INHEIRITAGE ACCOUNT OF SMA LIFE ASSURANCE CO, 485BPOS, 1995-09-29

INHEIRITAGE ACCOUNT OF SMA LIFE ASSURANCE CO
485BPOS, 1995-09-29

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<PAGE>
Registration Number 33-70948
811-8120

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-6

FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM
N-8B-2
Post-Effective Amendment No. 3
----

INHEIRITAGE ACCOUNT OF SMA LIFE ASSURANCE COMPANY
-------------------------------------------------
(Exact Name of Registrant)

SMA LIFE ASSURANCE COMPANY
440 Lincoln Street
Worcester MA 01653
(Address of Principal Executive Office)

Abigail M. Armstrong, Esq.
440 Lincoln Street
Worcester MA 01653
(Name and Address of Agent for Service of Process)

It is proposed that this filing will become effective:

____on____________pursuant to paragraph (a) of Rule 485
___60 days after filing pursuant to paragraph (a) of Rule 485
___immediately after filing pursuant to paragraph (b) of Rule 485
X on October 1, 1995 pursuant to paragraph (b) of Rule 485
---- -------------------
FLEXIBLE PREMIUM VARIABLE LIFE

Pursuant to Reg. Section 270.24f-2 of the Investment Company Act of 1940,
Registrant hereby declares that an indefinite amount of its securities is being
registered under the Securities Act of 1933. The Rule 24f-2 Notice for the
issuer's fiscal year ended December 31, 1994 was filed on February 22, 1995.

<PAGE>
RECONCILIATION AND TIE BETWEEN ITEMS
IN FORM N-8B-2 AND THE PROSPECTUS

Item No. of
Form N-8B-82 Caption in Prospectus
- ------------ ---------------------
1. . . . . . . . . . . . . . . . . . Cover Page
2. . . . . . . . . . . . . . . . . . Cover Page
3. . . . . . . . . . . . . . . . . . Not Applicable
4. . . . . . . . . . . . . . . . . . Distribution
5. . . . . . . . . . . . . . . . . . The Company, The Inheiritage Account
6. . . . . . . . . . . . . . . . . . The Inheiritage Account
7. . . . . . . . . . . . . . . . . . Not Applicable
8. . . . . . . . . . . . . . . . . . Not Applicable
9. . . . . . . . . . . . . . . . . . Legal Proceedings
10 . . . . . . . . . . . . . . . . . Summary; Description of the Company, The
Inheiritage Account, Allmerica
Investment Trust, Variable Insurance
Products Fund, Variable Insurance
Product Fund II, T. Rowe Price
International Series, Inc. and Delaware
Group Premium Fund; The Policy; Policy
Termination and Reinstatement; Other
Policy Provisions
11 . . . . . . . . . . . . . . . . . Summary; Allmerica Investment Trust;
Variable Insurance Products Fund;
Variable Insurance Products Fund II; T.
Rowe Price International Series, Inc.;
Delaware Group Premium Fund, Inc.;
Investment Objectives and Policies
12 . . . . . . . . . . . . . . . . . Summary; Allmerica Investment Trust;
Variable Insurance Products Fund;
Variable Insurance Products Fund II; T.
Rowe Price International Series, Inc.;
Delaware Group Premium Fund, Inc.
13 . . . . . . . . . . . . . . . . . Summary; Allmerica Investment Trust;
Variable Insurance Products Fund;
Variable Insurance Products Fund II; T.
Rowe Price International Series, Inc.;
Delaware Group Premium Fund, Inc.;
Investment Advisory Services to the
Trust; Investment Advisory Services to
Variable Insurance Products Fund;
Investment Advisory Services to Variable
Insurance Products Fund II; Investment
Advisory Services to T. Rowe Price
International Series, Inc.; Investment
Advisory Services to Delaware Group
Premium Fund, Inc.; Charges and
Deductions
14 . . . . . . . . . . . . . . . . . Summary; Application for a Policy
15 . . . . . . . . . . . . . . . . . Summary; Application for a Policy;
Premium Payments; Allocation of Net
Premiums
16 . . . . . . . . . . . . . . . . . The Inheiritage Account; Allmerica
Investment Trust; Variable Insurance
Products Fund; Variable Insurance
Products Fund II; T. Rowe Price
International Series, Inc.; Delaware
Group Premium Fund, Inc.; Premium
Payments; Allocation of Net Premiums
17 . . . . . . . . . . . . . . . . . Summary; Surrender; Partial Withdrawal;
Charges and Deductions; Policy

<PAGE>

Termination and Reinstatement
18 . . . . . . . . . . . . . . . . . The Inheiritage Account; Allmerica
Investment Trust; Variable Insurance
Products Fund; Variable Insurance
Products Fund II; T. Rowe Price
International Series, Inc.; Delaware
Group Premium Fund, Inc.; Premium
Payments
19 . . . . . . . . . . . . . . . . . Reports; Voting Rights
20 . . . . . . . . . . . . . . . . . Not Applicable
21 . . . . . . . . . . . . . . . . . Summary; Policy Loans; Other Policy
Provisions
22 . . . . . . . . . . . . . . . . . Other Policy Provisions
23 . . . . . . . . . . . . . . . . . Not Required
24 . . . . . . . . . . . . . . . . . Other Policy Provisions
25 . . . . . . . . . . . . . . . . . The Company
26 . . . . . . . . . . . . . . . . . Not Applicable
27 . . . . . . . . . . . . . . . . . The Company
28 . . . . . . . . . . . . . . . . . Directors and Principal Officers of the
Company
29 . . . . . . . . . . . . . . . . . The Company
30 . . . . . . . . . . . . . . . . . Not Applicable
31 . . . . . . . . . . . . . . . . . Not Applicable
32 . . . . . . . . . . . . . . . . . Not Applicable
33 . . . . . . . . . . . . . . . . . Not Applicable
34 . . . . . . . . . . . . . . . . . Not Applicable
35 . . . . . . . . . . . . . . . . . Distribution
36 . . . . . . . . . . . . . . . . . Not Applicable
37 . . . . . . . . . . . . . . . . . Not Applicable
38 . . . . . . . . . . . . . . . . . Summary; Distribution
39 . . . . . . . . . . . . . . . . . Summary; Distribution
40 . . . . . . . . . . . . . . . . . Not Applicable
41 . . . . . . . . . . . . . . . . . The Company, Distribution
42 . . . . . . . . . . . . . . . . . Not Applicable
43 . . . . . . . . . . . . . . . . . Not Applicable
44 . . . . . . . . . . . . . . . . . Premium Payments; Policy Value and Cash
Surrender Value
45 . . . . . . . . . . . . . . . . . Not Applicable
46 . . . . . . . . . . . . . . . . . Policy Value and Cash Surrender Value;
Federal Tax Considerations
47 . . . . . . . . . . . . . . . . . The Company
48 . . . . . . . . . . . . . . . . . Not Applicable
49 . . . . . . . . . . . . . . . . . Not Applicable
50 . . . . . . . . . . . . . . . . . The Inheiritage Account
51 . . . . . . . . . . . . . . . . . Cover Page; Summary; Charges and
Deductions; The Policy; Policy
Termination and Reinstatement; Other
Policy Provisions
52 . . . . . . . . . . . . . . . . . Addition, Deletion or Substitution of
Investments
53 . . . . . . . . . . . . . . . . . Federal Tax Considerations
54 . . . . . . . . . . . . . . . . . Not Applicable
55 . . . . . . . . . . . . . . . . . Not Applicable
56 . . . . . . . . . . . . . . . . . Not Applicable
57 . . . . . . . . . . . . . . . . . Not Applicable
58 . . . . . . . . . . . . . . . . . Not Applicable
59 . . . . . . . . . . . . . . . . . Not Applicable
<PAGE>

PROSPECTUS SUPPLEMENT
INHEIRITAGE ACCOUNT
(Supplement to prospectus dated May 1, 1995)

Effective October 1, 1995, the name of SMA Life Assurance Company has been
changed to ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY. The attached
prospectus is hereby amended to delete the name "SMA Life Assurance Company" and
to substitute ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY.

* * *

CHANGES IN DIRECTORS AND OFFICERS

Bradford K. Gallagher has resigned as Director, President and CEO of the
Company. Richard M. Reilly, who is a Director and previously was Vice President
of the Company, has been elected as President and CEO of the Company.

James R. McAuliffe has resigned as Director and Ruben P. Moreno has
resigned as Vice President of the Company.

SUPPLEMENT DATED OCTOBER 1, 1995

<PAGE>

This prospectus describes individual joint survivorship flexible premium
variable life insurance policies ("Policies") offered by SMA Life Assurance
Company ("Company") to applicants Age 80 or under respecting the younger
Insured and Age 85 or under respecting the older Insured. Life insurance
coverage is provided for two Insureds, with death proceeds payable at death
of the last surviving Insured. Within limits, the Policyowner may choose the
amount of initial premium desired and the initial Sum Insured. The
Policyowner has the flexibility to vary the frequency and amount of premium
payments, subject to certain restrictions and conditions. The Policyowner
may withdraw a portion of the Policy"s surrender value, or the Policy may be
fully surrendered at any time, subject to certain limitations. Because of
the substantial nature of the surrender charge, the Policy is not suitable
for short-term investment purposes. A Policyowner contemplating surrender of
a Policy should pay special attention to the limitation of deferred sales
charges on surrenders in the first two years following issuance or Face Amount
increase.

The Policies permit the Policyowner to allocate net premiums among up to
seven of eighteen sub-accounts ("Sub-Accounts") of the Inheiritage Account,
a separate account of the Company, and a fixed interest account ("General
Account") of the Company (together "Accounts"). Each Sub-Account invests
its assets in a corresponding investment portfolio of Allmerica Investment
Trust ("Trust"), Variable Insurance Products Fund ("VIPF"), Variable
Insurance Products Fund II ("VIPF II"), T. Rowe Price International Series,
Inc. ("T. Rowe") or Delaware Group Premium Fund, Inc. ("DGPF"). The
Trust is managed by Allmerica Investment Management Company, Inc.
("Allmerica Investment"). VIPF and VIPF II are managed by Fidelity
Management & Research Company ("Fidelity Management"). T. Rowe is managed
by Rowe Price-Fleming International, Inc. ("Price-Fleming"). The
International Equity Series, which is the only investment portfolio of DGPF
available under the Policies, is managed by Delaware International Advisers
Ltd. ("Delaware International").

In certain circumstances, a Policy may be considered a "modified endowment
contract." Under the Internal Revenue Code, any policy loan, partial
withdrawal or surrender from a modified endowment contract may be subject to
tax and tax penalties. See "FEDERAL TAX CONSIDERATIONS - Modified Endowment
Contracts."

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

IT MAY NOT BE ADVANTAGEOUS TO PURCHASE FLEXIBLE PREMIUM VARIABLE LIFE
INSURANCE AS A REPLACEMENT FOR THE POLICYOWNER'S CURRENT LIFE INSURANCE OR IF
THE POLICYOWNER ALREADY OWNS A FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY.

THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY CURRENT PROSPECTUSES OF THE
ALLMERICA INVESTMENT TRUST, VARIABLE INSURANCE PRODUCTS FUND, VARIABLE
INSURANCE PRODUCTS FUND II, T. ROWE PRICE INTERNATIONAL SERIES, INC. AND
DELAWARE GROUP PREMIUM FUND, INC. THE HIGH INCOME PORTFOLIO INVESTS IN
HIGHER YIELDING, HIGHER RISK, LOWER RATED DEBT SECURITIES (SEE "INVESTMENT
OBJECTIVES AND POLICIES" IN THIS PROSPECTUS). INVESTORS SHOULD RETAIN A
COPY OF THIS PROSPECTUS FOR FUTURE REFERENCE.

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

Dated May 1, 1995
440 Lincoln Street
Worcester, Massachusetts 01653
(508) 855-1000

<PAGE>

(Continued from cover page)

The Trust, VIPF, VIPF II, T. Rowe and DGPF are open-end, diversified series
investment companies. Eleven different investment portfolios of the Trust
are available under the Policies: the Growth Fund, Investment Grade Income
Fund, Money Market Fund, Equity Index Fund, Select International Equity Fund,
Government Bond Fund, Select Aggressive Growth Fund, Select Capital
Appreciation Fund, Select Growth Fund, Select Growth and Income Fund and
Small Cap Value Fund (the "Funds"). Four different investment portfolios
of VIPF are available under the Policies: High Income Portfolio,
Equity-Income Portfolio, Growth Portfolio, and Overseas Portfolio
("Portfolios"). One investment portfolio of VIPF II ("Portfolio") is
available under the Policies: the Asset Manager Portfolio. One investment
portfolio of T. Rowe ("Portfolio") is available under the Policies: the
International Stock Portfolio. One investment portfolio of DGPF ("Series")
is available under the Policies: the International Equity Series. Each Fund,
Portfolio and Series has its own investment objectives. The accompanying
prospectuses of the Trust, VIPF, VIPF II, T. Rowe and DGPF describe the
investment objectives and certain attendant risks of each Underlying Fund.
The International Stock Portfolio of T. Rowe is not available in all states.

There is no guaranteed minimum Policy value. The value of a Policy will vary
up or down to reflect the investment experience of allocations to the
Sub-Accounts and the fixed rates of interest earned by allocations to the
General Account. The Policy value will also be adjusted for other factors,
including the amount of charges imposed. The Policy will remain in effect so
long as the Policy value less any surrender charges and less any outstanding
debt is sufficient to pay certain monthly charges imposed in connection with
the Policy. The Policy value may decrease to the point where the Policy will
lapse and provide no further death benefit without additional premium
payments.

If the Policy is in effect at the death of the last surviving Insured, the
Company will pay a death benefit (the "Death Proceeds") to the beneficiary.
Prior to the Final Premium Payment Date, the Death Proceeds equal the Sum
Insured, less any debt, partial withdrawals, and any due and unpaid charges.
The Policyowner may choose either Sum Insured Option 1 (the Sum Insured is
fixed in amount) or Sum Insured Option 2 (the Sum Insured includes the Policy
value in addition to a fixed insurance amount). A Policyowner has the right
to change the Sum Insured option, subject to certain conditions. A guideline
minimum Sum Insured, equivalent to a percentage of the Policy value, will
apply if greater than the Sum Insured otherwise payable under Option 1 or
Option 2.

The Policy provides a Paid-Up Insurance option. IF THIS OPTION IS ELECTED,
CERTAIN POLICYOWNER RIGHTS DISCLOSED IN THIS PROSPECTUS WILL NOT APPLY. The
Policyowner who has elected the Paid-Up Insurance option may not pay
additional premiums, select Sum Insured Option 2, increase or decrease the
Face Amount or make partial withdrawals. Policy Value in the Inheiritage
Account will be transferred to the General Account on the date the Company
receives written request to exercise the option and transfers of Policy Value
back to the Inheiritage Account will not be permitted. Riders will continue
only with the consent of the Company. Surrender value and loan value are
calculated differently. See "THE POLICY - Paid-Up Insurance Option."

<PAGE>

TABLE OF CONTENTS

SPECIAL TERMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
PERFORMANCE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . 15
DESCRIPTION OF THE COMPANY, THE INHEIRITAGE ACCOUNT, ALLMERICA
INVESTMENT TRUST, VARIABLE INSURANCE PRODUCTS FUND, VARIABLE
INSURANCE PRODUCTS FUND II, T. ROWE PRICE INTERNATIONAL SERIES,
INC. AND DELAWARE GROUP PREMIUM
FUND, INC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
THE INHEIRITAGE ACCOUNT. . . . . . . . . . . . . . . . . . . . . . 18
ALLMERICA INVESTMENT TRUST . . . . . . . . . . . . . . . . . . . 18
VARIABLE INSURANCE PRODUCTS FUND . . . . . . . . . . . . . . . . . 19
VARIABLE INSURANCE PRODUCTS FUND II. . . . . . . . . . . . . . . . 19
T. ROWE PRICE INTERNATIONAL SERIES, INC. . . . . . . . . . . . . . 19
DELAWARE GROUP PREMIUM FUND, INC.. . . . . . . . . . . . . . . . . 19
INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . 19
INVESTMENT ADVISORY SERVICES TO THE TRUST. . . . . . . . . . . . . 21
INVESTMENT ADVISORY SERVICES TO VIPF AND VIPF II . . . . . . . . . 24
INVESTMENT ADVISORY SERVICES TO T. ROWE. . . . . . . . . . . . . . 24
INVESTMENT ADVISORY SERVICES TO DGPF.. . . . . . . . . . . . . . . 24
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS. . . . . . . . . 24
VOTING RIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 25

THE POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
APPLICATION FOR A POLICY . . . . . . . . . . . . . . . . . . . . . 26
FREE LOOK PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . 26
CONVERSION PRIVILEGES. . . . . . . . . . . . . . . . . . . . . . . 27
PREMIUM PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 27
INCENTIVE FUNDING DISCOUNT . . . . . . . . . . . . . . . . . . . . 27
ALLOCATION OF NET PREMIUMS . . . . . . . . . . . . . . . . . . . . 28
TRANSFER PRIVILEGE . . . . . . . . . . . . . . . . . . . . . . . . 28
DEATH PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SUM INSURED OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . 29
CHANGE IN SUM INSURED OPTION . . . . . . . . . . . . . . . . . . . 32
CHANGE IN FACE AMOUNT. . . . . . . . . . . . . . . . . . . . . . . 33
POLICY VALUE AND SURRENDER VALUE . . . . . . . . . . . . . . . . . 34
PAYMENT OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 35
OPTIONAL INSURANCE BENEFITS. . . . . . . . . . . . . . . . . . . . 35
SURRENDER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
PARTIAL WITHDRAWAL . . . . . . . . . . . . . . . . . . . . . . . . 35
PAID-UP INSURANCE OPTION . . . . . . . . . . . . . . . . . . . . . 36

CHARGES AND DEDUCTIONS . . . . . . . . . . . . . . . . . . . . . . . . . 36
TAX EXPENSE CHARGE . . . . . . . . . . . . . . . . . . . . . . . . 36
PREMIUM EXPENSE CHARGE . . . . . . . . . . . . . . . . . . . . . . 36
MONTHLY DEDUCTION FROM POLICY VALUE. . . . . . . . . . . . . . . . 36
CHARGES AGAINST ASSETS OF THE INHEIRITAGE ACCOUNT. . . . . . . . . 38
SURRENDER CHARGE . . . . . . . . . . . . . . . . . . . . . . . . . 39
CHARGES ON PARTIAL WITHDRAWAL. . . . . . . . . . . . . . . . . . . 40
TRANSFER CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . 41
CHARGE FOR INCREASE IN FACE AMOUNT . . . . . . . . . . . . . . . . 41
OTHER ADMINISTRATIVE CHARGES . . . . . . . . . . . . . . . . . . . 41

POLICY LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
LOAN INTEREST CHARGED. . . . . . . . . . . . . . . . . . . . . . . 41
REPAYMENT OF DEBT. . . . . . . . . . . . . . . . . . . . . . . . . 42
EFFECT OF POLICY LOANS . . . . . . . . . . . . . . . . . . . . . . 42

POLICY TERMINATION AND REINSTATEMENT . . . . . . . . . . . . . . . . . . 42
TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
REINSTATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 42

OTHER POLICY PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . 43
POLICYOWNER. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

<PAGE>

BENEFICIARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
INCONTESTABILITY . . . . . . . . . . . . . . . . . . . . . . . . . 43
SUICIDE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
NOTICE OF FIRST INSURED TO DIE . . . . . . . . . . . . . . . . . . 44
AGE . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
POSTPONEMENT OF PAYMENTS . . . . . . . . . . . . . . . . . . . . . 44

DIRECTORS AND PRINCIPAL OFFICERS OF THE COMPANY. . . . . . . . . . . . . 45

DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

REPORTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

FURTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 48

INDEPENDENT ACCOUNTANTS. . . . . . . . . . . . . . . . . . . . . . . . . 48

FEDERAL TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . 49
THE COMPANY AND THE INHEIRITAGE ACCOUNT. . . . . . . . . . . . . . 49
TAXATION OF THE POLICIES . . . . . . . . . . . . . . . . . . . . . 49
MODIFIED ENDOWMENT CONTRACTS . . . . . . . . . . . . . . . . . . . 50
ESTATE AND GENERATION SKIPPING TAXES . . . . . . . . . . . . . . . 50

MORE INFORMATION ABOUT THE GENERAL ACCOUNT . . . . . . . . . . . . . . . 51
GENERAL DESCRIPTION. . . . . . . . . . . . . . . . . . . . . . . . 51
GENERAL ACCOUNT VALUE. . . . . . . . . . . . . . . . . . . . . . . 51
THE POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
TRANSFERS, SURRENDERS, PARTIAL WITHDRAWALS AND POLICY LOANS. . . . 52

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 52

APPENDIX A - OPTIONAL BENEFITS . . . . . . . . . . . . . . . . . . . . . 82

APPENDIX B - PAYMENT OPTIONS . . . . . . . . . . . . . . . . . . . . . . 82

APPENDIX C - ILLUSTRATIONS OF SUM INSURED, POLICY VALUES AND
ACCUMULATED PREMIUMS . . . . . . . . . . . . . . . . . . . . . . . . . . 84

APPENDIX D - CALCULATION OF MAXIMUM SURRENDER CHARGES. . . . . . . . . . 90

<PAGE>

SPECIAL TERMS

ACCUMULATION UNIT: A measure of the Policyowner's interest in a Sub-Account.

AGE: An Insured's age as of the nearest birthday measured from a Policy
anniversary.

BENEFICIARY: The person(s) designated by the owner of the Policy to receive
the insurance proceeds upon the death of the last surviving Insured.

COMPANY: SMA Life Assurance Company.

DATE OF ISSUE: The date set forth in the Policy used to determine the Monthly
Payment Date, Policy months, Policy years, and Policy anniversaries.

DEATH PROCEEDS: Prior to the Final Premium Payment Date, the Death Proceeds
equal the amount calculated under the applicable Sum Insured Option (Option 1
or Option 2), less Debt outstanding at death of the last surviving Insured,
partial withdrawals, if any, partial withdrawal charges, and any due and
unpaid Monthly Deductions. After the Final Premium Payment Date, the Death
Proceeds equal the Surrender Value of the Policy.

DEBT: All unpaid Policy loans plus interest due or accrued on such loans.

DELIVERY RECEIPT: An acknowledgment, signed by the Policyowner and returned
to the Company's Principal Office, that the Policyowner has received the
Policy and the Notice of Withdrawal Rights.

EVIDENCE OF INSURABILITY: Information, including medical information
satisfactory to the Company, that is used to determine the Insureds' Premium
Class.

FACE AMOUNT: The amount of insurance coverage applied for. The Face Amount
of each Policy is set forth in the specification pages of the Policy.

FINAL PREMIUM PAYMENT DATE: The Policy anniversary nearest the younger
Insured's 95th birthday. The Final Premium Payment Date is the latest date
on which a premium payment may be made. After this date, the Death Proceeds
equal the Surrender Value of the Policy.

GENERAL ACCOUNT: All the assets of the Company other than those held in a
separate account.

GUIDELINE ANNUAL PREMIUM: The annual amount of premium that would be payable
through the Final Premium Payment Date of a Policy for the specified Sum
Insured, if premiums were fixed by the Company as to both timing and amount,
and monthly cost of insurance charges were based on the 1980 Commissioners
Standard Ordinary Mortality Tables (Mortality Table D, Smoker or Non-Smoker,
for unisex Policies), net investment earnings at an annual effective rate of
5%, and fees and charges as set forth in the Policy and any Policy riders.
The Sum Insured Option 1 Guideline Annual Premium is used when calculating
the maximum surrender charge.

GUIDELINE MINIMUM SUM INSURED: The minimum Sum Insured required to qualify
the Policy as "life insurance" under Federal tax laws. The Guideline
Minimum Sum Insured varies by Age. It is calculated by multiplying the
Policy Value by a percentage determined by the younger Insured's Age.

INHEIRITAGE ACCOUNT: A separate account of the Company to which the
Policyowner may make Net Premium allocations.

INSURANCE AMOUNT AT RISK: The Sum Insured less the Policy Value.

INSUREDS: The two persons covered under the Policy.

LOAN VALUE: The maximum amount that may be borrowed under the Policy.

MINIMUM MONTHLY FACTOR: A monthly premium amount calculated by the Company
and specified in the Policy. If the Policyowner pays this amount, the
Company guarantees that the Policy will not lapse prior to the 49th Monthly
Deduction after the Date of Issue or the effective date of an increase in the
Face Amount. However, making payments at least equal to the Minimum Monthly
Factors will not prevent the Policy from lapsing if (a) Debt exceeds Policy
Value less surrender charges or (b) partial withdrawals and partial
withdrawal charges have reduced premium payments below an amount equal

<PAGE>

to the Minimum Monthly Factor multiplied by the number of months since the
Date of Issue or the effective date of an increase.

MONTHLY DEDUCTION: Charges deducted monthly from the Policy Value of a Policy
prior to the Final Premium Payment Date. The charges include the monthly
cost of insurance, the monthly cost of any benefits provided by riders, and
the monthly administrative charge.

MONTHLY PAYMENT DATE: The date on which the Monthly Deduction is deducted
from Policy Value.

NET PREMIUM: An amount equal to the premium less a tax expense charge and
premium expense charge.

PAID-UP INSURANCE: Joint survivorship insurance coverage for the lifetime of
the Insureds, with no further premiums due.

POLICY CHANGE: Any change in the Face Amount, the addition or deletion of a
rider, or a change in the Sum Insured Option.

POLICY VALUE: The total amount available for investment under a Policy at any
time. It is equal to the sum of (a) the value of the Accumulation Units
credited to a Policy in the Sub-Accounts and (b) the accumulation in the
General Account credited to that Policy.

PREMIUM CLASS: The risk classification that the Company assigns the Insureds
based on the information in the application and any other Evidence of
Insurability considered by the Company. The Insureds' Premium Class will
affect the cost of insurance charge and the amount of premium required to
keep the Policy in force.

PRINCIPAL OFFICE: The Company's office, located at 440 Lincoln Street,
Worcester, Massachusetts 01653.

PRO RATA ALLOCATION: In certain circumstances, the Policyowner may specify
from which Sub-Account certain deductions will be made or to which
Sub-Account Policy Value will be allocated. If the Policyowner does not, the
Company will allocate the deduction or Policy Value among the General Account
and the Sub-Accounts in the same proportion that the Policy Value in the
General Account and the Policy Value in each Sub-Account bear to the total
Policy Value on the date of deduction or allocation.

SEPARATE ACCOUNT: A separate account consists of assets segregated from the
Company's other assets. The investment performance of the assets of each
separate account is determined separately from the other assets of the
Company. The assets of a separate Account which are equal to the reserves and
other contract liabilities are not chargeable with liabilities arising out of
any other business which the Company may conduct.

SUB-ACCOUNT: A division of the Inheiritage Account. Each Sub-Account invests
exclusively in the shares of a corresponding Fund of the Allmerica Investment
Trust, a corresponding Portfolio of the Variable Insurance Products Fund or
the Variable Insurance Products Fund II, the International Stock Portfolio of
T. Rowe Price International Series, Inc. or the International Equity Series
of the Delaware Group Premium Fund, Inc.

SUM INSURED: The amount payable upon the death of the last surviving Insured,
before the Final Premium Payment Date, prior to deductions for Debt
outstanding at the death of the last surviving Insured, partial withdrawals
and partial withdrawal charges, if any, and any due and unpaid Monthly
Deductions. The amount of the Sum Insured will depend on the Sum Insured
Option chosen, but will always be at least equal to the Face Amount.

SURRENDER VALUE: The amount payable upon a full surrender of the Policy. It
is the Policy Value less any Debt and applicable surrender charges.

UNDERLYING FUNDS: The Funds of the Allmerica Investment Trust, the Portfolios
of the Variable Insurance Products Fund and the Variable Insurance Products
Fund II, the Portfolio of T. Rowe Price International Series, Inc. and the
Series of the Delaware Group Premium Fund, Inc. available under the Policies.

UNDERLYING INVESTMENT COMPANIES: Allmerica Investment Trust, Variable
Insurance Products Fund, Variable Insurance Products Fund II, T. Rowe Price
International Series, Inc. and Delaware Group Premium Fund, Inc.

<PAGE>

VALUATION DATE: A day on which the net asset value of the shares of any of
the Underlying Funds is determined and Accumulation Unit values of the
Sub-Accounts are determined. Valuation Dates currently occur on each day on
which the New York Stock Exchange is open for trading, and on such other days
(other than a day during which no payment, partial withdrawal, or surrender
of a Policy is received) when there is a sufficient degree of trading in an
Underlying Fund's securities such that the current net asset value of the
Sub-Accounts may be materially affected.

VALUATION PERIOD: The interval between two consecutive Valuation Dates.

WRITTEN REQUEST: A request by the Policyowner in writing, satisfactory to the
Company.

<PAGE>

SUMMARY

THE POLICY - The flexible premium variable life policy (the "Policy")
offered by this prospectus allows the Policyowner, subject to certain
limitations, to make premium payments in any amount and frequency. As long
as the Policy remains in force, it will provide for: (1) life insurance
coverage on the named Insureds; (2) Policy Value; (3) surrender rights and
partial withdrawal rights; (4) loan privileges; and (5) in some cases,
additional insurance benefits available by rider for an additional charge.

The Policies are life insurance contracts, with death benefits, Policy Value,
and other features traditionally associated with life insurance. They are
"joint survivorship" Policies because Death Proceeds are payable, not on
the death of the first Insured to die, but on the death of the last surviving
Insured. The Policies are "variable" because, unlike the fixed benefits of
ordinary whole life insurance, the Policy Value will, and under certain
circumstances the Death Proceeds may, increase or decrease depending on the
investment experience of the Sub-Accounts of the Inheiritage Account. They
are "flexible premium" policies, because, unlike traditional insurance
policies, there is no fixed schedule for premium payments. Although the
Policyowner may establish a schedule of premium payments ("planned premium
payments"), failure to make the planned premium payments will not
necessarily cause a Policy to lapse nor will making the planned premium
payments guarantee that a Policy will remain in force. Thus, the Policyowner
may, but is not required to, pay additional premiums.

The Policy will remain in force until the Surrender Value is insufficient to
cover the next Monthly Deduction and loan interest accrued, if any, and a
grace period of 62 days has expired without adequate payment being made by
the Policyowner. During the first 48 Policy months after the Date of Issue
or the effective date of an increase in Face Amount, the Policy will not
lapse if the total premiums paid less debt, partial withdrawals and
withdrawal charges are equal to or exceed the sum of the Minimum Monthly
Factors for the number of months the Policy, increase, or a Policy Change
which causes a change in the Minimum Monthly Factor has been in force.
However, even during these periods making payments at least equal to the
Minimum Monthly Factors will not prevent the Policy from lapsing if Debt
equals or exceeds Policy Value less surrender charges.

SURRENDER CHARGES - At any time that a Policy is in effect, a Policyowner may
elect to surrender the Policy and receive its Surrender Value. A surrender
charge is calculated upon issuance of the Policy and upon each increase in
Face Amount. The duration of the surrender charge is 15 years. The
surrender charge is only imposed if, during its duration, the Policyowner
requests a full surrender or a decrease in Face Amount.

The maximum surrender charge calculated upon issuance of the Policy is equal
to the sum of (a) plus (b) where (a) is a deferred administrative charge
equal to $8.50 per thousand dollars of the initial Face Amount and (b) is a
deferred sales charge of 48% of premiums received up to a maximum number of
Guideline Annual Premiums subject to the deferred sales charge that varies by
average issue Age from 1.95 (for average issue Ages 5 through 75) to 1.31
(for average issue Age 82). In accordance with limitations under state
insurance regulations, the amount of the maximum surrender charge will not
exceed a specified amount per $1,000 of initial Face Amount, as indicated in
"APPENDIX D - CALCULATION OF MAXIMUM SURRENDER CHARGES." The maximum
surrender charge remains level for the first 40 Policy months and reduces by
0.5% or more per month thereafter, as described in "APPENDIX D - CALCULATION
OF MAXIMUM SURRENDER CHARGES." If the Policyowner surrenders the Policy
during the first two Policy years following the Date of Issue before making
premium payments associated with the initial Face Amount which are at least
equal to one Guideline Annual Premium, the deferred administrative charge
will be $8.50 per thousand dollars of initial Face Amount, as described
above, but the deferred sales charge will not exceed 25% of premiums
received. See "THE POLICY - Surrender" and "CHARGES AND DEDUCTIONS -
Surrender Charge."

A separate surrender charge will apply to and is calculated for each increase
in Face Amount. The maximum surrender charge for the increase is equal to
the sum of (a) plus (b) where (a) is equal to $8.50 per thousand dollars of
increase, and (b) is a deferred sales charge of 48% of premiums associated
with the increase, up to a maximum number of Guideline Annual Premiums (for
the increase) subject to the deferred sales charge that varies by average Age
(at the time of increase) from 1.95 (for average Ages 5 through 75) to 1.31
(for average Age 82). In accordance with limitations under state insurance
regulations, the amount of the surrender charge will not exceed a specified
amount per $1,000 of increase, as indicated in "APPENDIX D - CALCULATION OF
MAXIMUM SURRENDER CHARGES." As is true for the initial Face Amount, (a) is
a deferred administrative charge and (b) is a deferred sales charge. This
maximum surrender charge remains level for the first 40 Policy months
following the increase and reduces by 0.5% or more per month thereafter, as
described in "APPENDIX D - CALCULATION OF MAXIMUM SURRENDER CHARGES." If
the Policyowner surrenders the Policy

<PAGE>

during the first two Policy years following an increase in Face Amount before
making premium payments associated with the increase in Face Amount which are
at least equal to one Guideline Annual Premium, the deferred administrative
charge will be $8.50 per thousand dollars of Face Amount increase, as
described above, but the deferred sales charge will not exceed 25% of
premiums associated with the increase. See "THE POLICY - Surrender" and
"CHARGES AND DEDUCTIONS - Surrender Charge."

In the event of a decrease in Face Amount, the surrender charge imposed is
proportional to the charge that would apply to a full surrender. See "THE
POLICY - Surrender" and "CHARGES AND DEDUCTIONS - Surrender Charge."

PREMIUM EXPENSE CHARGE - A charge of 1% of premiums will be deducted from each
premium payment to partially compensate the Company for sales expenses
related to the Policies. See CHARGES AND DEDUCTIONS - Premium Expense
Charge."

MONTHLY DEDUCTIONS FROM POLICY VALUE - On the Date of Issue and each Monthly
Payment Date thereafter prior to the Final Premium Payment Date, certain
charges ("Monthly Deductions") will be deducted from the Policy Value. The
Monthly Deduction consists of a charge for cost of insurance, a charge for
the cost of any additional benefits provided by rider, and a charge for
administrative expenses. The Policyowner may instruct the Company to deduct
the Monthly Deduction from one specific Sub-Account. If the Policyowner does
not, the Company will make a Pro Rata Allocation of the charge. No Monthly
Deductions are made on or after the Final Premium Payment Date.

The monthly cost of insurance charge is determined by multiplying the
Insurance Amount at Risk (the Sum Insured minus the Policy Value) for each
Policy month by the applicable cost of insurance rate or rates. The
Insurance Amount at Risk will be affected by any decreases or increases in
the Face Amount.

As noted above, certain additional insurance rider benefits are available
under the Policy for an additional monthly charge. See "APPENDIX A -
Optional Benefits."

The monthly administrative charge is described in "CHARGES AND DEDUCTIONS
- - Monthly Deduction From Policy Value."

POLICY ADMINISTRATIVE CHARGES - Each of the charges listed below is designed
to reimburse the Company for actual Policy administrative costs incurred.
None of these charges is designed to result in a profit to the Company.

DEFERRED ADMINISTRATIVE CHARGE - A component of the surrender charge is a
charge for administrative expenses. This deferred administrative charge is
$8.50 per thousand dollars of the initial Face Amount or of an increase in
Face Amount. The charge is designed to reimburse the Company for
administrative costs associated with product research and development,
underwriting, policy administration, decreasing the Face Amount, and
surrendering a Policy. Because the maximum surrender charge reduces by 0.5%
or more per month after the 40th Policy month from the Date of Issue or the
effective date of an increase in Face Amount, in certain situations some or
all of the deferred administrative charge may not be assessed upon surrender
of the Policy. See "THE POLICY - Surrender" and "CHARGES AND DEDUCTIONS -
Surrender Charge."

