 7.54% 7.63% 24.69% 12/31/1998 $ 8,000 $ 8,948 7.54% 7.52%
</TABLE>

19
<PAGE>

Dreyfus Small Cap Value

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1993
December 31, 1993 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1993 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1993 $ 2,000 $ 2,000 N/A N/A
12/31/1994 $ 50,000 $ 48,787 -2.43% -2.43% -2.43% 12/31/1994 $ 4,000 $ 3,951 -2.43% -2.43%
12/31/1995 $ 50,000 $ 55,284 13.32% 5.15% 10.57% 12/31/1995 $ 6,000 $ 6,478 13.32% 7.76%
12/31/1996 $ 50,000 $ 69,010 24.83% 11.34% 38.02% 12/31/1996 $ 8,000 $ 10,086 24.83% 15.68%
12/31/1997 $ 50,000 $ 86,098 24.76% 14.55% 72.20% 12/31/1997 $ 10,000 $ 14,583 24.76% 18.97%
12/31/1998 $ 50,000 $ 83,679 -2.81% 10.85% 67.36% 12/31/1998 $ 12,000 $ 16,174 -2.81% 11.86%

<CAPTION>
Endeavor Enhanced Index

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1997
December 31, 1997 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1997 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1997 $ 2,000 $ 2,000 N/A N/A
12/31/1998 $ 50,000 $ 65,269 30.54% 30.54% 30.54% 12/31/1998 $ 4,000 $ 4,611 30.54% 30.54%

<CAPTION>
T. Rowe Price International

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1991
December 31, 1991 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1991 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1991 $ 2,000 $ 2,000 N/A N/A
12/31/1992 $ 50,000 $ 47,882 -4.24% -4.24% -4.24% 12/31/1992 $ 4,000 $ 3,915 -4.24% -4.24%
12/31/1993 $ 50,000 $ 56,367 17.72% 6.18% 12.73% 12/31/1993 $ 6,000 $ 6,609 17.72% 9.83%
12/31/1994 $ 50,000 $ 52,825 -6.29% 1.85% 5.65% 12/31/1994 $ 8,000 $ 8,194 -6.29% 1.60%
12/31/1995 $ 50,000 $ 57,925 9.66% 3.75% 15.85% 12/31/1995 $ 10,000 $ 10,985 9.66% 4.70%
12/31/1996 $ 50,000 $ 66,320 14.49% 5.81% 32.64% 12/31/1996 $ 12,000 $ 14,577 14.49% 7.74%
12/31/1997 $ 50,000 $ 67,614 1.95% 5.16% 35.23% 12/31/1997 $ 14,000 $ 16,861 1.95% 6.14%
12/31/1998 $ 50,000 $ 77,550 14.69% 6.47% 55.10% 12/31/1998 $ 16,000 $ 21,339 14.69% 8.09%
</TABLE>

20
<PAGE>

<TABLE>
<CAPTION>
Federated American Leaders Portfolio

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1994
December 31, 1994 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1994 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1994 $ 2,000 $ 2,000 N/A N/A
12/31/1995 $ 50,000 $ 67,009 34.02% 34.02% 34.02% 12/31/1995 $ 4,000 $ 4,680 34.02% 34.02%
12/31/1996 $ 50,000 $ 80,936 20.78% 27.23% 61.87% 12/31/1996 $ 6,000 $ 7,653 20.78% 25.40%
12/31/1997 $ 50,000 $ 106,414 31.48% 28.63% 112.83% 12/31/1997 $ 8,000 $ 12,062 31.48% 28.18%
12/31/1998 $ 50,000 $ 124,356 16.86% 25.58% 148.71% 12/31/1998 $ 10,000 $ 16,096 16.86% 24.00%

<CAPTION>
Federated High Income Bond Portfolio

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1994
December 31, 1994 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1994 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1994 $ 2,000 $ 2,000 N/A N/A
12/31/1995 $ 50,000 $ 58,975 17.95% 17.95% 17.95% 12/31/1995 $ 4,000 $ 4,359 17.95% 17.95%
12/31/1996 $ 50,000 $ 66,977 13.57% 15.74% 33.95% 12/31/1996 $ 6,000 $ 6,950 13.57% 15.08%
12/31/1997 $ 50,000 $ 75,747 13.09% 14.85% 51.49% 12/31/1997 $ 8,000 $ 9,861 13.09% 14.13%
12/31/1998 $ 50,000 $ 77,288 2.03% 11.50% 54.58% 12/31/1998 $ 10,000 $ 12,061 2.03% 9.38%

<CAPTION>
Federated Prime Money Portfolio

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1994
December 31, 1994 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1994 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1994 $ 2,000 $ 2,000 N/A N/A
12/31/1995 $ 50,000 $ 52,232 4.46% 4.46% 4.46% 12/31/1995 $ 4,000 $ 4,089 4.46% 4.46%
12/31/1996 $ 50,000 $ 54,361 4.08% 4.27% 8.72% 12/31/1996 $ 6,000 $ 6,256 4.08% 4.21%
12/31/1997 $ 50,000 $ 56,679 4.26% 4.27% 13.36% 12/31/1997 $ 8,000 $ 8,523 4.26% 4.24%
12/31/1998 $ 50,000 $ 59,022 4.13% 4.23% 18.04% 12/31/1998 $ 10,000 $ 10,875 4.13% 4.20%
</TABLE>

21
<PAGE>

<TABLE>
<CAPTION>
Federated U.S. Government Securities

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1994
December 31, 1994 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1994 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1994 $ 2,000 $ 2,000 N/A N/A
12/31/1995 $ 50,000 $ 53,766 7.53% 7.53% 7.53% 12/31/1995 $ 4,000 $ 4,151 7.53% 7.53%
12/31/1996 $ 50,000 $ 55,660 3.52% 5.51% 11.32% 12/31/1996 $ 6,000 $ 6,297 3.52% 4.87%
12/31/1997 $ 50,000 $ 60,044 7.88% 6.29% 20.09% 12/31/1997 $ 8,000 $ 8,793 7.88% 6.33%
12/31/1998 $ 50,000 $ 64,224 6.96% 6.46% 28.45% 12/31/1998 $ 10,000 $ 11,405 6.96% 6.58%

<CAPTION>
Federated Utility Portfolio

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1994
December 31, 1994 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1994 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1994 $ 2,000 $ 2,000 N/A N/A
12/31/1995 $ 50,000 $ 61,942 23.88% 23.88% 23.88% 12/31/1995 $ 4,000 $ 4,478 23.88% 23.88%
12/31/1996 $ 50,000 $ 68,654 10.84% 17.18% 37.31% 12/31/1996 $ 6,000 $ 6,963 10.84% 15.27%
12/31/1997 $ 50,000 $ 86,377 25.81% 19.99% 72.75% 12/31/1997 $ 8,000 $ 10,760 25.81% 20.16%
12/31/1998 $ 50,000 $ 97,789 13.21% 18.26% 95.58% 12/31/1998 $ 10,000 $ 14,182 13.21% 17.55%

<CAPTION>
Montgomery Growth

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1996
December 31, 1996 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1996 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1996 $ 2,000 $ 2,000 N/A N/A
12/31/1997 $ 50,000 $ 63,869 27.74% 27.74% 27.74% 12/31/1997 $ 4,000 $ 4,555 27.74% 27.74%
12/31/1998 $ 50,000 $ 65,314 2.26% 14.29% 30.63% 12/31/1998 $ 6,000 $ 6,658 2.26% 10.59%
</TABLE>

22
<PAGE>

Montgomery Emerging Markets

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1996
December 31, 1996 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1996 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1996 $ 2,000 $ 2,000 N/A N/A
12/31/1997 $ 50,000 $ 49,388 -1.22% -1.22% -1.22% 12/31/1997 $ 4,000 $ 3,976 -1.22% -1.22%
12/31/1998 $ 50,000 $ 30,653 -37.93% -21.70% -38.69% 12/31/1998 $ 6,000 $ 4,467 -37.93% -28.19%

<CAPTION>
Strong International Stock

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1995 $ 2,000 $ 2,000 N/A N/A
12/31/1996 $ 50,000 $ 54,835 9.67% 9.67% 9.67% 12/31/1996 $ 4,000 $ 4,193 9.67% 9.67%
12/31/1997 $ 50,000 $ 47,115 -14.08% -2.93% -5.77% 12/31/1997 $ 6,000 $ 5,603 -14.08% -6.77%
12/31/1998 $ 50,000 $ 44,574 -5.39% -3.76% -10.85% 12/31/1998 $ 8,000 $ 7,301 -5.39% -6.07%

<CAPTION>
Strong Schafer Value

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1997
December 31, 1997 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1997 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1997 $ 2,000 $ 2,000 N/A N/A
12/31/1998 $ 50,000 $ 50,751 1.50% 1.50% 1.50% 12/31/1998 $ 4,000 $ 4,030 1.50% 1.50%
</TABLE>

23
<PAGE>

Wanger U.S. Small Cap Advisor

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1995 $ 2,000 $ 2,000 N/A N/A
12/31/1996 $ 50,000 $ 72,815 45.63% 45.63% 45.63% 12/31/1996 $ 4,000 $ 4,913 45.63% 45.63%
12/31/1997 $ 50,000 $ 93,621 28.57% 36.84% 87.24% 12/31/1997 $ 6,000 $ 8,316 28.57% 34.61%
12/31/1998 $ 50,000 $ 101,093 7.98% 26.45% 102.19% 12/31/1998 $ 8,000 $ 10,980 7.98% 21.57%