MONTHLY ADMINISTRATIVE CHARGES - A component of the Monthly Deduction from
Policy Value is a charge for administrative expenses. Prior to the Final
Premium Payment Date, the charge is $6 per month. The charges are designed
to reimburse the Company for the costs associated with issuing and
administering the Policies, such as processing premium payments, policy loans
and loan repayments, change in Sum Insured Options, and death claims. These
charges also help cover the cost of providing annual statements and
responding to Policyholder inquiries. See "CHARGES AND DEDUCTIONS - Monthly
Deduction From Policy Value."

TRANSACTION CHARGE ON PARTIAL WITHDRAWALS - A transaction charge, which is
the smaller of 2% of the amount withdrawn or $25, is assessed at the time of
each partial withdrawal to reimburse the Company for the cost of processing
the withdrawal. In addition to the transaction charge, a partial withdrawal

<PAGE>

charge may also be made under certain circumstances. See "CHARGES AND
DEDUCTIONS - Charges On Partial Withdrawal."

CHARGE FOR INCREASE IN FACE AMOUNT - For each increase in Face Amount, a
charge of $50 will be deducted from Policy Value. This charge is designed to
reimburse the Company for underwriting and administrative costs associated
with the increase. See "THE POLICY - Change In Face Amount" and "CHARGES
AND DEDUCTIONS - Charge For Increase In Face Amount."

TRANSFER CHARGE - The first six transfers of Policy Value in a Policy year
will be free of charge. Thereafter, with certain exceptions, a transfer
charge of $10 will be imposed for each transfer request to reimburse the
Company for the costs of processing the transfer. See "THE POLICY -
Transfer Privilege" and "CHARGES AND DEDUCTIONS - Transfer Charges."

OTHER ADMINISTRATIVE CHARGES - The Company reserves the right to impose a
charge for the administrative costs associated with changing the Net Premium
allocation instructions, for changing the allocation of any Monthly
Deductions among the various Sub-Accounts, or for a projection of values.
See "CHARGES AND DEDUCTIONS - Other Administrative Charges."

CHARGES AGAINST THE INHEIRITAGE ACCOUNT - A daily charge equivalent to an
effective annual rate of 1.15% of the average daily net asset value of each
Sub-Account of the Inheiritage Account is imposed to compensate the Company
for its assumption of certain mortality and expense risks and for
administrative costs associated with the Inheiritage Account. The rate is
0.90% for the mortality and expense risk and 0.25% for the Inheiritage
Account administrative charge, which administrative charge is eliminated
after the fifteenth Policy year. See "CHARGES AND DEDUCTIONS - Charges
Against Assets Of The Inheiritage Account."

CHARGES OF THE UNDERLYING INVESTMENT COMPANIES - In addition to the charges
described above, certain fees and expenses are deducted from the assets of
the Underlying Investment Companies. See "CHARGES AND DEDUCTIONS - Charges
Against Assets Of The Inheiritage Account." The levels of fees and expenses
vary among the Underlying Investment Companies.

POLICY VALUE AND SURRENDER VALUE - The Policy Value is the total amount
available for investment under a Policy at any time. It is the sum of the
value of all Accumulation Units in the Sub-Accounts of the Inheiritage
Account and all accumulations in the General Account of the Company credited
to the Policy. The Policy Value reflects the amount and frequency of Net
Premiums paid, charges and deductions imposed under the Policy, interest
credited to accumulations in the General Account, investment performance of
the Sub-Account(s) to which Policy Value has been allocated, and partial
withdrawals. The Policy Value may be relevant to the computation of the
Death Proceeds. The Policyowner bears the entire investment risk for amounts
allocated to the Inheiritage Account. The Company does not guarantee a
minimum Policy Value. See "SUMMARY - Minimum Monthly Factor."

The Surrender Value will be the Policy Value less any Debt and applicable
surrender charges. The Surrender Value is relevant, for example, to the
continuation of the Policy and in the computation of the amounts available
upon partial withdrawals, Policy loans or surrender.

DEATH PROCEEDS - The Policy provides for the payment of certain Death
Proceeds to the named Beneficiary upon the death of the last surviving
Insured. There are no Death Proceeds payable on death of the first Insured
to die. Prior to the Final Premium Payment Date, the Death Proceeds will be
equal to the Sum Insured, reduced by any outstanding Debt, partial
withdrawals, partial withdrawal charges, and any Monthly Deductions due and
not yet deducted through the policy month in which the last surviving Insured
dies. Two Sum Insured Options are available. Under Option 1, the Sum
Insured is the greater of the Face Amount of the Policy or the Guideline
Minimum Sum Insured. Under Option 2, the Sum Insured is the greater of the
Face Amount of the Policy plus the Policy Value or the Guideline Minimum Sum
Insured. The Guideline Minimum Sum Insured is equivalent to a percentage
(determined each month based on the younger Insured's Age) of the Policy
Value. On or after the Final Premium Payment Date, the Death Proceeds will
equal the Surrender Value. See "THE POLICY - Death Proceeds."

The Death Proceeds under the Policy may be received in a lump sum or under
one of the Payment Options described in the Policy. See "APPENDIX B -
Payment Options."

FLEXIBILITY TO ADJUST SUM INSURED - Subject to certain limitations, the
Policyowner may adjust the Sum Insured, and thus the Death Proceeds, at any
time prior to the Final Premium Payment Date, by increasing or decreasing the
Face Amount of the Policy. Any change in the Face Amount will affect

<PAGE>

the monthly cost of insurance charges and the amount of the surrender charge.
If the Face Amount is decreased, a pro rata surrender charge may be imposed.
The Policy Value is reduced by the amount of the charge. See "THE POLICY -
Change In Face Amount." The minimum increase in Face Amount is $100,000,
and any increase may also require additional Evidence of Insurability
satisfactory to the Company. The increase is subject to a "free look
period" and, during the first 24 months after the increase, to a conversion
privilege. See "THE POLICY - Free Look Period - Conversion Privileges."

ADDITIONAL INSURANCE BENEFITS - The Policyowner has the flexibility to add
additional insurance benefits by rider. These include the Split Option
Rider, Other Insured Rider and Four-Year Term Rider. See "APPENDIX A -
Optional Benefits." The cost of these optional insurance benefits will be
deducted from Policy Value as part of the Monthly Deduction. See "CHARGES
AND DEDUCTIONS - Monthly Deduction From Policy Value."

POLICY ISSUANCE - If at the time of application the Policyowner makes a
payment equal to at least one Minimum Monthly Factor for the Policy as
applied for, the Company will provide conditional insurance, equal to the
amount applied for but not to exceed $500,000. If the application is
approved, the Policy will be issued as of the date the terms of the
conditional insurance agreement are met. If the Policyowner does not wish
to make any payment at the time of application, insurance coverage will not
be in force until delivery of the Policy and payment of sufficient premium
during the lifetime of the Insureds.

If any premiums are paid prior to the issuance of the Policy, such premiums
will be held in the Company's General Account. If the Policyowner's
application is approved and the Policy is issued and accepted, the initial
premiums held in the General Account will be credited with interest at a
specified rate beginning not later than the date of receipt of the premiums
at the Company's Principal Office. IF A POLICY IS NOT ISSUED AND ACCEPTED,
THE INITIAL PREMIUMS WILL BE RETURNED TO THE POLICYOWNER WITHOUT INTEREST.

Upon completion of issuance procedures, delivery of the Policy, and receipt
of any additional premiums, if less than $10,000 of initial Net Premiums have
been received by the Company, such Net Premiums will be allocated to the
Sub-Accounts according to the Policyowner's instructions. If initial Net
Premiums equal or exceed $10,000, or if the Policy provides for planned
premium payments during the first year equal to or exceeding $10,000
annually, $5,000 semi-annually, $2,500 quarterly or $1,000 monthly, the
entire Net Premium plus any interest earned will be allocated to the
Sub-Accounts upon return to the Company of a Delivery Receipt. See "THE
POLICY - Application For A Policy."

MINIMUM MONTHLY FACTOR - The Policy is guaranteed not to lapse prior to the
49th Monthly Deduction after Date of Issue or the effective date of an
increase in the Face Amount, if the Policyowner makes premium payments, less
partial withdrawals and partial withdrawal charges, at least equal to the sum
of the Minimum Monthly Factors for the number of months the Policy increase,
or Policy Change which causes a change in the Minimum Monthly Factor, has
been in force. Policy Changes which cause a change in the Minimum Monthly Factor
are changes in Face Amount and the addition or deletion of a rider. However, at
all other times, payments of such premiums do not guarantee that the Policy will
remain in force. See "THE POLICY - Premium Payments." Moreover, even
during the 48 month periods, if Debt exceeds Policy Value less surrender
charges, then making payments at least equal to the Minimum Monthly Factors
will not prevent the Policy from lapsing.

ALLOCATION OF NET PREMIUMS - Net premiums are the premiums paid less the tax
expense charge and premium expense charge. Net premiums may be allocated to
one or more Sub-Accounts of the Inheiritage Account, to the General Account,
or to any combination of Accounts. The Policyowner bears the investment risk
of Net Premiums allocated to the Sub-Accounts. Allocations may be made to no
more than seven Sub-Accounts at any one time. The minimum allocation is 1%
of Net Premium. All allocations must be in whole numbers and must total
100%. See "THE POLICY - Allocation Of Net Premiums."

Premiums allocated to the Company's General Account will earn a fixed rate of
interest. Net premiums and minimum interest are guaranteed by the Company.
For more information, see "MORE INFORMATION ABOUT THE GENERAL ACCOUNT."

INVESTMENT OPTIONS - The Policies permit Net Premiums to be allocated either
to the Company's General Account or to the Inheiritage Account. The
Inheiritage Account is currently comprised of eighteen Sub-Accounts
("Sub-Accounts"). Each Sub-Account invests exclusively in a corresponding
Underlying Fund of the Allmerica Investment Trust ("Trust") managed by
Allmerica Investment, the Variable Insurance Products Fund ("VIPF") or the
Variable Insurance Products Fund II ("VIPF II")

<PAGE>

managed by Fidelity Management, T. Rowe Price International Series, Inc.
("T. Rowe") managed by Rowe Price-Fleming International, Inc. with respect
to the International Stock Portfolio or the Delaware Group Premium Fund, Inc.
("DGPF") managed by Delaware International with respect to the
International Equity Series. In some states, insurance regulations may
restrict the availability of particular Underlying Funds. The Policies
permit the Policyowner to transfer Policy Value among the available
Sub-Accounts and between the Sub-Accounts and the General Account of the
Company, subject to certain limitations described under "THE POLICY -
Transfer Privilege."

The Trust, VIPF, VIPF II, T. Rowe and DGPF are open-end, diversified series
management investment companies. Ten different Underlying Funds of the Trust
(each a "Fund") are available under the Policies: the Growth Fund,
Investment Grade Income Fund, Money Market Fund, Equity Index Fund,
Government Bond Fund, Select International Equity Fund, Select Aggressive
Growth Fund, Select Growth Fund, Select Growth and Income Fund and Small Cap
Value Fund. Four different Underlying Funds of VIPF (each a "Portfolio")
are available under the Policies: the High Income Portfolio, Equity-Income
Portfolio, Growth Portfolio and Overseas Portfolio. One Underlying Fund of
VIPF II ("Portfolio") is available under the Policies: the Asset Manager
Portfolio. One Underlying Fund of T. Rowe ("Portfolio") is available under
the Policies: the International Stock Portfolio. One Underlying Fund of
DGPF ("Series") is available under the Policies: the International Equity
Series.

Each of the Underlying Funds has its own investment objectives. However,
certain Portfolios have investment objectives similar to certain Funds or
Series. Certain of the Underlying Funds may not be available in all states.

The value of each Sub-Account will vary daily depending upon the performance
of the Underlying Fund in which it invests. Each Sub-Account reinvests
dividends or capital gains distributions received from an Underlying Fund in
additional shares of that Underlying Fund.

There can be no assurance that the investment objectives of the Underlying
Funds can be achieved. For more information, see "DESCRIPTION OF THE
COMPANY, THE INHEIRITAGE ACCOUNT, ALLMERICA INVESTMENT TRUST, VARIABLE
INSURANCE PRODUCTS FUND, VARIABLE INSURANCE PRODUCTS FUND II, T. ROWE PRICE
INTERNATIONAL SERIES, INC. AND DELAWARE GROUP PREMIUM FUND, INC."

FREE LOOK PERIOD - The Policy provides for an initial Free Look Period. The
Policyowner may cancel the Policy by mailing or delivering it to the
Principal Office or to an agent of the Company on or before the latest of (a)
45 days after the application for the Policy is signed, (b) 10 days after the
Policyowner receives the Policy, or (c) 10 days after the Company mails or
personally delivers a Notice of Withdrawal Rights to the Policyowner.

Upon return of the Policy, the Company will refund an amount equal to the sum
of (a) the difference between the premium, including fees and charges paid,
and any amount allocated to the Inheiritage Account, (b) the value of the
amounts allocated to the Inheiritage Account at the date the Policy is
returned, and (c) any fees or charges imposed on the amounts allocated to the
Inheiritage Account. The amount refunded in (a) above includes any premiums
allocated to the General Account. However, where required by state law, the
Company will refund the entire amount of premiums paid. A free look
privilege also applies after a requested increase in Face Amount. See "THE
POLICY - Free Look Period."

CONVERSION PRIVILEGES - During the first 24 Policy months after the Date of
Issue, subject to certain restrictions, the Policyowner may convert this
Policy to a flexible premium fixed adjustable joint survivorship life
insurance policy by simultaneously transferring all accumulated value in the
Sub-Accounts to the General Account and instructing the Company to allocate
all future premiums to the General Account. A similar conversion privilege
is in effect for 24 Policy months after the date of an increase in Face
Amount. Where required by state law, and at the Policyowner's request, the
Company will issue a flexible premium adjustable joint survivorship life
insurance policy. The new policy will have the same face amount, issue ages,
date of issue and risk classifications as the original Policy. See "THE
POLICY - Conversion Privileges."

PARTIAL WITHDRAWAL - After the first Policy year, the Policyowner may make
partial withdrawals in a minimum amount of $500 from the Policy Value. Under
Option 1, the Face Amount is reduced by the amount of the partial withdrawal,
and a partial withdrawal will not be allowed if it would reduce the Face
Amount below $100,000.

A transaction charge which is described in "CHARGES AND DEDUCTIONS - Charges
On Partial Withdrawal," will be assessed to reimburse the Company for the
cost of processing each partial

<PAGE>

withdrawal. A partial withdrawal charge may also be imposed upon a partial
withdrawal. Generally, amounts withdrawn during each Policy year in excess
of 10% of the Policy Value ("excess withdrawal") are subject to the partial
withdrawal charge. The partial withdrawal charge is equal to 5% of the
excess withdrawal up to the surrender charge on the date of withdrawal. If
no surrender charge is applicable at the time of withdrawal, no partial
withdrawal charge will be deducted. The Policy's outstanding surrender
charge will be reduced by the amount of the partial withdrawal charge
deducted. See "THE POLICY - Partial Withdrawal" and "CHARGES AND DEDUCTIONS -
Charges On Partial Withdrawal."

PAID-UP INSURANCE OPTION - The Policyowner who elects this option will have,
without further premiums due, joint survivorship insurance coverage for the
lifetime of the Insureds, with the Death Proceeds payable on the death of the
last surviving Insured. The amount of Paid-Up Insurance, the basis of
values, and the effect on other Policy rights are stated in "THE POLICY -
Paid-Up Insurance Option."

LOAN PRIVILEGE - The Policyowner may borrow against the Policy Value. The
total amount the Policyowner may borrow is the Loan Value. Loan Value in the
first Policy Year is 75% of an amount equal to Policy Value less surrender
charge, Monthly Deductions, and interest on Debt to the end of the Policy
year. Thereafter, Loan Value is 90% of an amount equal to Policy Value less
the surrender charge.

Policy loans will be allocated among the General Account and the Sub-Accounts
in accordance with the Policyowner's instructions. If no allocation is made
by the Policyowner, the Company will make a Pro Rata Allocation among the
Accounts. In either case, Policy Value equal to the Policy loan will be
transferred from the appropriate Sub-Account(s) to the General Account, and
will earn monthly interest at an effective annual rate of at least 6%.
Therefore, a Policy loan may have a permanent impact on the Policy Value even
though it is eventually repaid. Although the loan amount is a part of the
Policy Value, the Death Proceeds will be reduced by the amount of outstanding
Debt at the death of the last surviving Insured. Policy loans will bear
interest at a fixed rate of 8% per year, due and payable in arrears at the
end of each Policy year. If interest is not paid when due, it will be added
to the loan balance. Policy loans may be repaid at any time. The
Policyowner must notify the Company if a payment is a loan repayment;
otherwise, it will be considered a premium payment. Any partial or full
repayment of Debt by the Policyowner will be allocated to the General Account
or Sub-Accounts in accordance with the Policyowner's instructions. If the
Policyowner does not specify an allocation, the Company will allocate the
loan repayment in accordance with the Policyowner's most recent premium
allocation instructions. See "POLICY LOANS."

POLICY LAPSE AND REINSTATEMENT - The failure to make premium payments will
not cause a Policy to lapse unless: (a) the Surrender Value is insufficient
to cover the next Monthly Deduction plus loan interest accrued, if any, or
(b) Debt exceeds Policy Value less surrender charges. A 62-day grace period
applies to each situation. Except for the situation described in (b) above,
the Policy will not lapse prior to the 49th Monthly Deduction following the
Date of Issue or the effective date of an increase in Face Amount, if the
Policyowner makes premium payments, less Debt, partial withdrawals and
partial withdrawal charges, at least equal to the sum of the Minimum Monthly
Factors for the number of months the Policy, increase, or Policy Change which
causes a change in the Minimum Monthly Factor, has been in force. Subject to
certain conditions (including Evidence of Insurability showing that the
Insureds are insurable according to the Company's underwriting rules and the
payment of sufficient premium), a Policy may be reinstated at any time within
3 years after the expiration of the grace period and prior to the Final
Premium Payment Date. The Company Reserves the right to increase the Minimum
Monthly Factor upon reinstatement. See "POLICY TERMINATION AND
REINSTATEMENT."

TAX TREATMENT - A Policy is generally subject to the same federal income tax
treatment as a conventional fixed benefit life insurance policy. Under
current tax law, to the extent there is no change in benefits, the
Policyowner will be taxed on Policy Value withdrawn from the Policy only to
the extent that the amount withdrawn exceeds the total premiums paid.
Withdrawals in excess of premiums paid will be treated as ordinary income.
During the first 15 Policy years, however, an "interest first" rule applies
to any distribution of cash that is required under Section 7702 of the
Internal Revenue Code because of a reduction of benefits under the Policy.
Death Proceeds under the Policy are excludable from the gross income of the
Beneficiary, but in some circumstances the Death Proceeds or the Policy Value
may be subject to federal estate tax. See "FEDERAL TAX CONSIDERATIONS -
Taxation Of The Policies."

<PAGE>

A Policy offered by this prospectus may be considered a "modified endowment
contract" if it fails a "7 - pay" test. A Policy fails to satisfy the 7 -
pay test if the cumulative premiums paid under the Policy at any time
during the first seven policy years exceeds the sum of the net level premiums
that would have been paid, had the Policy provided for paid-up future
benefits after the payment of seven level premiums. If the Policy is
considered a modified endowment contract, all distributions (including policy
loans, partial withdrawals, surrenders or assignments) will be taxed on an
"income-first" basis. In addition, with certain exceptions, an additional
10% penalty will be imposed on the portion of any distribution that is
includible in income. For more information, see "FEDERAL TAX
CONSIDERATIONS - Modified Endowment Contracts."

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

The purpose of the Policy is to provide insurance protection for the
Beneficiary named therein. This Summary is intended to provide only a very
brief overview of the more significant aspects of the Policy. Further detail
is provided in this prospectus and in the Policy. No claim is made that the
Policy is in any way similar or comparable to a systematic investment plan of
a mutual fund. The Policy together with its attached application constitutes
the entire agreement between the Company and the Policyowner.

<PAGE>

PERFORMANCE INFORMATION

The Policies were first offered to the public in 1994. However, the Company
may advertise "Total Return" and "Average Annual Total Return" performance
information based on the periods that the Underlying Funds have been in
existence. The results for any period prior to the Policies being offered
will be calculated as if the Policies had been offered during that period of
time, with all charges assumed to be those applicable to the Sub-Accounts,
the Underlying Funds, and (in Table I) under a "representative" Policy that
is surrendered at the end of the applicable period. FOR MORE INFORMATION ON
CHARGES UNDER THE POLICIES, SEE CHARGES AND DEDUCTIONS.

In each Table below, "One-Year Total Return" refers to the total of the
income generated by a sub-account, based on certain charges and assumptions
as described in the respective tables, for the one-year period ended December
31, 1994. "Average Annual Total Return" is based on the same charges and
assumptions, but reflects the hypothetical annually compounded return that
would have produced the same cumulative return if the Sub-Account's
performance had been constant over the entire period. Because average annual
total returns tend to smooth out variations in annual performance return,
they are not the same as actual year-by-year results.

TABLE I: SUB-ACCOUNT PERFORMANCE
NET OF ALL CHARGES AND ASSUMING SURRENDER OF THE POLICY
-------------------------------------------------------

The following performance information is based on the periods that the
Underlying Funds have been in existence. The data is net of expenses of the
Underlying Funds, all Sub-Account charges, and all Policy charges (including
surrender charges) for a representative Policy. It is assumed that the
Insureds are male, Age 45, standard (nonsmoker) Premium Class, and female,
Age 43, standard (nonsmoker) Premium Class, that the Face Amount of the
Policy is $500,000, that an annual premium payment of $5,500 (approximately
one Guideline Annual Premium) was made at the beginning of each Policy year,
that ALL premiums were allocated to EACH Sub-Account individually, and that
there was a full surrender of the Policy at the end of the applicable period.

- ----------------------------------------------------------------------------------------------
Average Annual Total Return as of 12/31/94
-------------------------------------------
Sub- Underlying One-Year 3 years 5 years Since Years Since
Account Fund Total return Inception Inception*
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>

1 Growth -100.00% -24.89% -0.52% 10.39% 9.67
2 Investment Grade -100.00% -24.00% -2.80% 5.14% 9.67
3 Money Market -100.00% -26.33% -6.43% 2.20% 9.67
4 Equity Index -100.00% -23.09% N/A -1.10% 4.26
5 Government Bond -100.00% -25.23% N/A -18.58% 3.35
6 Select Aggressive Growth -100.00% N/A N/A -19.32% 2.36
7 Select Growth -100.00% N/A N/A -33.49% 2.36
8 Select Growth and Income -100.00% N/A N/A -33.21% 2.36
9 Small Cap Value -100.00% N/A N/A -56.44% 1.67
11 Select Int'l Equity N/A N/A N/A -99.35% 0.67
12 Select Cap. Appreciation N/A N/A N/A N/A N/A
102 VIPF High Income -100.00% -12.91% 4.34% 7.27% 9.28
103 VIPF Equity Income -97.87% -12.22% 0.21% 6.62% 8.23
104 VIPF Growth -100.00% -18.45% 0.66% 8.34% 8.23
105 VIPF Overseas -100.00% -20.65% -20.64% 2.07% 7.92
106 VIPF II Asset Manager -100.00% -19.70% -19.68% 0.80% 5.32
150 T. Rowe Int'l Stock N/A N/A N/A -100.00% 0.58
207 DGPF Int'l Equity -100.00% N/A N/A -17.72% 2.17
- ----------------------------------------------------------------------------------------------
</TABLE>

PERFORMANCE INFORMATION REFLECTS ONLY THE PERFORMANCE OF A HYPOTHETICAL
INVESTMENT DURING THE PARTICULAR TIME PERIOD ON WHICH THE CALCULATIONS ARE
BASED. ONE-YEAR TOTAL RETURN AND AVERAGE ANNUAL TOTAL RETURN FIGURES ARE
BASED ON HISTORICAL EARNINGS AND ARE NOT INTENDED TO INDICATE FUTURE
PERFORMANCE. PERFORMANCE INFORMATION SHOULD BE CONSIDERED IN LIGHT OF THE
INVESTMENT OBJECTIVES AND POLICIES, CHARACTERISTICS AND QUALITY OF THE
PORTFOLIO OF THE UNDERLYING FUND IN WHICH A SUB-ACCOUNT INVESTS AND THE
MARKET CONDITIONS DURING THE GIVEN TIME PERIOD, AND SHOULD NOT BE CONSIDERED
AS A REPRESENTATION OF WHAT MAY BE ACHIEVED IN THE FUTURE.

<PAGE>

TABLE II: SUB-ACCOUNT PERFORMANCE
EXCLUDING MONTHLY POLICY CHARGES AND SURRENDER CHARGES
------------------------------------------------------

The following performance information is based on the periods that the
Underlying Funds have been in existence. The performance information is net
of total Underlying Fund expenses, all Sub-Account charges, and premium tax
and expense charges. THE DATA DOES NOT REFLECT MONTHLY CHARGES UNDER THE
POLICIES OR SURRENDER CHARGES. It is assumed that an annual premium payment
of $5,500 (approximately one Guideline Annual Premium) was made at the
beginning of each Policy year and that ALL premiums were allocated to EACH
Sub-Account individually.

1 Growth -1.01% 3.37% 8.61% 12.38% 9.67
2 Investment Grade -4.09% 4.00% 6.73% 7.45% 9.67
3 Money Market 2.72% 2.36% 3.78% 4.74% 9.67
4 Equity Index -0.12% 4.65% N/A 11.49% 4.26
5 Government Bond -2.03% 3.13% N/A 4.93% 3.35
6 Select Aggressive Growth -3.45% N/A N/A 14.01% 2.36
7 Select Growth -2.64% N/A N/A 3.13% 2.36
8 Select Growth and Income -0.44% N/A N/A 3.34% 2.36
9 Small Cap Value -7.60% N/A N/A 4.99% 1.67
11 Select Int'l Equity N/A N/A N/A -4.61% 0.67
12 Select Capital Appreciation N/A N/A N/A N/A N/A
102 VIPF High Income -2.70% 12.12% 12.70% 9.61% 9.28
103 VIPF Equity Income 5.82% 12.64% 9.22% 9.65% 8.23
104 VIPF Growth -1.18% 8.00% 9.59% 11.24% 8.23
105 VIPF Overseas 0.54% 6.40% 4.56% 5.76% 7.92
106 VIPF II Asset Manager 7.18% 7.09% 9.42% 8.92% 5.32
150 T. Rowe Int'l Stock N/A N/A N/A -0.25% 0.58
207 DGPF Int'l Equity 1.45% N/A N/A 17.41% 2.17
- ----------------------------------------------------------------------------------------------
</TABLE>

- - - -

*The inception dates for the Underlying Funds are: 4/29/85 for Growth,
Investment Grade and Money Market; 9/28/90 for Equity Index; 8/26/91 for
Government Bond; 8/21/92 for Select Aggressive Growth, Select Growth, and
Select Growth and Income; 4/30/93 for Small Cap Value; 5/01/94 for Select
International Equity; 10/09/86 for VIPF Equity-Income and VIPF Growth;
9/19/85 for VIPF High Income; 1/28/87 for VIPF Overseas; 9/06/89 for VIPF II
Asset Manager; 10/29/92 for DGPF International Equity; and 6/01/94 for the T.
Rowe International Stock. The Select Capital Appreciation Fund of the Trust
was not in existence in 1994.

<PAGE>

Performance information may be compared, in reports and promotional
literature, to: (i) the Standard & Poor's 500 Stock Index ("S & P 500"), Dow
Jones Industrial Average ("DJIA"), Shearson Lehman Aggregate Bond Index or
other unmanaged indices so that investors may compare results with those of a
group of unmanaged securities widely regarded by investors as representative
of the securities markets in general; (ii) other groups of variable life
separate accounts or other investment products tracked by Lipper Analytical
Services, a widely used independent research firm which ranks mutual funds
and other investment products by overall performance, investment objectives,
and assets, or tracked by other services, companies, publications, or
persons, such as Morningstar, Inc., who rank such investment products on
overall performance or other criteria; or (iii) the Consumer Price Index (a
measure for inflation) to assess the real rate of return from an investment.
Unmanaged indices may assume the reinvestment of dividends but generally do
not reflect deductions for administrative and management costs and expenses.

The Company may provide information on various topics of interest to
Policyowners and prospective Policyowners in sales literature, periodic
publications or other materials. These topics may include the relationship
between sectors of the economy and the economy as a whole and its effect on
various securities markets, investment strategies and techniques (such as
value investing, market timing, dollar cost averaging, asset allocation,
constant ratio transfer and account rebalancing), the advantages and
disadvantages of investing in tax-deferred and taxable investments, customer
profiles and hypothetical purchase and investment scenarios, financial
management and tax and retirement planning, and investment alternatives to
certificates of deposit and other financial instruments.

<PAGE>

DESCRIPTION OF THE COMPANY, THE INHEIRITAGE ACCOUNT,
ALLMERICA INVESTMENT TRUST, VARIABLE INSURANCE PRODUCTS FUND,
VARIABLE INSURANCE PRODUCTS FUND II
T. ROWE PRICE INTERNATIONAL SERIES, INC. AND
DELAWARE GROUP PREMIUM FUND, INC.

THE COMPANY - The Company is a life insurance company organized under the
laws of Delaware in July, 1974. Its Principal Office is located at 440
Lincoln Street, Worcester, Massachusetts 01653, Telephone 508-855-1000. The
Company is subject to the laws of the state of Delaware governing insurance
companies and to regulation by the Commissioner of Insurance of Delaware. In
addition, the Company is subject to the insurance laws and regulations of
other states and jurisdictions in which it is licensed to operate. As of
December 31, 1994, the Company had over $4 billion in assets and over $25
billion of life insurance in force. The Company is an indirect wholly-owned
subsidiary of State Mutual Life Assurance Company of America ("State
Mutual"), 440 Lincoln Street, Worcester, Massachusetts. State Mutual,
organized under the laws of Massachusetts in 1844, is the fifth oldest life
insurance company in America. As of December 31, 1994, State Mutual and its
subsidiaries (including the Company) had over $10 billion in combined assets
and over $42 billion of life insurance in force.

THE INHEIRITAGE ACCOUNT - The Inheiritage Account was authorized by vote of
the Board of Directors of the Company on September 15, 1993. The Inheiritage
Account is registered with the Securities and Exchange Commission
("Commission") as a unit investment trust under the Investment Company Act of
1940 ("1940 Act"). Such registration does not involve the supervision of its
management or investment practices or policies of the Inheiritage Account or
the Company by the Commission.

The assets used to fund the variable portion of the Policies are set aside in
the Inheiritage Account and are kept separate from the general assets of the
Company. Under Delaware law, assets equal to the reserves and other
liabilities of the Inheiritage Account may not be charged with any
liabilities arising out of any other business of the Company. The
Inheiritage Account currently has eighteen Sub-Accounts. Each Sub-Account is
administered and accounted for as part of the general business of the
Company, but the income, capital gains, or capital losses of each Sub-Account
are allocated to such Sub-Account, without regard to other income, capital
gains, or capital losses of the Company or the other Sub-Accounts. Each
Sub-Account invests exclusively in a corresponding investment portfolio
("Underlying Fund") of the Allmerica Investment Trust, the Variable Insurance
Products Fund, the Variable Insurance Products Fund II, T. Rowe Price
International Series, Inc. or the Delaware Group Premium Fund, Inc.
("Underlying Investment Companies"). The assets of each Underlying Fund are
held separate from the assets of the other Underlying Funds. Each Underlying
Fund operates as a separate investment vehicle and the income or losses of
one Underlying Fund generally have no effect on the investment performance
of another Underlying Fund. Shares of each Underlying Fund are not offered
to the general public but solely to separate accounts of life insurance
companies, such as the Inheiritage Account. Each Sub-Account has two
sub-divisions. One sub-division applies to Policies during their first
fifteen Policy years, which are subject to a Inheiritage Account
administrative charge. See "CHARGES AND DEDUCTIONS - Charges Against Assets
of the Inheiritage Account." Thereafter, such Policies are automatically
allocated to the second sub-division to account for the elimination of the
Inheiritage Account administrative charge.

The Company reserves the right, subject to compliance with applicable law, to
change the names of the Sub-Accounts and Inheiritage Account.

ALLMERICA INVESTMENT TRUST - Allmerica Investment Trust (the "Trust") is an
open-end, diversified management investment company registered with the
Commission under the 1940 Act. Such registration does not involve supervision
by the Commission of the investments or investment policy of the Trust or its
separate investment Funds.

The Trust was established by State Mutual as a Massachusetts business trust
on October 11, 1984, for the purpose of providing a vehicle for the
investment of assets of various separate accounts established by State
Mutual, the Company, or other affiliated insurance companies. Eleven
investment portfolios ("Funds") of the Trust are available under the
Policies, each issuing a series of shares: the Growth Fund, Investment Grade
Income Fund, Money Market Fund, Equity Index Fund, Government Bond Fund,
Select International Equity Fund, Select Aggressive Growth Fund, Select
Capital Appreciation Fund, Select Growth Fund, Select Growth and Income Fund,
and Small Cap Value Fund. Certain of the Funds may not be available in all
states.

<PAGE>

Allmerica Investment serves as investment adviser of the Trust and has
entered into sub-advisory agreements with other investment managers
("Sub-Advisers") who manage the investments of the Funds. See "INVESTMENT
ADVISORY SERVICES TO THE TRUST."

VARIABLE INSURANCE PRODUCTS FUND - Variable Insurance Products Fund ("VIPF"),
managed by Fidelity Management & Research Company ("Fidelity Management"), is
an open-end, diversified, management investment company organized as a
Massachusetts business trust on November 13, 1981 and registered with the
Commission under the 1940 Act. Four of its investment portfolios are
available under the Policies: High Income Portfolio, Equity-Income Portfolio,
Growth Portfolio and Overseas Portfolio.

Various Fidelity companies perform certain activities required to operate
VIPF. Fidelity Management, a registered investment adviser under the
Investment Advisers Act of 1940, is one of America's largest investment
management organizations and has its principal business address at 82
Devonshire Street, Boston MA. It is composed of a number of different
companies, which provide a variety of financial services and products.
Fidelity Management is the original Fidelity company, founded in 1946. It
provides a number of mutual funds and other clients with investment research
and portfolio management services. The Portfolios of VIPF as part of their
operating expenses pay an investment management fee to Fidelity Management.
See "INVESTMENT ADVISORY SERVICES TO VIPF AND VIPF II."

VARIABLE INSURANCE PRODUCTS FUND II - Variable Insurance Products Fund II
("VIPF II"), managed by Fidelity Management (see discussion under "VARIABLE
INSURANCE PRODUCTS FUND"), is an open-end, diversified, management
investment company organized as a Massachusetts business trust on March 21,
1988 and registered with the Commission under the 1940 Act. One of its
investment portfolios is available under the Policies: the Asset Manager
Portfolio.

T. ROWE PRICE INTERNATIONAL SERIES, INC. - T. Rowe Price International
Series, Inc. ("T. Rowe"), managed by Rowe Price-Fleming International, Inc.
("Price-Fleming") (See "INVESTMENT ADVISORY SERVICES TO T. ROWE"), is an
open-end, diversified, management investment company organized as a Maryland
corporation in 1994 and registered with the Commission under the 1940 Act.
One of its investment portfolios is available under the Policies: the
International Stock Portfolio.

DELAWARE GROUP PREMIUM FUND, INC.- Delaware Group Premium Fund, Inc. ("DGPF")
is an open-end, diversified management investment company registered with the
Commission under the 1940 Act. Such registration does not involve supervision
by the Commission of the investments or investment policy of DGPF or its
separate investment series.

DGPF was established to provide a vehicle for the investment of assets of
various separate accounts supporting variable insurance policies. One
investment portfolio ("Series") is available under the Policies, the
International Equity Series, which may not be available in all states.

The Investment adviser for the International Equity Series is Delaware
International Advisers Ltd. ("Delaware International"). See "INVESTMENT
ADVISORY SERVICES TO DGPF."

INVESTMENT OBJECTIVES AND POLICIES - A summary of investment objectives of
each of the Underlying Funds is set forth below. MORE DETAILED INFORMATION
REGARDING THE INVESTMENT OBJECTIVES, RESTRICTIONS AND RISKS, EXPENSES PAID BY
THE UNDERLYING FUNDS AND OTHER RELEVANT INFORMATION REGARDING THE UNDERLYING
INVESTMENT COMPANIES MAY BE FOUND IN THEIR RESPECTIVE PROSPECTUSES, WHICH
ACCOMPANY THIS PROSPECTUS AND SHOULD BE READ CAREFULLY BEFORE INVESTING. The
Statements of Additional Information of the Underlying Funds are available
upon request. There can be no assurance that the investment objectives of the
Underlying funds can be achieved.

GROWTH FUND (SUB-ACCOUNT 1) - The Growth Fund of the Trust is invested in
common stocks and securities convertible into common stocks that are believed
to represent significant underlying value in relation to current market
prices. The objective of the Growth Fund is to achieve long-term growth of
capital. Realization of current investment income, if any, is incidental to
this objective.

INVESTMENT GRADE INCOME FUND (SUB-ACCOUNT 2) - The Investment Grade Income
Fund of the Trust is invested in a diversified portfolio of fixed income
securities with the objective of seeking as high a level of total return
(including both income and realized and unrealized capital gains) as is
consistent with prudent investment management.

MONEY MARKET FUND (SUB-ACCOUNT 3) - The Money Market Fund of the Trust is
invested in a diversified portfolio of high-quality, short-term debt
instruments with the objective of obtaining maximum

<PAGE>

current income consistent with the preservation of capital and liquidity.

EQUITY INDEX FUND (SUB-ACCOUNT 4) - The Equity Index Fund of the Trust seeks
to provide investment results that correspond generally to the composite
price and yield performance of United States publicly traded common stocks.
The Equity Index Fund seeks to achieve its objective by attempting to
replicate the composite price and yield performance of the Standard & Poor's
500 Composite Stock Price Index.

GOVERNMENT BOND FUND (SUB-ACCOUNT 5) - The Government Bond Fund of the Trust
has the investment objectives of seeking high income, preservation of capital
and maintenance of liquidity, primarily through investments in debt
instruments issued or guaranteed by the U.S. Government or its agencies or
instrumentalities.

SELECT AGGRESSIVE GROWTH FUND (SUB-ACCOUNT 6) - The Select Aggressive Growth
Fund of the Trust seeks above-average capital appreciation by investing
primarily in common stocks of companies which are believed to have
significant potential for capital appreciation.

SELECT GROWTH FUND (SUB-ACCOUNT 7) - The Select Growth Fund of the Trust
seeks to achieve growth of capital by investing in a diversified portfolio
consisting primarily of common stocks selected on the basis of their
long-term growth potential.

SELECT GROWTH AND INCOME FUND (SUB-ACCOUNT 8) - The select Growth and Income
Fund of the Trust seeks a combination of long-term growth of capital and
current income. The Fund will invest primarily in dividend-paying common
stocks and securities convertible into common stocks.

SMALL CAP VALUE FUND (SUB-ACCOUNT 9) - The Small Cap Value Fund of the Trust
seeks long-term growth by investing principally in a diversified portfolio of
common stocks of smaller, faster-growing companies considered to be
attractively valued in the smaller company sector of the market.

SELECT INTERNATIONAL EQUITY FUND (SUB-ACCOUNT 11) - The Select International
Equity Fund of the Trust seeks maximum long-term total return (capital
appreciation and income) primarily by investing in common stocks of
established non-U.S. companies.

SELECT CAPITAL APPRECIATION FUND (SUB-ACCOUNT 12) - The Select Capital
Appreciation Fund of the Trust seeks long-term growth of capital in a manner
consistent with the preservation of capital. Realization of income is not a
significant investment consideration and any income realized on the Fund's
investments will be incidental to its primary objective. The Fund will
invest primarily in common stock of industries and companies which are
experiencing favorable demand for their products and services, and which
operate in a favorable competitive environment and regulatory climate. The
Sub-Adviser for the Select Capital Appreciation Fund is Janus Capital
Corporation.

HIGH INCOME PORTFOLIO (SUB-ACCOUNT 102) - The High Income Portfolio of VIPF
seeks to obtain a high level of current income by investing primarily in
high-yielding, lower-rated fixed-income securities (commonly referred to as
"junk bonds"), while also considering growth of capital. These securities are
often considered to be speculative and involve greater risk of default or
price changes than securities assigned a high quality rating. For more
information about these lower-rated securities, see "Risks of Lower-Rated
Debt Securities" in the VIPF prospectus.

EQUITY-INCOME PORTFOLIO (SUB-ACCOUNT 103) - The Equity-Income Portfolio of
VIPF seeks reasonable income by investing primarily in income-producing
equity securities. In choosing these securities, the Portfolio will also
consider the potential for capital appreciation. The Portfolio's goal is to
achieve a yield which exceeds the composite yield on the securities
comprising the Standard & Poor's 500 Composite Stock Price Index. The
Portfolio may invest in high yielding, lower-rated fixed-income securities
(commonly referred to as "junk bonds") which are subject to greater risk than
investments in higher-rated securities. For a further discussion of
lower-rated securities, please see "Risks of Lower-Rated Debt Securities" in
the VIPF prospectus.

GROWTH PORTFOLIO (SUB-ACCOUNT 104) - The Growth Portfolio of VIPF seeks to
achieve capital appreciation. The Portfolio normally purchases common
stocks, although its investments are not restricted to any one type of
security. Capital appreciation may also be found in other types of
securities, including bonds and preferred stocks.

OVERSEAS PORTFOLIO (SUB-ACCOUNT 105) - The Overseas Portfolio of VIPF seeks
long-term growth of capital primarily through investments in foreign
securities and provides a means for aggressive investors to diversify their
own portfolios by participating in companies and economies outside of the
United States.

<PAGE>

ASSET MANAGER PORTFOLIO (SUB-ACCOUNT 106) - The Asset Manager Portfolio of
VIPF II seeks high total return with reduced risk over the long-term by
allocating its assets among stocks, bonds and short-term fixed-income
instruments.

INTERNATIONAL STOCK PORTFOLIO (SUB-ACCOUNT 150) - The International Stock
Portfolio of T. Rowe seeks long-term growth of capital through investments
primarily in common stocks of established, non-U.S. companies.

INTERNATIONAL EQUITY SERIES (SUB-ACCOUNT 207) - The International Equity
Series of DGPF seeks long-term growth without undue risk to principal by
investing primarily in equity securities of foreign issuers providing the
potential for capital appreciation and income.

CERTAIN PORTFOLIOS HAVE INVESTMENT OBJECTIVES AND/OR POLICIES SIMILAR TO
THOSE OF CERTAIN FUNDS OR SERIES. THEREFORE, TO CHOOSE THE SUB-ACCOUNTS
WHICH WILL BEST MEET THE POLICYOWNER'S NEEDS AND OBJECTIVES, CAREFULLY READ
THE PROSPECTUSES OF THE TRUST, VIPF, VIPF II, T. ROWE AND DGPF ALONG WITH
THIS PROSPECTUS. IN SOME STATES, INSURANCE REGULATIONS MAY RESTRICT THE
AVAILABILITY OF PARTICULAR SUB-ACCOUNTS.

If required in the Policyowner's state, in the event of a material change in
the investment policy of a Sub-Account or the Underlying Fund in which it
invests, the Policyowner will be notified of the change. If the Policyowner
has Policy Value in that Sub-Account, the Company will transfer it without
charge on written request by the Policyowner to another Sub-Account or to the
General Account. The Company must receive the Policyowner's written request
within sixty (60) days of the later of (a) the effective date of such change
in the investment policy or (b) the receipt of the notice of the
Policyowner's right to transfer. The Policyowner may then change the premium
and deduction allocation percentages.

INVESTMENT ADVISORY SERVICES TO THE TRUST - The overall responsibility for
the supervision of the affairs of the Trust vests in the Trustees. The
Trustees have entered into a Management Agreement with Allmerica Investment
Management Company, Inc. ("Allmerica Investment"), an indirect wholly-owned
subsidiary of State Mutual, to handle the day-to-day affairs of the Trust.
Allmerica Investment, subject to review by the Trustees, is responsible for
the general management of the Funds. Allmerica Investment is also obligated
to perform certain administrative and management services for the Trust,
furnishes to the Trust all necessary office space, facilities, and equipment,
and pays the compensation, if any, of officers and Trustees who are
affiliated with Allmerica Investment.

Other than the expenses specifically assumed by Allmerica Investment under
the Management Agreement, all expenses incurred in the operation of the Trust
are borne by it, including fees and expenses associated with the registration
and qualification of the Trust's shares under the Securities Act of 1933,
other fees payable to the Commission, independent public accountant, legal
and custodian fees, association membership dues, taxes, interest, insurance
premiums, brokerage commission, fees and expenses of the Trustees who are not
affiliated with Allmerica Investment, expenses for proxies, prospectuses, and
reports to shareholders, and other expenses.

Pursuant to the Management Agreement with the Trust, Allmerica Investment has
entered into agreements ("Sub-Adviser Agreements") with other investment
advisers ("Sub-Advisers") under which each Sub-Adviser manages the
investments of one or more of the Funds. Under the Sub-Adviser Agreement, the
Sub-Adviser is authorized to engage in portfolio transactions on behalf of
the applicable Fund, subject to such general or specific instructions as may
be given by the Trustees. The terms of a Sub-Adviser Agreement cannot be
materially changed without the approval of a majority in interest of the
shareholders of the affected Fund.

<PAGE>

The Sub-Advisers of each of the Funds are as follows:

Growth Fund Miller, Anderson & Sherrerd
Investment Grade Income Allmerica Asset Management, Inc.
Money Market Fund Allmerica Asset Management, Inc.
Equity Index Fund Allmerica Asset Management, Inc.
Government Bond Fund Allmerica Asset Management, Inc.
Select International Equity Fund Bank of Ireland Asset Management Limited
Select Aggressive Growth Fund Nicholas-Applegate Capital Management
Select Capital Appreciation Fund Janus Capital Corporation
Select Growth Fund United Asset Management Corporation
Select Growth and Income Fund John A. Levin & Co., Inc.
Small Cap Value Fund David L. Babson & Co. Inc.

Allmerica Asset Management, Inc. is an indirect wholly owned subsidiary of
State Mutual.

For providing its services under the Management Agreement, Allmerica
Investment will receive a fee, computed daily at an annual rate based on the
average daily net asset value of each Fund as follows:

FUND NET ASSET VALUE RATE
---- --------------- -----
<S> <C> <S>

Growth First $50 million 0.60%
$50 - 250 million 0.50%
Over $250 million 0.35%

Investment Grade Income First $50 million 0.50%
$50 - 250 million 0.35%
Over $250 million 0.25%

Money Market First $50 million 0.35%
$50 - 250 million 0.25%
Over $250 million 0.20%

Equity Index First $50 million 0.35%
$50 - 250 million 0.30%
Over $250 million 0.25%

Government Bond * 0.50%

Select International Equity * 1.00%

Select Aggressive Growth * 1.00%

Select Capital Appreciation * 1.00%

Select Growth * 0.85%

Select Growth and Income * 0.75%

Small Cap Value * 0.85%

<FN>
* For the Government Bond Fund, Select International Equity Fund, Select
Aggressive Growth Fund, Select Capital Appreciation Fund, Select Growth
Fund, Select Growth and Income Fund and Small Cap Value Fund, each rate
applicable to Allmerica Investment does not vary according to the level of
assets in the Fund.

</TABLE>

<PAGE>

Allmerica Investment's fee computed for each Fund will be paid from the
assets of such Fund. Allmerica Investment is solely responsible for the
payment of all fees for investment management services to the Sub-Advisers,
who will receive from Allmerica Investment a fee, computed daily at an annual
rate based on the average daily net asset value of each Fund as follows:

SUB-ADVISER FUND NET ASSET VALUE RATE
----------- ---- --------------- -----
<S> <C> <C> <C>

Miller, Anderson Growth * *
& Sherrerd

Allmerica Asset Investment Grade Income ** 0.20%
Management, Inc.

Allmerica Asset Money Market ** 0.10%
Management, Inc.

Allmerica Asset Equity Index ** 0.10%
Management, Inc.

Allmerica Asset Government Bond ** 0.20%
Management, Inc.

Bank of Ireland Asset Select International First $50 million 0.45%
Management Limited Equity Fund Next $50 million 0.40%
Over $100 million 0.30%

Nicholas-Applegate Capital Select Aggressive Growth ** 0.60%
Management

Janus Capital Corporation Select Capital First $100 million 0.60%
Appreciation Over $100 million 0.55%

United Asset Management Select Growth First $50 million 0.50%
Corporation $50 - 100 million 0.45%
$150 - 250 million 0.35%
$250 - 350 million 0.30%
Over $350 million 0.25%

John A. Levin & Co., Inc. Select Growth and First $100 million 0.40%
Income Next $200 million 0.25%
Over $300 million 0.30%

David L. Babson Small Cap Value *** 0.50%
& Co. Inc.

<FN>
* Allmerica Investment will pay a fee to Miller, Anderson & Sherrerd based on
the aggregate assets of the Growth Fund and certain other accounts of State
Mutual and its affiliates (collectively, the "Affiliated Accounts") which
are managed by Miller, Anderson & Sherrerd, under the following schedule:

AGGREGATE AVERAGE
ASSETS RATE

First $50 million 0.500%
$50 - 100 million 0.375%
$100 - 500 million 0.250%
$500 - 850 million 0.200%
Over $850 million 0.150%

** For the Investment Grade Income Fund, Money Market Fund, Equity Index
Fund, Government Bond Fund, Select Aggressive Growth Fund and Small Cap
Value Fund, each rate applicable to the Sub-Advisers does not vary according
to the level of assets in the Fund.
</TABLE>

<PAGE>

The prospectus of the Trust contains additional information concerning the
Funds, including information concerning additional expenses paid by the
Funds, and should be read in conjunction with this prospectus.

INVESTMENT ADVISORY SERVICES TO VIPF AND VIPF II- For managing investments
and business affairs, each Portfolio pays a monthly fee to Fidelity
Management.

The prospectuses of VIPF and VIPF II contain additional information
concerning the Portfolios, including information concerning additional
expenses paid by the Portfolios, and should be read in conjunction with this
prospectus.

VIPF AND VIPF II PORTFOLIOS - The High Income Portfolio pays a monthly fee to
Fidelity Management at an annual fee rate made up of the sum of two
components:

1. A group fee rate based on the monthly average net assets of all
the mutual funds advised by Fidelity Management. On an annual basis
this rate cannot rise above 0.37%, and drops as total assets in all
these funds rise.

2. An individual fund fee rate of 0.45% of the High Income Portfolio's
average net assets throughout the month. One-twelfth of the annual
management fee rate is applied to net assets averaged over the most
recent month, resulting in a dollar amount which is the management
fee for that month.

The Equity-Income, Growth, Asset Manager, and Overseas Portfolios' fee rates
are each made of two components:

1. A group fee rate based on the monthly average net assets of all of
the mutual funds advised by Fidelity Management. On an annual basis,
this rate cannot rise above 0.52%, and drops as total assets in all
these mutual funds rise.

2. An individual Portfolio fee rate of 0.20% for the Equity-Income
Portfolio, 0.30% for the Growth Portfolio, 0.40% for the Asset
Manager Portfolio, and 0.45% for the Overseas Portfolio.

One-twelfth of the sum of these two rates is applied to the respective
Portfolio's net assets averaged over the most recent month, giving a dollar
amount which is the fee for that month.

Thus, the High Income Portfolio may have a fee of as high as 0.82% of its
average net assets. The Equity-Income Portfolio may have a fee of as high as
0.72% of its average net assets. The Growth Portfolio may have a fee of as
high as 0.82% of its average net assets. The Asset Manager Portfolio may have
a fee as high as 0.92% of its average net assets. The Overseas Portfolio may
have a fee of as high as 0.97% of its average net assets. The actual fee
rate may be less depending on the total assets in the funds advised by
Fidelity Management.

INVESTMENT ADVISORY SERVICES TO T. ROWE - The Investment Adviser for the
International Stock Portfolio is Rowe Price-Fleming International, Inc.
("Price-Fleming"). Price-Fleming, founded in 1979 as a joint venture between
T. Rowe Price Associates, Inc. and Robert Fleming Holdings, Limited, is one
of America's largest international mutual fund asset managers with
approximately $9 billion under management in its offices in Baltimore,
London, Tokyo and Hong Kong. To cover investment management and operating
expenses, the International Stock Portfolio pays Price-Fleming a single,
all-inclusive fee of 1.05% of its average daily net assets.

INVESTMENT ADVISORY SERVICES TO DGPF - Each Series of DGPF pays an investment
adviser an annual fee for managing the portfolios and making the investment
decisions for the Series. The investment adviser for the International
Equity Series is Delaware International Advisers Ltd. ("Delaware
International"). The annual fee paid by the International Equity Series to
Delaware International is equal to 0.75% of the average daily net assets of
the Series.

ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS - The Company reserves the
right, subject to applicable law, to make additions to, deletions from, or
substitutions for the shares that are held in the Sub-Accounts or that the
Sub-Accounts may purchase. If the shares of any Underlying Fund are no
longer available for investment or if in the Company's judgment further
investment in any Underlying Fund should become inappropriate in view of the
purposes of the Inheiritage Account or the affected Sub-Account, the Company
may redeem the shares of that Underlying Fund and substitute

<PAGE>

shares of another registered open-end management company. The Company will
not substitute any shares attributable to a Policy interest in a Sub-Account
without notice to the Policyowner and prior approval of the Commission and
state insurance authorities, to the extent required by the 1940 Act or other
applicable law. The Inheiritage Account may, to the extent permitted by law,
purchase other securities for other policies or permit a conversion between
policies upon request by a Policyowner.

The Company also reserves the right to establish additional Sub-Accounts of
the Inheiritage Account, each of which would invest in shares corresponding
to a new Underlying Fund or in shares of another investment company having a
specified investment objective. Subject to applicable law and any required
Commission approval, the Company may, in its sole discretion, establish new
Sub-Accounts or eliminate one or more Sub-Accounts if marketing needs, tax
considerations or investment conditions warrant. Any new Sub-Accounts may be
made available to existing Policyowners on a basis to be determined by the
Company.

Shares of the Funds of the Trust are also issued to separate accounts of the
Company and its affiliates which issue variable annuity contracts ("mixed
funding"). Shares of the Portfolios of VIPF and VIPF II, the portfolio of T.
Rowe and the Series of DGPF are also issued to other unaffiliated insurance
companies ("shared funding"). It is conceivable that in the future such
mixed funding or shared funding may be disadvantageous for variable life
Policyowners or variable annuity Policyowners. Although the Company and the
Underlying Investment Companies do not currently foresee any such
disadvantages to either variable life insurance Policyowners or variable
annuity Policyowners, the Company and the respective Trustees intend to
monitor events in order to identify any material conflicts between such
Policyowners and to determine what action, if any, should be taken in
response thereto. If the Trustees were to conclude that separate funds
should be established for variable life and variable annuity separate
accounts, the Company will bear the attendant expenses.

If any of these substitutions or changes are made, the Company may by
appropriate endorsement change the Policy to reflect the substitution or
change and will notify Policyowners of all such changes. If the Company
deems it to be in the best interest of Policyowners, and subject to any
approvals that may be required under applicable law, the Inheiritage Account
or any Sub-Account(s) may be operated as a management company under the 1940
Act, may be deregistered under the 1940 Act if registration is no longer
required, or may be combined with other Sub-Accounts or other separate
accounts of the Company.

VOTING RIGHTS - To the extent required by law, the Company will vote
Underlying Fund shares held by each Sub-Account in accordance with
instructions received from Policyowners with Policy Value in such
Sub-Account. If the 1940 Act or any rules thereunder should be amended or if
the present interpretation of the 1940 Act or such rules should change, and
as a result the Company determines that it is permitted to vote shares in its
own right, whether or not such shares are attributable to the Policies, the
Company reserves the right to do so.

Each person having a voting interest will be provided with proxy materials of
the respective Underlying Fund together with an appropriate form with which
to give voting instructions to the Company. Shares held in each Sub-Account
for which no timely instructions are received will be voted in proportion to
the instructions received from all persons with an interest in such
Sub-Account furnishing instructions to the Company. The Company will also
vote shares held in the Inheiritage Account that it owns and which are not
attributable to Policies in the same proportion.

The number of votes which a Policyowner has the right to instruct will be
determined by the Company as of the record date established for the
Underlying Fund. This number is determined by dividing each Policyowner's
Policy Value in the Sub-Account, if any, by the net asset value of one share
in the corresponding Underlying Fund in which the assets of the Sub-Account
are invested.

The Company may, when required by state insurance regulatory authorities,
disregard voting instructions if the instructions require that the shares be
voted so as (a) to cause a change in the subclassification or investment
objective of one or more of the Underlying Funds or (b) to approve or
disapprove an investment advisory contract for the Underlying Funds. In
addition, the Company may disregard voting instructions in favor of any
change in the investment policies or in any investment adviser or principal
underwriter initiated by Policyowners or the Trustees. The Company's
disapproval of any such change must be reasonable and, in the case of a
change in investment policies or investment adviser, based on a good faith
determination that such change would be contrary to state law or otherwise is
inappropriate in light of the objectives and purposes of the Underlying
Funds. In the event the Company does disregard voting instructions, a
summary of that action and the reasons for that action will be included in
the next periodic report to Policyowners.

<PAGE>

THE POLICY

APPLICATION FOR A POLICY - Upon receipt at its Principal Office of a
completed application from a prospective Policyowner, the Company will follow
certain insurance underwriting procedures designed to determine whether the
proposed Insureds are insurable. This process may involve such verification
procedures as medical examinations and may require that further information
be provided by the proposed Policyowner before a determination of
insurability can be made. A Policy cannot be issued until this underwriting
procedure has been completed. The Company reserves the right to reject an
application which does not meet the Company's underwriting guidelines, but in
underwriting insurance, the Company shall comply with all applicable federal
and state prohibitions concerning unfair discrimination.

If at the time of application a prospective Policyowner makes a payment equal
to at least one Minimum Monthly Factor for the Policy as applied for, pending
underwriting approval, the Company will provide fixed conditional insurance
pursuant to a Conditional Insurance Agreement in the amount of insurance
applied for, up to a maximum of $500,000. This coverage will generally
continue for a maximum of 90 days from the date of the application or the
completion of a medical exam, should one be required. In no event will any
insurance proceeds be paid under the Conditional Insurance Agreement if the
death of either Insured is by suicide.

If the application is approved, the Policy will be issued as of the date the
terms of the Conditional Insurance Agreement were met. If no Conditional
Insurance Agreement is in effect because the prospective Policyowner does not
wish to make any payment until the Policy is issued or has paid an initial
premium that is not sufficient to place the Policy in force, upon delivery of
the Policy the Company will require payment of sufficient premium to place
the insurance in force.

Pending completion of insurance underwriting and Policy issuance procedures,
the initial premium will be held in the Company's General Account. If the
application is approved and the Policy is issued and accepted, the initial
premium held in the General Account will be credited with interest not later
than the date of receipt of the premium at the Company's Principal Office. IF
A POLICY IS NOT ISSUED, THE PREMIUMS WILL BE RETURNED TO THE POLICYOWNER
WITHOUT INTEREST.

If the Policy is issued to the Trustee of an employee benefit plan, the
amounts held in the Company's General Account will be allocated to the
Sub-Accounts according to the Policyowner's instructions, upon return of a
Delivery Receipt to the Principal Office. For all other Policyowners, if the
initial net premiums are less than $10,000, the amounts held in the Company's
General Account will be allocated to the Sub-Accounts (according to the
Policyowner's instructions) not later than three days after underwriting
approval of the Policy. If the initial net premiums equal or exceed $10,000,
or if the Policy provides for planned premium payments during the first year
equal to or exceeding $10,000 annually, $5,000 semi-annually, $2,500
quarterly or $1,000 monthly, the entire Net Premium plus any interest earned
will remain in the General Account until return of a Delivery Receipt to the
Principal Office. The entire amount held in the General Account for
allocation to the Inheiritage Account will then be allocated to the
Sub-Accounts according to the Policyowner's instructions. Amounts remaining
in the General Account will continue to be credited interest from date of
receipt of the premium at the Principal Office.

FREE LOOK PERIOD - The Policy provides for an initial Free Look Period. The
Policyowner may cancel the Policy by mailing or delivering the Policy to the
Principal Office or an agent of the Company on or before the latest of (a) 45
days after the application for the Policy is signed, (b) 10 days after the
Policyowner receives the Policy, or (c) 10 days after the Company mails or
personally delivers a notice of withdrawal rights to the Policyowner.

When the Policyowner returns the Policy, the Company will mail within 7 days
a refund equal to the sum of (a) the difference between the premiums,
including fees and charges paid, and any amounts allocated to the Inheiritage
Account, and (b) the value of the amounts allocated to the Inheiritage
Account at the date the Policy is returned, and (c) any fees or charges
imposed on the amounts allocated to the Inheiritage Account. The amount
refunded in (a) above includes any premiums allocated to the General Account.
Where required by state law, the refund will equal the premiums paid. The
refund of any premium paid by check, however, may be delayed until the check
has cleared the bank.

After an increase in Face Amount, the Company will mail or personally deliver
a notice of a "Free Look" with respect to the increase. The Policyowner will
have the right to cancel the increase before the latest of (a) 45 days after
the application for the increase is signed, (b) 10 days after the Policyowner
receives the new specification pages issued for the increase, or (c) 10 days
after the Company mails or delivers

<PAGE>

a notice of withdrawal rights to the Policyowner. Upon cancelling the
increase, the Policyowner will receive a credit to the Policy Value of
charges which would not have been deducted but for the increase. The amount
to be credited will be refunded if the Policyowner so requests. The Company
will also waive any surrender charge calculated for the increase.

CONVERSION PRIVILEGES - Once during the first 24 months after the Date of
Issue or after the effective date of an increase in Face Amount, while the
Policy is in force, the Policyowner may convert the Policy without Evidence
of Insurability to a flexible premium adjustable joint survivorship life
insurance Policy with fixed and guaranteed minimum benefits. Assuming that
there have been no increases in the initial Face Amount, the Policyowner can
accomplish this within 24 months after the Date of Issue by transferring,
without charge, the Policy Value in the Inheiritage Account to the General
Account and by simultaneously changing the premium allocation instructions to
allocate future premium payments to the General Account. Within 24 months
after the effective date of each increase, the Policyowner can transfer,
without charge, all or part of the Policy Value in the Inheiritage Account to
the General Account and simultaneously change the premium allocation
instructions to allocate all or part of future premium payments to the
General Account.

Where required by state law, and at the Policyowner's request, the Company
will issue a flexible premium adjustable joint survivor life insurance policy
to the Policyowner. The new policy will have the same face amount, issue
ages, date of issue and risk classifications as the original Policy.

PREMIUM PAYMENTS - Premium Payments are payable to the Company, and may be
mailed to the Principal Office or paid through an authorized agent of the
Company. All premium payments after the initial premium payment are credited
to the Inheiritage Account or General Account as of date of receipt at the
Principal Office.

The Policyowner may establish a schedule of planned premiums which will be
billed by the Company at regular intervals. Failure to pay planned premiums,
however, will not itself cause the Policy to lapse. The Policyowner may also
make unscheduled premium payments at any time prior to the Final Premium
Payment Date or skip planned premium payments, subject to the maximum and
minimum premium limitations described below. Therefore, unlike conventional
insurance policies, a Policy does not obligate the Policyowner to pay
premiums in accordance with a rigid and inflexible premium schedule.

The Policyowner may also elect to pay premiums by means of a monthly
automatic payment ("MAP") procedure. Under a MAP procedure, amounts will be
deducted each month, generally on the Monthly Payment Date, from the
Policyowner's checking account and applied as a premium under a Policy. The
minimum payment permitted under MAP is $50.

Premiums are not limited as to frequency and number. However, no premium
payment may be less than $100 without the Company's consent. Moreover,
premium payments must be sufficient to provide a positive Surrender Value at
the end of each Policy month, or the Policy may lapse. See "POLICY
TERMINATION AND REINSTATEMENT." If, in the first 48 policy months following
issue or an increase in the Face Amount, the Policyowner makes premium
payments, less partial withdrawals and partial withdrawal charges, at least
equal to the sum of the Minimum Monthly Factors for the number of months the
Policy, increase in Face Amount, or Policy Change which causes a change in
the Minimum Monthly Factor has been in force, the Policy is guaranteed not to
lapse during that period. EXCEPT FOR THE 48 POLICY MONTHS AFTER THE DATE OF
ISSUE OR THE EFFECTIVE DATE OF AN INCREASE IN FACE AMOUNT, MAKING MONTHLY
PAYMENTS AT LEAST EQUAL TO THE MINIMUM MONTHLY FACTORS DOES NOT GUARANTEE
THAT THE POLICY WILL REMAIN IN FORCE.

In no event may the total of all premiums paid exceed the current maximum
premium limitations set forth in the Policy, which are required by Federal
tax laws. These maximum premium limitations will change whenever there is
any change in the Face Amount, the addition or deletion of a rider, or a
change in the Sum Insured Option. If a premium is paid which would result in
total premiums exceeding the current maximum premium limitations, the Company
will only accept that portion of the premiums which shall make total premiums
equal the maximum. Any part of the premiums in excess of that amount will be
returned and no further premiums will be accepted until allowed by the
current maximum premium limitation prescribed by Internal Revenue Service
rules. However, notwithstanding the current maximum premium limitations, the
Company will accept a premium which is needed in order to prevent a lapse of
the Policy during a policy year. See "POLICY TERMINATION AND REINSTATEMENT."

INCENTIVE FUNDING DISCOUNT - The Company will lower the cost of insurance
charges by 5%

<PAGE>

during any Policy year for which the Policyowner qualifies for an incentive
funding discount. To qualify, total premiums paid under the Policy, less any
debt, withdrawals and withdrawal charges, and transfers from other policies
issued by the Company, must exceed 90% of the guideline level premiums (as
defined in Section 7702 of the Internal Revenue Code) accumulated from the
Date of Issue to the date of qualification.

Qualification for the incentive funding discount is determined on the Date of
Issue for the first Policy year and on each Policy anniversary for each
subsequent Policy year. However, if the Company receives the proceeds from a
policy issued by an unaffiliated company to be exchanged for the Policy, the
qualification for the incentive funding discount for the first Policy year
will be determined on the date the proceeds are received by the Company and
only insurance charges becoming due after the date such proceeds are received
will be eligible for the incentive funding discount. The incentive funding
discount is not available for Policies issued and delivered in New York.

ALLOCATION OF NET PREMIUMS - The Net Premium equals the premium paid less the
tax expense charge and the premium expense charge. In the application for a
Policy, the Policyowner indicates the initial allocation of Net Premiums
among the General Account and the Sub-Accounts of the Inheiritage Account.
The Policyowner may allocate premiums to one or more Sub-Accounts, but may
not have Policy Value in more than seven (7) Sub-Accounts at any one time.
The minimum amount which may be allocated to a Sub-Account is 1% of Net
Premium paid. Allocation percentages must be in whole numbers (for example,
33 1/3% may not be chosen) and must total 100%.

The Policyowner may change the allocation of future Net Premiums at any time
pursuant to written or telephone request. A properly completed authorization
form must be on file before telephone requests will be honored. The change
will be effective as of the date of receipt of the notice at the Principal
Office. No charge is currently imposed for changing premium allocation
instructions. The Company reserves the right to impose such a charge in the
future, but guarantees that the charge will not exceed $25.

The Policy Value in the Sub-Accounts will vary with their investment
experience; the Policyowner bears this investment risk. The investment
performance may affect the Death Proceeds as well. Policyowners should
periodically review their allocations of premiums and Policy Value in light
of market conditions and overall financial planning requirements.

TRANSFER PRIVILEGE - Subject to the Company's then current rules, the
Policyowner may at any time transfer the Policy Value among the Sub-Accounts
or between a Sub-Account and the General Account. However, the Policy Value
held in the General Account to secure a Policy loan may not be transferred.

All requests for transfers must be made to the Principal Office. The amount
transferred will be based on the Policy Value in the Account(s) next computed
after receipt of the transfer order. The Company will make transfers pursuant
to written or telephone request. A properly completed authorization form
must be on file at the Principal Office before telephone instructions will be
honored.

Transfers involving the General Account are currently permitted only if:

(a) There has been at least a ninety (90) day period since the last
transfer from the General Account; and

(b) The amount transferred from the General Account in each transfer
does not exceed the lesser of $100,000 or 25% of the Accumulated
Value under the Policy.

These rules are subject to change by the Company.

The Policyowner may have automatic transfers of at least $100 a month made on
a periodic basis from (a) Sub-Account 3 or Sub-Account 5 (which invest in the
Money Market Fund and Government Bond Fund of the Trust, respectively) to one
or more of the other Sub-Accounts or (b) automatically reallocate Policy
Value among the Sub-Accounts. Automatic transfers may be made on a monthly,
bimonthly, quarterly, semiannual or annual schedule. All transfers will be
processed on the 15th of each scheduled month. If the 15th is not a business
day or is the Monthly Payment Date, the automatic transfer will be processed
on the next business day.

The transfer privilege is subject to the consent of the Company. The Company
reserves the right to impose limitations on transfers including, but not
limited to: (1) the minimum amount that may be

<PAGE>

transferred, (2) the minimum amount that may remain in a Sub-Account
following a transfer from that Sub-Account, (3) the minimum period of time
between transfers involving the General Account, and (4) the maximum amount
that may be transferred each time from the General Account.

The first six transfers in a Policy year will be free of any charge.
Thereafter a $10 transfer charge will be deducted from the amount transferred
for each transfer in that Policy year. The Company may increase or decrease
this charge, but it is guaranteed never to exceed $25. The first automatic
transfer counts as one transfer towards the six free transfers allowed in
each policy year; each subsequent automatic transfer is without charge and
does not reduce the remaining number of transfers which may be made free of
charge. Any transfers made with respect to a conversion privilege, Policy
loan or material change in investment policy will not count towards the six
free transfers.

DEATH PROCEEDS - The Policy provides for the payment of the Death Proceeds of
the Policy to the named Beneficiary on the death of the last surviving
Insured. There are no Death Proceeds payable on the death of the first
Insured to die. Within 90 days of the death of the first Insured to die, or
as soon thereafter as is reasonably possible, the Policyowner must mail to
the Principal Office due proof of such death. As long as the Policy remains
in force (see "POLICY TERMINATION AND REINSTATEMENT"), the Company will, upon
due proof of the death of the last surviving Insured, pay the Death Proceeds
of the Policy to the named Beneficiary. The Company will normally pay the
Death Proceeds within seven days of receiving due proof of the death of the
last surviving Insured, but the Company may delay payments under certain
circumstances. See "OTHER POLICY PROVISIONS - Postponement Of Payments."
The Death Proceeds may be received by the Beneficiary in cash or under one or
more of the payment options set forth in the Policy. See "APPENDIX B -
PAYMENT OPTIONS."

Prior to the Final Premium Payment Date, the Death Proceeds are: (a) The Sum
Insured provided under Option 1 or Option 2, whichever is elected and in
effect on the date of death of the last surviving Insured; plus (b) any
additional insurance on the Insureds' lives that is provided by rider; minus
(c) any outstanding Debt, any partial withdrawals and partial withdrawal
charges, and any Monthly Deductions due and unpaid through the Policy month
in which the last surviving Insured dies. After the Final Premium Payment
Date, the Death Proceeds equal the surrender Value of the Policy. The amount
of Death Proceeds payable will be determined as of the date of the Company's
receipt of due proof of death of the last surviving Insured.

SUM INSURED OPTIONS - The Policy provides two Sum Insured Options: Option 1
and Option 2, as described below. The Policyowner designates the desired Sum
Insured Option in the application. The Policyowner may change the option once
per Policy year by written request. There is no charge for a change in option.

Under Option 1, the Sum Insured is equal to the greater of the Face Amount of
insurance or the Guideline Minimum Sum Insured.