<CAPTION>
Wanger International Small Cap Advisor

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1995 $ 2,000 $ 2,000 N/A N/A
12/31/1996 $ 50,000 $ 65,573 31.15% 31.15% 31.15% 12/31/1996 $ 4,000 $ 4,623 31.15% 31.15%
12/31/1997 $ 50,000 $ 64,197 -2.10% 13.31% 28.39% 12/31/1997 $ 6,000 $ 6,526 -2.10% 8.52%
12/31/1998 $ 50,000 $ 74,195 15.58% 14.06% 48.39% 12/31/1998 $ 8,000 $ 9,542 15.58% 11.88%

<CAPTION>
Warburg Pincus International Equity

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1995 $ 2,000 $ 2,000 N/A N/A
12/31/1996 $ 50,000 $ 54,661 9.32% 9.32% 9.32% 12/31/1996 $ 4,000 $ 4,186 9.32% 9.32%
12/31/1997 $ 50,000 $ 53,081 -2.89% 3.04% 6.16% 12/31/1997 $ 6,000 $ 6,065 -2.89% 1.09%
12/31/1998 $ 50,000 $ 55,558 4.67% 3.58% 11.12% 12/31/1998 $ 8,000 $ 8,348 4.67% 2.85%
</TABLE>

24
<PAGE>

Warburg Pincus Small Company Growth

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1995 $ 2,000 $ 2,000 N/A N/A
12/31/1996 $ 50,000 $ 56,588 13.18% 13.18% 13.18% 12/31/1996 $ 4,000 $ 4,264 13.18% 13.18%
12/31/1997 $ 50,000 $ 65,015 14.89% 14.03% 30.03% 12/31/1997 $ 6,000 $ 6,898 14.89% 14.29%
12/31/1998 $ 50,000 $ 62,752 -3.48% 7.87% 25.50% 12/31/1998 $ 8,000 $ 8,658 -3.48% 5.30%

<CAPTION>
WRL Alger Aggressive Growth

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1994
December 31, 1994 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1994 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1994 $ 2,000 $ 2,000 N/A N/A
12/31/1995 $ 50,000 $ 68,574 37.15% 37.15% 37.15% 12/31/1995 $ 4,000 $ 4,743 37.15% 37.15%
12/31/1996 $ 50,000 $ 75,249 9.73% 22.68% 50.50% 12/31/1996 $ 6,000 $ 7,205 9.73% 18.89%
12/31/1997 $ 50,000 $ 92,647 23.12% 22.83% 85.29% 12/31/1997 $ 8,000 $ 10,870 23.12% 20.87%
12/31/1998 $ 50,000 $ 136,885 47.75% 28.63% 173.77% 12/31/1998 $ 10,000 $ 18,061 47.75% 29.93%

<CAPTION>
WRL J.P. Morgan Real Estate Securities

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1998
December 31, 1998 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1998 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1998 $ 2,000 $ 2,000 N/A N/A
</TABLE>

25
<PAGE>

WRL Janus Global
<TABLE>
<CAPTION>

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1992
December 31, 1992 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1992 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1992 $ 2,000 $ 2,000 N/A N/A
12/31/1993 $ 50,000 $ 67,100 34.20% 34.20% 34.20% 12/31/1993 $ 4,000 $ 4,684 34.20% 34.20%
12/31/1994 $ 50,000 $ 66,835 -0.40% 15.62% 33.67% 12/31/1994 $ 6,000 $ 6,665 -0.40% 10.71%
12/31/1995 $ 50,000 $ 81,724 22.28% 17.79% 63.45% 12/31/1995 $ 8,000 $ 10,150 22.28% 16.12%
12/31/1996 $ 50,000 $ 103,726 26.92% 20.01% 107.45% 12/31/1996 $ 10,000 $ 14,883 26.92% 20.00%
12/31/1997 $ 50,000 $ 122,389 17.99% 19.61% 144.78% 12/31/1997 $ 12,000 $ 19,561 17.99% 19.40%
12/31/1998 $ 50,000 $ 158,110 29.19% 21.15% 216.22% 12/31/1998 $ 14,000 $ 27,270 29.19% 21.75%

WRL Janus Growth

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1986
December 31, 1986 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1986 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1986 $ 2,000 $ 2,000 N/A N/A
12/31/1987 $ 50,000 $ 55,090 10.18% 10.18% 10.18% 12/31/1987 $ 4,000 $ 4,204 10.18% 10.18%
12/31/1988 $ 50,000 $ 64,931 17.86% 13.96% 29.86% 12/31/1988 $ 6,000 $ 6,954 17.86% 15.14%
12/31/1989 $ 50,000 $ 94,873 46.11% 23.80% 89.75% 12/31/1989 $ 8,000 $ 12,161 46.11% 28.77%
12/31/1990 $ 50,000 $ 94,050 -0.87% 17.11% 88.10% 12/31/1990 $ 10,000 $ 14,056 -0.87% 17.10%
12/31/1991 $ 50,000 $ 149,350 58.80% 24.46% 198.70% 12/31/1991 $ 12,000 $ 24,321 58.80% 28.08%
12/31/1992 $ 50,000 $ 151,857 1.68% 20.34% 203.71% 12/31/1992 $ 14,000 $ 26,729 1.68% 21.10%
12/31/1993 $ 50,000 $ 156,890 3.31% 17.75% 213.78% 12/31/1993 $ 16,000 $ 29,615 3.31% 17.06%
12/31/1994 $ 50,000 $ 142,916 -8.91% 14.03% 185.83% 12/31/1994 $ 18,000 $ 28,977 -8.91% 11.54%
12/31/1995 $ 50,000 $ 208,939 46.20% 17.22% 317.88% 12/31/1995 $ 20,000 $ 44,364 46.20% 16.81%
12/31/1996 $ 50,000 $ 244,887 17.21% 17.22% 389.77% 12/31/1996 $ 22,000 $ 53,996 17.21% 16.87%
12/31/1997 $ 50,000 $ 286,009 16.79% 17.18% 472.02% 12/31/1997 $ 24,000 $ 65,063 16.79% 16.86%
12/31/1998 $ 50,000 $ 467,470 63.45% 20.48% 834.94% 12/31/1998 $ 26,000 $ 108,344 63.45% 21.59%
</TABLE>

26
<PAGE>

WRL LKCM Strategic Total Return
<TABLE>
<CAPTION>

$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1993
December 31, 1993 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ------- ----- ------ ------ ------ ---- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1993 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1993 $ 2,000 $ 2,000 N/A N/A
12/31/1994 $ 50,000 $ 49,411 -1.18% -1.18% -1.18% 12/31/1994 $ 4,000 $ 3,976 -1.18% -1.18%
12/31/1995 $ 50,000 $ 61,203 23.86% 10.64% 22.41% 12/31/1995 $ 6,000 $ 6,925 23.86% 14.70%
12/31/1996 $ 50,000 $ 69,930 14.26% 11.83% 39.86% 12/31/1996 $ 8,000 $ 9,913 14.26% 14.49%
12/31/1997 $ 50,000 $ 84,668 21.08% 14.07% 69.34% 12/31/1997 $ 10,000 $ 14,002 21.08% 16.90%
12/31/1998 $ 50,000 $ 92,231 8.93% 13.03% 84.46% 12/31/1998 $ 12,000 $ 17,253 8.93% 14.42%
</TABLE>

Individualized Computer Generated Illustrations

Peoples Benefit may from time to time use computer-based software available
through Morningstar, CDA/Wiesnberger and/or other firms to provide registered
representatives and existing and/or potential owners of Policies with
individualized hypothetical performance illustrations for some or all of the
Portfolios. Such illustrations may include, without limitation, graphs, bar
charts and other types of formats presenting the following information: (i) the
historical results of a hypothetical investment in a single Portfolio; (ii) the
historical fluctuation of the value of a single Portfolio (actual and
hypothetical); (iii) the historical results of a hypothetical investment in more
than one Portfolio; (iv) the historical performance of two or more market
indices in relation to one another and/or one or more Portfolios; (v) the
historical performance of two or more market indices in comparison to a single
Portfolio or a group of Portfolios; (vi) a market risk/reward scatter chart
showing the historical risk/reward relationship of one or more mutual funds or
Portfolios to one or more indices and a broad category of similar anonymous
variable annuity subaccounts; and (vii) Portfolio data sheets showing various
information about one or more Portfolios (such as information concerning total
return for various periods, fees and expenses, standard deviation, alpha and
beta, investment objective, inception date and net assets).

PERFORMANCE COMPARISONS

Performance information for any subaccount reflects only the performance of a
hypothetical Policy under which Accumulation Value is allocated to a subaccount
during a particular time period on which the calculations are based. Performance
information should be considered in light of the investment objectives and
policies, characteristics and quality of the Portfolio in which the subaccount
invests, and the market conditions during the given period, and should not be
considered as a representation of what may be achieved in the future.

Reports and marketing materials may, from time to time, include information
concerning the rating of Peoples Benefit Life Insurance Company, Inc. as
determined by one or more of the ratings services listed below, or other
recognized rating services. Reports and promotional literature may also contain
other information including (i) the ranking of any subaccount derived from
rankings of variable annuity separate accounts or other investment products
tracked by Lipper Analytical Services or by other rating services, companies,
publications, or other person who rank separate accounts or other investment
products on overall performance or other criteria, and (ii) the effect of
tax-deferred compounding on a subaccount's investment returns, or returns in
general, which may be illustrated by graphs, charts, or otherwise, and which may
include a comparison, at various points in time, of the return from an
investment in a Policy (or returns in general) on a tax-deferred basis (assuming
one or more tax rates) with the return on a taxable basis.