Under Option 2, the Sum Insured is equal to the greater of the Face Amount of
insurance plus the Policy Value or the Guideline Minimum Sum Insured.

GUIDELINE MINIMUM SUM INSURED -The Guideline Minimum Sum Insured is equal to
a percentage of the Policy Value as set forth in the first Table below (for
all policies issued in Pennsylvania and for certain other Policies* described
below, Table 2 applies). The Guideline Minimum Sum Insured is determined in
accordance with Internal Revenue Code regulations to ensure that the Policy
qualifies as a life insurance contract and that the insurance proceeds will
be excluded from the gross income of the Beneficiary.

<PAGE>

GUIDELINE MINIMUM SUM INSURED TABLE
<TABLE>
<CAPTION>
Age of Younger Insured
on Death of Last Surviving Percentage of
Insured Policy value
<S> <C>
60 and under . . . . . . . . . . . . . . . . . . 300%
61 . . . . . . . . . . . . . . . . . . . . . . . 293%
62 . . . . . . . . . . . . . . . . . . . . . . . 286%
63 . . . . . . . . . . . . . . . . . . . . . . . 279%
64 . . . . . . . . . . . . . . . . . . . . . . . 272%
65 . . . . . . . . . . . . . . . . . . . . . . . 265%
66 . . . . . . . . . . . . . . . . . . . . . . . 258%
67 . . . . . . . . . . . . . . . . . . . . . . . 251%
68 . . . . . . . . . . . . . . . . . . . . . . . 244%
69 . . . . . . . . . . . . . . . . . . . . . . . 237%
70 . . . . . . . . . . . . . . . . . . . . . . . 230%
71 . . . . . . . . . . . . . . . . . . . . . . . 223%
72 . . . . . . . . . . . . . . . . . . . . . . . 217%
73 . . . . . . . . . . . . . . . . . . . . . . . 211%
74 . . . . . . . . . . . . . . . . . . . . . . . 205%
75 . . . . . . . . . . . . . . . . . . . . . . . 198%
76 . . . . . . . . . . . . . . . . . . . . . . . 192%
77 . . . . . . . . . . . . . . . . . . . . . . . 186%
78 . . . . . . . . . . . . . . . . . . . . . . . 180%
79 . . . . . . . . . . . . . . . . . . . . . . . 173%
80 . . . . . . . . . . . . . . . . . . . . . . . 167%
81 . . . . . . . . . . . . . . . . . . . . . . . 163%
82 . . . . . . . . . . . . . . . . . . . . . . . 159%
83 . . . . . . . . . . . . . . . . . . . . . . . 155%
84 . . . . . . . . . . . . . . . . . . . . . . . 151%
85 . . . . . . . . . . . . . . . . . . . . . . . 147%
86 . . . . . . . . . . . . . . . . . . . . . . . 143%
87 . . . . . . . . . . . . . . . . . . . . . . . 139%
88 . . . . . . . . . . . . . . . . . . . . . . . 135%
89 . . . . . . . . . . . . . . . . . . . . . . . 130%
90 . . . . . . . . . . . . . . . . . . . . . . . 125%
91 . . . . . . . . . . . . . . . . . . . . . . . 120%
92 . . . . . . . . . . . . . . . . . . . . . . . 115%
93 . . . . . . . . . . . . . . . . . . . . . . . 110%
94 . . . . . . . . . . . . . . . . . . . . . . . 105%
95 and above . . . . . . . . . . . . . . . . . . 100%
</TABLE>

<PAGE>

For all Policies issued in Pennsylvania and for certain other Policies*
described below, GUIDELINE MINIMUM SUM INSURED TABLE 2 applies, as follows:

GUIDELINE MINIMUM SUM INSURED
TABLE 2

<TABLE>
<CAPTION>
----------------------------------------------------
Age Percentage Age Percentage
----------------------------------------------------
<S> <C> <C> <C>
thru 40 250% 60 130%
41 243% 61 128%
42 236% 62 126%
43 229% 63 124%
44 222% 64 122%
45 215% 65 120%
46 209% 66 119%
47 203% 67 118%
48 197% 68 117%
49 191% 69 116%
50 185% 70 115%
51 178% 71 113%
52 171% 72 111%
53 164% 73 109%
54 157% 74 107%
55 150% 75 thru 105%
56 146% 91 104%
57 142% 92 103%
58 138% 93 102%
59 134% 94 101%
95 100%

<FN>
*For a period of ninety days after a state insurance department has
approved the use of GUIDELINE MINIMUM SUM INSURED TABLE 2, the Company will
permit Policy Owners in that state to endorse the Policy to elect GUIDELINE
MINIMUM SUM INSURED TABLE 2. After a state insurance department has approved
its use, all new Policies issued in that state will utilize GUIDELINE MINIMUM
SUM INSURED TABLE 2.
</TABLE>

Under both Option 1 and Option 2 the Sum Insured provides insurance
protection. Under Option 1, the Sum Insured remains level unless the
applicable percentage of Policy Value under Guideline Minimum Sum Insured
exceeds the Face Amount, in which case the Sum Insured will vary as the
Policy Value varies. Under Option 2, the Sum Insured varies as the Policy
Value changes.

For any Face Amount, the amount of the Sum Insured and thus the Death
Proceeds will be greater under Option 2 than under Option 1, since the Policy
Value is added to the specified Face Amount and included in the Death
Proceeds only under Option 2. However, the cost of insurance included in the
Monthly Deduction will be greater, and thus the rate at which Policy Value
will accumulate will be slower, under Option 2 than under Option 1 (assuming
the same specified Face Amount and the same actual premiums paid). See
"CHARGES AND DEDUCTIONS - Monthly Deduction From Policy Value." If the
Policyowner desires to have premium payments and investment performance
reflected in the amount of the Sum Insured, the Policyowner should choose
Option 2. If the Policyowner desires premium payments and investment
performance reflected to the maximum extent in the Policy Value, the
Policyowner should select Option 1.

ILLUSTRATION OF OPTION 1 - For purposes of this illustration, assume that the
younger Insured is under the Age of 40, and that there is no outstanding Debt.

Under Option 1, a Policy with a $300,000 Face Amount will generally have a
Sum Insured equal to $300,000. However, because the Sum Insured must be
equal to or greater than 300% of Policy Value, if at any time the Policy
Value exceeds $100,000, the Sum Insured will exceed the $300,000 Face Amount.
In this example, each additional dollar of Policy Value above $100,000 will
increase the Sum Insured by $3.00. For example, a Policy with a Policy Value
of $125,000 will have a Guideline Minimum Sum Insured of $375,000 ($125,000 x
3.00); Policy Value of $150,000 will produce a Guideline Minimum Sum Insured
of $450,000 ($150,000 x 3.00); and Policy Value of $200,000 will produce a
Guideline Minimum Sum Insured of $600,000 ($200,000 x 3.00).

<PAGE>

Similarly, so long as Policy Value exceeds $100,000, each dollar taken out of
Policy Value will reduce the Sum Insured by $3.00. If, for example, the
Policy Value is reduced from $125,000 to $100,000 because of partial
withdrawals, charges or negative investment performance, the Sum Insured will
be reduced from $375,000 to $300,000. If at any time, however, the Policy
Value multiplied by the applicable percentage is less than the Face Amount,
the Sum Insured will equal the Face Amount of the Policy.

The applicable percentage becomes lower as the younger Insured's Age
increases. If the younger Insured's Age in the above example were, for
example, 70 (rather than between 0 and 40), the applicable percentage would
be 230%. The Sum Insured would not exceed the $300,000 Face Amount unless
the Policy Value exceeded $130,436 (rather than $100,000), and each dollar
then added to or taken from Policy Value would change the Sum Insured by
$2.30.

ILLUSTRATION OF OPTION 2 - For purposes of this illustration, assume that the
younger Insured is under the Age of 40 and that there is no outstanding Debt.

Under Option 2, a Policy with a Face Amount of $300,000 will generally
produce a Sum Insured of $300,000 plus Policy Value. For example, a Policy
with Policy Value of $50,000 will produce a Sum Insured of $350,000 ($300,000
+ $50,000); Policy Value of $80,000 will produce a Sum Insured of $380,000
($300,000 + $80,000); Policy Value of $100,000 will produce a Sum Insured of
$400,000 ($300,000 + $100,000). However, the Sum Insured must be at least
300% of the Policy Value. Therefore, if the Policy Value is greater than
$150,000, 300% of that amount will be the Sum Insured, which will be greater
than the Face Amount plus Policy Value. In this example, each additional
dollar of Policy Value above $150,000 will increase the Sum Insured by $3.00.
For example, if the Policy Value is $200,000, the Guideline Minimum Sum
Insured will be $600,000 ($200,000 x 3.00); Policy Value of $250,000 will
produce a Guideline Minimum Sum Insured of $750,000 ($250,000 x 3.00); and
Policy Value of $300,000 will produce a Guideline Minimum Sum Insured of
$900,000 ($300,000 x 3.00).

Similarly, if Policy Value exceeds $150,000, each dollar taken out of Policy
Value will reduce the Sum Insured by $3.00. If, for example, the Policy
Value is reduced from $200,000 to $150,000 because of partial withdrawals,
charges or negative investment performance, the Sum Insured will be reduced
from $600,000 to $450,000. If at any time, however, Policy Value multiplied
by the applicable percentage is less than the Face Amount plus Policy Value,
then the Sum Insured will be the current Face Amount plus Policy Value.

The applicable percentage becomes lower as the younger Insured's Age
increases. If the Insured's Age in the above example were 70, the applicable
percentage would be 230%, so that the Sum Insured must be at least 2.30 times
the Policy Value. The amount of the Sum Insured would be the sum of the
Policy Value plus $300,000 unless the Policy Value exceeded $230,769 (rather
than $150,000). Each dollar added to or subtracted from the Policy would
change the Sum Insured by $2.30.

The Sum Insured under Option 2 will always be the greater of the Face Amount
plus Policy Value or the Policy Value multiplied by the applicable percentage.

CHANGE IN SUM INSURED OPTION - Generally, the Sum Insured Option in effect
may be changed once each Policy year by sending a written request for change
to the Principal Office. Changing Sum Insured Options will not require
Evidence of Insurability. The effective date of any such change will be the
Monthly Payment Date on or following the date of receipt of the request. No
charges will be imposed on changes in Sum Insured Options.

If the Sum Insured Option is changed from Option 2 to Option 1, the Face
Amount will be increased to equal the Sum Insured which would have been
payable under Option 2 on the effective date of the change (i.e. the Face
Amount immediately prior to the change plus the Policy Value on the date of
the change). The amount of the Sum Insured will not be altered at the time
of the change. However, the change in option will affect the determination
of the Sum Insured from that point on, since the Policy Value will no longer
be added to the Face Amount in determining the Sum Insured; the Sum Insured
will equal the new Face Amount (or, if higher, the Guideline Minimum Sum
Insured). The cost of insurance may be higher or lower than it otherwise
would have been since any increases or decreases in Policy Value will,
respectively, reduce or increase the Insurance Amount at Risk under Option 1.
Assuming a positive net investment return with respect to any amounts in the
Inheiritage Account, changing the Sum Insured Option from Option 2 to
Option 1 will reduce the Insurance Amount at Risk and therefore the cost of
insurance charge for all

<PAGE>

subsequent Monthly Deductions, compared to what such charge would have been
if no such change were made.

If the Sum Insured Option is changed from Option 1 to Option 2, the Face
Amount will be decreased to equal the Sum Insured less the Policy Value on
the effective date of the change. This change may not be made if it would
result in a Face Amount less than $100,000. A change from Option 1 to Option
2 will not alter the amount of the Sum Insured at the time of the change, but
will affect the determination of the Sum Insured from that point on. Because
the Policy Value will be added to the new specified Face Amount, the Sum
Insured will vary with the Policy Value. Thus, under Option 2, the Insurance
Amount at Risk will always equal the Face Amount unless the Guideline Minimum
Sum Insured is in effect. The cost of insurance may also be higher or lower
than it otherwise would have been without the change in Sum Insured Option.
See "CHARGES AND DEDUCTIONS - Monthly Deduction From Policy Value."

A change in Sum Insured Option may result in total premiums paid exceeding
the then current maximum premium limitation determined by Internal Revenue
Service Rules. In such event, the Company will pay the excess to the
Policyowner. See "THE POLICY - Premium Payments."

CHANGE IN FACE AMOUNT - Subject to certain limitations, the Policyowner may
increase or decrease the specified Face Amount of a Policy at any time by
submitting a written request to the Company. Any increase or decrease in the
specified Face Amount requested by the Policyowner will become effective on
the Monthly Payment Date on or next following the date of receipt of the
request at the Principal Office, or, if Evidence of Insurability is required,
the date of approval of the request.

INCREASES - Along with the written request for an increase, the Policyowner
must submit satisfactory Evidence of Insurability. The consent of the
Insureds is also required whenever the Face Amount is increased. A request
for an increase in Face Amount may not be less than $100,000. The
Policyowner may not increase the Face Amount after the younger Insured
reaches Age 80 or the older Insured reaches Age 85. An increase must be
accompanied by an additional premium if the Surrender Value is less than $50
plus an amount equal to the sum of two Minimum Monthly Factors. On the
effective date of each increase in Face Amount, a transaction charge of $50
will be deducted from Policy Value for administrative costs. The effective
date of the increase will be the first Monthly Payment Date on or following
the date all of the conditions for the increase are met.

An increase in the Face Amount will generally affect the Insurance Amount at
Risk and may affect the portion of the Insurance Amount at Risk included in
various Premium Classes (if more than one Premium Class applies), both of
which may affect the monthly cost of insurance charges. A surrender charge
will also be calculated for the increase. See "CHARGES AND DEDUCTIONS -
Monthly Deduction From Policy Value, - Surrender Charge."

After increasing the Face Amount, the Policyowner will have the right (1)
during a Free Look Period, to have the increase cancelled and the charges
which would not have been deducted but for the increase will be credited to
the Policy and (2) during the first 24 months following the increase, to
transfer any or all Policy Value to the General Account free of charge. See
"THE POLICY - Free Look Period - Conversion Privileges." A refund of charges
which would not have been deducted but for the increase will be made at the
Policyowner's request.

DECREASES - The minimum amount for a decrease in Face Amount is $100,000.
The Face Amount in force after any decrease may not be less than $100,000.
If, following a decrease in Face Amount, the Policy would not comply with the
maximum premium limitation applicable under the Internal Revenue Service
Rules, the decrease may be limited or Policy Value may be returned to the
Policyowner (at the Policyowner's election) to the extent necessary to meet
the requirements. A return of Policy Value may result in tax liability to
the Policyowner.

A decrease in the Face Amount will affect the total Insurance Amount at Risk
and the portion of the Insurance Amount at Risk covered by various Premium
Classes, both of which may affect a Policyowner's monthly cost of insurance
charges. See "CHARGES AND DEDUCTIONS - Monthly Deduction From Policy Value."
For purposes of determining the cost of insurance charge, any decrease in the
Face Amount will reduce the Face Amount in the following order: (1) the Face
Amount provided by the most recent increase; (2) the next most recent
increases successively, and (3) the initial Face Amount. This order will
also be used to determine whether a surrender charge will be deducted and in
what amount. If the Policyowner requests a decrease in the Face Amount,

<PAGE>

the amount of any surrender charge deducted will reduce the current Policy
Value. The Policyowner may specify one Sub-Account from which the surrender
charge will be deducted. If no specification is provided, the Company will
make a Pro Rata Allocation. The current surrender charge will be reduced by
the amount deducted. See "CHARGES AND DEDUCTIONS - Surrender Charge."

POLICY VALUE AND SURRENDER VALUE - The Policy Value is the total amount
available for investment and is equal to the sum of the accumulation in the
General Account and the value of the Accumulation Units in the Sub-Accounts.
The Policy Value is used in determining the Surrender Value (the Policy Value
less any Debt and applicable surrender charges). See "THE POLICY - Surrender."
There is no guaranteed minimum Policy Value. Because Policy Value on any date
depends upon a number of variables, it cannot be predetermined.

Policy Value and Surrender Value will reflect frequency and amount of Net
Premiums paid, interest credited to accumulations in the General Account, the
investment performance of the chosen Sub-Accounts, any partial withdrawals,
any loans, any loan repayments, any loan interest paid or credited, and any
charges assessed in connection with the Policy.

CALCULATION OF POLICY VALUE - The Policy Value is determined first on the
Date of Issue and thereafter on each Valuation Date. On the Date of Issue,
the Policy Value will be the Net Premiums received, plus any interest earned
during the period when premiums are held in the General Account (before being
transferred to the Inheiritage Account; see THE POLICY - Application For A
Policy") less any Monthly Deductions due. On each Valuation Date after the
Date of Issue the Policy Value will be:

(a) the aggregate of the values in each of the Sub-Accounts on the Valuation
Date, determined for each Sub-Account by multiplying the value of an
Accumulation Unit in that Sub-Account on that date by the number of such
Accumulations Units allocated to the Policy; plus

(b) the value in the General Account (including any amounts transferred to
the General Account with respect to a loan).

Thus, the Policy Value is determined by multiplying the number of
Accumulation Units in each Sub-Account by the value of the applicable
Accumulation Units on the particular Valuation Date, adding the products, and
adding the amount of the accumulations in the General Account, if any.

THE ACCUMULATION UNIT - Each Net Premium is allocated to the Sub-Account(s)
selected by the Policyowner. Allocations to the Sub-Accounts are credited to
the Policy in the form of Accumulation Units. Accumulation Units are
credited separately for each Sub-Account.

The number of Accumulation Units of each Sub-Account credited to the Policy
is equal to the portion of the Net Premium allocated to the Sub-Account,
divided by the dollar value of the applicable Accumulation Unit as of the
Valuation Date the payment is received at the Company's Principal Office.
The number of Accumulation Units will remain fixed unless changed by a
subsequent split of Accumulation Unit value, transfer, partial withdrawal or
surrender. In addition, if the Company is deducting the Monthly Deduction or
other charges from a Sub-Account, each such deduction will result in
cancellation of a number of Accumulation Units equal in value to the amount
deducted.

The dollar value of an Accumulation Unit of each Sub-Account varies from
Valuation Date to Valuation Date based on the investment experience of that
Sub-Account. That experience, in turn, will reflect the investment
performance, expenses and charges of the respective Underlying Fund. The
value of an Accumulation Unit was set at $1.00 on the first Valuation Date
for each Sub-Account. The dollar value of an Accumulation Unit on a given
Valuation Date is determined by multiplying the dollar value of the
corresponding Accumulation Unit as of the immediately preceding Valuation
Date by the appropriate net investment factor.

NET INVESTMENT FACTOR - The net investment factor measures the investment
performance of a Sub-Account of the Inheiritage Account during the Valuation
Period just ended. The net investment factor for each Sub-Account is equal to
1.0000 plus the number arrived at by dividing (a) by (b) and subtracting (c)
and (d) from the result, where:

(a) is the investment income of that Sub-Account for the Valuation Period,
plus capital gains, realized or unrealized, credited during the
Valuation Period; minus capital losses, realized or unrealized, charged
during the Valuation Period; adjusted for provisions made for taxes,
if any;

<PAGE>

(b) is the value of that Sub-Account's assets at the beginning of the
Valuation Period;

(c) is a charge for each day in the Valuation Period equal on an annual
basis to .90% of the daily net asset value of that Sub-Account for
mortality and expense risks. This charge may be increased or decreased
by the Company, but may not exceed 1.275%; and

(d) is the Inheiritage Account administrative charge for each day in the
Valuation Period equal on an annual basis to 0.25% of the daily net
asset value of that Sub-Account. This charge is applicable only during
the first fifteen Policy years.

The net investment factor may be greater or less than one. Therefore, the
value of an Accumulation Unit may increase or decrease. The Policyowner
bears the investment risk.

Allocations to the General Account are not converted into Accumulation Units,
but are credited interest at a rate periodically set by the Company. See
"MORE INFORMATION ABOUT THE GENERAL ACCOUNT."

PAYMENT OPTIONS - During the Insureds' lifetime, the Policyowner may arrange
for the Death Proceeds to be paid in a single sum or under one or more of the
available payment options. The payment options currently available are
described in Appendix B, "PAYMENT OPTIONS." These choices are also available
at the Final Premium Payment Date and if the Policy is surrendered. The
Company may make more payment options available in the future. If no
election is made, the Company will pay the Death Proceeds in a single sum.
When the Death Proceeds are payable in a single sum, the Beneficiary may,
within one year of the death of the last surviving Insured, select one or
more of the payment options, if no payments have yet been made.

OPTIONAL INSURANCE BENEFITS - Subject to certain requirements, one or more of
the optional insurance benefits described in "APPENDIX A - OPTIONAL BENEFITS"
may be added to a Policy by rider. The cost of any optional insurance
benefits will be deducted as part of the Monthly Deduction. See "CHARGES AND
DEDUCTIONS - Monthly Deduction From Policy Value."

SURRENDER - The Policyowner may at any time surrender the Policy and receive
its Surrender Value. The Surrender Value is the Policy Value less any Debt
and applicable surrender charges. The Surrender Value will be calculated as
of the Valuation Date on which a written request for surrender and the Policy
are received at the Principal Office. A surrender charge will be deducted
when a Policy is surrendered if less than 15 full Policy years have elapsed
from the Date of Issue of the Policy or from the effective date of any
increase in Face Amount. See "CHARGES AND DEDUCTIONS - Surrender Charge."

The proceeds on surrender may be paid in a single lump sum or under one of
the payment options described in "APPENDIX B - PAYMENT OPTIONS." The Company
will normally pay the Surrender Value within seven days following the
Company's receipt of the surrender request, but the Company may delay payment
under the circumstances described in "OTHER POLICY PROVISIONS - Postponement
Of Payments."

For important tax consequences which may result from surrender see "FEDERAL
TAX CONSIDERATIONS."

PARTIAL WITHDRAWAL - Any time after the first Policy year, the Policyowner
may withdraw a portion of the Surrender Value of the Policy, subject to the
limits stated below, upon written request filed at the Principal Office. The
written request must indicate the dollar amount the Policyowner wishes to
receive and the Accounts from which such amount is to be withdrawn. The
Policyowner may allocate the amount withdrawn among the Sub-Accounts and the
General Account. If the Policyowner does not provide allocation instructions
the Company will make a Pro Rata Allocation. Each partial withdrawal must be
in a minimum amount of $500. Under Option 1, the Face Amount is reduced by
the amount of the partial withdrawal, and a partial withdrawal will not be
allowed if it would reduce the Face Amount below $100,000.

A partial withdrawal from a Sub-Account will result in the cancellation of
the number of Accumulation Units equivalent in value to the amount withdrawn.
The amount withdrawn equals the amount requested by the Policyowner plus the
transaction charge and any applicable partial withdrawal charge as described
under "CHARGES AND DEDUCTIONS - Charges On Partial Withdrawal." The Company
will normally pay the amount of the partial withdrawal within seven days
following the Company's receipt of the partial withdrawal request, but the
Company may delay

<PAGE>

payment under certain circumstances described in "OTHER POLICY PROVISIONS -
Postponement Of Payments."

For important tax consequences which may result from partial withdrawals, see
"FEDERAL TAX CONSIDERATIONS."

PAID-UP INSURANCE OPTION - Upon written request, the Policyowner may elect to
have, without further premiums due, joint survivorship insurance coverage for
the lifetime of the Insureds, with the Death Proceeds payable on the death of
the last surviving Insured. The amount of Paid-Up Insurance will be the
amount which the Surrender Value can purchase for a net single premium at the
Insureds' ages and classes of risk on the date this option is elected. If the
Surrender Value exceeds the net single premium, the excess will be paid to
the Policyowner. The net single premium is based on the Commissioner's 1980
Standard Ordinary Mortality Table D, Smoker or Non-Smoker (or appropriate
increases in such tables for non-standard risks). Interest will not be less
than 4.5%.

IF THE PAID-UP INSURANCE OPTION IS ELECTED, THE FOLLOWING POLICYOWNER RIGHTS
WILL BE AFFECTED: The Policyowner who has elected the Paid-Up Insurance
option may not pay additional premiums, select Sum Insured Option 2, increase
or decrease the Face Amount or make partial withdrawals. Riders will continue
only with the consent of the Company. The Policyowner may, after electing
Paid-Up Insurance, surrender the Policy for its net cash value. Guaranteed
cash value equals the net single premium for the Paid-Up Insurance at the
Insureds' attained ages, or the survivor's attained age if one Insured has
died. The net cash value is the cash value less any debt. Policy Value in
the Inheiritage Account will be transferred to the General Account on the
date the Company receives written request to exercise the option. Transfers
of Policy Value from the General Account back to the Inheiritage Account will
not be permitted. See also "MORE INFORMATION ABOUT THE GENERAL ACCOUNT,"
which discusses the ramifications of the Policy Value being allocated to the
General Account, including limitations respecting securities regulation.

In most instances, the result of electing the Paid-Up Insurance option will
be to cause the Policy to be treated as a modified endowment contract. If
the Policy becomes a modified endowment contract, Policy loans, partial
withdrawals or surrender will be subject to unfavorable federal tax
treatment. See "FEDERAL TAX CONSIDERATIONS - Modified Endowment Contracts."

CHARGES AND DEDUCTIONS

Charges will be deducted in connection with the Policy to compensate the
Company for providing the insurance benefits set forth in the Policy and any
additional benefits added by rider, administering the Policy, incurring
distribution expenses, and assuming certain risks in connection with the
Policies. Each of the charges identified as an administrative charge is
intended to reimburse the Company for actual administrative costs incurred,
and is not intended to result in a profit to the Company.

TAX EXPENSE CHARGE - A charge will be deducted from each premium payment
for state and local premium taxes paid by the Company for the Policy and to
compensate the Company for federal taxes imposed for deferred acquisition
costs ("DAC taxes"). The total charge is the actual state and local premium
taxes paid by the Company, varying according to jurisdiction, and a DAC tax
deduction of 1% of premiums. The premium tax deduction will change when
either the applicable jurisdiction changes or the tax rate changes in the
applicable jurisdiction. The Company should be notified of any change in
address as soon as possible. The 1% rate attributable to premiums for DAC
taxes approximates the Company's expenses in paying federal taxes for
deferred acquisition costs associated with the Policies. The Company
reserves the right to increase or decrease the 1% DAC tax deduction to
reflect changes in the Company's expenses for DAC taxes. The DAC tax
deduction is a factor the Company must use when calculating the maximum sales
load it can charge under SEC rules.

PREMIUM EXPENSE CHARGE - A charge of 1% of premiums will be deducted from
each premium payment to partially compensate the Company for the cost of
selling the Policies. The premium expense charge is a factor the Company
must use when calculating the maximum sales load it can charge under SEC
rules during the first two Policy years.

MONTHLY DEDUCTION FROM POLICY VALUE - Prior to the Final Premium Payment
Date, a Monthly Deduction from Policy Value will be made to cover a charge
for the cost of insurance, a

<PAGE>

charge for any optional insurance benefits added by rider and a monthly
administrative charge. The cost of insurance charge and the monthly
administrative charges are discussed below. The Monthly Deduction on or
following the effective date of a requested increase in the Face Amount will
also include a $50 administrative charge for the increase. See "THE POLICY -
Change In Face Amount."

Prior to the Final Premium Payment Date, the Monthly Deduction will be
deducted as of each Monthly Payment Date commencing with the Date of Issue of
the Policy. It will be allocated to one Sub-Account according to the
Policyowner's instructions, or, if no allocation is specified, the Company
will make a Pro Rata Allocation. If the Sub-Account the Policyowner
specifies does not have sufficient funds to cover the Monthly Deduction, the
Company will deduct the charge for that month as if no specification were
made. However, if on subsequent Monthly Payment Dates there is sufficient
Policy Value in the Sub-Account the Policyowner specified, the Monthly
Deduction will be deducted from that Sub-Account. No Monthly Deductions will
be made on or after the Final Premium Payment Date.

COST OF INSURANCE - This charge is designed to compensate the Company for the
anticipated cost of providing Death Proceeds to Beneficiaries of those last
surviving Insureds who die prior to the Final Premium Payment Date. The cost
of insurance is determined on a monthly basis, and is determined separately
for the initial Face Amount and for each subsequent increase in Face Amount.
Because the cost of insurance depends upon a number of variables, it can vary
from month to month.

CALCULATION OF THE CHARGE - If the Policyowner selects Sum Insured Option 2,
the monthly cost of insurance charge for the initial Face Amount will equal
the applicable cost of insurance rate multiplied by the initial Face Amount.
If the Policyowner selects Sum Insured Option 1, however, the applicable cost
of insurance rate will be multiplied by the initial Face Amount less the
Policy Value (minus charges for rider benefits) at the beginning of the
policy month. Thus, the cost of insurance charge may be greater for owners
who have selected Sum Insured Option 2 than for those who have selected Sum
Insured Option 1, assuming the same Face Amount in each case and assuming
that the Guideline Minimum Sum Insured is not in effect. In other words,
since the Sum Insured under Option 1 remains constant while the Sum Insured
under Option 2 varies with the Policy Value, any Policy Value increases will
reduce the insurance charge under Option 1 but not under Option 2.

If the Policyowner selects Sum Insured Option 2, the monthly insurance charge
for each increase in Face Amount (other than an increase caused by a change
in Sum Insured Option) will be equal to the cost of insurance rate applicable
to that increase multiplied by the increase in Face Amount. If the
Policyowner selects Sum Insured Option 1, the applicable cost of insurance
rate will be multiplied by the increase in the Face Amount reduced by any
Policy Value (minus rider charges) in excess of the initial Face Amount at
the beginning of the policy month.

If the Guideline Minimum Sum Insured is in effect under either Option, a
monthly cost of insurance charge will also be calculated for that portion of
the Sum Insured which exceeds the current Face Amount. This charge will be
calculated by multiplying the cost of insurance rate applicable to the
initial Face Amount times the Guideline Minimum Sum Insured (Policy Value
times the applicable percentage) less the greater of the Face Amount or the
Policy Value if the Policyowner selected Sum Insured Option 1, or less the
Face Amount plus the Policy Value if the Policyowner selected Sum Insured
Option 2. When the Guideline Minimum Sum Insured is in effect, the cost of
insurance charge for the initial Face Amount and for any increases will be
calculated as set forth in the preceding two paragraphs.

The monthly cost of insurance charge will also be adjusted for any decreases
in Face Amount. See "THE POLICY - Change In Face Amount: Decreases."

COST OF INSURANCE RATES - Cost of insurance rates are based on a blended
unisex rate table, Age and Premium Class of the Insureds at the Date of
Issue, the effective date of an increase or date of rider, as applicable, the
amount of premiums paid less debt, any partial withdrawals and withdrawal
charges, and risk classification. Sex-distinct rates do not apply, except in
those states that do not permit unisex rates. The cost of insurance rates
are determined at the beginning of each Policy year for the initial Face
Amount. The cost of insurance rates for an increase in Face Amount or rider
are determined annually on the anniversary of the effective date of each
increase or rider. The cost of insurance rates generally increase as the
Insureds' Ages increase. The actual monthly cost of insurance rates will be
based on the Company's expectations as to future mortality experience. They
will not, however, be greater than the guaranteed cost of insurance rates set
forth

<PAGE>

in the Policy. These guaranteed rates are based on the 1980 Commissioners
Standard Ordinary Mortality Tables (Mortality Table D, Smoker or Non-Smoker,
for unisex Policies) and the Insureds' Ages. The Tables used for this
purpose set forth different mortality estimates for smokers and non-smokers.
Any change in the cost of insurance rates will apply to all persons of the
same insuring Age and Premium Class whose Policies have been in force for the
same length of time.

The premium class of an Insured will affect the cost of insurance rates. The
Company currently places Insureds into standard premium classes and
substandard premium classes. In an otherwise identical Contract, an Insured
in the standard premium class will have a lower cost of insurance than an
Insured in a substandard premium class with a higher mortality risk. The
premium classes are also divided into two categories: smokers and
nonsmokers. Nonsmoking Insureds will incur lower cost of insurance rates than
Insureds who are classified as smokers but who are otherwise in the same
premium class. Any Insured with an Age at issuance under 18 will be
classified initially as regular or substandard. The Insured then will be
classified as a smoker at Age 18 unless the Insured provides satisfactory
evidence that the Insured is a nonsmoker. The Company will provide notice to
the Policyowner of the opportunity for an Insured to be classified as a
nonsmoker when the Insured reaches Age 18.

The cost of insurance rate is determined separately for the initial Face
Amount and for the amount of any increase in Face Amount. For each increase
in Face Amount the Policyowner requests, at a time when an Insured is in a
less favorable Premium Class than previously, a correspondingly higher cost
of insurance rate will apply only to that portion of the Insurance Amount at
Risk for the increase. For the initial Face Amount and any prior increases,
the Company will use the Premium Class previously applicable. On the other
hand, if an Insured's Premium Class improves on an increase, the lower cost
of insurance rate generally will apply to the entire Insurance Amount at Risk.

MONTHLY ADMINISTRATIVE CHARGES - Prior to the Final Premium Payment Date, a
monthly administrative charge of $6 per month will be deducted from Policy
Value. This charge will be used to compensate the Company for expenses
incurred in the administration of the Policy and will compensate the Company
for first year underwriting and other start-up expenses incurred in
connection with the Policy. These expenses include the cost of processing
applications, conducting medical examinations, determining insurability and
the Insureds' Premium Class, and establishing Policy records. The Company
does not expect to derive a profit from these charges.

CHARGES AGAINST ASSETS OF THE INHEIRITAGE ACCOUNT - The Company assesses each
Sub-Account with a charge for mortality and expense risks assumed by the
Company and a charge for administrative expenses of the Inheiritage Account.

MORTALITY AND EXPENSE RISK CHARGE - The Company currently makes a charge on
an annual basis of 0.90% of the daily net asset value in each Sub-Account.
This charge is for the mortality risk and expense risk which the Company
assumes in relation to the variable portion of the Policies. The total
charges may be increased or decreased by the Board of Directors of the
Company once each year, subject to compliance with applicable state and
federal requirements, but it may not exceed 1.275% on an annual basis.

Any mortality and expense risk charge above 0.90% is currently considered
above the range of industry practice. To increase the charge above the range
of industry practice, the Company must file a request with the Securities and
Exchange Commission ("SEC") for an exemption from certain SEC rules, in which
it would be necessary to demonstrate that the proposed charge is reasonable
in relation to the risks assumed under the Policy. Even with such a
demonstration, there is no assurance that the SEC would issue an exemption
order.

The mortality risk assumed by the Company is that Insureds may live for a
shorter time than anticipated, and that the Company will therefore pay an
aggregate amount of Death Proceeds greater than anticipated. The expense
risk assumed is that the expenses incurred in issuing and administering the
Policies will exceed the amounts realized from the administrative charges
provided in the Policies. If the charge for mortality and expense risks is
not sufficient to cover actual mortality experience and expenses, the Company
will absorb the losses. If costs are less than the amounts provided, the
difference will be a profit to the Company. To the extent this charge
results in a current profit to the Company, such profit will be available for
use by the Company for, among other things, the payment of distribution,
sales and other expenses. Since mortality and expense risks involve future
contingencies which are not subject to precise determination in advance, it
is not feasible to identify specifically the portion of the charge which is
applicable to each.

<PAGE>

INHEIRITAGE ACCOUNT ADMINISTRATIVE CHARGE - During the first fifteen Policy
years, the Company assesses a charge on an annual basis of 0.25% of the daily
net asset value in each Sub-Account. The charge is assessed to help defray
administrative expenses actually incurred in the administration of the
Inheiritage Account and the Sub-Accounts and is not expected to be a source
of profit. The administrative functions and expenses assumed by the Company
in connection with the Inheiritage Account and the Sub-Accounts include, but
are not limited to, clerical, accounting, actuarial and legal services, rent,
postage, telephone, office equipment and supplies, expenses of preparing and
printing registration statements, expenses of preparing and typesetting
prospectuses and the cost of printing prospectuses not allocable to sales
expense, filing and other fees. No Inheiritage Account administrative charge
is imposed after the fifteenth Policy year.