27
<PAGE>

Each subaccount's performance depends on, among other things, the performance of
the underlying Portfolio which, in turn, depends upon such variables as:

. quality of underlying investments;

. average maturity of underlying investments;

. type of instruments in which the Portfolio is invested;

. changes in interest rates and market value of underlying investments;

. changes in Portfolio expenses; and

. the relative amount of the Portfolio's cash flow.

From time to time, we may advertise the performance of the subaccounts and the
underlying Portfolios as compared to similar funds or portfolios using certain
indexes, reporting services and financial publications, and we may advertise
rankings or ratings issued by certain services and/or other institutions. These
may include, but are not limited to, the following:

. Dow Jones Industrial Average ("DJIA"), an unmanaged index representing
share prices of major industrial corporations, public utilities, and
transportation companies. Produced by the Dow Jones & Company, it is
cited as a principal indicator of market conditions.

. Standard & Poor's Daily Stock Price Index of 500 Common Stocks, a
composite index of common stocks in industrial, transportation, and
financial and public utility companies, which can be used to compare
to the total returns of funds whose portfolios are invested primarily
in common stocks. In addition, the Standard & Poor's index assumes
reinvestments of all dividends paid by stocks listed on its index.
Taxes due on any of these distributions are not included, nor are
brokerage or other fees calculated into the Standard & Poor's figures.

. Lipper Analytical Services, Inc., a reporting service that ranks funds
in various fund categories by making comparative calculations using
total return. Total return assumes the reinvestment of all income
dividends and capital gains distributions, if any. From time to time,
we may quote the Portfolios' Lipper rankings in various fund
categories in advertising and sales literature.

. Bank Rate Monitor National Index, Miami Beach, Florida, a financial
reporting service which publishes weekly average rates of 50 leading
bank and thrift institution money market deposit accounts. The rates
published in the index are an average of the personal account rates
offered on the Wednesday prior to the date of publication by ten of
the largest banks and thrifts in each of the five largest Standard
Metropolitan Statistical Areas. Account minimums range upward from
$2,500 in each institution, and compounding methods vary. If more than
one rate is offered, the lowest rate is used. Rates are subject to
change at any time specified by the institution.

. Shearson Lehman Government/Corporate (Total) Index, an index comprised
of approximately 5,000 issues which include: non-convertible bonds
publicly issued by the U.S. government or its agencies; corporate
bonds guaranteed by the U.S. government and quasi-federal
corporations; and publicly issued, fixed-rate, non-convertible
domestic bonds of companies in industry, public utilities and finance.
The average maturity of these bonds approximates nine years. Tracked
by Shearson Lehman, Inc., the index calculates total returns for one
month, three month, twelve month, and ten year periods and
year-to-date.

. Shearson Lehman Government/Corporate (Long-Term) Index, an index
composed of the same types of issues as defined above. However, the
average maturity of the bonds included in this index approximates 22
years.

28
<PAGE>

. Shearson Lehman Government Index, an unmanaged index comprised of all
publicly issued, non-convertible domestic debt of the U.S. government,
or any agency thereof, or any quasi-federal corporation and of
corporate debt guaranteed by the U.S. government. Only notes and bonds
with a minimum outstanding principal of $1 million and a minimum
maturity of one year are included.

. Morningstar, Inc., an independent rating service that publishes the
bi-weekly Mutual Fund Values. Mutual Fund Values rates more than 1,000
NASDAQ-listed mutual funds of all types, according to their
risk-adjusted returns. The maximum rating is five stars, and ratings
are effective for two weeks.

. Money, a monthly magazine that regularly ranks money market funds in
various categories based on the latest available seven-day compound
(effective) yield. From time to time, the Fund will quote its Money
ranking in advertising and sales literature.

. Standard & Poor's Utility Index, an unmanaged index of common stocks
from forty different utilities. This index indicates daily changes in
the price of the stocks. The index also provides figures for changes
in price from the beginning of the year to date, and for a twelve
month period.

. Dow Jones Utility Index, an unmanaged index comprised of fifteen
utility stocks that tracks changes in price daily and over a six month
period. The index also provides the highs and lows for each of the
past five years.

. The Consumer Price Index, a measure for determining inflation.

Investors may use such indexes (or reporting services) in addition to the Funds'
Prospectuses to obtain a more complete view of each Portfolio's performance
before investing. Of course, when comparing each Portfolio's performance to any
index, conditions such as composition of the index and prevailing market
conditions should be considered in assessing the significance of such companies.
Unmanaged indexes may assume the reinvestment of dividends but generally do not
reflect deductions for administrative and management costs and expenses.

When comparing funds using reporting services, or total return and yield, or
effective yield, investors should take into consideration any relevant
differences in funds such as permitted portfolio compositions and methods used
to value portfolio securities and compute offering price.

SAFEKEEPING OF ACCOUNT ASSETS

Title to assets of the Separate Account is held by Peoples Benefit. The assets
are kept physically segregated and held separate and apart from Peoples
Benefit's general account assets. The general account contains all of the assets
of Peoples Benefit. Records are maintained of all purchases and redemptions of
eligible Portfolio shares held by each of the subaccounts and the general
account.

CONFLICTS OF INTEREST WITH OTHER SEPARATE ACCOUNTS

The Portfolios may be made available to registered separate accounts offering
variable annuity and variable life products of Peoples Benefit or other
insurance companies. Although Peoples Benefit believes it is unlikely, a
material conflict could arise between the interests of the Separate Account and
one or more of the other participating separate accounts. In the event a
material conflict does exist, the affected insurance companies agree to take any
necessary steps, including removing their separate accounts from the Fund if
required by law, to resolve the matter. See the Fund's prospectus for more
information.

29
<PAGE>

PEOPLES BENEFIT

The Company is a direct subsidiary of Monumental Life Insurance Company, Capital
Liberty, L.P., and Commonwealth General Corporation, which, respectively, have
76.3%, 20%, and 3.7% interests in the Company. Monumental Life Insurance Company
is a direct subsidiary of Capital General Development Corporation and First AUSA
Life Insurance Company, which, respectively, have 73.23% and 26.77% interests in
Monumental Life Insurance Company. Monumental Life Insurance Company and
Commonwealth General Corporation have, respectively, 99% and 1% interests in
Capital Liberty, L.P. Commonwealth General Corporation is a wholly owned
subsidiary of Transamerica Holding Company. Capital General Development
Corporation is a wholly owned subsidiary of Commonwealth General Corporation.
First AUSA Life Insurance Company is a wholly owned subsidiary of Transamerica
Holding Company.

The Company is a wholly owned indirect subsidiary of AEGON USA, Inc., which in
turn is wholly owned by AEGON U.S. Holding Corporation, a wholly owned
subsidiary of AEGON International N.V. AEGON International N.V. is a wholly
owned subsidiary of AEGON N.V. Vereniging AEGON (a Netherlands membership
association) has a 53.16% interest in AEGON N.V.

The Company was formerly known as National Home Life Assurance Company, until
July 1, 1995, when it changed its name to Providian Life and Health Insurance
Company. On October 1, 1998, it changed its name to Peoples Benefit Life
Insurance Company.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

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

TAX STATUS OF THE POLICY

The following discussion is based on the assumption that the policy qualifies as
an annuity contract for federal income tax purposes.

DISTRIBUTION REQUIREMENTS

The Code requires that nonqualified policies contain specific provisions for
distribution of policy proceeds upon the death of any owner. In order to be
treated as an annuity contract for federal income tax purposes, the Code
requires that such policies provide that if any owner dies on or after the
annuity commencement date and before the entire interest in the policy has been
distributed, the remaining portion most be distributed at least as rapidly as
under the method in effect on such owner's death. If any owner dies before the
annuity commencement date, the entire interest in the policy must generally be
distributed within 5 years after such owner's date of death or be used to
purchase an immediate annuity under which payments will begin within one year of
such owner's death and will be made for the life of the beneficiary or for a
period not extending beyond the life expectancy of the "designated beneficiary"
as defined in section 72(s) of the Code. However, if upon such owner's death
prior to the annuity commencement date, such owner's surviving spouse becomes
the sole new owner, then the policy may be continued with the surviving spouse
as the new owner. Under the policy, the beneficiary is the designated
beneficiary of an owner/annuitant and the successor owner is the designated
beneficiary of an owner who is not the annuitant. If any owner is not a natural
person, then for purposes of these distribution requirements, the primary
annuitant shall be treated as an owner and any death or change of such primary
annuitant shall be treated as an owner and any death or change of such primary
annuitant shall be treated as the death of an owner. The nonqualified policies
contain provisions intended to comply with these requirements of the Code. No
regulations interpreting these requirements of the Code have yet been issued and
thus no assurance can be given that the provisions contained in the policy
satisfy all such Code requirements. The

30
<PAGE>

provisions contained in the policy will be reviewed and modified if necessary to
assure that they comply with the Code requirements when clarified by regulation
or otherwise.

DIVERSIFICATION REQUIREMENTS

Section 817(h) of the Code provides that in order for a variable contract which
is based on a segregated asset account to qualify as an annuity contract under
the Code, the investments made by such account must be "adequately diversified"
in accordance with Treasury regulations. The Treasury regulations issued under
Section 817(h) (Treas. Reg. ss.1.817-5) apply a diversification requirement to
each of the subaccounts. The separate account, through its underlying funds and
their portfolios, intends to comply with the diversification requirements of the
Treasury regulations. Peoples Benefit has entered into agreements with each
underlying fund company which requires the portfolios to be operated in
compliance with the Treasury regulations.

OWNER CONTROL

In certain circumstances, owners of variable annuity contracts may be considered
the owners, for federal income tax purposes, of the assets of the separate
account used to support their contracts. In those circumstances, income and
gains from the separate account assets would be includable in the variable
annuity contract owner's gross income. Several years ago, the IRS stated in
published rulings that a variable annuity contract owner will be considered the
owner of separate account assets if the contract owner possesses incidents of
ownership in those assets, such as the ability to exercise investment control
over the assets.

More recently, the Treasury Department announced in connection with the issuance
of regulations concerning investment diversification, that those regulations "do
not provide guidance concerning the circumstances in which investor control of
the investments of a segregated asset account may cause the investor (i.e.,
you), rather than the insurance company, to be treated as the owner of the
assets in the account." This announcement also stated that guidance would be
issued by way of regulations or rulings on the "extent to which policyholders
may direct their investments to particular subaccounts without being treated as
owners of the underlying assets."

The ownership rights under the contract are similar to, but different in certain
respects from those described by the IRS in rulings in which it was determined
that contract owners were not owners of separate account assets. For example,
you have the choice of one or more subaccounts in which to allocate purchase
payments and policy values, and may be able to transfer among these accounts
more frequently than in such rulings. These differences could result in you
being treated as the owner of the assets of the separate account. In addition,
Peoples Benefit does not know what standards will be set forth, if any, in the
regulation or rulings that the Treasury Department has stated it expects to
issue. Peoples Benefit therefore reserves the right to modify the policies as
necessary to attempt to prevent you from being considered the owner of a pro
rata share of the assets of the separate account.

WITHHOLDING

The portion of any distribution under a policy that is includable in gross
income will be subject to federal income tax withholding unless the recipient of
such distribution elects not to have federal income tax withheld. Election forms
will be provided at the time distributions are requested to be made. The
withholding rate varies according to the type of distribution and the owner's
tax status. For qualified policies, "eligible rollover distributions" from
Section 401(a) plans, Section 403(a) annuities, and Section 403(b) tax-sheltered
annuities are subject to mandatory federal income tax withholding of 20%. An
eligible rollover distribution is the taxable portion of any distribution from
such a plan, except certain distributions such as distributions required by the
Code or distributions in a specified annuity form. The 20% withholding does not
apply, however, if the owner chooses a "direct rollover" from the plan to
another tax-qualified plan or IRA. Different withholding requirements may apply
in the case of non-United States persons.

QUALIFIED POLICIES

31
<PAGE>

consequences may result from contributions in excess of specified limits;
distributions prior to age 59 1/2 (subject to certain exceptions); distributions
that do not conform to specified commencement and minimum distribution rules;
and in other specified circumstances. Some retirement plans are subject to
distribution and other requirements that are not incorporated into the policies
or our administration procedures. Owners, participants and beneficiaries are
responsible for determining that contributions, distributions and other
transactions with respect to the policies comply with applicable law.

For qualified plans under Section 401(a), 403(a), 403(b), and 457, the Code
requires that distributions generally must commence no later than the later of
April 1 of the calendar year following the calendar year in which the owner (or
plan participant) (i) reaches age 70 1/2 or (ii) retires, and must be made in
specified form or manner. If the plan participant is a "5 percent owner" (as
defined in the Code), distributions generally must begin no later than April 1
of the calendar year in which the owner (or plan participant reaches age 70 1/2.
Each owner is responsible for requesting distributions under the policy that
satisfy applicable tax rules.

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

INDIVIDUAL RETIREMENT ANNUITIES

In order to qualify as a traditional individual retirement annuity under Section
408(b) of the Code, a policy must contain certain provisions: (i) the owner must
be the annuitant; (ii) the policy generally is not transferable by the owner,
e.g., the owner may not designate a new owner, designate a contingent owner or
assign the policy as collateral security; (iii) the total Purchase Payments for
any calendar year may not exceed $2,000, except in the case of a rollover amount
or contribution under Section 402(c), 403(a)(4), 403(b)(8) or 408(d)(3) of the
Code; (iv) annuity payments or withdrawals must begin no later than April 1 of
the calendar year following the calendar year in which the annuitant attains age
70 1/2; (v) an annuity payment option with a period certain that will guarantee
annuity payments beyond the life expectancy of the annuitant and the beneficiary
may not be selected; and certain payments of death benefits must be made in the
event the annuitant dies prior to the distribution of the policy value. Policies
intended to qualify as traditional individual retirement annuities under Section
408(b) of the Code contain such provisions. Amounts in the IRA (other than
nondeductible contributions) are taxed when distributed from the IRA.
Distributions prior to age 59 1/2 (unless certain exceptions apply) are subject
to a 10% penalty tax.

No part of the funds for an individual retirement account (including a Roth IRA)
or annuity should be invested in a life insurance contract, but the regulations
thereunder allow such funds to be invested in an annuity contract that provides
a death benefit that equals the greater of the purchase payments paid or the
cash value for the contract. The policy provides an enhanced death benefit that
could exceed the amount of such a permissible death benefit, but it is unclear
to what extent such an enhanced death benefit could disqualify the policy as an
IRA. The Internal Revenue Service has not reviewed the policy for qualification
as an IRA, and has not addressed in a ruling of general applicability whether an
enhanced death benefit provision, such as the provision in the policy, comports
with IRA qualification requirements.

ROTH INDIVIDUAL RETIREMENT ANNUITIES (ROTH IRA)

The Roth IRA, under Section 408A of the Code, contains many of the same
provisions as a traditional IRA. However, there are some differences. First, the
contributions are not deductible and must be made in cash or as a rollover or
transfer from another Roth IRA or other IRA. A rollover from or conversion of an
IRA to a Roth IRA may be subject to tax and other special rules may apply to the
rollover or conversion and to distributions attributable thereto. You should
consult a tax adviser before combining any converted amounts with any other Roth
IRA contributions, including any other conversion amounts from other tax years.
The Roth IRA is available to individuals with earned income and whose modified
adjusted gross income is under $110,000 for single filers, $160,000 for married
filing jointly, and $10,000 for married filing separately. The amount per
individual that may be contributed to all IRAs (Roth and traditional) is $2,000.
Secondly, the distributions are taxed differently. The Roth IRA offers tax-free
distributions when made 5 tax years after the first contribution to any Roth IRA
of the individual and made after attaining age 59 1/2, to pay for qualified
first time homebuyer expenses (lifetime maximum of $10,000) or due to death or
disability. All other distributions are subject to income tax when made from
earnings and may be subject to a premature withdrawal

32
<PAGE>

penalty tax unless an exception applies. Unlike the traditional IRA, there are
no minimum required distributions during the owner's lifetime; however, required
distributions at death are generally the same.

SECTION 403(b) PLANS

Under Section 403(b) of the Code, payments made by public school systems and
certain tax exempt organizations to purchase policies for their employees are
excludable from the gross income of the employee, subject to certain
limitations. However, such payments may be subject to FICA (Social Security)
taxes. The policies include a death benefit that in some cases may exceed the
greater of the purchase payments or the policy value. The death benefit could be
characterized as an incidental benefit, the amount of which is limited in any
tax-sheltered annuity under section 403(b). Because the death benefit may exceed
this limitation, employers using the policies in connection with such plans
should consult their tax adviser. Additionally, in accordance with the
requirements of the Code, Section 403(b) annuities generally may not permit
distribution of (i) elective contributions made in years beginning after
December 31, 1988, and (ii) earnings on those contributions and (iii) earnings
on amounts attributed to elective contributions held as of the end of the last
year beginning before January 1, 1989. Distributions of such amounts will be
allowed only upon the death of the employee, on or after attainment of age 59
1/2, separation from service, disability, or financial hardship, except that
income attributable to elective contributions may not be distributed in the case
of hardship.

CORPORATE PENSION AND PROFIT-SHARING PLANS AND H.R. 10 PLANS

Sections 401(a) and 403(a) of the Code permit corporate employers to establish
various types of retirement plans for employees and self-employed individuals to
establish qualified plans for themselves and their employees. Such retirement
plans may permit the purchase of the policies to accumulate retirement savings.
Adverse tax consequences to the plan, the participant or both may result if the
policy is assigned or transferred to any individual as a means to provide
benefit payments. The policies include a death benefit that in some cases may
exceed the greater of the purchase payments or the policy value. The death
benefit could be characterized as an incidental benefit, the amount of which is
limited in a pension or profit sharing plan. Because the death benefit may
exceed this limitation, employers using the policies in connection with such
plans should consult their tax adviser.