OTHER CHARGES AGAINST THE ASSETS OF THE INHEIRITAGE ACCOUNT - Because the
Sub-Accounts purchase shares of the Underlying Investment Companies, the
value of the Accumulation Units of the Sub-Accounts will reflect the
investment advisory fee and other expenses incurred by the Underlying
Investment Companies. The prospectuses and statements of additional
information of the Trust, VIPF, VIPF II, T. Rowe and DGPF contain additional
information concerning such fees and expenses.

No charges are currently made against the Sub-Accounts for federal or state
income taxes. Should the Company determine that taxes will be imposed, the
Company may make deductions from the Sub-Account to pay such taxes. See
"FEDERAL TAX CONSIDERATIONS." The imposition of such taxes would result in a
reduction of the Policy Value in the Sub-Accounts.

SURRENDER CHARGE - The Policy provides for a contingent surrender charge. A
separate surrender charge, described in more detail below, is calculated upon
the issuance of the Policy and for each increase in the Face Amount. The
surrender charge is comprised of a contingent deferred administrative charge
and a contingent deferred sales charge. The contingent deferred
administrative charge compensates the Company for expenses incurred in
administering the Policy. The contingent deferred sales charge compensates
the Company for expenses relating to the distribution of the Policy,
including Agent's commissions, advertising and the printing of the prospectus
and sales literature.

A surrender charge may be deducted if the Policyowner requests a full
surrender of the Policy or a decrease in Face Amount. The duration of the
surrender charge is 15 years from Date of Issue or from the effective date of
any increase in the Face Amount. The maximum surrender charge calculated
upon issuance of the Policy is equal to the sum of (a) plus (b) where (a) is
a deferred administrative charge equal to $8.50 per thousand dollars of the
initial Face Amount and (b) is a deferred sales charge of 48% of premiums
received up to a maximum number of Guideline Annual Premiums subject to the
deferred sales charge that varies by average issue Age from 1.95 (for average
issue Ages 5 through 75) to 1.31 (for average issue Age 82). In accordance
with limitations under state insurance regulations, the amount of the maximum
surrender charge will not exceed a specified amount per $1,000 initial face
Amount, as indicated in "APPENDIX D - CALCULATION OF MAXIMUM SURRENDER
CHARGES." The maximum surrender charge continues in a level amount for 40
Policy months and reduces by 0.5% or more per month thereafter, as described
in "APPENDIX D - CALCULATION OF MAXIMUM SURRENDER CHARGES." This reduction
in the maximum surrender charge will reduce the deferred sales charge and the
deferred administrative charge proportionately.

If the Policyowner surrenders the Policy during the first two Policy years
following the Date of Issue before making premium payments associated with
the initial Face Amount which are at least equal to one Guideline Annual
Premium, the deferred administrative charge will be $8.50 per thousand
dollars of initial Face Amount, as described above, but the deferred sales
charge will not exceed 25% of premiums received. See "APPENDIX D -
CALCULATION OF MAXIMUM SURRENDER CHARGES."

A separate surrender charge will apply to and is calculated for each increase
in Face Amount. The surrender charge for the increase is in addition to that
for the initial Face Amount. The maximum surrender charge for the increase
is equal to the sum of (a) plus (b), where (a) is equal to $8.50 per thousand
dollars of increase, and (b) is a deferred sales charge of 48% of premiums
associated with the increase, up to a maximum number of Guideline Annual
Premiums (for the increase) subject to the deferred sales charge that varies
by average Age (at the time of increase) from 1.95 (for average Ages 5
through 75) to 1.31 (for average Age 82). In accordance with limitations
under state insurance regulations, the amount of the surrender charge will
not exceed a specified amount per $1,000 of increase, as indicated in
"APPENDIX D -CALCULATION OF MAXIMUM SURRENDER

39
<PAGE>

CHARGES." As is true for the initial Face Amount, (a) is a deferred
administrative charge and (b) is a deferred sales charge. The maximum
surrender charge for the increase continues in a level amount for 40 Policy
months and reduces by 0.5% or more per month thereafter, as provided in
"APPENDIX D - CALCULATION OF MAXIMUM SURRENDER CHARGES." If the Policyowner
surrenders the Policy during the first two Policy years following an increase
in Face Amount before making premium payments associated with the increase in
Face Amount which are at least equal to one Guideline Annual Premium, the
deferred administrative charge will be $8.50 per thousand dollars of Face
Amount increase, as described above, but the deferred sales charge will not
exceed 25% of premiums associated with the increase. See "APPENDIX D -
CALCULATION OF MAXIMUM SURRENDER CHARGES." The premiums associated with the
increase are determined as described below.

Additional premium payments may not be required to fund a requested increase
in Face Amount. Therefore, a special rule, which is based on relative
Guideline Annual Premium payments, applies to allocate a portion of existing
Policy Value to the increase and to allocate subsequent premium payments
between the initial Policy and the increase. For example, suppose the
Guideline Annual Premium is equal to $1,500 before an increase and is equal
to $2,000 as a result of the increase. The Policy Value on the effective
date of the increase would be allocated 75% ($1,500/$2,000) to the initial
Face Amount and 25% to the increase. All future premiums would also be
allocated 75% to the initial Face Amount and 25% to the increase. Thus,
existing Policy Value associated with the increase will equal the portion of
Policy Value allocated to the increase on the effective date of the increase,
before any deductions are made. Premiums associated with the increase will
equal the portion of the premium payments actually made on or after the
effective date of the increase which are allocated to the increase.

See "APPENDIX D - CALCULATION OF MAXIMUM SURRENDER CHARGES," for examples
illustrating the calculation of the maximum surrender charge for the initial
Face Amount and for any increases, as well as for the surrender charge based
on actual premiums paid or associated with any increases.

A surrender charge may be deducted on a decrease in the Face Amount. In the
event of a decrease, the surrender charge deducted is a fraction of the
charge that would apply to a full surrender of the Policy. The fraction will
be determined by dividing the amount of the decrease by the current Face
Amount and multiplying the result by the surrender charge. If more than one
surrender charge is in effect (i.e., pursuant to one or more increases in the
Face Amount of a Policy), the surrender charge will be applied in the
following order: (1) the most recent increase; (2) the next most recent
increases successively, and (3) the initial Face Amount. Where a decrease
causes a partial reduction in an increase or in the initial Face Amount, a
proportionate share of the surrender charge for that increase or for the
initial Face Amount will be deducted.

CHARGES ON PARTIAL WITHDRAWAL - After the first policy year, partial
withdrawals of Surrender Value may be made. The minimum withdrawal is $500.
Under Option 1, the Face Amount is reduced by the amount of the partial
withdrawal, and a partial withdrawal will not be allowed if it would reduce
the Face Amount below $100,000.

A transaction charge, which is the smaller of 2% of the amount withdrawn or
$25, will be assessed on each partial withdrawal to reimburse the Company for
the cost of processing the withdrawal. The Company does not expect to make a
profit on this charge.

A partial withdrawal charge may also be deducted from Policy Value. For each
partial withdrawal the Policyowner may withdraw an amount equal to 10% of the
Policy Value on the date the written withdrawal request is received by the
Company less the total of any prior withdrawals in that Policy year which
were not subject to the Partial Withdrawal charge, without incurring a
partial withdrawal charge. Any partial withdrawal in excess of this amount
("excess withdrawal") will be subject to the partial withdrawal charge. The
partial withdrawal charge is equal to 5% of the excess withdrawal up to the
amount of the surrender charge(s) on the date of withdrawal.

This right is not cumulative from Policy year to Policy year. For example,
if only 8% of Policy Value were withdrawn in Policy year two, the amount the
Policyowner could withdraw in subsequent Policy years would not be increased
by the amount the Policyowner did not withdraw in the second Policy year.

The Policy's outstanding surrender charge will be reduced by the amount of
the partial withdrawal charge deducted, by proportionately reducing the
deferred sales charge component and the deferred

<PAGE>

administrative charge component. The partial withdrawal charge deducted will
decrease existing surrender charges in the following order: (1) the most
recent increase in Face Amount; (2) the next most recent increases
successively, and (3) the initial Face Amount.

TRANSFER CHARGES - The first six transfers in a Policy year will be free of
charge. Thereafter, a transfer charge of $10 will be imposed for each
transfer request to reimburse the Company for the administrative costs
incurred in processing the transfer request. The Company reserves the right
to increase the charge, but it will never exceed $25. The Company also
reserves the right to change the number of free transfers allowed in a Policy
Year. See "THE POLICY - Transfer Privilege."

The Policyowner may have automatic transfers of at least $100 a month made on
a periodic basis (a) from Sub-Account 3 or Sub-Account 5 (which invest in the
Money Market Fund and Government Bond Fund of the Trust, respectively) to one
or more of the other Sub-Accounts or (b) to reallocate Policy Value among the
Sub-Accounts. The first automatic transfer counts as one transfer towards the
six free transfers allowed in each policy year. Each subsequent automatic
transfer is without charge and does not reduce the remaining number of
transfers which may be made without charge.

If the Policyowner utilizes the Conversion Privilege, Loan Privilege or
reallocates Policy Value within 20 days of the Date of Issue of the Policy,
any resulting transfer of Policy Value from the Sub-Accounts to the General
Account will be free of charge, and in addition to the six free transfers in
a Policy year. See "THE POLICY - Conversion Privileges" and "POLICY LOANS."

CHARGE FOR INCREASE IN FACE AMOUNT - For each increase in Face Amount the
Policyowner requests, a transaction charge of $50 will be deducted from
Policy Value to reimburse the Company for administrative costs associated
with the increase. This charge is guaranteed not to increase and the Company
does not expect to make a profit on this charge.

OTHER ADMINISTRATIVE CHARGES - The Company reserves the right to impose a
charge for the administrative costs incurred for changing the Net Premium
allocation instructions, for changing the allocation of any Monthly
Deductions among the various Sub-Accounts, or for a projection of values. No
such charges are currently imposed and any such charge is guaranteed not to
exceed $25.

POLICY LOANS

Loans may be obtained by request to the Company on the sole security of this
Policy. The total amount which may be borrowed is the Loan Value. In the
first Policy year, the Loan Value is 75% of Policy Value reduced by
applicable surrender charges as well as Monthly Deductions and interest on
Debt to the end of the Policy year. The Loan Value in the second Policy year
and thereafter is 90% of an amount equal to Policy Value reduced by
applicable surrender charges. There is no minimum limit on the amount of the
loan. The loan amount will normally be paid within seven days after the
Company receives the loan request at its Principal Office, but the Company
may delay payments under certain circumstances. See "OTHER POLICY
PROVISIONS - Postponement Of Payments."

A Policy loan may be allocated among the General Account and one or more
Sub-Accounts. If the Policyowner does not make an allocation, the Company
will make a Pro Rata Allocation based on the amounts in the Accounts on the
date the Company receives the loan request. Policy Value in each Sub-Account
equal to the Policy loan allocated to such Sub-Account will be transferred to
the General Account, and the number of Accumulation Units equal to the Policy
Value so transferred will be cancelled. This will reduce the Policy Value in
these Sub-Accounts. These transactions are not treated as transfers for
purposes of the transfer charge.

As long as the Policy is in force, Policy Value in the General Account equal
to the loan amount will be credited with interest at an effective annual
yield of at least 6% per year. NO ADDITIONAL INTEREST WILL BE CREDITED TO
SUCH POLICY VALUE.

LOAN INTEREST CHARGED - Interest accrues daily and is payable in arrears at
the annual rate of 8%. Interest is due and payable at the end of each Policy
year or on a pro rata basis for such shorter period as the loan may exist.
Interest not paid when due will be added to the loan amount and bear interest
at the same rate. After the due and unpaid interest is added to loan amount,
if the new loan amount exceeds the Policy Value in the General Account, the
Company will transfer Policy Value equal to that excess loan amount from the
Policy Value in each Sub-Account to the

<PAGE>

General Account as security for the excess loan amount. The Company will
allocate the amount transferred among the Sub-Accounts in the same proportion
that the Policy Value in each Sub-Account bears to the total Policy Value in
all Sub-Accounts.

REPAYMENT OF DEBT - Loans may be repaid at any time prior to the lapse of the
Policy. Upon repayment of Debt, the portion of the Policy Value that is in
the General Account securing the Debt repaid will be allocated to the various
Accounts and increase the Policy Value in such accounts in accordance with
the Policyowner's instructions. If the Policyowner does not make a repayment
allocation, the Company will allocate Policy Value in accordance with the
Policyowner's most recent premium allocation instructions; provided, however,
that loan repayments allocated to the Inheiritage Account cannot exceed
Policy Value previously transferred from the Inheiritage Account to secure
the Debt.

If Debt exceeds the Policy Value less the surrender charge, the Policy will
terminate. A notice of such pending termination will be mailed to the last
known address of the Policyowner and any assignee. If the Policyowner does
not make sufficient payment within 62 days after this notice is mailed, the
Policy will terminate with no value. See "POLICY TERMINATION AND
REINSTATEMENT."

EFFECT OF POLICY LOANS - Although Policy loans may be repaid at any time
prior to the lapse of the Policy, Policy loans will permanently affect the
Policy Value and Surrender Value, and may permanently affect the Death
Proceeds. The effect could be favorable or unfavorable, depending upon
whether the investment performance of the Sub-Account(s) is less than or
greater than the interest credited to the Policy Value in the General Account
attributable to the loan.

Moreover, outstanding Policy loans and the accrued interest will be deducted
from the proceeds payable upon the death of the last surviving Insured or
upon surrender.

POLICY TERMINATION AND REINSTATEMENT

TERMINATION - The failure to make premium payments will not cause the Policy
to lapse unless: (a) the Surrender Value is insufficient to cover the next
Monthly Deduction plus loan interest accrued; or (b) Debt exceeds the Policy
Value less surrender charges. If one of these situations occurs, the Policy
will be in default. The Policyowner will then have a grace period of 62 days,
measured from the date of default, to make sufficient payments to prevent
termination. On the date of default, the Company will send a notice to the
Policyowner and to any assignee of record. The notice will state the amount
of premium due and the date on which it is due.

Failure to make a sufficient payment within the grace period will result in
termination of the Policy. If the last surviving Insured dies during the
grace period, the Death Proceeds will still be payable, but any Monthly
Deductions due and unpaid through the policy month in which the last
surviving Insured dies and any other overdue charge will be deducted from the
Death Proceeds.

Except for the situation described in (b) above, if, during the first 48
months after the Date of Issue or the effective date of an increase in Face
Amount, the Policyowner makes premium payments, less Debt, partial
withdrawals and partial withdrawal charges, at least equal to the sum of the
Minimum Monthly Factors for the number of months the Policy, increase, or
Policy Change which causes a change in the Minimum Monthly Factor has been in
force, the Policy is guaranteed not to lapse during that period. A Policy
Change which causes a change in the Minimum Monthly Factor is a change in the
Face Amount or the addition or deletion of a rider. Except for the first 48
months after the Date of Issue or the effective date of an increase, payments
equal to the Minimum Monthly Factor do not guarantee that the Policy will
remain in force.

REINSTATEMENT - If the Policy has not been surrendered and the Insureds are
alive, the terminated Policy may be reinstated anytime within 3 years after
the date of default and before the Final Premium Payment Date. The
reinstatement will be effective on the Monthly Payment Date following the
date the Policyowner submits the following to the Company: (1) a written
application for reinstatement; (2) Evidence of Insurability showing that the
Insureds are insurable according to the Company's underwriting rules; and (3)
a premium that, after the deduction of the tax expense charge and premium
expense charge, is large enough to cover the minimum amount payable, as
described below.

MINIMUM AMOUNT PAYABLE - If reinstatement is requested when less than 48
Monthly Deductions have been made since the Date of Issue or the effective
date of an increase in the Face Amount,

<PAGE>

the Policyowner must pay the lesser of the amount shown in A or B:

Under A, the minimum amount payable is the Minimum Monthly Factor for the
three-month period beginning on the date of reinstatement.

Under B, the minimum amount payable is the sum of

. the amount by which the surrender charge as of the date of reinstatement
exceeds the Policy Value on the date of default; plus

. Monthly Deductions for the three-month period beginning on the date of
reinstatement.

If reinstatement is requested after 48 Monthly Deductions have been made
since the Date of Issue of the policy or any increase in the Face Amount, the
Policyowner must pay the amount shown in B above. The Company reserves the
right to increase the Minimum Monthly Factor upon reinstatement.

SURRENDER CHARGE - The surrender charge on the date of reinstatement is the
surrender charge which would have been in effect had the Policy remained in
force from the Date of Issue. The Policy Value less Debt on the date of
default will be restored to the Policy to the extent it does not exceed the
surrender charge on the date of reinstatement. Any Policy Value less Debt as
of the date of default which exceeds the surrender charge on the date of
reinstatement will not be restored.

POLICY VALUE ON REINSTATEMENT - The Policy Value on the date of reinstatement
is:

. the Net Premium paid to reinstate the Policy increased by interest from
the date the payment was received at the Company's Principal Office;

. plus an amount equal to the Policy Value less Debt on the date of
default to the extent it does not exceed the surrender charge on the
date of reinstatement;

. minus the Monthly Deduction due on the date of reinstatement.

The Policyowner may not reinstate any Debt outstanding on the date of default
or foreclosure.

OTHER POLICY PROVISIONS

The following Policy provisions may vary in certain states in order to comply
with requirements of the insurance laws, regulations, and insurance
regulatory agencies in those states.

POLICYOWNER - The Policyowner is named in the application for the Policy.
The Policyowner is generally entitled to exercise all rights under a Policy
while the Insureds are alive, subject to the consent of any irrevocable
Beneficiary (the consent of a revocable Beneficiary is not required). The
consent of the Insureds is required whenever the Face Amount of insurance is
increased.

BENEFICIARY -The Beneficiary is the person or persons to whom the insurance
proceeds are payable upon the death of the last surviving Insured. Unless
otherwise stated in the Policy, the Beneficiary has no rights in the Policy
before the death of the last surviving Insured. While the Insureds are
alive, the Policyowner may change any Beneficiary unless the Policyowner has
declared a Beneficiary to be irrevocable. If no Beneficiary is alive when
the last surviving Insured dies, the owner (or the owner's estate) will be
the Beneficiary. If more than one Beneficiary is alive when the last
surviving Insured dies, they will be paid in equal shares, unless the
Policyowner has chosen otherwise. Where there is more than one Beneficiary,
the interest of a Beneficiary who dies before the last surviving Insured dies
will pass to surviving Beneficiaries proportionally.

INCONTESTABILITY - The Company will not contest the validity of a Policy
after it has been in force during the lifetimes of both Insureds for two
years from the Date of Issue. The Company will not contest the validity of
any increase in the Face Amount after such increase or rider has been in
force during the lifetimes of both Insureds for two years from its effective
date.

SUICIDE - The Death Proceeds will not be paid if either Insured commits
suicide, while sane or insane, within two years from the Date of Issue.
Instead, the Company will pay the Beneficiary an amount equal to all premiums
paid for the Policy, without interest, less any outstanding Debt and less any
partial withdrawals. If either Insured commits suicide, while sane or
insane, generally within two years from the effective date of any increase in
the Sum Insured, the Company's liability

<PAGE>

with respect to such increase will be limited to a refund of the cost
thereof. The Beneficiary will receive the administrative charges and
insurance charges paid for such increase.

NOTICE OF FIRST INSURED TO DIE - Within 90 days of the death of the first
Insured to die, or as soon thereafter as is reasonably possible, the
Policyowner must mail to the Principal Office due proof of such death.

AGE - If the Age of either Insured as stated in the application for a Policy
is not correct, benefits under a Policy will be adjusted to reflect the
correct Age, if death of the last surviving Insured occurs prior to the Final
Premium Payment Date. The adjusted benefit will be that which the most
recent cost of insurance charge would have purchased for the correct Age. In
no event will the Sum Insured be reduced to less than the Guideline Minimum
Sum Insured.

ASSIGNMENT - The owner may assign a Policy as collateral or make an absolute
assignment of the Policy. All rights under the Policy will be transferred to
the extent of the assignee's interest. The Consent of the assignee may be
required in order to make changes in premium allocations, to make transfers,
or to exercise other rights under the Policy. The Company is not bound by an
assignment or release thereof, unless it is in writing and is recorded at the
Company's Principal Office. When recorded, the assignment will take effect
as of the date the written request was signed. Any rights created by the
assignment will be subject to any payments made or actions taken by the
Company before the assignment is recorded. The Company is not responsible for
determining the validity of any assignment or release.

POSTPONEMENT OF PAYMENTS - Payments of any amount due from the Inheiritage
Account upon surrender, partial withdrawals, or death of the last surviving
Insured, as well as payments of a Policy loan and transfers may be postponed
whenever: (a) the New York Stock Exchange is closed other than customary
weekend and holiday closings, or trading on the New York Stock Exchange is
restricted as determined by the SEC or (b) an emergency exists, as determined
by the SEC, as a result of which disposal of securities is not reasonably
practicable or it is not reasonably practicable to determine the value of the
Inheiritage Account's net assets. Payments under the Policy of any amounts
derived from the premiums paid by check may be delayed until such time as the
check has cleared the bank.

The Company also reserves the right to defer payment of any amount due from
the General Account upon surrender, partial withdrawal or death of the last
surviving Insured, as well as payments of policy loans and transfers from the
General Account, for a period not to exceed six months.

<PAGE>

DIRECTORS AND PRINCIPAL OFFICERS OF THE COMPANY

Name and Position Principal Occupation(s) During Past Five Years
- ------------------------------------ ---------------------------------------------------
<S> <C>

Barry Z. Aframe Vice President and Counsel, State Mutual
Vice President and Counsel

Abigail M. Armstrong Counsel, State Mutual
Secretary and Counsel

Richard J. Baker Vice President and Secretary, State Mutual
Director and Vice President

Whitworth F. Bird, Jr., M.D. Vice President and Medical Director, State Mutual,
Vice President and Medical Director since 1990; Vice President and Medical Director,
Phoenix Mutual Life Insurance Company, 1988 to
1990

Alan R. Boyer Vice President, State Mutual, since 1991; Second
Vice President Vice President 1989 to 1991

Mark R. Colborn Vice President and Controller, State Mutual
Vice President and Controller

Lisa M. Coleman Vice President, State Mutual, since 1994;
Vice President Deputy Manager, Brown Brothers Harriman and
Company, 1989 to 1994

Dix F. Davis Vice President, State Mutual
Vice President

Bruce A. Emond Vice President, State Mutual, since 1994; Second
Vice President Vice President, State Mutual 1984 to 1993

Edward W. Ford Vice President, State Mutual, since 1993; Senior
Vice President Vice President Plymouth Rock Assurance
Corporation, 1990 to 1993

Bruce H. Freedman Vice President, State Mutual, since 1992; Principal,
Vice President Aldrich, Eastman and Waltch, L.P., 1985 to 1991

</TABLE>

45
<PAGE>

Name and Position Principal Occupation(s) During Past Five Years
- ------------------------------------ ---------------------------------------------------
<S> <C>

Bradford K. Gallagher Director and President SMA Life, since 1990;
Director, President and CEO Vice President, State Mutual, since 1990;
Managing Director, FMR Corp., 1986 to 1990;
Director, Fidelity Investments Brokerage Services,
Ltd., 1986 to 1990; Director, Fidelity Brokerage
Services, Inc., 1986 to 1990; President, Plymouth
Investments, 1986 to 1990; Exec. Committee
Member, Fidelity Investments Southwest Co., 1986
to 1990; President, Fidelity Investments
Institutional Services Co., 1985 to 1990

Brian L. Hirst Vice Presient and Actuary, State of Mutual
Vice President and Actuary

Kruno Huitzingh Vice President & Chief Information Officer, State
Vice President and Mutual, since 1993; Executive Vice President,
Chief Information Officer Chicago Board Options Exchange, 1985 to 1993

John P. Kavanaugh Vice President, State Mutual
Vice President

John F. Kelly Senior Vice President, General Counsel and
Director Assistant Secretary, State Mutual

Richard H. Kremer Vice President, State Mutual, since 1994; Senior
Vice President Company 1991 to 1994; Senior Vice President,
Cigna Individual Financial Service Company 1988
to 1994

Jeffrey P. Lagarce Vice President, State Mutual, since 1994; National
Vice President Sales Director, Metropolitan Life Insurance
Company 1976 to 1994

Joseph W. MacDougall, Jr. Vice President, Associate General Counsel and
Vice President, Associate General Assistant Secretary, State Mutual
Counsel and Assistant Secretary

William H. Mawdsley Vice President and Actuary, State Mutual
Vice President and Actuary

James R. McAuliffe President and CEO, Citizens Insurance Company
Director of America since 1995; Vice President and Chief
Investment Officer, State Mutual 1986 to 1994

Roderick A. McGarry, II Vice President, State Mutual
Vice President

</TABLE>

<PAGE>

Name and Position Principal Occupation(s) During Past Five Years
- ------------------------------------ ---------------------------------------------------
<S> <C>

Ruben P. Moreno Vice President, State Mutual
Vice President

John W. Nunley Vice President, State Mutual
Vice President

John F. O"Brien Director, President and Chief Executive Officer
Director and Chairman of the Board of State Mutual, since 1989; Director and
Chairman of the Board, SMA Life since 1989

Edward J. Parry, III Vice President and Treasurer, State Mutual
Vice President and Treasurer since 1993; Asst. Vice President to 1992 to 1993;
Manager, Price Waterhouse, 1987 to 1992

Richard M. Reilly Vice President, State Mutual, since 1990;
Director and Vice President Director and President, Allmerica Investments,
Inc., since 1990; Director and President Allmerica
Investment Management Company, Inc., since
1990; Director, President and CEO, Allmerica
Investment Services, Inc., since 1992; Director and
Executive Vice President, 1990 to 1992; Senior
Vice President, Oppenheimer Capital, 1987 to 1990

Henry P. St. Cyr Vice President and Asst. Treasurer, State
Vice President and Asst. Treasurer Mutual, since 1993; Vice President and
Treasurer, 1988 to 1993

Eric Simonsen Vice President and Chief Financial Officer,
Director, Vice President and Chief State Mutual, since 1990; Partner, The Lincoln
Financial Officer Group, 1987 to 1990

Ann K. Tripp Vice President, State Mutual, since 1994;
Vice President Assistance Vice President, 1991 to 1994; Senior
Investment Officer and Asst. Treasurer, 1989
to 1991

Jerome F. Weihs Vice President, State Mutual, since 1991;
Vice President Second Vice President, 1988 to 1991

Diane E. Wood Vice President, State Mutual, since 1991;
Vice President Second Vice President, 1989 to 1991

</TABLE>

DISTRIBUTION

Allmerica Investments, Inc. an indirect subsidiary of State Mutual, acts as
the principal underwriter of the Policies pursuant to a Sales and
Administrative Services Agreement with the Company and the Inheiritage
Account. Allmerica Investments, Inc. is registered with the Securities and
Exchange Commission as a broker-dealer and is a member of the National
Association of Securities Dealers. The Policies are sold by agents of the
Company who are registered representatives of Allmerica Investments, Inc.

The Company pays to registered representatives who sell the Policy
commissions based on a commission schedule. After issue of the Policy or an
increase in Face Amount, commissions generally will equal 50 percent of the
first year premiums up to a basic premium amount established by the Company.
Thereafter, commissions will generally equal 3.5 percent of any additional
premiums. Certain registered

<PAGE>

representatives, including registered representatives enrolled in the
Company's training program for new agents, may receive additional first year
and renewal commissions and training reimbursements. General Agents of the
Company and certain registered representatives may also be eligible to
receive expense reimbursements based on the amount of earned commissions.
General Agents may also receive overriding commissions, which will not exceed
10 percent of first year or 14 percent of renewal premiums.

The Company intends to recoup the commission and other sales expense through
a combination of the deferred sales charge component of the anticipated
surrender and partial withdrawal charges, and the investment earnings on
amounts allocated to accumulate on a fixed basis in excess of the interest
credited on fixed accumulations by the Company. There is no additional
charge to the Policy Owner or to the Separate Account. Any surrender charge
assessed on a Policy will be retained by the Company except for amounts it
may pay to Allmerica Investments, Inc. for services it performs and expenses
it may incur as principal underwriter and general distributor.

REPORTS

The Company will maintain the records relating to the Inheiritage Account.
The Policyowner will be promptly sent statements of significant transactions
such as premium payments, changes in specified Face Amount, changes in Sum
Insured Option, transfers among Sub-Accounts and the General Account, partial
withdrawals, increases in loan amount by the Policyowner, loan repayments,
lapse, termination for any reason, and reinstatement. An annual statement
will also be sent to the Policyowner within 30 days after a Policy
Anniversary. The annual statement will summarize all of the above
transactions and deductions of charges during the Policy year. It will also
set forth the status of the Death Proceeds, Policy Value, Surrender Value,
amounts in the Sub-Accounts and General Account, and any Policy loan(s).

In addition, the Policyowner will be sent periodic reports containing
financial statements and other information for the Inheiritage Account and
the Underlying Investment Companies as required by the Investment Company Act
of 1940.

LEGAL PROCEEDINGS

There are no legal proceedings pending to which the Inheiritage Account is a
party, or to which the assets of the Inheiritage Account are subject. The
Company is not involved in any litigation that is of material importance in
relation to its total assets or that relates to the Inheiritage Account.

FURTHER INFORMATION

A Registration Statement under the Securities Act of 1933 relating to this
offering has been filed with the Securities and Exchange Commission. Certain
portions of the Registration Statement and amendments have been omitted from
this prospectus pursuant to the rules and regulations of the Securities and
Exchange Commission. Statements contained in this prospectus concerning the
Policy and other legal documents are summaries. The complete documents and
omitted information may be obtained from the Securities and Exchange
Commission's principal office in Washington, D.C., upon payment of the
Securities and Exchange Commission's prescribed fees.

INDEPENDENT ACCOUNTANTS

The financial statements of the Company as of December 31, 1994 and 1993 and
for each of the three years in the period ended December 31, 1994 and of the
Inheiritage Account of SMA Life Assurance Company as of December 31, 1994 and
the period then ended, included in this Prospectus constituting part of the
Registration Statement, have been so included in reliance on the report of
Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.

The financial statements of the Company included herein should be considered
only as bearing on the ability of the Company to meet its obligations under
the Policies.

<PAGE>

FEDERAL TAX CONSIDERATIONS

The effect of federal income taxes on the value of a Policy, on loans,
withdrawals, or surrenders, on death benefit payments, and on the economic
benefit to the Policyowner or the Beneficiary depends upon a variety of
factors. The following discussion is based upon the Company's understanding
of the present federal income tax laws as they are currently interpreted.
From time to time legislation is proposed which, if passed, could
significantly, adversely and possibly retroactively affect the taxation of
the Policies. No representation is made regarding the likelihood of
continuation of current federal income tax laws or of current interpretations
by the Internal Revenue Service (IRS). Moreover, no attempt has been made to
consider any applicable state or other tax laws.

It should be recognized that the following summary of federal income tax
aspects of amounts received under the Policies is not exhaustive, does not
purport to cover all situations and is not intended as tax advice.
Specifically, the discussion below does not address certain tax provisions
that may be applicable if the Policyowner is a corporation or the Trustee of
an employee benefit plan. A qualified tax adviser should always be consulted
with regard to the application of law to individual circumstances.

THE COMPANY AND THE INHEIRITAGE ACCOUNT - The Company is taxed as a life
insurance company under Subchapter L of the Internal Revenue Code of 1986
(the "Code") and files a consolidated tax return with its parent and
affiliates. The Company does not expect to incur any income tax upon the
earnings or realized capital gains attributable to the Inheiritage Account.
Based on these expectations, no charge is made for federal income taxes which
may be attributable to the Inheiritage Account.

The Company will review periodically the question of a charge to the
Inheiritage Account for federal income taxes. Such a charge may be made in
future years for any federal income taxes incurred by the Company. This might
become necessary if the tax treatment of the Company is ultimately determined
to be other than what the Company believes it to be, if there are changes
made in the federal income tax treatment of variable life insurance at the
Company level, or if there is a change in the Company's tax status. Any such
charge would be designed to cover the federal income taxes attributable to
the investment results of the Inheiritage Account.

Under current laws the Company may also incur state and local taxes (in
addition to premium taxes) in several states. At present these taxes are not
significant. If there is a material change in applicable state or local tax
laws, charges may be made for such taxes paid, or reserves for such taxes,
attributable to the Inheiritage Account.

TAXATION OF THE POLICIES - The Company believes that the Policies described
in this prospectus will be considered life insurance contracts under Section
7702 of the Code, which generally provides for the taxation of life insurance
contracts and places limitations on the relationship of the Policy Value to
the Insurance Amount at risk. As a result, the Death Proceeds payable are
excludable from the gross income of the Beneficiary. Moreover, any increase
in the Policy Value of the Policy is not taxable until received by the
Policyowner or the Policyowner's designee. But see "MODIFIED ENDOWMENT
CONTRACTS." Although the Company believes that the Policies are in
compliance with Section 7702 of the Code, the manner in which Section 7702
should be applied to certain features of a joint survivorship life insurance
contract is not directly addressed by Section 7702. In the absence of final
regulations or other guidance issued under Section 7702, there is necessarily
some uncertainty whether a Policy will meet the Section 7702 definition of a
life insurance contract. This is true particularly if the Policyowner pays
the full amount of premiums permitted under the Policy. A Policyowner
contemplating the payment of such premiums should do so only after consulting
a tax adviser. If a Policy were determined not to be a life insurance
contract under Section 7702, it would not have most of the tax advantages
normally provided by a life insurance contract.

The Code requires that the investment of each Sub-Account be adequately
diversified in accordance with Treasury regulations in order to be treated as
a life insurance policy for tax purposes. Although the Company does not have
control over the investments of the Underlying Funds, the Company believes
that the Underlying Funds currently meet the Treasury's diversification
requirements, and the Company will monitor continued compliance with these
requirements. In connection with the issuance of previous regulations
relating to diversification requirements, the Treasury Department announced
that such regulations do not provide guidance concerning the extent to which
Policyowners may direct their investments to particular divisions of a
separate account. Regulations in this regard may be issued in

<PAGE>

the future. It is possible that if and when regulations are issued, the
Policies may need to be modified to comply with such regulations. For these
reasons, the Policies or the Company's administrative rules may be modified
as necessary to prevent a Policyowner from being considered the owner of the
assets of the Inheiritage Account.

The Company believes that loans received under a Policy will be treated as
indebtedness of the Policyowner for federal tax purposes, and under current
law will not constitute income to the Policyowner so long as the Policy
remains in force. But see "MODIFIED ENDOWMENT CONTRACTS." Deducting interest
on policy loans is, however, subject to the restrictions of Section 264 of
the Code. Consumer interest paid on Policy loans under a Policy owned by an
individual is not tax deductible. In addition, no tax deduction is allowed
for any interest on any loan under one or more life insurance policies
(purchased after June 20, 1986) owned by a taxpayer covering the life of any
individual who is an officer or employee of or is financially interested in,
any business carried on by that taxpayer, to the extent the aggregate amount
of such loans exceeds $50,000.

Depending upon the circumstances, a surrender, partial withdrawal, change in
the Sum Insured Option, change in the Face Amount, lapse with policy loan
outstanding, or assignment of the Policy may have tax consequences. In
particular, under specified conditions, a distribution under the Policy
during the first fifteen years from Date of Issue that reduces future
benefits under the Policy will be taxed to the Policyowner as ordinary income
to the extent of any investment earnings in the Policy. Federal, state and
local income, estate, inheritance, and other tax consequences of ownership or
receipt of Policy proceeds depend on the circumstances of each Insured,
Policyowner, or Beneficiary.

The Split Option Rider permits a Policy to be split into two other life
insurance policies, one covering each Insured singly. A Policy split may
have adverse tax consequences. It is not clear whether a Policy split will
be treated as a nontaxable exchange under Section 1035 of the Code. Unless a
Policy split is so treated, it could result in recognition of taxable income
on the gain in the Policy. In addition, it is not clear whether, in all
circumstances, the individual policies that result from a Policy split would
be treated as life insurance policies under Section 7702 of the Code or would
be classified as modified endowment contracts. The Policyowner should consult
a competent tax adviser regarding the possible adverse tax consequences of a
Policy Split.