DEFERRED COMPENSATION PLANS

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

NON-NATURAL PERSONS

Pursuant to Section 72(u) of the Code, an annuity contract held by a taxpayer
other than a natural person generally will not be treated as an annuity contract
under the Code; accordingly, an owner who is not a natural person will recognize
as ordinary income for a taxable year the excess of (i) the sum of the policy
value as of the close of the taxable year and all previous distributions under
the policy over (ii) the sum of the Purchase Payments paid for the taxable year
and any prior taxable year and the amounts includable in gross income for any
prior taxable year with respect to the policy. For these purposes, the policy
value at the year-end may have to be increased by any positive excess interest
adjustment, which could result from a full surrender at such time. There is
however, no definitive guidance on the proper tax treatment of excess interest
adjustments, and the owner should contact a competent tax adviser with respect
to the potential tax consequences of an excess interest adjustment.
Notwithstanding the preceding sentences in this paragraph, Section 72(u) of the
Code does not apply to (i) a policy where the nominal owner is not a natural
person but the beneficial owner is a natural person, (ii) a policy acquired by
the estate of a decedent by reason of such decedent's death, (iii) a qualified
policy (other than one qualified under Section 457) or (iv) a single-payment
annuity where the

33
<PAGE>

annuity commencement date is no later than one year from the date of the single
Purchase Payment; instead, such policies are taxed as described above under the
heading "Taxation of Annuities."

TAXATION OF PEOPLES BENEFIT

Peoples Benefit is taxed as a life insurance company under Part I of Subchapter
L of the Internal Revenue Code. Since the Separate Account is not a separate
entity from Peoples Benefit and its operations form a part of Peoples Benefit,
the Separate Account will not be taxed separately as a "regulated investment
company" under Subchapter M of the Internal Revenue 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 Peoples Benefit. Peoples Benefit reserves the
right to make a deduction for taxes should they be imposed with respect to such
items in the future.

Under present laws, Peoples Benefit will incur state or local taxes in several
states. At the present, Peoples Benefit does not charge the Contract Owner for
these taxes. If there is a change in state or local tax laws, Peoples Benefit
may make charges for such taxes. Peoples Benefit 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. 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.

Peoples Benefit will periodically review the question of a charge to the
Separate Account for corporate federal income taxes related to the Separate
Account. Such a charge may be made in future years for any federal income taxes
Peoples Benefit incurs. This might become necessary if Peoples Benefit
ultimately determines that its tax treatment is not what it currently believes
it to be, if there are changes in the federal income tax treatment of annuities
at the corporate level, or if there is a change in Peoples Benefit's tax status.
If Peoples Benefit should incur federal income taxes attributable to investment
income or capital gains retained as part of the reserves under the Policies, the
Accumulated Value of the Policy would be correspondingly adjusted by any
provision or charge for such taxes.

STATE REGULATION OF PEOPLES BENEFIT

Peoples Benefit is a stock life insurance company organized under the laws of
Iowa, and is subject to regulation by the Iowa State Department of Insurance. An
annual statement is filed with the Iowa Commissioner of Insurance on or before
March 1st of each year covering the operations and reporting on the financial
condition of Peoples Benefit as of December 31st of the preceding calendar year.
Periodically, the Iowa Commissioner of Insurance examines the financial
condition of Peoples Benefit, including the liabilities and reserves of the
Separate Account.

RECORDS AND REPORTS

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

DISTRIBUTION OF THE POLICIES

AFSG Securities Corporation ("AFSG"), formerly Providian Securities Corporation,
the principal underwriter of the Policy, is ultimately a wholly-owned subsidiary
of AEGON N.V. AFSG is registered with the SEC under the Securities Exchange Act
of 1934 as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. Commissions and expense allowance payments not to
exceed, in the aggregate, 6.75% of Purchase Payments may be paid to entities
which sell the Policy. Additional payments may be made for other services not
directly related to the sale of the Policy.

34
<PAGE>

The Policy is offered to the public through brokers licensed under the federal
securities laws and state insurance laws that have entered into agreements with
AFSG. The offering of the Policy is continuous and AFSG does not anticipate
discontinuing the offering of the Policy. However, AFSG does reserve the right
to discontinue the offering of the Policy.

LEGAL PROCEEDINGS

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

OTHER INFORMATION

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

FINANCIAL STATEMENTS

The audited financial statements of certain subaccounts of the Separate Account
which are available for investment by Advisor's Edge Contract Owners as of
December 31, 1999, and for each of the two years in the period then ended,
including the Report of Independent Auditors thereon, are included in this
Statement of Additional Information.

The audited statutory-basis financial statements of Peoples Benefit as of
December 31, 1999, and 1998, and for each of the three years in the period ended
December 31, 1999, including the Reports of Independent Auditors thereon, are
included in this Statement of Additional Information. They should be
distinguished from the financial statements of the subaccounts of the Separate
Account which are available for investment by Advisor's Edge Contract Owners and
should be considered only as bearing on the ability of Peoples Benefit to meet
its obligations under the Contracts. They should not be considered as bearing on
the investment performance of the assets held in the Separate Account.

35
<PAGE>

THE ADVISOR'S EDGE SELECT
VARIABLE ANNUITY

Issued Through

Peoples Benefit Life Insurance Company
Separate Account V
By
Peoples Benefit Life Insurance Company

Prospectus
(DATE)

The Advisor's Edge Select Variable Annuity (the "Policy") provides a means of
investing on a tax-deferred basis in 29 portfolios of underlying mutual funds
(the "Portfolios") and a fixed account which offers interest at rates that are
guaranteed by Peoples Benefit Life Insurance Company. The Policy is an
individual variable annuity policy and is intended for retirement savings or
other long-term investment purposes. For investments in the Subaccounts, you
bear all investment risk (including the possible loss of principal), and
investment results are not guaranteed. The Policy provides a Right to Cancel
period of at least 20 days (30 days or more in some instances) during which the
Policy may be cancelled.

The Policy is not available in all states.

Alliance Variable Products Series Fund, Inc.
Alliance Growth
Alliance Premier Growth
Alliance Technology

The Dreyfus Socially Responsible Growth Fund, Inc.
Dreyfus Socially Responsible Growth

Endeavor Series Trust
Dreyfus Small Cap Value
Endeavor Enhanced Index
T. Rowe Price International Stock

The Federated Insurance Series
Federated American Leaders
Federated High Income Bond
Federated Prime Money
Federated U.S. Government Securities
Federated Utility

The Montgomery Funds III
Montgomery Growth
Montgomery Emerging Markets

Seligman Portfolios, Inc.
Seligman Capital
Seligman Communications and Information
Seligman Global Technology

SteinRoe Variable Investment Trust
Stein Roe Small Company Growth

Strong Variable Insurance Funds, Inc.
Strong International Stock
Strong Schafer Value

Transamerica Variable Insurance Fund, Inc.
Transamerica VIF Growth

Wanger Advisors Trust
Wanger U.S. Small Cap Advisor
Wanger International Small Cap Advisor

Warburg Pincus Trust
Warburg Pincus International Equity
Warburg Pincus Small Company Growth

WRL Series Fund, Inc.
WRL Alger Aggressive Growth
WRL J.P. Morgan Real Estate Securities
WRL Janus Growth
WRL LKCM Strategic Total Return
<PAGE>

Contents

1 Cross Reference to Definitions 23 Taxes

2 Summary 26 Access to Your Money

6 Fee Table 28 Performance

9 Example 30 Death Benefit

11 The Annuity Policy 33 Other Information

12 Annuity Payments 36 Table of Contents of Statement of
Additional Information
15 Purchase

18 Investment Options

22 Expenses

CROSS REFERENCE TO DEFINITIONS

Accumulation Phase........................................................ 11
Adjusted Policy Value..................................................... 26
Annuitant................................................................. 33
Annuity Commencement Date................................................. 12
Annuity Payment Options................................................... 12
Business Day.............................................................. 15
Cash Value................................................................ 26
Excess Interest Adjustment................................................ 27
Guaranteed Period Options................................................. 11
Income Phase.............................................................. 11
Initial Premium Payment................................................... 15
Net Premium Payment....................................................... 15
Policy.................................................................... 11
Policy Anniversary........................................................ 16
Policy Date............................................................... 16
Policy Owner.............................................................. 33
Policy Value.............................................................. 26
Policy Year............................................................... 16
Portfolios................................................................ 18
Premium Payment........................................................... 15
Qualified Policy.......................................................... 15
Right to Cancel Period.................................................... 34
Tax Deferral.............................................................. 23

1
<PAGE>

SUMMARY

1. THE ANNUITY POLICY

The Advisor's Edge Select Variable Annuity

Advisor's Edge Select is a flexible-premium multi-funded variable annuity
offered by Peoples Benefit Life Insurance Company ("Peoples Benefit"). The
Policy provides a means of investing on a tax-deferred basis in twenty-nine
portfolios of the underlying funds and a fixed account offered by Peoples
Benefit.

Who Should Invest

The Policy is intended for long-term investors who want tax-deferred
accumulations of funds, generally for retirement but also for other long-term
purposes.

The Policy provides benefits in two distinct phases: accumulation and income.

The Accumulation Phase

During the Accumulation Phase, you choose to allocate your investment in the
Policy among the twenty-nine Portfolios and the fixed account available under
the Policy. You can contribute additional amounts to the Policy and you can take
withdrawals from the Policy during the Accumulation Phase. The value of your
investment depends on the investment performance of the Portfolios of the
underlying funds that you choose. Your earnings are generally not taxed during
this phase unless you withdraw them.