MODIFIED ENDOWMENT CONTRACTS - The Technical and Miscellaneous Revenue Act of
1988 ("Act") adversely affects the tax treatment of distributions under
so-called "modified endowment contracts." Under the Act, any life insurance
policy, including a Policy offered by this prospectus, that fails to satisfy
a "7-pay" test is considered a modified endowment contract. A Policy fails
to satisfy the 7-pay test if the cumulative premiums paid under the Policy at
any time during the first seven policy years exceeds the sum of the net level
premiums that would have been paid, had the Policy provided for paid-up
future benefits after the payment of seven level premiums.

If a Policy is considered a modified endowment contract, all distributions
under the Policy will be taxed on an "income first" basis. Most distributions
received by a Policyowner directly or indirectly (including loans,
withdrawals, partial surrenders, or the assignment or pledge of any portion
of the value of the Policy) will be includible in gross income to the extent
that the cash Surrender Value of the Policy exceeds the Policyowner's
investment in the contract. Any additional amounts will be treated as a
return of capital to the extent of the Policyowner's basis in the Policy. In
addition, with certain exceptions, an additional 10% tax will be imposed on
the portion of any distribution that is includible in income. All modified
endowment contracts issued by the same insurance company to the same
policyowner during any 12-month period will be treated as a single modified
endowment contract in determining taxable distributions.

Currently, each Policy is reviewed when premiums are received to determine if
it satisfies the 7-pay test. If the Policy does not satisfy the 7-pay test,
the Company will notify the Policyowner of the option of requesting a refund
of the excess premium. The refund process must be completed within 60 days
after the Policy anniversary, or the Policy will be permanently classified as
a modified endowment contract.

ESTATE AND GENERATION SKIPPING TAXES - When the last surviving Insured dies,
the Death Proceeds will generally be includible in the Policyowner's estate
for purposes of federal estate tax if the last surviving Insured owned the
Policy. If the Policyowner was not the last surviving Insured, the fair
market value of the Policy would be included in the Policyowner's estate upon
the Policyowner's death.

<PAGE>

Nothing would be includible in the last surviving Insured's estate if he or
she neither retained incidents of ownership at death nor had given up
ownership within three years before death.

Federal estate tax is integrated with federal gift tax under a unified rate
schedule. In general, estates less than $600,000 will not incur a federal
estate tax liability. In addition, an unlimited marital deduction may be
available for federal estate and gift tax purposes. The unlimited marital
deduction permits the deferral of taxes until the death of the surviving
spouse, when the Death Proceeds would be available to pay taxes due and other
expenses incurred.

As a general rule, if an Insured is the Policyowner and Death Proceeds are
payable to a person two or more generations younger than the Policyowner, a
generation-skipping tax may be payable on the Death Proceeds at rates similar
to the maximum estate tax rate in effect at the time. If the Policyowner
(whether or not he or she is an Insured) transfers ownership of the Policy to
someone two or more generations younger, the transfer may be subject to the
generation-skipping tax, the taxable amount being the value of the Policy.
(Such a transfer is unlikely but not impossible.) If the Death Proceeds are
not includible in the Insured's estate (because the Insured retained no
incidents of ownership and did not relinquish ownership within three years
before death), the payment of the Death Proceeds to the beneficiary is not
subject to the generation-skipping tax regardless of the beneficiary's
generation. The generation-skipping tax provisions generally apply to
transfers which would be subject to the gift and estate tax rules.
Individuals are generally allowed an aggregate generation skipping tax
exemption of $1 million. Because these rules are complex, the Policyowner
should consult with a tax adviser for specific information where benefits are
passing to younger generations.

MORE INFORMATION ABOUT THE GENERAL ACCOUNT

As discussed earlier, the Policyowner may allocate Net Premiums and transfer
Policy Value to the General Account. Because of exemption and exclusionary
provisions in the securities laws, any amount in the General Account is not
generally subject to regulation under the provisions of the Securities Act of
1933 or the Investment Company Act of 1940. Accordingly, the disclosures in
this Section have not been reviewed by the Securities and Exchange
Commission. Disclosures regarding the fixed portion of the Policy and the
General Account may, however, be subject to certain generally applicable
provisions of the Federal securities laws concerning the accuracy and
completeness of statements made in prospectuses.

GENERAL DESCRIPTION - The General Account of the Company is made up of all of
the general assets of the Company other than those allocated to any separate
account. Allocations to the General Account become part of the assets of the
Company and are used to support insurance and annuity obligations. Subject
to applicable law, the Company has sole discretion over the investment of
assets of the General Account.

A portion or all of Net Premiums may be allocated or transferred to
accumulate at a fixed rate of interest in the General Account. Such net
amounts are guaranteed by the Company as to principal and a minimum rate of
interest. The allocation or transfer of funds to the General Account does
not entitle the Policyowner to share in the investment experience of the
General Account.

GENERAL ACCOUNT VALUE - The Company bears the full investment risk for
amounts allocated to the General Account and guarantees that interest
credited to each Policyowner's Policy Value in the General Account will not
be less than an annual rate of 4% ("Guaranteed Minimum Rate").

The Company may, AT ITS SOLE DISCRETION, credit a higher rate of interest
("excess interest"), although it is not obligated to credit interest in
excess of 4% per year, and might not do so. However, the excess interest
rate, if any, in effect on the date a premium is received at the Principal
Office is guaranteed on that premium for one year, unless the Policy Value
associated with the premium becomes security for a Policy loan. AFTER SUCH
INITIAL ONE YEAR GUARANTEE OF INTEREST ON NET PREMIUM, ANY INTEREST CREDITED
ON THE POLICY'S ACCUMULATED VALUE IN THE GENERAL ACCOUNT IN EXCESS OF THE
GUARANTEED MINIMUM RATE PER YEAR WILL BE DETERMINED IN THE SOLE DISCRETION OF
THE COMPANY. THE POLICYOWNER ASSUMES THE RISK THAT INTEREST CREDITED MAY NOT
EXCEED THE GUARANTEED MINIMUM RATE.

Even if excess interest is credited to accumulated value in the General
Account, no excess interest will be credited to that portion of the Policy
Value which is equal to Debt. However, such Policy Value will

<PAGE>

be credited interest at an effective annual yield of at least 6%.

The Company guarantees that, on each Monthly Payment Date, the Policy Value
in the General Account will be the amount of the Net Premiums allocated or
Policy Value transferred to the General Account, plus interest at an annual
rate of 4% per year, plus any excess interest which the Company credits, less
the sum of all Policy charges allocable to the General Account and any
amounts deducted from the General Account in connection with loans, partial
withdrawals, surrenders or transfers.

THE POLICY - This prospectus describes a flexible premium variable life
insurance policy and is generally intended to serve as a disclosure document
only for the aspects of the Policy relating to the Inheiritage Account. For
complete details regarding the General Account, see the Policy itself.

TRANSFERS, SURRENDERS, PARTIAL WITHDRAWALS AND POLICY LOANS - If a Policy is
surrendered or if a partial withdrawal is made, a surrender charge or partial
withdrawal charge, as applicable, may be imposed. In the event of a decrease
in Face Amount, the surrender charge deducted is a fraction of the charge
that would apply to a full surrender of the Policy. Partial withdrawals are
made on a last-in/first-out basis from Policy Value allocated to the General
Account.

The first six transfers in a policy year are free of charge. Thereafter, a
$10 transfer charge will be deducted for each transfer in that Policy year.
The transfer privilege is subject to the consent of the Company and to the
Company's then current rules.

Policy loans may also be made from the Policy Value in the General Account.

Transfers, surrenders, partial withdrawals, Death Proceeds and Policy loans
payable from the General Account may be delayed up to six months. However, if
payment is delayed for 30 days (10 days in New York) or more, the Company
will pay interest at least equal to an effective annual yield of 3.5% per
year for the period of deferment. Amounts from the General Account used to
pay premiums on policies with the Company will not be delayed.

FINANCIAL STATEMENTS

Financial Statements for the Company and for the Inheiritage Account are
included in this prospectus beginning immediately after this section. The
financial statements of the Company should be considered only as bearing on
the ability of the Company to meet its obligations under the Policy. They
should not be considered as bearing on the investment performance of the
assets held in the Inheiritage Account.

<PAGE>

SMA LIFE ASSURANCE COMPANY

FINANCIAL STATEMENTS

DECEMBER 31, 1994 and 1993

<PAGE>

SMA LIFE ASSURANCE COMPANY

December 31, 1994

Financial Statements
Report of Independent Accountants. . . . . . . . . . . . . . . . . . . . . . . 1
Statement of Financial Position. . . . . . . . . . . . . . . . . . . . . . . . 2
Statement of Operations and Changes in Stockholder's Equity. . . . . . . . . . 3
Statement of Cash Flows. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . 5

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

February 13, 1995

To the Board of Directors and Stockholder of
SMA Life Assurance Company

In our opinion, the accompanying statement of financial position and the related
statements of operations and changes in stockholder's equity and of cash flows
present fairly, in all material respects, the financial position of SMA Life
Assurance Company at December 31, 1994 and 1993, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1994, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

As discussed in Note 1 to the financial statements, the Company may adopt
Statement of Financial Accounting Standards No. 120, "Accounting and Reporting
by Mutual Life Insurance Enterprises and by Insurance Enterprises for Certain
Long-Duration Participating Contracts", and Financial Accounting Standards Board
Interpretation No. 40, "Applicability of Generally Accepted Accounting
Principles to Mutual Life Insurance and Other Enterprises", in 1996. If these
pronouncements are adopted, the financial statements for the year ended December
31, 1994 will be retroactively restated for the effects of these changes in
accounting principles.

Price Waterhouse LLP
Boston, Massachusetts

<PAGE>

SMA LIFE ASSURANCE COMPANY
(A Wholly Owned Subsidiary of State Mutual Life Assurance Company of America)

STATEMENT OF FINANCIAL POSITION
as of December 31
(in thousands)

ASSETS 1994 1993
---- ----
<S> <C> <C>
Cash $ 7,248 $ 10,172
Investments:
Bonds 1,595,275 1,567,658
Stocks 12,283 23,478
Mortgage loans 295,532 383,059
Policy loans 116,600 109,014
Real estate 51,288 40,904
Short term investments 45,239 4,999
Other investment assets 27,443 314
----------- -----------
Total cash and investments 2,150,908 2,148,598

Premiums deferred and uncollected 5,452 6,953
Investment income due and accrued 39,442 39,993
Other assets 6,548 12,560
Assets held in separate accounts 1,869,695 1,296,620
----------- -----------

$ 4,072,045 $ 3,504,724
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:

Policy liabilities:
Life reserves $ 890,880 $ 905,813
Annuity and other fund reserves 928,325 925,098
Accident and health reserves 121,580 115,081
Claims payable 11,720 10,476
----------- -----------

Total policy liabilities 1,952,505 1,956,468

Expenses and taxes payable 17,484 43,123
Other liabilities 32,445 26,069
Asset valuation reserve 20,786 10,964
Obligations related to separate account business 1,859,502 1,285,884
----------- -----------

Total liabilities 3,882,722 3,322,508
----------- -----------

Stockholder's equity:
Common stock, $1,000 par value
Authorized - 10,000 shares
Issued and outstanding - 2,517 shares 2,517 2,517
Additional paid-in capital 199,307 199,307
Unassigned deficit (13,621) (20,744)
Special contingency reserves 1,120 1,136
----------- -----------
Total stockholder's equity 189,323 182,216
----------- -----------

$ 4,072,045 $ 3,504,724
----------- -----------
----------- -----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

2
<PAGE>

SMA LIFE ASSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA)

STATEMENT OF OPERATIONS AND
CHANGES IN STOCKHOLDER'S EQUITY
for the year ended December 31
(In thousands)

REVENUE 1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Premiums and other considerations:
Life $ 195,633 $ 189,285 $ 181,992
Annuities 707,172 660,143 365,443
Accident and health 31,927 35,718 35,612
Reinsurance commissions and reserve adjustments 4,195 2,309 2,372
---------- ---------- ----------

Total premiums and other considerations 938,927 887,455 585,419

Net investment income 170,430 177,612 183,159
Realized capital gains (losses), net of tax (17,172) (7,225) 576
Other revenue 26,065 19,055 13,224
---------- ---------- ----------

Total revenue 1,118,250 1,076,897 782,378
---------- ---------- ----------

POLICY BENEFITS AND OPERATING EXPENSES
Policy benefits:
Claims, surrenders and other benefits 331,418 275,290 250,317
Increase in policy reserves 40,113 15,292 159,127
---------- ---------- ----------

Total policy benefits 371,531 290,582 409,444

Operating and selling expenses 164,175 160,928 134,482
Taxes, except capital gains tax 22,846 19,066 29,540
Net transfers to separate accounts 553,295 586,539 199,164
---------- ---------- ----------

Total policy benefits and operating expenses 1,111,847 1,057,115 772,630
---------- ---------- ----------

NET INCOME 6,403 19,782 9,748

STOCKHOLDER'S EQUITY AT BEGINNING OF YEAR 182,216 171,941 177,809
Unrealized capital gains (losses) on investments 12,170 (9,052) (20,770)
Transfer from (to) asset valuation reserve (9,822) 1,974 2,883
Other adjustments (1,644) (2,429) 2,271
---------- ---------- ----------

STOCKHOLDER'S EQUITY AT END OF YEAR $ 189,323 $ 182,216 $ 171,941
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

SMA LIFE ASSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA)

STATEMENT OF CASH FLOWS
for the year ended December 31
(In thousands)

CASH FLOW FROM OPERATING ACTIVITIES 1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Premiums, deposits and other income $ 962,147 $ 902,725 $ 602,253
Allowances and reserve adjustments on
reinsurance ceded 3,279 22,185 18,918
Net investment income 173,294 182,843 182,531
Net increase in policy loans (7,585) (7,812) (8,777)
Benefits to policyholders and beneficiaries (330,900) (298,612) (257,274)
Operating and selling expenses and taxes (213,399) (176,361) (126,421)
Net transfers to separate accounts (600,760) (634,021) (221,492)
Other sources (applications) 19,868 7,757 (43,869)
---------- ---------- ----------

NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 5,944 (1,296) 145,869
---------- ---------- ----------

CASH FLOW FROM INVESTING ACTIVITIES
Sales and maturities of long term investments:
Bonds 478,512 386,414 400,636
Stocks 63 64 80
Real estate and other invested assets 3,008 11,094 4,350
Repayment of mortgage principal 65,334 79,844 95,972
Capital gains tax (968) (3,296) --
Acquisition of long term investments:
Bonds (508,603) (466,086) (710,371)
Stocks -- -- (2,617)
Real estate and other invested assets (24,544) (2,392) (1,910)
Mortgage loans (364) (2,266) (852)
Other investing activities 18,934 (27,254) (3,001)
---------- ---------- ----------

NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES 31,372 (23,878) (217,713)
---------- ---------- ----------

Net change in cash and short term investments 37,316 (25,174) (71,844)

CASH AND SHORT TERM INVESTMENTS
Beginning of the year 15,171 40,345 112,189
---------- ---------- ----------

End of the year $ 52,487 $ 15,171 $ 40,345
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

4
<PAGE>

SMA LIFE ASSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA)

NOTES TO FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BASIS OF PRESENTATION - SMA Life Assurance Company (SMA Life or
the "Company") is a wholly owned subsidiary of SMA Financial Corp., which is
wholly owned by State Mutual Life Assurance Company of America (State Mutual), a
mutual life insurance company. The stockholder's equity of the Company is being
maintained at a minimum level of 5% of general account assets by State Mutual in
accordance with a policy established by vote of State Mutual's Board of
Directors.

The Company's financial statements have been prepared on the basis of accounting
practices prescribed or permitted by the Insurance Department of the State of
Delaware and in conformity with practices prescribed by the National Association
of Insurance Commissioners (NAIC), which are generally accepted accounting
principles for mutual life insurance companies and their stock life insurance
subsidiaries.

Certain reclassifications have been made to prior year amounts to conform with
the current year presentation.

VALUATION OF INVESTMENTS - Investments in bonds are carried principally at
amortized cost, in accordance with NAIC guidelines. Preferred stocks are
carried generally at cost and common stocks are carried at market value. Policy
loans are carried principally at unpaid principal balances.

Mortgage loans on real estate are stated at unpaid principal balances, net of
unamortized discounts. Mortgage loans are reduced for losses expected by
management to be realized on transfers of mortgage loans to real estate (upon
foreclosure), on the disposition or settlement of mortgage loans and on mortgage
loans which management believes may not be collectible in full. In determining
the amount of the loss, management considers, among other things, the estimated
fair value of the underlying collateral. Investment real estate and real estate
acquired through foreclosure are carried at the lower of depreciated cost or
market value.

An asset valuation reserve (AVR) for bonds, mortgage loans, stocks, real estate,
and other invested assets is maintained by appropriations from surplus in
accordance with a formula specified by the NAIC and is classified as a
liability.

FINANCIAL INSTRUMENTS - In the normal course of business, the Company enters
into transactions involving various types of financial instruments including
investments such as bonds and stocks and investment and loan commitments. These
instruments involve credit risk and also may be subject to risk of loss due to
interest rate fluctuations. The Company evaluates and monitors each financial
instrument individually and, when appropriate, obtains collateral or other
security to minimize losses.

RECOGNITION OF PREMIUM INCOME AND ACQUISITION COSTS - In general, premiums are
recognized as revenue over the premium paying period of the policies;
commissions and other costs of acquiring the policies are charged to operations
when incurred.

SEPARATE ACCOUNTS - Separate account assets and liabilities represent segregated
funds administered and invested by the Company for the benefit of certain
variable annuity and variable life contractholders. Assets consist principally
of bonds, common stocks, and short term obligations at market value. The
investment income, gains, and losses of these accounts generally accrue to the
contractholders and therefore, are not included in the Company's net income.
Appreciation and depreciation of the Company's interest in the separate
accounts, including undistributed net investment income, is reflected in
stockholder's equity.

INSURANCE RESERVES AND ANNUITY AND OTHER FUND RESERVES - Reserves for life
insurance, annuities, and accident and health insurance are established in
amounts adequate to meet the estimated future obligations of policies in force.
These liabilities are computed based upon mortality, morbidity and interest rate
assumptions applicable to these coverages, including provision for adverse
deviation. Interest rates range from 3% to 6% for life insurance and 3 1/2% to
9 1/2% for annuities, and mortality and morbidity assumptions reflect the
Company's experience and industry standards. The assumptions vary by plan, age
at issue, year of issue and duration. Claims reserves are computed based on
historical experience modified for expected trends in frequency and severity.
Withdrawal characteristics of annuity and other fund reserves vary by contract.

<PAGE>

SMA LIFE ASSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA)

At December 31, 1994 and 1993, approximately 77% and 70%, respectively, of the
contracts (included in both the general account and separate accounts of the
Company) were not subject to discretionary withdrawal or were subject to
withdrawal at book value less surrender charge.

FEDERAL INCOME TAXES - State Mutual, its non-insurance domestic subsidiaries and
SMA Life file a consolidated United States Federal income tax return. Entities
included within the consolidated group are segregated into either a life
insurance or non-life insurance company subgroup. The consolidation of these
subgroups is subject to certain statutory restrictions on the percentage of
eligible non-life taxable operating losses that can be applied to offset life
company taxable income. Allmerica P&C and its subsidiaries file a separate
United States Federal income tax return.

The Federal income tax for the non-life insurance subsidiaries is calculated on
a separate return basis. Any current tax liability (benefit) is paid to
(reimbursed by) State Mutual. Tax benefits resulting from taxable operating
losses of the non-life subsidiaries are not reimbursed currently by State
Mutual. However, to the extent such losses are utilized by the consolidated
group, they are reflected as a liability of State Mutual.

The Federal income tax for the life companies is calculated on a line of
business basis, excluding the operating results of the non-insurance
subsidiaries and Allmerica P&C. The tax is allocated to each life company based
on its contribution to the taxable income or loss of each line of business.

CAPITAL GAINS AND LOSSES - Realized capital gains and losses, net of applicable
capital gains tax or benefit, exclusive of those transferred to the interest
maintenance reserve (IMR), are included in the statement of operations.
Unrealized capital gains and losses are reflected as direct credits or charges
to stockholder's equity. The IMR, which is included in other liabilities,
establishes a reserve for realized gains and losses, net of tax, resulting from
changes in interest rates on short and long term fixed income investments. Net
realized gains and losses charged to the IMR are amortized into net investment
income over the remaining life of the investment sold.

PENDING ACCOUNTING PRONOUNCEMENT - In April 1993, the Financial Accounting
Standards Board (FASB) issued Interpretation No. 40, "Applicability of Generally
Accepted Accounting Principles to Mutual Life Insurance and Other Enterprises"
(FIN 40), which establishes a different definition of generally accepted
accounting principles for mutual life insurance companies (and their stock life
insurance subsidiaries). Under the Interpretation, financial statements of
mutual life insurance companies (and their stock life insurance subsidiaries)
which are prepared on the basis of statutory accounting, will no longer be
characterized as in conformity with generally accepted accounting principles.

In January 1995, the FASB issued Statement of Financial Accounting Standards No.
120, "Accounting and Reporting by Mutual Life Insurance Enterprises and by
Insurance Enterprises for Certain Long-Duration Participating Contracts" (SFAS
No. 120), and the American Institute of Certified Public Accountants (AICPA)
issued Statement of Position No. 95-1, "Accounting for Certain Insurance
Activities of Mutual Life Insurance Enterprises" (SOP 95-1). SFAS No. 120
extends the requirements of SFAS No. 60, "Accounting and Reporting by Insurance
Enterprises," No. 97, "Accounting and Reporting by Insurance Enterprises for
Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale
of Investments," and No. 113, "Accounting and Reporting for Reinsurance of
Short-Duration and Long-Duration Contracts," to mutual life insurance
enterprises. SOP 95-1 establishes accounting for certain participating life
insurance contracts for mutual life insurance enterprises. SFAS No. 120
requires mutual life insurance enterprises (and permits stock life insurance
enterprises) to apply the provisions of SOP 95-1 to those contracts which meet
the conditions in SFAS No. 120.

FIN 40, SFAS No. 120 and SOP 95-1 are all effective for financial statements
issued for fiscal years beginning after December 15, 1995.

Management of the Company has not yet determined the effect on its financial
statements of applying the new pronouncements nor whether it will continue to
present its general purpose financial statements in conformity with the
statutory basis of accounting or adopt the accounting changes required in order
to continue to present its financial statements in conformity with generally
accepted accounting principles. If the Company chooses to adopt the accounting
changes required, the effect of the changes would be reported retroactively
through restatement of all previously issued financial statements beginning with
the earliest year presented. The cumulative effect of adopting these changes
would be included in the earliest year presented.

6
<PAGE>

SMA LIFE ASSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA)

NOTE 2 - INVESTMENTS

BONDS - The carrying value and fair value of investments in bonds,are as
follows:

<TABLE>
<CAPTION>
December 31, 1994
-----------------
Gross Gross
Carrying Unrealized Unrealized Fair
(In thousands) Value Appreciation Depreciation Value
----- ------------ ------------ -----
<S> <C> <C> <C> <C>
Federal government bonds $ 17,651 $ 8 $ 762 $ 16,897
State, local and government agency bonds 1,110 54 -- 1,164
Foreign government bonds 31,863 83 3,735 28,211
Corporate securities 1,462,871 8,145 56,011 1,415,005
Mortgage-backed securities 81,780 268 1,737 80,311
----------- ----------- ----------- -----------

$ 1,595,275 $ 8,558 $ 62,245 $ 1,541,588
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>

<TABLE>
<CAPTION>
December 31, 1994
-----------------
Gross Gross
Carrying Unrealized Unrealized Fair
(In thousands) Value Appreciation Depreciation Value
----- ------------ ------------ -----
<S> <C> <C> <C> <C>
Federal government bonds $ 7,969 $ 356 $ -- $ 8,325
State, local and government agency bonds 15,212 678 -- 15,890
Foreign government bonds 24,152 720 9 24,863
Corporate securities 1,519,050 74,777 4,430 1,589,397
Mortgage-backed securities 1,275 92 -- 1,367
----------- ----------- ----------- -----------

Total $ 1,567,658 $ 76,623 $ 4,439 $ 1,639,842
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>

The carrying value and fair value by contractual maturity at December 31, 1994,
are shown below. Actual maturities will differ from contractual maturities
because borrowers may have the right to call or prepay obligations with or
without call or prepayment penalties or the Company may have the right to put or
sell the obligation back to the issuer. Mortgage-backed securities are
classified based on expected maturities.

Carrying Fair
(In thousands) Value Value
----- -----
<S> <C> <C>
Due in one year or less $ 225,814 $ 224,695
Due after one year through five years 774,918 751,778
Due after five years through ten years 428,080 404,377
Due after ten years 166,463 160,738
----------- -----------

Total $ 1,595,275 $ 1,541,588
----------- -----------
----------- -----------
</TABLE>

MORTGAGE LOANS AND REAL ESTATE - Mortgage loans and real estate investments, are
diversified by property type and location. Real estate investments have been
obtained primarily through foreclosure. Mortgage loans are collateralized by
the related properties and are generally no more than 75% of the property value
at the time the original loan is made. At December 31, 1994 and 1993, mortgage
loan and real estate investments were distributed by the following types and
geographic regions:

7
<PAGE>

SMA LIFE ASSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA)

(In thousands)

Property Type 1994 1993
- ------------- ---- ----
<S> <C> <C>
Office buildings $ 140,292 $ 172,694
Residential 57,061 74,514
Retail 72,787 72,756
Industrial/Warehouse 39,424 62,572
Other 37,256 41,427
--------- ---------

Total $ 346,820 $ 423,963
--------- ---------
--------- ---------
<CAPTION>

Geographic Region 1994 1993
- ----------------- ---- ----
<S> <C> <C>
South Atlantic $ 92,934 $ 118,434
East North Central 72,704 78,343
Middle Atlantic 48,688 58,291
Pacific 39,892 45,666
West North Central 27,377 33,325
Mountain 12,211 31,116
New England 26,613 28,759
East South Central 6,224 8,250
West South Central 20,177 21,779
--------- ---------

Total $ 346,820 $ 423,963
--------- ---------
--------- ---------
</TABLE>

NET INVESTMENT INCOME - The components of net investment income for the year
ended December 31 were as follows:

(In thousands) 1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Bonds $ 123,495 $ 126,729 $ 119,777
Stocks 1,799 953 692
Mortgage loans 31,945 40,823 52,406
Real estate 8,425 9,493 8,412
Policy loans 8,797 8,215 7,701
Other investments 1,651 674 344
Short term investments 1,378 840 1,848
--------- --------- ---------
177,490 187,727 191,180
Less investment expenses 9,138 11,026 8,035
--------- --------- ---------

Net investment income, before IMR amortization 168,352 176,701 183,145

IMR amortization 2,078 911 14
--------- --------- ---------

Net investment income $ 170,430 $ 177,612 $ 183,159
--------- --------- ---------
--------- --------- ---------

</TABLE>

REALIZED CAPITAL GAINS AND LOSSES - Realized capital gains (losses) on
investments for the years ended December 31 were as follows:

(In thousands) 1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Bonds $ 645 $ 10,133 $ 3,302
Stocks (62) 16 33
Mortgage loans (17,142) (83) 162
Real Estate 605 (2,044) 1,985
--------- --------- ---------
(15,954) 8,022 5,482
Less income tax 968 3,296 4,623
--------- --------- ---------

Net realized capital gains (losses) before transfer to IMR (16,922) 4,726 859
Net realized capital gains transferred to IMR (250) (11,951) (283)
--------- --------- ---------

Net realized capital gains (losses) $ (17,172) $ (7,225) $ 576
--------- --------- ---------
--------- --------- ---------
</TABLE>

8
<PAGE>

SMA LIFE ASSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA)

Proceeds from voluntary sales of investments in bonds during 1994, 1993 and 1992
were $178,640 thousand, $131,783 thousand and $153,218 thousand, respectively.
Gross gains of $3,010 thousand, $4,523 thousand and $3,043 thousand and gross
losses of $4,553 thousand, $450 thousand and $139 thousand, respectively, were
realized on those sales.

NOTE 3 - FAIR VALUE DISCLOSURES OF FINANCIAL INFORMATION

Statement of Financial Accounting Standards No. 107, "Disclosures about Fair
Value of Financial Instruments" requires disclosure of fair value information
about certain financial instruments (insurance contracts, real estate, goodwill
and taxes are excluded) for which it is practicable to estimate such values,
whether or not these instruments are included in the balance sheet. The fair
values presented for certain financial instruments are estimates which, in many
cases, may differ significantly from the amounts which could be recognized upon
immediate liquidation. In cases where market prices are not available,
estimates of fair value are based on discounted cash flow analyses which utilize
current interest rates for similar financial instruments which have comparable
terms and credit quality.

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments:

FINANCIAL ASSETS:

CASH AND SHORT TERM INVESTMENTS - The carrying amounts reported in the statement
of financial position approximate fair value.

BONDS - Fair values are based on quoted market prices, if available. If a
quoted market price is not available, fair values are estimated using
independent pricing sources or internally developed pricing models using
discounted cash flow analyses.

STOCKS - Fair values are based on quoted market prices, if available. If a
quoted market price is not available, fair values are estimated using
independent pricing sources or internally developed pricing models.

MORTGAGE LOANS - Fair values are estimated by discounting the future contractual
cash flows using the current rates at which similar loans would be made to
borrowers with similar credit ratings. The fair value of below investment grade
mortgage loans is limited to the lesser of the present value of the cash flows
or book value.

POLICY LOANS - The carrying amount reported in the statement of financial
position approximates fair value since policy loans have no defined maturity
dates and are inseparable from the insurance contracts.

FINANCIAL LIABILITIES:

ANNUITY AND OTHER FUND RESERVES (WITHOUT MORTALITY/MORBIDITY FEATURES) - Fair
values for the Company's liabilities under individual annuity contracts are
estimated based on current surrender values.

9
<PAGE>

SMA LIFE ASSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA)

The estimated fair values of the financial instruments as of December 31 were as
follows:

1994 1993
---- ----
Carrying Fair Carrying Fair
(In thousands) Value Value Value Value
----- ----- ----- -----
<S> <C> <C> <C> <C>
Financial Assets:
Cash $ 7,248 $ 7,248 $ 10,172 $ 10,172
Short term investments 45,239 45,239 4,999 4,999
Bonds 1,595,275 1,541,588 1,567,658 1,639,842
Stocks 12,283 12,283 32,478 32,478
Mortgage loans 295,532 291,704 383,059 395,327
Policy loans 116,600 116,600 109,014 109,014

Financial Liabilities:
Individual annuity contracts 869,230 862,662 870,112 865,668
Supplemental contracts without life
contingencies 16,673 16,673 14,842 14,842
Other contract deposit funds 1,105 1,105 1,317 1,317

</TABLE>

NOTE 4 - FEDERAL INCOME TAXES

The federal income tax provisions for 1994, 1993 and 1992 were $13,109 thousand,
$8,551 thousand and $18,108 thousand, respectively, which include taxes
applicable to realized capital gains of $968 thousand, $3,296 thousand and
$4,623 thousand.

The effective federal income tax rates were 67%, 30% and 65% in 1994, 1993 and
1992, respectively. The differences between the federal statutory rate and the
Company's effective tax rates are primarily related to decreases in taxable
income for the write-offs of mortgage loans; and increases in taxable income for
differences in policyholder liabilities for federal income tax purposes and
financial reporting purposes and the deferral of policy acquisition costs for
federal tax purposes. The Company paid to State Mutual $14,353 thousand,
$8,100 thousand and $30,000 thousand in 1994, 1993 and 1992, respectively, for
its federal income taxes.

The consolidated federal income tax returns are routinely audited by the
Internal Revenue Service (IRS) and provisions are routinely made in the
financial statements in anticipation of the results of these audits. The
Internal Revenue Service (IRS) has completed its examination of all of the
consolidated federal income tax returns through 1988. Deficiencies asserted
with respect to tax years 1977 through 1981 have been paid and recorded and the
consolidated group has filed a recomputation of such years with appeals claiming
a refund with respect to certain agreed upon issues, but has not recognized any
benefit in its financial statements. The consolidated group is currently
considering its response to certain adjustments proposed by the IRS with respect
to the consolidated federal income tax returns for 1982 and 1983. If upheld,
these proposed adjustments would result in additional payments; however, the
consolidated group will vigorously defend its position with respect to these
adjustments. In management's opinion, adequate tax liabilities have been
established for all years.

NOTE 5 - REINSURANCE

The Company participates in reinsurance to reduce overall risks, including
exposure to large losses and to permit recovery of a portion of direct losses.
Reinsurance contracts do not relieve the Company from its obligation to its
policyholders. Reinsurance financial data for the years ended December 31, is as
follows:

(In thousands) 1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Reinsurance premiums assumed $ 3,788 $ 4,190 $ 4,614
Reinsurance premiums ceded 17,430 14,798 15,570
Deduction from insurance liability including
reinsurance recoverable on unpaid claims 46,734 42,805 48,191

</TABLE>

10
<PAGE>

SMA LIFE ASSURANCE COMPANY
(A Wholly Owned Subsidiary of State Mutual Life Assurance Company of America)

The Company cedes to State Mutual approximately 10% of its individual life
business. Premiums ceded to State Mutual aggregated $7,771 thousand, $9,000
thousand and $9,586 thousand in 1994, 1993 and 1992, respectively. The Company
has also entered into various reinsurance agreements with State Mutual under
which certain insurance risks related to individual accident and health
business, premium income and related expenses are assumed by the Company from
State Mutual. Premiums assumed pursuant to these agreements aggregated $3,788
thousand, $4,190 thousand and $4,614 thousand in 1994, 1993 and 1992,
respectively .

NOTE 6 - DIVIDEND RESTRICTIONS

Delaware has enacted laws governing the payment of dividends by insurers. These
laws affect the dividend paying ability of the Company. Pursuant to Delaware's
statute, the maximum amount of dividends and other distributions that an insurer
may pay in any twelve month period, without the prior approval of the Delaware
Commissioner of Insurance, is limited to the greater of (i) 10% of its statutory
policyholder surplus as of the preceding December 31 or (ii) the individual
company's statutory net gain from operations for the preceding calendar year (if
such insurer is a life company) or its net income (not including realized
capital gains) for the preceding calendar year (if such insurer is not a life
company). Any dividends to be paid by an insurer, whether or not in excess of
the aforementioned threshold, from a source other than earned surplus would also
require the prior approval of the Delaware Commissioner of Insurance. While the
Company is currently operating on a profitable basis, it has a negative earned
surplus position and accordingly is precluded from paying dividends to State
Mutual without the approval of the Commissioner of Insurance.

NOTE 7 - RELATED PARTY TRANSACTIONS

State Mutual provides management, operating personnel and facilities on a cost
reimbursement basis to the Company. Expenses for services received from State
Mutual were $102,461 thousand, $98,676 thousand and $88,273 thousand in 1994,
1993 and 1992, respectively. The net amounts payable to State Mutual and
affiliates for accrued expenses and various other liabilities and receivables
were $8,344 thousand and $12,182 thousand at December 31, 1994 and 1993,
respectively.

During 1992, the Company sold a building to an affiliated company at its
estimated fair value of $4,350 thousand. The Company recognized a capital gain
on the sale, net of tax, in the amount of $1,310 thousand.

NOTE 8 - FUNDS ON DEPOSIT

In March 1994, the Company voluntarily withdrew from being licensed in New York.
In connection with the withdrawal State Mutual, which is licensed in New York,
became qualified to sell the products previously sold by SMA Life in New York.
The Company agreed with the New York Department of Insurance to maintain,
through a custodial account in New York, a security deposit, the market value of
which will at all times equal 102% of all outstanding general account
liabilities of the Company for New York policyholders, claimants and creditors.
As of December 31, 1994, the carrying value and fair value of the assets on
deposit was $327,899 thousand and $323,474 thousand, respectively, which is in
excess of the required amount.

Additional securities with a carrying value of $3,855 thousand and $3,353
thousand were on deposit with various other state and governmental authorities
as of December 31, 1994 and 1993, respectively.

NOTE 9 - LITIGATION

The Company has been named a defendant in various legal proceedings arising in
the normal course of business. In the opinion of management, based on the
advice of legal counsel, the ultimate resolution of these proceedings will not
have a material effect on the Company's financial statements.