The Income Phase

2. ANNUITY PAYMENTS

3. PURCHASE

2
<PAGE>

4. INVESTMENT OPTIONS

The Portfolios
--------------

Alliance Variable Products Series Fund, Inc.
Advised by Alliance Capital Management L.P.
Alliance Growth Portfolio
Alliance Premier Growth Portfolio
Alliance Technology Portfolio

The Dreyfus Socially Responsible Growth Fund, Inc.
Advised by The Dreyfus Corporation
Dreyfus Socially Responsible Growth Portfolio

Endeavor Series Trust
Advised by Endeavor Management Co.
Dreyfus Small Cap Value Portfolio
Endeavor Enhanced Index Portfolio
T. Rowe Price International Stock Portfolio

The Federated Insurance Series
Advised by Federated Investment Management Company
Federated American Leaders Fund II ("Federated American Leaders
Portfolio")
Federated High Income Bond Fund II ("Federated High Income Bond
Portfolio")
Federated Prime Money Fund II ("Federated Prime Money Portfolio")
Federated Utility Fund II ("Federated Utility Portfolio")
Federated Fund for U.S. Government Securities II ("Federated U.S.
Government Securities Portfolio")

The Montgomery Funds III
Advised by Montgomery Asset Management, LLC
Montgomery Variable Series: Growth Fund ("Montgomery Growth Portfolio")
Montgomery Variable Series: Emerging Mark ets Fund ("Montgomery
Emerging Markets Portfolio")

Seligman Portfolios, Inc.
Advised by J. & W. Seligman & Co. Incorporated
Seligman Capital Portfolio
Seligman Communications and Information Portfolio
Seligman Global Technology Portfolio

3
<PAGE>

Strong Variable Insurance Funds, Inc.
Advised by Strong Capital Management, Inc.
Strong International Stock Fund II ("Strong International Stock
Portfolio")
Strong Schafer Value Fund II ("Strong Schafer Value Portfolio")

Transamerica Variable Insurance Fund, Inc.
Advised by Transamerica Investment Management, LLC.
Transamerica VIF Growth Portfolio

Wanger Advisors Trust
Advised by Wanger Asset Management, L.P.
Wanger U.S. Small Cap Advisor ("Wanger U.S. Small Cap Advisor
Portfolio")
Wanger International Small Cap Advisor ("Wanger International Small Cap
Advisor Portfolio")

Warburg Pincus Trust
Advised by Credit Suisse Asset Management
Warburg Pincus International Equity Portfolio
Warburg Pincus Small Company Growth Portfolio

WRL Series Fund, Inc.
Advised by WRL Investment Management, Inc.
Aggressive Growth Portfolio ("WRL Alger Aggressive Growth Portfolio")
Real Estate Securities Portfolio ("WRL J.P. Morgan Real Estate
Securities Portfolio")
Growth Portfolio ("WRL Janus Growth Portfolio")
Strategic Total Return Portfolio ("WRL LKCM Strategic Total Portfolio")

You can make or lose money in any of the Subaccounts that invest in these
Portfolios depending on their investment performance.

5. EXPENSES

No sales load is deducted from Premium Payments.

Peoples Benefit will deduct mortality and expense risk fees and administrative
charges at an annual rate of either 1.45%, 1.50% or 1.60% per year from the
assets in each subaccount (depending on the death benefit you select).

You will also pay certain expenses associated with the operation of the
Portfolios of the underlying funds.

6. TAXES

4
<PAGE>

7. ACCESS TO YOUR MONEY

You may have to pay income tax and a tax penalty on any money you take out.

8. PERFORMANCE

Past performance does not indicate or predict future performance.

9. DEATH BENEFIT

If you are both the owner and the annuitant and you die before the Income Phase
begins, then your beneficiary will receive a death benefit.

You may choose one of the following guaranteed minimum death benefits:

. Return of Premium - available if the owner or annuitant is age 0 to 85 on
the Policy Date
. 6 Year Step-Up To Age 81 - available if the owner or annuitant is age 0 to
75 on the Policy Date
. Double Enhanced Death Benefit - available if the owner or annuitant is age
0 to 79 on the Policy Date

If the owner is not the annuitant, no death benefit is paid if the owner dies.

10. OTHER INFORMATION

Additional Features

This Policy has additional features that might interest you. These features are
not available in all states and may not be suitable for your particular
situation. These include the following:

. You can arrange to have money automatically sent to you monthly, quarterly,
semi-annually or annually while your policy is in the Accumulation Phase.
This feature is referred to as the "systematic payout option." Amounts you
receive may be included in your gross income, and in certain circumstances,
may be subject to penalty taxes.
. Under certain medically related circumstances, we will allow you to
surrender or partially withdraw your Policy Value without an Excess
Interest Adjustment. This feature is called the "Nursing Care and Terminal
Condition Withdrawal Option."
. Under certain unemployment circumstances, you may withdraw all or a portion
of the Policy Value free of Excess Interest Adjustments. This feature is
called the "Unemployment Waiver."
. You may make transfers and/or change the allocation of additional Premium
Payments by telephone.

5
<PAGE>

. You can arrange to have a certain amount of money (at least $500)
automatically transferred from the fixed account or the Federated Prime
Money Portfolio either monthly or quarterly, into your choice of
subaccounts. This feature is called "Dollar Cost Averaging."

Right to Cancel Period

Peoples Benefit Life Insurance Company

Peoples Benefit Life Insurance Company is a life insurance company incorporated
under Iowa law. It is principally engaged in offering life insurance and annuity
policies.

Peoples Benefit Life Insurance Company Separate Account V

The Separate Account is a unit investment trust registered with the SEC and
operating under Iowa law. The Separate Account has twenty-nine Subaccounts
dedicated to the Policy, each of which invests solely in a corresponding
Portfolio of the underlying Funds.

Other topics

Additional information on the topics summarized above and on other topics not
summarized here can be found at OTHER INFORMATION, page 36.

11. INQUIRIES AND POLICY AND POLICYHOLDER INFORMATION

For more information about the Advisor's Edge Select variable annuity, call or
write: Peoples Benefit Life Insurance Company, Variable Annuity Department, 4333
Edgewood Road, N.E., Cedar Rapids, Iowa 52499, 800-866-6007.

FEE TABLE

The following table illustrates all expenses (except for Premium Taxes that may
be assessed) that you would incur as a Policy Owner. 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 Policy. The fee table reflects
all expenses for both the Separate Account and the Funds. For a complete
discussion of Policy costs and expenses, see EXPENSES, page 25.
<TABLE>
<S> <C>
Policy Owner Transaction Expenses
Sales Load Imposed on Premiums.............................................................. None
Contingent Deferred Sales Load (surrender charge)........................................... None
Exchange Fees............................................................................... None
Annual Policy Service Charge................................................................ None(1)
Separate Account Annual Expenses (as a percentage of assets in the Separate Account)
Mortality and Expense Risk Fee.............................................................. 1.45%
Administrative Charge....................................................................... 0.15%
-----
Total Annual Separate Account Expenses...................................................... 1.60%(2)
</TABLE>

(2) Total Annual Separate Account Expenses shown (1.45%) applies to the Double
Enhanced Death Benefit option. This reflects a fee that is 0. 10% and 0.15%
per year higher than the 1.35% and 1.30% corresponding fees for the 6 Year
Step-Up Death Benefit and Return of Premium Death Benefit options,
respectively.

6
<PAGE>

Portfolio Annual Expenses

Rule
Management and Other 12b-1 Total Portfolio
Advisory Expenses Expenses Fee Annual Expenses
----------------- -------- --- ---------------
<S> <C> <C> <C> <C>
Alliance Growth Portfolio..................................... 0.75% 0.12% 0.25% 1.12%
Alliance Premier Growth Portfolio............................. 1.00% 0.04% 0.25% 1.29%
Alliance Technology Portfolio(7).............................. 1.00% 0.27% 0.25% 1.52%
Dreyfus Small Cap Value Portfolio(1).......................... 0.80% 0.10% 0.32% 1.22%
Dreyfus Socially Responsible Growth Portfolio................. 0.75% 0.04% -- 0.79%
Endeavor Enhanced Index Portfolio............................. 0.75% 0.03% -- 0.78%
Federated American Leaders Portfolio.......................... 0.75% 0.13% -- 0.88%
Federated High Income Bond Portfolio.......................... 0.60% 0.19% -- 0.79%
Federated Prime Money Portfolio............................... 0.50% 0.23% -- 0.73%
Federated U.S. Government Securities Portfolio................ 0.60% 0.24% -- 0.84%
Federated Utility Portfolio................................... 0.75% 0.19% -- 0.94%
Montgomery Growth Portfolio(2)................................ 0.52% 0.73% -- 1.25%
Montgomery Emerging Markets Portfolio......................... 1.25% 0.37% -- 1.62%
Seligman Capital Portfolio(8)................................. 0.40% 0.19% 0.25% 0.84%
Seligman Communication and Information Portfolio(8)........... 0.75% 0.11% 0.25% 1.11%
Seligman Global Technology Portfolio(8)(9).................... 1.00% 0.40% 0.15% 1.55%
Stein Roe Small Company Growth Portfolio...................... 0.65% 0.02% -- 0.67%
Strong International Stock Portfolio.......................... 1.00% 0.16% -- 1.16%
Strong Schafer Value Portfolio................................ 1.00% 0.20% -- 1.20%
Transamerica VIF Growth Portfolio(6).......................... 0.70% 0.15% -- 0.85%
T. Rowe Price International Stock Portfolio(3)................ 0.90% 0.10% -- 1.00%
Wanger U.S. Small Cap Advisor Portfolio....................... 0.96% 0.06% -- 1.02%
Wanger International Small Cap Advisor Portfolio.............. 1.25% 0.24% -- 1.49%
Warburg Pincus International Equity Portfolio(4).............. 1.00% 0.32% -- 1.32%
Warburg Pincus Small Company Growth Portfolio(4).............. 0.90% 0.24% -- 1.14%
WRL Alger Aggressive Growth Portfolio(5)...................... 0.80% 0.09% -- 0.89%
WRL J.P. Morgan Real Estate Securities Portfolio(5)........... 0.80% 0.20% -- 1.00%
WRL Janus Global(5)........................................... 0.80% 0.12% -- 0.92%
WRL Janus Growth Portfolio(5)................................. 0.80% 0.05% -- 0.85%
WRL LKCM Strategic Total Return Portfolio(5).................. 0.80% 0.07% -- 0.87%