<PAGE>

- --------------------------------------------------------------------------------------------------------
INHEIRITAGE ACCOUNT
STATEMENTS OF ASSETS AND LIABILITIES - December 31, 1994
- --------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
1 2 3
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investment in shares of Allmerica Investment Trust . . . . . $ 141,388 $ 74,589 $ 497,732
Investment in shares of Fidelity Variable
Insurance Products Fund. . . . . . . . . . . . . . . . . . -- -- --
Investment in shares of Delaware Group Premium Fund, Inc.. . -- -- --
Receivable from SMA Life Assurance Company (Sponsor) . . . . 264 -- --
------------ ------------ ------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . 141,652 74,589 497,732

LIABILITIES:
Payable to SMA Life Assurance Company (Sponsor). . . . . . . -- 19 460
------------ ------------ ------------
Net assets . . . . . . . . . . . . . . . . . . . . . . . . $ 141,652 $ 74,570 $ 497,272
------------ ------------ ------------
------------ ------------ ------------
Net asset distribution by category:
Variable life policies . . . . . . . . . . . . . . . . . . $ 141,652 $ 74,570 $ 497,272
Value of investment by
SMA Life Assurance Company (Sponsor) . . . . . . . . . . -- -- --
------------ ------------ ------------
$ 141,652 $ 74,570 $ 497,272
------------ ------------ ------------
------------ ------------ ------------

Units outstanding, December 31, 1994 . . . . . . . . . . . . 136,657 74,852 487,790
Net asset value per unit, December 31, 1994 . . . . . . . . $ 1.036547 $ .996230 $ 1.019438

</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

- ------------------------------------------------------------------------------------------------------------------------------------
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
4 5 6 7 8
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investment in shares of Allmerica Investment Trust . . . . $ 26,429 $ 109,678 $ 230,817 $ 39,261 $ 130,265
Investment in shares of Fidelity Variable
Insurance Products Fund. . . . . . . . . . . . . . . . . . -- -- -- -- --
Investment in shares of Delaware Group Premium Fund, Inc. . -- -- -- -- --
Receivable from SMA Life Assurance Company (Sponsor) . . . . -- -- 446 81 --
---------- ----------- ----------- ---------- -----------
Total assets . . . . . . . . . . . . . . . . . . . . . . . 26,429 109,678 231,263 39,342 130,265

LIABILITIES:
Payable to SMA Life Assurance Company (Sponsor). . . . . . . 24 116 -- -- 117
---------- ----------- ----------- ---------- -----------
Net assets . . . . . . . . . . . . . . . . . . . . . . . $ 26,405 $ 109,562 $ 231,263 $ 39,342 $ 130,148
---------- ----------- ----------- ---------- -----------
---------- ----------- ----------- ---------- -----------
Net asset distribution by category:
Variable life policies . . . . . . . . . . . . . . . . . . $ 26,405 $ 109,562 $ 231,263 $ 39,342 $ 130,148
Value of investment by SMA Life Assurance
Company (Sponsor) . . . . . . . . . . . . . . . . . . . . -- -- -- -- --
---------- ----------- ----------- ---------- -----------
$ 26,405 $ 109,562 $ 231,263 $ 39,342 $ 130,148
---------- ----------- ----------- ---------- -----------
---------- ----------- ----------- ---------- -----------

Units outstanding, December 31, 1994 . . . . . . . . . . . . 26,967 109,393 238,034 38,885 127,750
Net asset value per unit, December 31, 1994. . . . . . . . . $ .979159 $ 1.001545 $ .971552 $ 1.011768 $ 1.018769

</TABLE>

<PAGE>

- ---------------------------------------------------------------------------------------------------------
INHEIRITAGE ACCOUNT
STATEMENTS OF ASSETS AND LIABILITIES - December 31, 1994, Continued
- ---------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
9 11 102
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investment in shares of Allmerica Investment Trust . . . . . $ 168,888 $ 81,046 --
Investment in shares of Fidelity Variable
Insurance Products Fund . . . . . . . . . . . . . . . . . . -- -- $ 61,973
Investment in shares of Delaware Group Premium Fund, Inc. . -- -- --
Receivable from SMA Life Assurance Company (Sponsor) . . . . 300 -- --
----------- ------------ ------------
Total assets . . . . . . . . . . . . . . . . . . . . . . 169,188 81,046 61,973

LIABILITIES:
Payable to SMA Life Assurance Company (Sponsor). . . . . . . -- 75 --
----------- ------------ ------------
Net assets . . . . . . . . . . . . . . . . . . . . . . . $ 169,188 $ 80,971 $ 61,973
----------- ------------ ------------
----------- ------------ ------------

Net asset distribution by category:
Variable life policies . . . . . . . . . . . . . . . . . $ 169,188 $ 80,875 $ 61,973
Value of investment by
SMA Life Assurance Company (Sponsor). . . . . . . . . . . -- 96 --
----------- ------------ ------------
$ 169,188 $ 80,971 $ 61,973
----------- ------------ ------------
----------- ------------ ------------

Units outstanding, December 31, 1994 . . . . . . . . . . . . 173,602 84,533 62,596
Net asset value per unit, December 31, 1994. . . . . . . . . $ .974578 $ .957861 $ .990034

</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

- ------------------------------------------------------------------------------------------------------------------------------------
INHEIRITAGE ACCOUNT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
103 104 105 106 207
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investment in shares of Allmerica Investment Trust . . . . . -- -- -- -- --
Investment in shares of Fidelity Variable
Insurance Products Fund . . . . . . . . . . . . . . . $ 330,500 $ 292,936 $ 307,978 $ 318,813 --

Investment in shares of Delaware Group Premium Fund, Inc.. -- -- -- -- $ 60,173
Receivable from SMA Life Assurance Company (Sponsor) . . . . 292 269 368 -- --
----------- ----------- ----------- ----------- ---------
Total assets . . . . . . . . . . . . . . . . . . . . . . 330,792 293,205 308,346 318,813 60,173

LIABILITIES:
Payable to SMA Life Assurance Company (Sponsor). . . . . . . -- -- -- 201 54
----------- ----------- ----------- ----------- ---------
Net assets . . . . . . . . . . . . . . . . . . . . . . $ 330,792 $ 293,205 $ 308,346 $ 318,612 $ 60,119
----------- ----------- ----------- ----------- ---------
----------- ----------- ----------- ----------- ---------

Net asset distribution by category:
Variable life policies . . . . . . . . . . . . . . . . . . $ 330,792 $ 293,205 $ 308,346 $ 318,513 $ 60,119
Value of investment by
SMA Life Assurance Company (Sponsor) . . . . . . . . . . -- -- -- 99 --
----------- ----------- ----------- ----------- ---------
$ 330,792 $ 293,205 $ 308,346 $ 318,612 $ 60,119
----------- ----------- ----------- ----------- ---------
----------- ----------- ----------- ----------- ---------

Units outstanding, December 31, 1994 . . . . . . . . . . . . 313,937 276,444 321,831 322,579 61,279
Net asset value per unit, December 31, 1994. . . . . . . . . $ 1.053690 $ 1.060632 $ .958097 $ .987703 $.981074

</TABLE>

<PAGE>

- ------------------------------------------------------------------------------------------------------------------------
INHEIRITAGE ACCOUNT
Statements of Operations For the Period Ended December 31, 1994
- ------------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
1(d) 2(c) 3(g)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends. . . . . . . . . . . . . . . . . . . . . . . . . $ 7,437 $ 1,762 $ 7,247

EXPENSES:
Mortality and expense risk fees. . . . . . . . . . . . . . 277 73 1,400
Administrative expense fees. . . . . . . . . . . . . . . . 77 20 389
---------- --------- ---------
Total expenses. . . . . . . . . . . . . . . . . . . . . . 354 93 1,789
---------- --------- ---------

Net investment income (loss) . . . . . . . . . . . . . . . . 7,083 1,669 5,458
---------- --------- ---------

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain(loss). . . . . . . . . . . . . . . . . . 1 (51) --
Net unrealized gain (loss) . . . . . . . . . . . . . . . . (7,689) (1,514) --
---------- --------- ---------

Net realized and unrealized gain (loss) on investments . . (7,688) (1,565) --
---------- --------- ---------

Net increase (decrease) in net assets from operations. . . $ (605) $ 104 $ 5,458
---------- --------- ---------
---------- --------- ---------

<FN>

(a) For the period April 21, 1994 (date of initial investment) to December 31, 1994.
(b) For the period April 22, 1994 (date of initial investment) to December 31, 1994.
(c) For the period April 28, 1994 (date of initial investment) to December 31, 1994.
(d) For the period May 12, 1994 (date of initial investment) to December 31, 1994.
(e) For the period May 13, 1994 (date of initial investment) to December 31, 1994.
(f) For the period May 20, 1994 (date of initial investment) to December 31, 1994.
(g) For the period May 27, 1994 (date of initial investment) to December 31, 1994.
(h) For the period June 2, 1994 (date of initial investment) to December 31, 1994.
(i) For the period June 14, 1994 (date of initial investment) to December 31, 1994.
(j) For the period June 22, 1994 (date of initial investment) to December 31, 1994.
(k) For the period July 1, 1994 (date of initial investment) to December 31, 1994.
(l) For the period August 15, 1994 (date of initial investment) to December 31, 1994.

</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

- ----------------------------------------------------------------------------------------------------------------------------
INHEIRITAGE ACCOUNT
- ----------------------------------------------------------------------------------------------------------------------------

- -----------------------------------------------------------------------------------------------------------------------------------
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
4(l) 5(k) 6(b) 7(f) 8(c)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends. . . . . . . . . . . . . . . . . . . . . . . . . $ 541 $ 2,198 -- $ 119 $ 3,878

EXPENSES:
Mortality and expense risk fees. . . . . . . . . . . . . . 39 200 $ 370 65 358
Administrative expense fees. . . . . . . . . . . . . . . . 11 56 103 18 100
--------- ---------- -------- --------- -----------
Total expenses. . . . . . . . . . . . . . . . . . . . . . 50 256 473 83 458
--------- ---------- -------- --------- -----------

Net investment income (loss) . . . . . . . . . . . . . . . 491 1,942 (473) 36 3,420
--------- ---------- -------- --------- -----------

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain(loss). . . . . . . . . . . . . . . . . . (7) 47 268 (31) 290
Net unrealized gain (loss) . . . . . . . . . . . . . . . . (544) (1,709) (54) (914) (5,437)
--------- ---------- -------- --------- -----------

Net realized and unrealized gain (loss) on investments . . (551) (1,662) 214 (945) (5,147)
--------- ---------- -------- --------- -----------

Net increase (decrease) in net assets from operations. . . $ (60) $ 280 $ (259) $ (909) $ (1,727)
--------- ---------- -------- --------- -----------
--------- ---------- -------- --------- -----------

</TABLE>

<PAGE>

- ------------------------------------------------------------------------------------------------------------------------
INHEIRITAGE ACCOUNT
Statements of Operations For the Period Ended December 31, 1994, Continued
- ------------------------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
9(h) 11(j) 102(e)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends . . . . . . . . . . . . . . . . . . . . . . . $ 743 $ 176 --
EXPENSES:
Mortality and expense risk fees . . . . . . . . . . . . 356 150 $ 114
Administrative expense fees . . . . . . . . . . . . . . 99 42 32
---------- ---------- ---------
Total expenses. . . . . . . . . . . . . . . . . . . . . 455 192 146
---------- ---------- ---------
Net investment income (loss). . . . . . . . . . . . . . 288 (16) (146)
---------- ---------- ---------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss). . . . . . . . . . . . . . . . 78 (39) (6)
Net unrealized gain (loss). . . . . . . . . . . . . . . (3,761) (3,111) (155)
---------- ---------- ---------
Net realized and unrealized gain (loss) on investments. (3,683) (3,150) (161)
---------- ---------- ---------
Net increase (decrease) in net assets from operations . $ (3,395) $ (3,166) $ (307)
---------- ---------- ---------
---------- ---------- ---------

<FN>

</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

- ------------------------------------------------------------------------------------------------------------------------------
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
103(c) 104(d) 105(a) 106(i) 207(d)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends . . . . . . . . . . . . . . . . . . . . . . . $ 2,581 -- -- $ 22 --
EXPENSES:
Mortality and expense risk fees . . . . . . . . . . . . 707 $ 837 $ 727 569 $ 186
Administrative expense fees . . . . . . . . . . . . . . 196 232 202 158 52
---------- --------- ---------- ---------- ----------
Total expenses . . . . . . . . . . . . . . . . . . . 903 1,069 929 727 238
---------- --------- ---------- ---------- ----------
Net investment income (loss) . . . . . . . . . . . . . . . 1,678 (1,069) (929) (705) (238)
---------- --------- ---------- ---------- ----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss). . . . . . . . . . . . . . . . 478 1,050 (15) (44) --
Net unrealized gain (loss). . . . . . . . . . . . . . . (3,903) 8,355 (9,330) (8,236) (1,212)
---------- --------- ---------- ---------- ----------
Net realized and unrealized gain (loss) on investments. (3,425) 9,405 (9,345) (8,280) (1,212)
---------- --------- ---------- ---------- ----------
Net increase (decrease) in net assets from operations . $ (1,747) $ 8,336 $ (10,274) $ (8,985) $ (1,450)
---------- --------- ---------- ---------- ----------
---------- --------- ---------- ---------- ----------

</TABLE>

<PAGE>

- ------------------------------------------------------------------------------------------------------------------------------
INHEIRITAGE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------
SUB-ACCOUNT 1 SUB-ACCOUNT 2 SUB-ACCOUNT 3
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
5/12/94* TO 12/31/94 4/28/94* TO 12/31/94 5/27/94* TO 12/31/94
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) . . . . . . . . . . . . . . $ 7,083 $ 1,669 $ 5,458
Net realized gain (loss) from security transactions. . . 1 (51) --
Net unrealized gain (loss) on investments. . . . . . . . (7,689) (1,514) --
---------- ---------- ----------

Net increase (decrease) in net assets from operations. . (605) 104 5,458
---------- ---------- ----------

FROM CAPITAL TRANSACTIONS:
Net premiums . . . . . . . . . . . . . . . . . . . . . . 34,411 19,120 311,479
Terminations . . . . . . . . . . . . . . . . . . . . . . -- -- --
Other transfers from (to) the General Account of
SMA Life Assurance Company (Sponsor). . . . . . . . . . 107,846 55,346 180,335
Net increase in net assets from investments by
SMA Life Assurance Company (Sponsor) . . . . . . . . . -- -- --
---------- ---------- ----------
Net increase in net assets from capital transactions . . 142,257 74,466 491,814
---------- ---------- ----------
Net increase in net assets . . . . . . . . . . . . . . . 141,652 74,570 497,272

NET ASSETS:
Beginning of period. . . . . . . . . . . . . . . . . . . -- -- --
---------- ---------- ----------
End of period. . . . . . . . . . . . . . . . . . . . . . $ 141,652 $ 74,570 $ 497,272
---------- ---------- ----------
---------- ---------- ----------

<FN>

* Date of initial investment.

</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

- ------------------------------------------------------------------------------------------------------------------------------------
SUB-ACCOUNT 4 SUB-ACCOUNT 5 SUB-ACCOUNT 6 SUB-ACCOUNT 7 SUB-ACCOUNT 8
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
8/15/94* TO 7/01/94* TO 4/22/94* TO 5/20/94* TO 4/28/94* TO
12/31/94 12/31/94 12/31/94 12/31/94 12/31/94
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) . . . . . . . . . . . . . $ 491 $ 1,942 $ (473) $ 36 $ 3,420
Net realized gain (loss) from security transactions. . (7) 47 268 (31) 290
Net unrealized gain (loss) on investments. . . . . . . (544) (1,709) (54) (914) (5,437)
-------- --------- --------- -------- --------

Net increase (decrease) in net assets from operations. (60) 280 (259) (909) (1,727)
-------- --------- --------- -------- --------

FROM CAPITAL TRANSACTIONS:
Net premiums . . . . . . . . . . . . . . . . . . . . . 7,031 10,629 81,071 13,108 34,562
Terminations . . . . . . . . . . . . . . . . . . . . . -- -- -- -- --
Other transfers from (to) the General Account of
SMA Life Assurance Company (Sponsor). . . . . . . . . 19,434 98,653 150,451 27,143 97,313
Net increase in net assets from investments by
SMA Life Assurance Company (Sponsor) . . . . . . . . -- -- -- -- --
-------- --------- --------- -------- ---------
Net increase in net assets from capital transactions . 26,465 109,282 231,522 40,251 131,875
-------- --------- --------- -------- ---------
Net increase in net assets . . . . . . . . . . . . . . 26,405 109,562 231,263 39,342 130,148

NET ASSETS:
Beginning of period. . . . . . . . . . . . . . . . . . -- -- -- -- --
-------- --------- --------- -------- ---------
End of period. . . . . . . . . . . . . . . . . . . . . $ 26,405 $ 109,562 $ 231,263 $ 39,342 $ 130,148
-------- --------- --------- -------- ---------
-------- --------- --------- -------- ---------
</TABLE>

<PAGE>

- -----------------------------------------------------------------------------------------------------------------------------
INHEIRITAGE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS, Continued
- -----------------------------------------------------------------------------------------------------------------------------

- -----------------------------------------------------------------------------------------------------------------------------
SUB-ACCOUNT 9 SUB-ACCOUNT 11 SUB-ACCOUNT 102
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
6/02/94* TO 12/31/94 6/22/94* TO 12/31/94 5/13/94* TO 12/31/94
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) . . . . . . . . . . . . $ 288 $ (16) $ (146)
Net realized gain (loss) from security transactions . 78 (39) (6)
Net unrealized gain (loss) on investments . . . . . . (3,761) (3,111) (155)
----------- ----------- -----------
Net increase (decrease) in net assets from
operations . . . . . . . . . . . . . . . . . . . . (3,395) (3,166) (307)
----------- ----------- -----------

FROM CAPITAL TRANSACTIONS:
Net premiums. . . . . . . . . . . . . . . . . . . . . 64,114 30,883 29,339
Terminations . . . . . . . . . . . . . . . . . . . . -- -- --
Other transfers from (to) the General Account of
SMA Life Assurance Company (Sponsor) . . . . . . . 108,469 53,154 32,941
Net increase in net assets from investments by
SMA Life Assurance Company (Sponsor) . . . . . . . -- 100 --
----------- ----------- -----------
Net increase in net assets from capital transactions 172,583 84,137 62,280
----------- ----------- -----------
Net increase in net assets . . . . . . . . . . . . . 169,188 80,971 61,973

Net Assets:
Beginning of period . . . . . . . . . . . . . . . . . -- -- --
----------- ----------- -----------
End of period . . . . . . . . . . . . . . . . . . . . $ 169,188 $ 80,971 $ 61,973
----------- ----------- -----------
----------- ----------- -----------

<FN>

* Date of initial investment.

</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

- ------------------------------------------------------------------------------------------------------------------------------------
INHEIRITAGE ACCOUNT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
SUB-ACCOUNT 103 SUB-ACCOUNT 104 SUB-ACCOUNT 105
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
4/28/94* TO 12/31/94 5/12/94* TO 12/31/94 4/21/94* TO 12/31/94
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) . . . . . . . . . . . . . . . . . $ 1,678 $ (1,069) $ (929)
Net realized gain (loss) from security transactions. . . . . . 478 1,050 (15)
Net unrealized gain (loss) on investments. . . . . . . . . . . (3,903) 8,355 (9,330)
--------- ---------- --------

Net increase (decrease) in net assets from
operations. . . . . . . . . . . . . . . . . . . . . . . . . . (1,747) 8,336 (10,274)
--------- ---------- --------

FROM CAPITAL TRANSACTIONS:
Net premiums . . . . . . . . . . . . . . . . . . . . . . . . . 95,195 79,238 92,813
Terminations . . . . . . . . . . . . . . . . . . . . . . . . . -- -- --
Other transfers from (to) the General Account of
SMA Life Assurance Company (Sponsor). . . . . . . . . . . . 237,344 205,631 225,807
Net increase in net assets from investments by
SMA Life Assurance Company (Sponsor). . . . . . . . . . . . -- -- --
-------- ---------- ---------
Net increase in net assets from capital transactions . . . . . 332,539 284,869 318,620
-------- ---------- ---------
Net increase in net assets . . . . . . . . . . . . . . . . . . 330,792 293,205 308,346

Net Assets:
Beginning of period. . . . . . . . . . . . . . . . . . . . . . -- -- --
----------- ----------- -----------
End of period. . . . . . . . . . . . . . . . . . . . . . . . . $ 330,792 $ 293,205 $ 308,346
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

- ---------------------------------------------------------------------------------------------------------------------
SUB-ACCOUNT 106 SUB-ACCOUNT 207
FOR THE PERIOD FOR THE PERIOD
6/14/94* TO 12/31/94 5/12/94* TO 12/31/94
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) . . . . . . . . . . . . . . . . . $ (705) $ (238)
Net realized gain (loss) from security transactions. . . . . . (44) --
Net unrealized gain (loss) on investments. . . . . . . . . . . (8,236) (1,212)
----------- -----------

Net increase (decrease) in net assets from operations. . . . . (8,985) (1,450)
----------- -----------

FROM CAPITAL TRANSACTIONS:
Net premiums . . . . . . . . . . . . . . . . . . . . . . . . . 85,685 18,949
Terminations . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Other transfers from (to) the General Account of
SMA Life Assurance Company (Sponsor). . . . . . . . . . . . 241,812 42,620
Net increase in net assets from investments by
SMA Life Assurance Company (Sponsor). . . . . . . . . . . . 100 --
----------- -----------
Net increase in net assets from capital transactions . . . . . 327,597 61,569
----------- -----------
Net increase in net assets . . . . . . . . . . . . . . . . . . 318,612 60,119

Net Assets:
Beginning of period. . . . . . . . . . . . . . . . . . . . . . -- --
----------- -----------
End of period. . . . . . . . . . . . . . . . . . . . . . . . . $ 318,612 $ 60,119
----------- -----------
----------- -----------

</TABLE>

<PAGE>

- --------------------------------------------------------------------------------
INHEIRITAGE ACCOUNT
NOTES TO FINANCIAL STATEMENTS - December 31, 1994
- --------------------------------------------------------------------------------

NOTE 1 - ORGANIZATION

The Inheiritage Account (Inheiritage) is a separate investment account of SMA
Life Assurance Company (the Company), established on April 21, 1994 for the
purpose of separating from the general assets of the Company those assets used
to fund the variable portion of flexible premium variable life policies issued
by the Company. The Company is a wholly-owned subsidiary of State Mutual Life
Assurance Company of America (State Mutual). Under applicable insurance law, the
assets and liabilities of Inheiritage are clearly identified and distinguished
from the other assets and liabilities of the Company. Inheiritage cannot be
charged with liabilities arising out of any other business of the Company.

Inheiritage is registered as a unit investment trust under the Investment
Company Act of 1940, as amended (the 1940 Act). Inheiritage currently offers
sixteen Sub-Accounts. Each Sub-Account invests exclusively in a corresponding
investment portfolio of the Allmerica Investment Trust (the Trust) managed by
Allmerica Investment Management Company, Inc., a wholly-owned subsidiary of
State Mutual, or of the Variable Insurance Products Fund (VIPF), or the Variable
Insurance Products Fund II (VIPF II) managed by Fidelity Management & Research
Company (Fidelity Management), or of the Delaware Group Premium Fund, Inc.
(DGPF) managed by Delaware International Advisors, Ltd. The Trust, VIPF, VIPF
II, and DGPF are open-end, diversified series management investment companies
registered under the 1940 Act.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Investments - Security transactions are recorded on the trade date.
Investments held by the Sub-Accounts are stated at the net asset value per share
of the respective investment portfolio of the Trust, VIPF, VIPF II, or DGPF. Net
realized gains and losses on securities sold are determined on the average cost
method. Dividends and capital gain distributions are recorded on the ex-dividend
date and are reinvested in additional shares of the respective investment
portfolio of the Trust, VIPF, VIPF II, or DGPF at net asset value.

Federal Income Taxes - The Company is taxed as a "life insurance company"
under Subchapter L of the Internal Revenue Code and files a consolidated
Federal Income Tax return with State Mutual. The Company anticipates no tax
liability resulting from the operations of Inheiritage. Therefore, no provision
for income taxes has been charged against Inheiritage.

<PAGE>

- --------------------------------------------------------------------------------
INHEIRITAGE ACCOUNT
NOTES TO FINANCIAL STATEMENTS - December 31, 1994, Continued
- --------------------------------------------------------------------------------

NOTE 3 - INVESTMENTS

The number of shares owned, aggregate cost, and net asset value per share of
each Sub-Account's investment in the Trust, VIPF, VIPF II and DGPF at December
31, 1994 were as follows:

- -----------------------------------------------------------------------------------------------------------------------
PORTFOLIO INFORMATION
SUB- INVESTMENT NUMBER OF AGGREGATE NET ASSET
ACCOUNT PORTFOLIO SHARES COST VALUE PER SHARE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Allmerica Investment Trust:
1 Growth 77,943 $ 149,077 $ 1.814
2 Investment Grade Income 73,705 76,103 1.012
3 Money Market 497,732 497,732 1.000
4 Equity Index 18,004 26,973 1.468
5 Government Bond 110,008 111,387 0.997
6 Select Aggressive Growth 165,223 230,871 1.397
7 Select Growth 35,724 40,175 1.099
8 Select Growth and Income 126,840 135,702 1.027
9 Small Cap Value 155,085 172,649 1.089
11 Select International Equity 84,160 84,157 0.963

Fidelity Variable Insurance Products Fund:
102 High Income 5,760 62,128 10.760
103 Equity Income 21,531 334,403 15.350
104 Growth 13,506 284,581 21.690
105 Overseas 19,654 317,308 15.670

Fidelity Variable Insurance Products Fund II:
106 Asset Manager 23,119 327,049 13.790

Delaware Group Premium Fund:
207 International Equities 5,078 61,385 11.850

</TABLE>

NOTE 4 - RELATED PARTY TRANSACTIONS

Net premiums represent gross policy premiums recorded by the Company less
applicable premium taxes. On the date of issue and each monthly payment date
thereafter, a monthly charge is deducted from the policy value to compensate the
Company for the cost of insurance, which varies by policy, the cost of any
additional benefits provided by rider, and a monthly administrative charge of
$6. The policyowner may instruct the Company to deduct this monthly charge from
a specific Sub-Account, but if not so specified, it will be deducted on a
pro-rata basis of allocation which is

<PAGE>

the same proportion that the policy value in the General Account of the Company
and in each Sub-Account bear to the total policy value. For the period ended
December 31, 1994, these monthly deductions from Sub-Account policy values
amounted to $26,519.

The Company makes a charge of .90% per annum based on the average daily net
assets of each Sub-Account at each valuation date for mortality and expense
risks. The mortality and expense risks annual charge may be increased or
decreased by the Board of Directors of the Company once each year, subject to
compliance with applicable state and federal requirements, but the total charge
may not exceed 1.275% per annum. During the first 15 policy years, the Company
also charges each Sub-Account .25% per annum based on the average daily net
assets of each Sub-Account for administrative expenses. These charges are
deducted in the daily computation of unit values but paid to the Company on a
monthly basis.

Allmerica Investments, Inc., (Allmerica Investments), a wholly-owned
subsidiary of State Mutual, is principal underwriter and general distributor of
Inheiritage, and does not receive any compensation for sales of Inheiritage
policies. Commissions are paid to registered representatives of Allmerica
Investments by the Company. As the current series of policies have a contingent
deferred sales charge, no deduction is made for sales charges at the time of the
sale.

NOTE 5 - DIVERSIFICATION REQUIREMENTS

Under the provisions of Section 817(h) of the Internal Revenue Code, a
variable life insurance contract, other than a contract issued in connection
with certain types of employee benefit plans, will not be treated as a variable
life insurance contract for federal income tax purposes for any period for
which the investments of the segregated asset account on which the contract is
based are not adequately diversified. The Code provides that the "adequately
diversified" requirement may be met if the underlying investments satisfy either
a statutory safe harbor test or diversification requirements set forth in
regulations issued by the Secretary of Treasury.

The Internal Revenue Service has issued regulations under Section 817(h) of
the Code. The Company believes that Inheiritage satisfies the current
requirements of the regulations, and it intends that Inheiritage will continue
to meet such requirements.

100

<PAGE>

NOTE 6 - PURCHASES AND SALES OF SECURITIES

Cost of purchases and proceeds from sales of the Trust, VIPF, VIPF II and
DGPF shares by Inheiritage during the period ended December 31, 1994 were as
follows:

SUB-
ACCOUNT INVESTMENT PORTFOLIO PURCHASES SALES
- ------- -------------------- ----------- -------
<S> <C> <C> <C>
Allmerica Investment Trust:
1 Growth . . . . . . . . . . . . . . . . . . . . . $ 153,214 $ 4,139
2 Investment Grade Income . . . . . . . . . . . . . 131,203 55,049
3 Money Market . . . . . . . . . . . . . . . . . . 800,285 302,553
4 Equity Index . . . . . . . . . . . . . . . . . . 36,784 9,804
5 Government Bond . . . . . . . . . . . . . . . . . 143,176 31,836
6 Select Aggressive Growth . . . . . . . . . . . . 240,905 10,301
7 Select Growth . . . . . . . . . . . . . . . . . . 41,460 1,255
8 Select Growth and Income . . . . . . . . . . . . 192,740 57,328
9 Small Cap Value . . . . . . . . . . . . . . . . . 192,634 20,064
11 Select International Equity . . . . . . . . . . . 98,571 14,376

Fidelity Variable Insurance Products Fund:
102 High Income . . . . . . . . . . . . . . . . . . . 64,543 2,409
103 Equity Income . . . . . . . . . . . . . . . . . . 379,537 45,612
104 Growth . . . . . . . . . . . . . . . . . . . . . 312,876 29,345
105 Overseas . . . . . . . . . . . . . . . . . . . . 344,873 27,550

Fidelity Variable Insurance Products Fund II:
106 Asset Manager . . . . . . . . . . . . . . . . . . 330,299 3,206

Delaware Group Premium Fund:
207 International Equities . . . . . . . . . . . . . 62,038 652
----------- -----------
Totals . . . . . . . . . . . . . . . . . . . . . $ 3,525,138 $ 615,479
----------- -----------
----------- -----------

</TABLE>

101

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of SMA Life
Assurance Company and Policyowners
of Inheiritage Account of SMA Life
Assurance Company

In our opinion, the accompanying statements of assets and liabilities and the
related statements of operations and of changes in net assets present fairly, in
all material respects, the financial position of Sub-Accounts 1, 2, 3, 4, 5, 6,
7, 8, 9, 11, 102, 103, 104, 105, 106 and 207 (constituting the Inheiritage
Account of SMA Life Assurance Company) at December 31, 1994, the results of each
of their operations and the changes in each of their net assets for the periods
indicated, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of SMA Life Assurance Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
December 31, 1994 by correspondence with the Trust and Funds, provide a
reasonable basis for the opinion expressed above.

Price Waterhouse LLP
Boston, Massachusetts

February 13, 1995

102

<PAGE>

APPENDIX A - OPTIONAL BENEFITS

This Appendix is intended to provide only a very brief overview of additional
insurance benefits available by rider. For more information, the Policyowner's
agent should be contacted.

The following supplemental benefits are available for issue under the Policies
for an additional charge.

SPLIT OPTION RIDER

This rider, available only at Date of Issue, permits the Policyowner
to split the Policy into two life insurance policies, one covering
each Insured singly, subject to Company guidelines.

OTHER INSURED RIDER

This rider provides a term insurance benefit for up to five Insureds.
At present this benefit is only available for the spouse and minor
children of either primary Insured. The rider includes a feature that
allows the Policyowner to convert the other-insured coverage to any
permanent life insurance policy acceptable to the Company.

FOUR-YEAR TERM RIDER

This rider provides a term insurance benefit during the first four
Policy years, payable upon the death of the last surviving Insured
during the coverage period.

APPENDIX B - PAYMENT OPTIONS

PAYMENT OPTIONS - Upon written request, the Surrender Value or all or part of
the Death Proceeds may be placed under one or more of the payment options below
or any other option offered by the Company. If the Policyowner does not make an
election, the Company will pay the benefits in a single sum. A certificate will
be provided to the payee describing the payment option selected.

If a payment option is selected, the Beneficiary may pay to the Company any
amount that would otherwise be deducted from the Sum Insured.

The amounts payable under a payment option for each $1,000 value applied will be
the greater of:

(a) the rate per $1,000 of value applied based on the Company's
non-guaranteed current payment option rates for the Policies; or

(b) the rate in the Policy for the applicable payment option.

The following payment options are currently available. The amounts payable
under these options are paid from the General Account. None are based on the
investment experience of the Inheiritage Account.

Option A: PAYMENTS FOR A SPECIFIED NUMBER OF YEARS. The Company will make
equal payments for any selected number of years (not greater than
thirty). Payments may be made annually, semi-annually, quarterly
or monthly.

Option B: LIFETIME MONTHLY PAYMENTS. Payments are based on the payee's Age
on the date the first payment will be made. One of three
variations may be chosen. Depending upon this choice, payments
will end:

(a) upon the death of the payee, with no further payments due
(Life Annuity);

(b) upon the death of the payee, but not before the sum of the
payments made first equals or exceeds the amount applied under
this option (Life Annuity with Installment Refund); or

(c) upon the death of the payee, but not before a selected period
(5,10 or 20 years) has elapsed (Life Annuity with Period
Certain).

<PAGE>

Option C: INTEREST PAYMENTS. The Company will pay interest at a rate
determined by the Company each year but which will not be less
than 3.5%. Payments may be made annually, semi-annually,
quarterly or monthly. Payments will end when the amount left
with the Company has been withdrawn. However, payments will not
continue after the death of the payee. Any unpaid balance plus
accrued interest will be paid in a lump sum.

Option D: PAYMENTS FOR A SPECIFIED AMOUNT. Payments will be made until the
unpaid balance is exhausted. Interest will be credited to the
unpaid balance. The rate of interest will be determined by the
Company each year but will not be less than 3.5%. Payments may
be made annually, semi-annually, quarterly or monthly. The
payment level selected must provide for the payment each year of
at least 8% of the amount applied.

Option E: LIFETIME MONTHLY PAYMENTS FOR TWO PAYEES. One of three
variations may be chosen. After the death of one payee, payments
will continue to the survivor:

(a) in the same amount as the original amount;

(b) in an amount equal to 2/3 of the original amount; or

Payments are based on the payees' ages on the date the first payment
is due. Payments will end upon the death of the surviving payee.

SELECTION OF PAYMENT OPTIONS - The amount applied under any one option for any
one payee must be at least $5,000. The periodic payment for any one payee must
be at least $50.
Subject to the Policyowner's and/or the Beneficiary's provision, any option
selection may be changed before the Death Proceeds become payable. If the
Policyowner makes no selection, the Beneficiary may select an option when the
Death Proceeds become payable.

If the amount of monthly income payments under Option B, choice (c) for the
attained Age of the payee are the same for different periods certain, the
Company will deem an election to have been made for the longest period certain
which could have been elected for such Age and amount.

The Policyowner may give the Beneficiary the right to change from Option C or D
to any other option at any time. If the payee selects Option C or D when this
policy becomes a claim, the right may be reserved to change to any other
option. The payee who elects to change options must be a payee under the
option selected.

ADDITIONAL DEPOSITS - An additional deposit may be made to any proceeds when
they are applied under Option B or E. A charge not to exceed 3% will be made.
The Company may limit the amount of this deposit.

RIGHTS AND LIMITATIONS - A payee does not have the right to assign any amount
payable under any option. A payee does not have the right to commute any amount
payable under Option B or E. A payee will have the right to commute any amount
payable under Option A only if the right is reserved in the written request
selecting the option. If the right to commute is exercised, the commuted values
will be computed at the interest rates used to calculate the benefits. The
amount left under Option C, and any unpaid balance under Option D, may be
withdrawn by the payee only as set forth in the written request selecting the
option.

A corporation or fiduciary payee may select only option A, C or D. Such
selection will be subject to the consent of the Company.

PAYMENT DATES - The first payment under any option, except Option C, will be due
on the date this policy matures by death or otherwise, unless another date is
designated. Payments under Option C begin at the end of the first payment
period.