</TABLE>

1 For the Dreyfus Small Cap Portfolio, the Management and Advisory Expenses
were 0.80% and Other Expenses before reimbursements were 0.10%. Therefore,
Total Portfolio Annual Expenses before reimbursements (reduced by custodial
offset arrangements) for the period ended December 31, 1999 were 0.90%. The
Board of Trustees of Endeavor Series Trust has authorized an arrangement
whereby, subject to best price and execution, executing brokers will share
commissions with the Trust's affiliated broker. Under supervision of the
Trustees, the affiliated broker will use the "recaptured commission" to
promote marketing of the Trust's shares. The staff of the SEC believes
that, through the use of these recaptured commissions, the Trust is
indirectly paying for distribution expenses and that such amounts must be
shown as 12b-1 fees in the above table. The use of recaptured commission to
promote the sale of the Trust's shares involves no additional costs to the
Trust or any Policy Owner. Endeavor Series Trust, on the basis of advice of
counsel, does not believe that recaptured brokerage commissions should be
treated as 12b-1 fees. For more information on the Trust's Brokerage
Enhancement Plan, see the Trust's prospectus accompanying this prospectus.

7
<PAGE>

8. Class shares of each Seligman Portfolio were first offered on May 1, 2000.
Expense figures shown for Rule 12b-1 Fees are estimated for the fiscal year
2000.

9. J&W Seligman & Co. Incorporated, the Manager, has agreed to reimburse other
expenses which exceed 0.40% per annum of average net assets of Seligman
Global Technology Portfolio. Without such reimbursement, other expenses for
1999 would have been 0.41%.

8
<PAGE>

EXAMPLE

A = Double Enhance Death Benefit Option (1.45%)
B = Return of Premium Death Benefit Option (1.30%)
C = 6 Year Step-Up To Age 81 Death Benefit Option (1.35%)

<TABLE>
<CAPTION>
------------------------------------------------
1 3 5 10
Year Years Years Years
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Growth Portfolio A 28 84 144 305
------------------------------------------------------
B 26 80 137 290
------------------------------------------------------
C 27 81 139 295
--------------------------------------------------------------------------------------------------------------
Alliance Premier Growth Portfolio A 29 89 152 321
------------------------------------------------------
B 28 85 145 307
------------------------------------------------------
C 28 87 147 312
--------------------------------------------------------------------------------------------------------------
Alliance Technology Portfolio A 31 96 164 343
------------------------------------------------------
B 30 92 156 329
------------------------------------------------------
C 31 93 159 334
--------------------------------------------------------------------------------------------------------------
Dreyfus Small Cap Value Portfolio A 29 87 149 315
------------------------------------------------------
B 27 83 141 300
------------------------------------------------------
C 28 84 144 305
--------------------------------------------------------------------------------------------------------------
Dreyfus Socially Responsible Growth Portfolio A 24 75 128 273
------------------------------------------------------
B 23 70 120 257
------------------------------------------------------
C 23 72 123 263
--------------------------------------------------------------------------------------------------------------
Endeavor Enhanced Index Portfolio A 24 74 127 272
------------------------------------------------------
B 23 70 119 256
------------------------------------------------------
C 23 71 122 262
--------------------------------------------------------------------------------------------------------------
Federated American Leaders Portfolio A 25 77 132 282
------------------------------------------------------
B 24 73 125 267
------------------------------------------------------
C 24 74 127 272
--------------------------------------------------------------------------------------------------------------
Federated High Income Bond Portfolio A 24 75 128 273
------------------------------------------------------
B 23 70 120 257
------------------------------------------------------
C 23 72 123 263
--------------------------------------------------------------------------------------------------------------
Federated Prime Money Portfolio A 24 73 125 267
------------------------------------------------------
B 22 68 117 251
------------------------------------------------------
C 23 70 119 256
--------------------------------------------------------------------------------------------------------------
Federated U.S. Government Securities Portfolio A 25 76 130 278
------------------------------------------------------
B 23 72 123 263
------------------------------------------------------
C 24 73 125 268
--------------------------------------------------------------------------------------------------------------
Federated Utility Portfolio A 26 79 135 288
------------------------------------------------------
B 24 75 128 273
------------------------------------------------------
C 25 76 130 278
--------------------------------------------------------------------------------------------------------------
Montgomery Growth Portfolio A 29 88 150 318
------------------------------------------------------
B 27 84 143 303
------------------------------------------------------
C 28 85 145 308
--------------------------------------------------------------------------------------------------------------
Montgomery Emerging Markets Portfolio A 32 99 168 352
------------------------------------------------------
B 31 95 161 338
------------------------------------------------------
C 31 96 164 343
--------------------------------------------------------------------------------------------------------------
Seligman Capital Portfolio A 25 76 130 278
------------------------------------------------------
B 23 72 123 263
------------------------------------------------------
C 24 73 125 268
--------------------------------------------------------------------------------------------------------------
</TABLE>

9
<PAGE>

<TABLE>
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Seligman Communications and Information Portfolio A 27 84 143 304
------------------------------------------------------
B 26 80 136 290
------------------------------------------------------
C 26 81 139 294
--------------------------------------------------------------------------------------------------------------
Seligman Global Technology Portfolio A 32 97 165 346
------------------------------------------------------
B 30 93 158 332
------------------------------------------------------
C 31 94 160 336
--------------------------------------------------------------------------------------------------------------
Stein Roe Small Company Growth Portfolio A 23 71 122 261
------------------------------------------------------
B 22 66 114 245
------------------------------------------------------
C 22 68 116 250
--------------------------------------------------------------------------------------------------------------
Strong International Stock Portfolio A 28 86 146 309
------------------------------------------------------
B 26 81 139 294
------------------------------------------------------
C 27 83 141 299
--------------------------------------------------------------------------------------------------------------
Strong Schafer Value Portfolio A 28 87 148 313
------------------------------------------------------
B 27 82 141 298
------------------------------------------------------
C 27 84 143 303
--------------------------------------------------------------------------------------------------------------
Transamerica VIF Growth Portfolio A 25 76 131 279
------------------------------------------------------
B 23 72 123 264
------------------------------------------------------
C 24 73 126 269
--------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock Portfolio A 26 81 138 293
------------------------------------------------------
B 25 76 131 279
------------------------------------------------------
C 25 78 133 284
--------------------------------------------------------------------------------------------------------------
Wanger U.S. Small Cap Advisor Portfolio A 27 81 139 295
------------------------------------------------------
B 25 77 132 281
------------------------------------------------------
C 26 78 134 286
--------------------------------------------------------------------------------------------------------------
Wanger International Small Cap Advisor Portfolio A 31 95 162 340
------------------------------------------------------
B 30 91 155 326
------------------------------------------------------
C 30 92 157 331
--------------------------------------------------------------------------------------------------------------
Warburg Pincus International Equity Portfolio A 30 90 154 324
------------------------------------------------------
B 28 86 146 310
------------------------------------------------------
C 29 87 149 315
--------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Growth Portfolio A 28 85 145 307
------------------------------------------------------
B 26 81 138 292
------------------------------------------------------
C 27 82 140 297
--------------------------------------------------------------------------------------------------------------
WRL Alger Aggressive Growth Portfolio A 25 78 134 285
------------------------------------------------------
B 24 74 126 270
------------------------------------------------------
C 24 75 129 275
--------------------------------------------------------------------------------------------------------------
WRL J.P. Morgan Real Estate Securities Portfolio A 26 81 138 293
------------------------------------------------------
B 25 76 131 279
------------------------------------------------------
C 25 78 133 284
--------------------------------------------------------------------------------------------------------------
WRL Janus Global Portfolio A 26 79 136 289
------------------------------------------------------
B 24 75 128 274
------------------------------------------------------
C 25 76 131 279
--------------------------------------------------------------------------------------------------------------
WRL Janus Growth Portfolio A 25 76 130 277
------------------------------------------------------
B 23 71 122 262
------------------------------------------------------
C 24 73 125 267
--------------------------------------------------------------------------------------------------------------
WRL LKCM Strategic Total Return Portfolio A 25 77 131 280
------------------------------------------------------
B 23 72 124 265
------------------------------------------------------
C 24 74 126 270
--------------------------------------------------------------------------------------------------------------
</TABLE>

You should not consider this example to be a representation of past or future
expenses or performance. Actual expenses may be higher than those shown, subject
to the guarantees in the Policy.

10
<PAGE>

1. THE ANNUITY POLICY

The Advisor's Edge Select variable annuity is a flexible-premium multi-funded
variable annuity offered by Peoples Benefit. The Policy provides a means of
investing on a tax-deferred basis in twenty-nine Portfolios of the underlying
mutual funds (the "Portfolios") and a fixed account. The fixed account offers
interest rates that Peoples Benefit guarantees will not decrease during the
selected guaranteed period. There may be a different interest rate for each
different guaranteed period that you select. The Guaranteed Period Options are
the various interest rate periods for the fixed account which Peoples Benefit
may offer and into which Premium Payments may be paid or amounts transferred.

Who Should Invest

The Policy is intended for long-term investors who want tax-deferred
accumulation of funds, generally for retirement but also for other long-term
investment purposes. The tax-deferred feature of the Policy is most attractive
to investors in high federal and state marginal tax brackets who have exhausted
other avenues of tax deferral, such as pre-tax contributions to
employer-sponsored retirement or savings plans. The tax-deferred feature of the
Policy is unnecessary when the Policy is purchased to fund a qualified plan.

About the Policy

The Advisor's Edge Select variable annuity is a policy between you, the Policy
Owner, and Peoples Benefit, the issuer of the Policy.

The Policy provides benefits in two distinct phases: accumulation and income.

Accumulation Phase

The Accumulation Phase starts when you purchase your Policy and ends immediately
before the Annuity Commencement Date, when the Income Phase starts. During the
Accumulation Phase, you choose to allocate your investment in the Policy among
the twenty-nine available Portfolios and the fixed account. The Policy is a
variable annuity because the value of your investment in the Subaccounts can go
up or down depending on the investment performance of the Subaccounts you
choose. The Policy is a flexible-premium annuity because you can make additional
investments of at least $500 until the Income Phase begins. During this phase,
you are generally not taxed on earnings from amounts invested unless you
withdraw them.

Other benefits available during the Accumulation Phase include the ability to:

. Make transfers among your Subaccount choices at no charge and without
current tax consequences. (See Transfers Among the Subaccounts and the
Fixed Account, page 23.)

. Withdraw all or part of your money with no surrender penalty charged by
Peoples Benefit, although you may incur income taxes and a 10% penalty tax.
(See Full and Partial Withdrawals, page 30.)

Income Phase

11
<PAGE>

The Separate Account

2. ANNUITY PAYMENTS

During the Income Phase, you receive regular annuity payments under a wide range
of Annuity Payment Options.

Starting the Income Phase

The Annuity Commencement Date for Qualified Policies may also be controlled by
endorsements, the plan, or applicable law.

Annuity Payment Options

A charge for Premium Taxes and an Excess Interest Adjustment may be made when
annuity payments begin.

The Annuity Payment Options are explained below. Options 1, 2, and 4 are fixed
only. Options 3 and 5 can be fixed or variable.

. Payment Option 2 - Income for a Specified Period. We will make level
payments only for a fixed period you choose. No funds will remain at the
end.

12
<PAGE>

. Payment Option 3 - Life Income. You may choose between:

Fixed Payments

. No Period Certain - We will make level payments only during the
annuitant's lifetime.
. 10 Years Certain - We will make level payments for the longer of the
annuitant's lifetime or ten years.
. Guaranteed Return of Policy Proceeds - We will make level payments for
the longer of the annuitant's lifetime or until the total dollar
amount of payments we make to you equals the amount applied to this
option.

Variable Payments

. No Period Certain - Payments will be made only during the lifetime of
the annuitant.
. 10 Years Certain - Payments will be made for the longer of the
annuitant's lifetime or ten years.

. Payment Option 5 - Joint and Survivor Annuity. You may choose between:

Fixed Payments

. Payments are made during the joint lifetime of the annuitant and a
joint annuitant of your selection. Payments will be made as long as
either person is living.

Variable Payments

. Payments are made during the joint lifetime of the annuitant and a
joint annuitant of your selection. Payments will be made as long as
either person is living.

Other annuity payment options may be arranged by agreement with Peoples Benefit.
Certain annuity payment options may not be available in all states.

NOTE CAREFULLY:

IF:
. you choose Life Income with No Period Certain or a Joint and Survivor
Annuity; and
. the annuitant(s) dies before the due date of the second (third, fourth,
etc.) annuity payment;

THEN:
. we may make only one (two, three, etc.) annuity payments.

THEN:
. the remaining guaranteed payments will be continued to that person's
beneficiary, or their present value may be paid in a single sum.

13
<PAGE>

Calculating Annuity Payments

Fixed Annuity Payments. Each fixed Annuity Payment is guaranteed to be at least
the amount shown in the Policy's Annuity Tables corresponding to the Annuity
Payment Option selected.

A Few Things to Keep in Mind Regarding Annuity Payments

. From time to time, Peoples Benefit may require proof that the Annuitant,
Joint Annuitant, or Policy Owner is living.

. At the time Peoples Benefit calculates your fixed Annuity Payments, Peoples
Benefit may offer more favorable rates than those guaranteed in the Annuity
Tables found in the Policy.

. Once Annuity Payments begin, you may not select a different Annuity Payment
Option. Nor may you cancel an Annuity Payment Option after Annuity Payments
have begun.

. If you have selected a variable Annuity Payment Option, you may change the
Subaccount funding the variable Annuity Payments by written request or by
calling 800-866-6007.

14
<PAGE>

3. PURCHASE

Customer Order Form and Issuance of Policies

To invest in the Advisor's Edge Select variable annuity, you should send a
completed customer order form and your Initial Premium Payment to the address
indicated on the customer order form. If you wish to make a personal delivery by
hand or courier to Peoples Benefit of your completed customer order form and
Initial Premium Payment (rather than through the mail), do so at our
Administrative Offices, 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499.
Peoples Benefit will issue a Policy only if the Annuitant and Joint Annuitant
are 85 years of age or less.

In addition to Non-Qualified Policies, Peoples Benefit also offers the Advisor's
Edge Select as a Qualified Policy. Note that Qualified Policies contain certain
other restrictive provisions limiting the timing of payments to and
distributions from the Qualified Policy. (See QUALIFIED INDIVIDUAL RETIREMENT
ANNUITIES, page 29.)

DEFINITION

Qualified Policy

Premium Payments

A Premium Payment is any amount you use to buy or add to the Policy. A Premium
Payment may be reduced by any applicable Premium Tax. In that case, the
resulting amount is called a Net Premium Payment.

A Few Things to Keep in Mind Regarding Premium Payments

. The minimum Initial Premium Payment for a Non-Qualified Policy is $10,000.

. The minimum Initial Premium Payment for a Qualified Policy is $1,000 (or
$50 if by payroll deduction).

. Additional Premium Payments received before the close of the New York Stock
Exchange (usually 4:00 p.m. Eastern time) are credited to the Policy as of
the close of business that same day.

. The total of all Premium Payments may not exceed $1,000,000 without our
prior approval.

. Your Initial Net Premium Payment will be immediately invested among the
Subaccounts selected in your customer order form. See Allocation of Premium
Payments, page 16, for more information.

15
<PAGE>

DEFINITION

Premium Tax

A Premium Tax is a regulatory tax some states assess on the Premium Payments
made into a Policy. If we should have to pay any Premium Tax, we will deduct
it from the Policy Value on the Annuity Commencement Date, date of death, or
date of full surrender.

As of the date of this Prospectus, the following state assesses a Premium Tax
on all initial and subsequent Purchase Payments:

Non-
Qualified Qualified
--------- ---------

South Dakota............................... 0.00% 1.25%

Non-
Qualified Qualified
--------- ---------

California................................. 0.50% 2.35%
Maine...................................... 0.00 2.00
Nevada..................................... 0.00 3.50
West Virginia.............................. 1.00 1.00
Wyoming.................................... 0.00 1.00

Purchasing by Wire

For wiring instructions, please contact our Administrative Office at
800-866-6007.

Allocation of Premium Payments

16
<PAGE>

WHAT'S MY POLICY WORTH TODAY?

Policy Value

plus -

. any additional Net Premium Payments credited

. any increase in the Policy Value due to investment results of the
Portfolio(s) you selected and the interest credited to the Guaranteed
Period Options

. Positive Excess Interest Adjustment, if applicable

minus -

. any decrease in the Policy Value due to investment results of the
Subaccounts you selected

. the daily Mortality and Expense Risk Fee

. the daily Administrative Expense Charge

. the Annual Policy Service Charge, if applicable

. any withdrawals

. any charges for Transfers made after the first twelve in a Policy Year

. Negative Excess Interest Adjustment, if applicable

. any Premium Taxes that occur during the Valuation Period.

The Valuation Period is any period between two successive Business Days
beginning at the close of business of the first Business Day and ending at the
close of business of the next Business Day.

All dividends and capital gains earned will be reinvested and reflected in the
Accumulation Unit Value. Only in this way can these earnings remain
tax-deferred.

17
<PAGE>

4. INVESTMENT OPTIONS

The Advisor's Edge Select variable annuity offers you a means of investing in
twenty-nine Portfolios offered by twelve different investment companies (each
investment company a "Fund") and a fixed account. The companies that provide
investment advice and administrative services for the underlying fund portfolios
offered through this Policy are listed below. More detailed information,
including an explanation of the Portfolio's investment objectives, may be found
in the current prospectuses for the underlying funds, which are attached to this
prospectus. You should read the prospectuses for the underlying funds carefully
before you invest. For information about the fixed account and the Guaranteed
Period Options, see The Fixed Account, page 23.