The last payment under any option will be made as stated in the description of
that option. However, should a payee under Option B or E die prior to the due
date of the second monthly payment, the amount applied less the first monthly
payment will be paid in a lump sum or under any option other

<PAGE>

than Option E. A lump sum payment will be made to the surviving payee under
Option E or the succeeding payee under Option B.

APPENDIX C - ILLUSTRATIONS OF SUM INSURED, POLICY VALUES
AND ACCUMULATED PREMIUMS

The tables on pages 86-89 illustrate the way in which a Policy's Sum Insured and
Policy Value could vary over an extended period of time. They assume that all
premiums are allocated to and remain in the Inheiritage Account for the entire
period shown and are based on hypothetical gross investment rates of return for
the Underlying Fund (i.e., investment income and capital gains and losses,
realized or unrealized) equivalent to constant gross (after tax) annual rates of
0%, 6%, and 12%.

The tables illustrate a Policy issued on the lives of both Insureds, each Age
55, under a standard Premium Class and qualifying for the non-smoker discount.

The columns on pages 86 and 88 are based on the guaranteed cost of insurance
rates; columns on pages 87 and 89 are based on the current cost of insurance
rates as presently in effect.

The Policy Values and Death Proceeds would be different from those shown if the
gross annual investment rates of return averaged 0%, 6%, and 12% over a period
of years, but fluctuated above or below such averages for individual policy
years. The values would also be different depending on the allocation of a
Policy's total Policy Value among the Sub-Accounts of the Inheiritage Account,
if the actual rates of return averaged 0%, 6% or 12, but the rates of each
Underlying Fund varied above and below such averages.

The amounts shown for the Death Proceeds and Policy Values take into account the
deduction from premium for the tax expense charge, the Monthly Deduction from
Policy Value, and the daily charge against the Inheiritage Account for mortality
and expense risks and the Inheiritage Account administrative charge for the
first fifteen Policy years, equivalent to an effective annual rate of 1.15% of
the average daily value of the assets in the Inheiritage Account attributable to
the Policies, and 0.90% thereafter. The amounts shown in the tables also take
into account the Underlying Investment Company advisory fees and operating
expenses, which are assumed to be at an annual rate of 0.85% of the average
daily net assets of the Underlying Investment Company. The actual fees and
expenses of each Underlying Investment Company vary, and in 1994 ranged from an
annual rate of 0.45% to an annual rate of 1.50% of average daily net assets.
The fees and expenses associated with your Policy may be more or less than 0.85%
in the aggregate, depending upon how you make allocations of Policy Value among
the Sub-Accounts. Under its Management Agreement with the Trust, Allmerica
Investments has declared a voluntary expense limitation of 1.50% of average net
average assets for the Select International Equity Fund, 1.20% for the Growth
Fund, 1.00% for the Investment Grade Income Fund, 0.60% for the Money Market
Fund, 0.60% for the Equity Index Fund, 1.00% for the Government Bond Fund, 1.35%
for the Select Aggressive Growth Fund and Select Capital Appreciation Fund,
1.20% for the Select Growth Fund, 1.10% for the Select Growth and Income Fund,
and 1.25% for the Small Cap Value Fund. Without the effect of the expense
limitation, in 1994 the total operation expenses of the Select International
Equity Fund and Small Cap Value Fund would have been 1.78% and 1.01%,
respectively, of average net assets. Fidelity Management has voluntarily agreed
to temporarily limit the total operating expenses (excluding interest, taxes,
brokerage commissions and extraordinary expenses) of the Equity-Income, Growth
and Overseas Portfolios to an annual rate of 1.50%, and of the High Income
Portfolio to an annual rate of 1.00%, and of the Asset Manager Portfolio to an
annual rate of 1.25%, of each Portfolio's average net assets. The total
operating expenses of the Portfolios of VIPF and VIPF II were less than their
respective caps in 1994. Price-Fleming has voluntarily agreed to limit the
total operating expenses (except interest, taxes, brokerage commissions,
directors' fees and expenses and extraordinary expenses) of the International
Stock Portfolio to 1.05% of its average daily net assets. Delaware
International has agreed voluntarily to waive its management fees and reimburse
the International Equity Series to limit certain expenses to 8/10 of 1% of the
average daily net assets. Without the effect of the expense limitations, in
1994 the total operating expenses of the International Equity Series would have
been 1.01% of its average net assets.

Taking into account the mortality and expense risk charge and the Inheiritage
Account administrative charge and the assumed 0.85% charge for Underlying
Investment Company advisory fees and operating expenses, the gross annual rates
of investment return of 0%, 6% and 12% correspond to net annual rates of -2.00%,
4.00%, 10.00%, respectively, during the first 15 Policy years and -1.75%, 4.25%
and

<PAGE>

10.25%, respectively, thereafter.

The hypothetical returns shown in the table do not reflect any charges for
income taxes against the Inheiritage Account since no charges are currently
made. However, if in the future such charges are made, in order to produce
illustrated death benefits and cash values, the gross annual investment rate of
return would have to exceed 0%, 6% or 12% by a sufficient amount to cover the
tax charges.

The second column of the tables show the amount which would accumulate if an
amount equal to the Guideline Annual Premium were invested to earn interest,
(after taxes) at 5% compounded annually.

The tables illustrate the Policy Values that would result based upon the
assumptions that no Policy loans have been made, that the Policyowner has not
requested an increase or decrease in the initial Face Amount, that no partial
withdrawals have been made, and that no transfers above 6 have been made in any
Policy year (so that no transaction or transfer charges have been incurred).

Upon request, the Company will provide a comparable illustration based upon the
proposed Insureds' Ages, and underwriting classification, and the requested Face
Amount, Sum Insured Option, and riders.

TO CHOOSE THE SUB-ACCOUNTS WHICH WILL BEST MEET THE POLICYOWNER'S NEEDS AND
OBJECTIVES, CAREFULLY READ THE PROSPECTUSES OF THE TRUST, VIPF, VIPF II, T. ROWE
AND DGPF ALONG WITH THIS PROSPECTUS.

<PAGE>

GUARANTEED COST OF INSURANCE CHARGES

Insured 1: Unisex Nonsmoker Issue Age 55
Insured 2: Unisex Nonsmoker Issue Age 55
$1,000,000 Sum Insured Option 1
<TABLE>
<CAPTION>

Hypothetical Gross 0% Hypothetical Gross 6% Hypothetical Gross 12%

Policy Premium Surrender Policy Death Surrender Policy Death Surrender Policy Death
Year + Interest Value Value Benefit Value Value Benefit Value Value Benefit
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>

1 10,500 0 9,240 1,000,000 0 9,809 1,000,000 0 10,378 1,000,000
2 21,525 5,470 18,186 1,000,000 7,182 19,898 1,000,000 8,963 21,678 1,000,000
3 33,101 7,819 26,819 1,000,000 11,252 30,252 1,000,000 14,967 33,967 1,000,000
4 45,256 16,879 35,119 1,000,000 22,617 40,857 1,000,000 29,077 47,317 1,000,000
5 58,019 25,962 43,062 1,000,000 34,591 51,691 1,000,000 44,704 61,804 1,000,000
6 71,420 34,656 50,616 1,000,000 46,766 62,726 1,000,000 61,546 77,506 1,000,000
7 85,491 42,919 57,739 1,000,000 59,101 73,921 1,000,000 79,680 94,500 1,000,000
8 100,266 50,697 64,377 1,000,000 71,542 85,222 1,000,000 99,179 112,859 1,000,000
9 115,779 57,914 70,454 1,000,000 84,013 96,553 1,000,000 120,106 132,646 1,000,000
10 132,068 64,479 75,879 1,000,000 96,419 107,819 1,000,000 142,524 153,924 1,000,000
11 149,171 71,437 80,557 1,000,000 109,798 118,918 1,000,000 167,642 176,762 1,000,000
12 167,130 77,535 84,375 1,000,000 122,890 129,730 1,000,000 194,392 201,232 1,000,000
13 185,986 82,661 87,221 1,000,000 135,571 140,131 1,000,000 222,871 227,431 1,000,000
14 205,786 86,690 88,970 1,000,000 147,705 149,985 1,000,000 253,186 255,466 1,000,000
15 226,575 89,469 89,469 1,000,000 159,123 159,123 1,000,000 285,458 285,458 1,000,000
16 248,404 88,738 88,738 1,000,000 167,729 167,729 1,000,000 318,247 318,247 1,000,000
17 271,324 86,156 86,156 1,000,000 175,045 175,045 1,000,000 353,300 353,300 1,000,000
18 295,390 81,519 81,519 1,000,000 180,840 180,840 1,000,000 390,879 390,879 1,000,000
19 320,660 74,232 74,232 1,000,000 184,525 184,525 1,000,000 431,068 431,068 1,000,000
20 347,193 63,695 63,695 1,000,000 185,488 185,488 1,000,000 474,082 474,082 1,000,000
Age 60 58,019 25,962 43,062 1,000,000 34,591 51,691 1,000,000 44,704 61,804 1,000,000
Age 65 132,068 64,479 75,879 1,000,000 96,419 107,819 1,000,000 142,524 153,924 1,000,000
Age 70 226,575 89,469 89,469 1,000,000 159,123 159,123 1,000,000 285,458 285,458 1,000,000
Age 75 347,193 63,695 63,695 1,000,000 185,488 185,488 1,000,000 474,082 474,082 1,000,000

<FN>
(1) Assumes a $10,000 premium is paid at the beginning of each Policy
Year. "Premiums + Interest" column assumes premiums paid at 5% per
year. Values will be different if premiums are paid with a different
frequency or in different amounts.

(2) Assumes that no policy loan has been made. Excessive loans or
withdrawals may cause this Policy to lapse because of insufficient
Policy Value.
</TABLE>

THE HYPOTHETICAL INVESTMENT RATES OF RETURN ARE ILLUSTRATIVE ONLY, AND SHOULD
NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN, AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS BY A
POLICYOWNER, AND THE DIFFERENT INVESTMENT RATES OF RETURN FOR THE UNDERLYING
FUNDS. THE VALUE OF UNITS, CASH VALUE, AND DEATH BENEFIT FOR A POLICY WOULD
BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF INVESTMENT RETURN
AVERAGES 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED ABOVE AND
BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS, OR IF ANY PREMIUMS WERE
ALLOCATED OR CASH VALUE TRANSFERRED TO THE FIXED ACCOUNT, NO REPRESENTATIONS
CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.

<PAGE>

CURRENT COST OF INSURANCE CHARGES

Insured 1: Unisex Nonsmoker Issue Age 55
Insured 2: Unisex Nonsmoker Issue Age 55
$1,000,000 Sum Insured Option 1
<TABLE>
<CAPTION>

Hypothetical Gross 0% Hypothetical Gross 6% Hypothetical Gross 12%

1 10,500 0 9,244 1,000,000 0 9,813 1,000,000 0 10,383 1,000,000
2 21,525 5,494 18,210 1,000,000 7,207 19,923 1,000,000 8,989 21,704 1,000,000
3 33,101 7,891 26,891 1,000,000 11,328 30,328 1,000,000 15,047 34,047 1,000,000
4 45,256 17,043 35,283 1,000,000 22,792 41,032 1,000,000 29,264 47,504 1,000,000
5 58,019 26,283 43,383 1,000,000 34,938 52,038 1,000,000 45,078 62,178 1,000,000
6 71,420 35,229 51,189 1,000,000 47,390 63,350 1,000,000 62,226 78,186 1,000,000
7 85,491 43,875 58,695 1,000,000 60,151 74,971 1,000,000 80,834 95,654 1,000,000
8 100,266 52,213 65,893 1,000,000 73,222 86,902 1,000,000 101,037 114,717 1,000,000
9 115,779 60,231 72,771 1,000,000 86,597 99,137 1,000,000 122,985 135,525 1,000,000
10 132,068 67,919 79,319 1,000,000 100,277 111,677 1,000,000 146,843 158,243 1,000,000
11 149,171 76,297 85,417 1,000,000 115,291 124,411 1,000,000 173,832 182,952 1,000,000
12 167,130 84,176 91,016 1,000,000 130,455 137,295 1,000,000 202,976 209,816 1,000,000
13 185,986 91,508 96,068 1,000,000 145,729 150,289 1,000,000 234,464 239,024 1,000,000
14 205,786 98,242 100,522 1,000,000 161,067 163,347 1,000,000 268,511 270,791 1,000,000
15 226,575 104,318 104,318 1,000,000 176,413 176,413 1,000,000 305,355 305,355 1,000,000
16 248,404 107,680 107,680 1,000,000 189,902 189,902 1,000,000 343,787 343,787 1,000,000
17 271,324 110,188 110,188 1,000,000 203,275 203,275 1,000,000 385,739 385,739 1,000,000
18 295,390 111,790 111,790 1,000,000 216,491 216,491 1,000,000 431,631 431,631 1,000,000
19 320,660 112,272 112,272 1,000,000 229,363 229,363 1,000,000 481,843 481,843 1,000,000
20 347,193 111,443 111,443 1,000,000 241,727 241,727 1,000,000 536,868 536,868 1,000,000
Age 60 58,019 26,283 43,383 1,000,000 34,938 52,038 1,000,000 45,078 62,178 1,000,000
Age 65 132,068 67,919 79,319 1,000,000 100,277 111,677 1,000,000 146,843 158,243 1,000,000
Age 70 226,575 104,318 104,318 1,000,000 176,413 176,413 1,000,000 305,355 305,355 1,000,000
Age 75 347,193 111,443 111,443 1,000,000 241,727 241,727 1,000,000 536,868 536,868 1,000,000

(2) Assumes that no policy loan has been made. Excessive loans or
withdrawals may cause this Policy to lapse because of insufficient
Policy Value.
</TABLE>

<PAGE>

GUARANTEED COST OF INSURANCE CHARGES

Insured 1: Unisex Nonsmoker Issue Age 55
Insured 2: Unisex Nonsmoker Issue Age 55
$1,000,000 Sum Insured Option 2
<TABLE>
<CAPTION>

Hypothetical Gross 0% Hypothetical Gross 6% Hypothetical Gross 12%

1 10,500 0 9,240 1,009,240 0 9,809 1,009,809 0 10,378 1,010,378
2 21,525 5,467 18,182 1,018,182 7,179 19,894 1,019,894 8,959 21,674 1,021,674
3 33,101 7,807 26,807 1,026,807 11,239 30,239 1,030,239 14,952 33,952 1,033,952
4 45,256 16,850 35,090 1,035,090 22,583 40,823 1,040,823 29,037 47,277 1,047,278
5 58,019 25,904 43,004 1,043,004 34,521 51,621 1,051,621 44,619 61,719 1,061,719
6 71,420 34,552 50,512 1,050,512 46,634 62,594 1,062,594 61,380 77,340 1,077,340
7 85,491 42,745 57,565 1,057,565 58,871 73,691 1,073,691 79,379 94,199 1,094,199
8 100,266 50,421 64,101 1,064,101 71,164 84,844 1,084,844 98,664 112,344 1,112,344
9 115,779 57,493 70,033 1,070,033 83,416 95,956 1,095,956 119,259 131,799 1,131,800
10 132,068 63,859 75,259 1,075,259 95,504 106,904 1,106,904 141,175 152,575 1,152,575
11 149,171 70,549 79,669 1,079,669 108,435 117,555 1,117,555 165,549 174,669 1,174,669
12 167,130 76,295 83,135 1,083,135 120,909 127,749 1,127,749 191,222 198,062 1,198,062
13 185,986 80,971 85,531 1,085,531 132,757 137,317 1,137,317 218,169 222,729 1,222,729
14 205,786 84,438 86,718 1,086,718 143,789 146,069 1,146,069 246,346 248,626 1,248,626
15 226,575 86,532 86,532 1,086,532 153,777 153,777 1,153,777 275,675 275,675 1,275,675
16 248,404 84,970 84,970 1,084,970 160,530 160,530 1,160,530 304,419 304,419 1,304,419
17 271,324 81,398 81,398 1,081,398 165,465 165,465 1,165,465 333,940 333,940 1,333,940
18 295,390 75,626 75,626 1,075,626 168,274 168,274 1,168,274 364,077 364,077 1,364,077
19 320,660 67,063 67,063 1,067,063 168,215 168,215 1,168,215 394,224 394,224 1,394,224
20 347,193 55,158 55,158 1,055,158 164,548 164,548 1,164,549 423,743 423,743 1,423,743
Age 60 58,019 25,904 43,004 1,043,004 34,521 51,621 1,051,621 44,619 61,719 1,061,719
Age 65 132,068 63,859 75,259 1,075,259 95,504 106,904 1,106,904 141,175 152,575 1,152,575
Age 70 226,575 86,532 86,532 1,086,532 153,777 153,777 1,153,777 275,675 275,675 1,275,675
Age 75 347,193 55,158 55,158 1,055,158 164,548 164,548 1,164,549 423,743 423,743 1,423,743

(2) Assumes that no policy loan has been made. Excessive loans or
withdrawals may cause this Policy to lapse because of insufficient
Policy Value.
</TABLE>

<PAGE>

CURRENT COST OF INSURANCE CHARGES

Insured 1: Unisex Nonsmoker Issue Age 55
Insured 2: Unisex Nonsmoker Issue Age 55
$1,000,000 Sum Insured Option 2
<TABLE>
<CAPTION>

Hypothetical Gross 0% Hypothetical Gross 6% Hypothetical Gross 12%

1 10,500 0 9,244 1,009,244 0 9,813 1,009,813 0 10,382 1,010,382
2 21,525 5,491 18,207 1,018,207 7,204 19,919 1,019,919 8,985 21,701 1,021,701
3 33,101 7,881 26,881 1,026,881 11,317 30,317 1,030,317 15,034 34,034 1,034,034
4 45,256 17,021 35,261 1,035,261 22,765 41,005 1,041,005 29,232 47,472 1,047,472
5 58,019 26,239 43,339 1,043,339 34,883 51,983 1,051,983 45,011 62,111 1,062,111
6 71,420 35,152 51,112 1,051,112 47,292 63,252 1,063,252 62,102 78,062 1,078,062
7 85,491 43,751 58,571 1,058,571 59,987 74,807 1,074,807 80,618 95,438 1,095,438
8 100,266 52,025 65,705 1,065,705 72,964 86,644 1,086,644 100,686 114,366 1,114,366
9 115,779 59,959 72,499 1,072,500 86,210 98,750 1,098,750 122,435 134,975 1,134,975
10 132,068 67,540 78,940 1,078,940 99,716 111,116 1,111,116 146,014 157,414 1,157,414
11 149,171 75,772 84,892 1,084,893 114,485 123,605 1,123,605 172,594 181,714 1,181,714
12 167,130 83,458 90,298 1,090,298 129,312 136,152 1,136,152 201,148 207,988 1,207,988
13 185,986 90,541 95,101 1,095,101 144,129 148,689 1,148,689 231,803 236,363 1,236,363
14 205,786 96,959 99,239 1,099,239 158,861 161,141 1,161,141 264,690 266,970 1,266,970
15 226,575 102,641 102,641 1,102,641 173,416 173,416 1,173,417 299,942 299,942 1,299,942
16 248,404 105,518 105,518 1,105,518 185,879 185,879 1,185,879 336,199 336,199 1,336,200
17 271,324 107,431 107,431 1,107,431 197,927 197,927 1,197,927 375,200 375,200 1,375,201
18 295,390 108,322 108,322 1,108,322 209,467 209,467 1,209,467 417,148 417,148 1,417,148
19 320,660 107,952 107,952 1,107,953 220,211 220,211 1,220,211 462,068 462,068 1,462,068
20 347,193 106,115 106,115 1,106,115 229,890 229,890 1,229,890 510,023 510,023 1,510,023
Age 60 58,019 26,239 43,339 1,043,339 34,883 51,983 1,051,983 45,011 62,111 1,062,111
Age 65 132,068 67,540 78,940 1,078,940 99,716 111,116 1,111,116 146,014 157,414 1,157,414
Age 70 226,575 102,641 102,641 1,102,641 173,416 173,416 1,173,417 299,942 299,942 1,299,942
Age 75 347,193 106,115 106,115 1,106,115 229,890 229,890 1,229,890 510,023 510,023 1,510,023

(2) Assumes that no policy loan has been made. Excessive loans or
withdrawals may cause this Policy to lapse because of insufficient
Policy Value.
</TABLE>

<PAGE>

APPENDIX D - CALCULATION OF MAXIMUM SURRENDER CHARGES

A separate surrender charge is calculated upon issuance of the Policy and
upon each increase in Face Amount. The maximum surrender charge is equal to
the sum of (a) plus (b), where (a) is a deferred administrative charge equal
to $8.50 per $1,000 of initial Face Amount (or Face Amount increase) and (b)
is a deferred sales charge of 48% of premiums received up to a maximum number
of Guideline Annual Premiums (GAPs), based on the joint life expectancy of
both Insureds, subject to the deferred sales charge that varies as shown
below by average issue Age or average Age at time of increase, as applicable:

<TABLE>
<CAPTION>
Applicable Age Maximum GAPs
-------------- ------------
<S> <C>
5-75 1.95
76 1.92
77 1.81
78 1.69
79 1.60
80 1.50
81 1.40
82 1.31
</TABLE>

A further limitation is imposed based on the Standard Non-Forfeiture Law of
each state. The maximum surrender charges upon issuance of the Policy and
upon each increase in Face Amount are shown in the table below. During the
first two Policy years following issue or an increase in Face Amount, the
actual surrender charge may be less than the maximum. See "CHARGES AND
DEDUCTIONS - Surrender Charge."

The maximum surrender charge initially remains level for 40 months, declines
by one-half of one percent of the initial amount for 80 months, and then
declines by one percent each month thereafter, reaching zero at the end of
180 Policy months (15 Policy years).

The Factors used in calculating the maximum surrender charges vary with the
issue Age of the younger Insured as indicated in the table that follows.

<PAGE>

INITIAL MAXIMUM SURRENDER CHARGE PER $1,000 FACE AMOUNT

Initial Initial Initial
Younger Surrender Younger Surrender Younger Surrender
Issue Age Charge Issue Age Charge Issue Age Charge
- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
5 5.00 31 9.40 57 21.00
6 5.00 32 9.80 58 22.00
7 5.00 33 10.20 59 23.00
8 5.00 34 10.60 60 24.00
9 5.00 35 11.00 61 25.00
10 5.00 36 11.40 62 26.00
11 5.00 37 11.80 63 27.00
12 5.00 38 12.20 64 28.00
13 5.00 39 12.60 65 29.00
14 5.00 40 13.00 66 30.00
15 5.00 41 13.40 67 31.00
16 5.00 42 13.80 68 32.00
17 5.00 43 14.20 69 33.00
18 5.00 44 14.60 70 34.00
19 5.00 45 15.00 71 35.00
20 5.00 46 15.40 72 35.00
21 5.40 47 15.80 73 35.00
22 5.80 48 16.20 74 35.00
23 6.20 49 16.60 75 35.00
24 6.60 50 17.00 76 35.00
25 7.00 51 17.40 77 35.00
26 7.40 52 17.80 78 35.00
27 7.80 53 18.20 79 35.00
28 8.20 54 18.60 80 35.00
29 8.60 55 19.00
30 9.00 56 20.00
</TABLE>

<PAGE>

EXAMPLES

For the purposes of these examples, assume that two nonsmokers, each Age 55,
are covered as the Insureds under a $1,000,000 Policy. In this example the
Guideline Annual Premium ("GAP") equals $16,861.10. The maximum surrender
charge for the Policy is calculated as follows:

(a) Deferred Administrative Charge $ 8,500.00
($8.50/$1,000 of Face Amount)

(b) Deferred Sales Charge $15,781.99
(48% x 1.95 GAPs)
-------------

TOTAL $24,281.99

Maximum Surrender Charge per Table on page 68 (19.00 x 1,000) $19,000.00

During the first two Policy years after the Date of Issue, the actual
surrender charge is the smaller of the maximum surrender charge and the
following sum:

(a) Deferred Administrative Charge $ 8,500.00
($8.50/$1,000 of Face Amount)

(b) Deferred Sales Charge Varies
(not to exceed 25% of Premiums
received, up to one GAP, but
less than the maximum number
of GAPs subject to the deferred
sales charge)
--------------
Sum of (a) and (b)

The maximum surrender charge is $19,000. All premiums are associated with
the initial face amount unless the face amount is increased.

EXAMPLE 1:
- ----------

Assume the Policyowner surrenders the Policy in the 10th policy month, having
paid total premiums of $7,500. The actual surrender charge would be $10,375.

EXAMPLE 2:
- ----------

Assume the Policyowner surrenders the Policy in the 120th month. After the
40th policy month, the maximum surrender charge decreases by 0.5% per month
during this period ($95 per month in this example). In this example, the
maximum surrender charge would be $11,400.

<PAGE>
Part II

UNDERTAKING TO FILE REPORTS

Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents, and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
in that section.

RULE 484 UNDERTAKING

Article VIII of Registrant's Bylaws provides: Each Director and each Officer of
the Corporation, whether or not in office, (and his executors or
administrators), shall be indemnified or reimbursed by the Corporation against
all expenses actually and necessarily incurred by him in the defense or
reasonable settlement of any action, suit, or proceeding in which he is made a
party by reason of his being or having been a Director or Officer of the
Corporation, including any sums paid in settlement or to discharge judgment,
except in relation to matters as to which he shall be finally adjudged in such
action, suit, or proceeding to be liable for negligence or misconduct in the
performance of his duties as such Director or Officer; and the foregoing right
of indemnification or reimbursement shall not affect any other rights to which
he may be entitled under the Articles of Incorporation, any statute, bylaw,
agreement, vote of stockholders, or otherwise.

Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

RULE 6E-3(T) REPRESENTATIONS, DESCRIPTIONS AND UNDERTAKINGS

Registrant makes the following representations pursuant to the requirements of
Rule 6e-3(T) under the Investment Company Act of 1940:

A. Risk Charge

Pursuant to Rule 6e-3(T)(b)(13)(iii)(F)(1), Registrant represents that Rule 6e-
3(T)(b)(13)(iii)(F) has been relied upon in deducting charges for mortality
expense and risks assumed by Allmerica Financial Life Insurance and Annuity
Company (the "Company").

Pursuant to Rule 6e-3(T)(b)(13)(iii)(F)(2), Registrant represents that the
mortality and expense risk charge is within the range of industry practice for
comparable second-to-die flexible premium variable life insurance contracts.
The methodology used to support this representation is based upon an analysis of
the mortality and expense risk charges adopted under other second-to-die
flexible premium variable life insurance contracts. Registrant undertakes to
keep and make available to the Commission on request the documents used to
support the foregoing representation.

<PAGE>

B. Distribution Costs

Pursuant to Rule 6e-3(T)(b)(13)(iii)(F)(4)(ii)(A), Registrant represents that
the Company has concluded that there is a reasonable likelihood that the
distribution financing arrangement of the Registrant will benefit the Registrant
and contract holders and will keep and make available to the Commission on
request a memorandum setting forth the basis for this representation. Pursuant
to Section 6e-3(T)(b)(13)(iii)(F)(4)(ii)(B)(2), Registrant also represents that
it will invest only in management investment companies which have undertaken to
have a board of directors, a majority of whom are not interested persons of the
company, formulate and approve any plan under Rule 12b-1 under the Investment
Company Act of 1940 to finance distribution expenses.

UNDERTAKINGS CONCERNING MORTALITY AND EXPENSE RISK CHARGE

The flexible premium variable life policies offered by this registration
statement provide for a mortality and expense risk charge of 0.90%, on an annual
basis, of the daily net asset value of each Sub-Account of the VEL Account. The
Company acknowledges that any mortality and expense risk charge above 0.90% is
currently considered above the range of industry practice. If the Company
proposes to increase the charges above the range of industry practice, the
Company hereby undertakes to file an exemption request with the Securities and
Exchange Commission ("Commission") in which it would demonstrate that the
proposed charge is reasonable in relation to the risks assumed under the Policy.

This undertaking is given subject to the applicability of future federal
legislation or Commission rules or regulation which might permit an increase in
the mortality and expense risk charge beyond the range of industry practice,
without submitting an exemption application and/or making the demonstration
described above. In such case, in lieu of the undertaking described above, the
Company hereby undertakes to comply with the provisions of such legislation,
rules, or regulations in implementing any increase in the mortality and expense
risk charge.

CONTENTS OF THE REGISTRATION STATEMENT

This registration statement comprises the following papers and documents:

The facing sheet.
Cross-reference to items required by Form N-8B-2.
The prospectus consisting of ____ pages.
The undertaking to file reports.
The undertaking pursuant to Rule 484 under the Securities Act of 1933.
Representatives, descriptions and undertaking pursuant to Rule 6e-
3(T)(b)(13)(iii)(F) under the Investment Company Act of 1940 (the "1940 Act").
The signatures.

<PAGE>

Written consents of the following persons:

1. Price Waterhouse

2. Opinion of Counsel

The following exhibits:

1. Exhibit 1

(Exhibits required by paragraph A of the instructions to Form N-8B-2)

(1) Certified copy of Resolutions of the Board of Directors of the
Company of September 15, 1993 establishing the Inheiritage
Account was previously filed on October 25, 1993 and is herein
incorporated by reference.

(2) Not Applicable.

(3) (a) Form of Sales and Administrative Services Agreement between
the Company and Allmerica Investments, Inc. was previously
filed on October 25, 1993 and is herein incorporated by
reference.

(b) Registered Representative Agreement and Resident Sponsor
Agreement of Allmerica Investment, Inc. (formerly "SMA
Equities, Inc.") were previously filed by the Company on
June 3, 1987, Registration No. 33-14672 and are incorporated
herein by reference.

(4) Not Applicable.

(5) Forms of Policy and Policy riders were previously
filed on October 25, 1993 and are herein
incorporated by reference.

(6) Organizational documents of the Company, as amended

(7) Not Applicable.

(8) (a) Form of Participation Agreement with Allmerica Investment
Trust was previously filed by the Company on June 3, 1987,
in Registration Statement No. 33-14672, and is incorporated
herein by reference.

(b) Form of Participation Agreement with Variable Insurance
Products Fund and Variable Insurance Products Fund II was
previously filed by the Company on June 3, 1987, in
Registration Statement No. 33-14672, and is incorporated
herein by reference.

(c) Form of Participation Agreement with Delaware Group Premium
Fund, Inc. was previously filed by the Company on December
27, 1991 in Registration Statement No. 33-44830, and is
incorporated herein by reference.

(d) Form of Participation Agreement with T. Rowe Price
International Series, Inc. was previously filed on May 1,
1995 and is incorporated herein by reference.

(9) Not Applicable.

<PAGE>

(10) Form of Application was previously filed on October 25, 1993 and
is herein incorporated by reference.

2. Form of Policy and Policy riders are included in Exhibit 1 above.

3. Opinion of Counsel.

4. Not Applicable.

5. Not Applicable.

6. Actuarial Consent was previously filed on May 1, 1995 and is
incorporated herein by reference..

7. Procedures Memorandum pursuant to Rule 6e-3(T)(b)(12)(iii) under the
1940 Act which includes conversion procedures pursuant to Rule 6e-
3(T)(b)(13)(v)(B) was previously filed on October 25, 1993 and is
herein incorporated by reference.

8. Consent of Independent Accountants.

9. AUV Calculation Services Agreement with The Shareholder Services Group
dated March 31, 1995 was previously filed on May 1, 1995 and is
incorporated herein by reference..

<PAGE>

FORM S-6 EXHIBIT TABLE

Exhibit 1(6) Articles of Incorporation and Bylaws, as amended

Exhibit 3 Opinion of Counsel

Exhibit 8 Consent of Independent Accountants
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, Registrant has duly caused this post-effective amendment to
the Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, and its seal to be hereunto affixed and attested, all
in the City of Worcester, and Commonwealth of Massachusetts, on the 25th day
of September, 1995. Registrant certifies that it meets the requirement of
Securities Act Rule 485(b) for effectiveness of this post-effective amendment to
its Registration Statement.

SMA LIFE ASSURANCE COMPANY
INHEIRITAGE ACCOUNT

Attest: /s/ Joseph W. MacDougall, Jr.
------------------------------
Joseph W. MacDougall, Jr.
Vice President, Associate General Counsel
and Assistant Secretary

Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed by the following persons in the
capacities and on the date indicated.

Signature Title Date
- --------- ----- ----

/s/ Richard M. Reilly Director, President and September 25, 1995
- ----------------------- Chief Executive Officer -------------------
Richard M. Reilly

/s/ John F. O'Brien Director and Chairman of the
- ----------------------- Board
John F. O'Brien

/s/ Eric A. Simonsen Director, Vice President and
- ------------------------ Chief Financial Officer
Eric A. Simonsen

/s/ Mark R. ColborN Vice President and
- ------------------------ Controller
Mark R. Colborn

/s/ Richard J. Baker Director and Vice President
- ------------------------
Richard J. Baker

/s/ John F. Kelly Director
- ------------------------
John F. Kelly

<PAGE>

CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION

SMA LIFE ASSURANCE COMPANY, a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY:

FIRST: That at a meeting of the Board of Directors of SMA Life Assurance
Company resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to be
advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendment is
as follows:

RESOLVED: That the Certificate of Incorporation of this corporation be amended
by changing the Article thereof numbered "First" so that as amended said Article
shall be and read as follows: "THE NAME OF THE CORPORATION IS ALLMERICA
FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY."

SECOND: That at a meeting of the Board of Directors of SMA Life Assurance
Company resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to be
advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendment is
as follows:

RESOLVED: That effective October 1, 1995, and subject to the approval of the
Stockholder of the Company, the Certificate of Incorporation of SMA Life
Assurance Company, a Delaware corporation, shall be amended to add the following
as Article Tenth:

"A director or officer of this corporation shall not be liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director or officer, except to the extent that exculpation from
liability is not permitted under the General Corporation Law of the State of
Delaware as in effect at the time such liability is determined. No amendment or
repeal of this paragraph shall apply to or have any effect on the liability of
alleged liability of any director or officer of the corporation for or with
respect to any acts or omissions of such director or officer occurring prior to
such amendment or repeal.

THIRD: That thereafter, pursuant to resolution of its Board of Directors, a
special meeting of the stockholders of said corporation was duly called and
held, upon notice in accordance with Section 222 of the General Corporation Law
of the State of Delaware, at which meeting the necessary number of shares as
required by statue were voted in favor of the amendments.

<PAGE>

FOURTH: That said amendments were duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.

FIFTH: That the capital of said corporation shall not be reduced or increased
by reason of said amendment.

SIXTH: That the effective date of said amendments shall be October 1, 1995.

In Witness Whereof, said SMA Life Assurance Company has caused its corporate
seal to be hereunto affixed and this certificate to be signed by Bradford K.
Gallagher, its President, and Abigail M. Armstrong, its Secretary, this 29th day
of June 1995.

By: /s/ Bradford K. Gallagher
------------------------------------
President
(Corporate Seal)

By: /s/ Abigal M. Armstrong
------------------------------------
Secretary
Attest:

/s/ Randi B. Setterlund
- -----------------------

<PAGE>

CERTIFICATE OF AMENDMENT

CERTIFICATE OF INCORPORATION

***

American Variable Annuity Life Assurance Company, a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware,

DOES HEREBY CERTIFY:

FIRST: That at a meeting of the Board of Directors of American Variable
Annuity Life Assurance Company resolutions were duly adopted setting forth a
proposed amendment of the Certificate of Incorporation of said corporation,
declaring said amendment to be advisable and calling a meeting of the
stockholders of said corporation for consideration thereof. The resolution
setting forth the proposed amendment is as follows:

RESOLVED, that the Certificate of Incorporation of this corporation be
amended by changing the Article thereof numbered "FIRST" so that, as amended
said Article shall be and read as follows:

"The name of the corporation is SMA Life Assurance Company"

SECOND: That thereafter, pursuant to resolution of its Board of Directors,
a special meeting of the stockholders of said corporation was duly called and
held, upon notice in accordance with Section 222 of the General Corporation Law
of the State of Delaware at which meeting the necessary number of shares as
required by statute were voted in favor of the amendment.

THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.

FOURTH: That the capital of said corporation shall not be reduced under or
by reason of said amendment.

FIFTH: That the effective date of said amendment shall be January 1,
1982.

IN WITNESS WHEREOF, said American Variable Annuity Life Assurance Company
has caused its corporate seal to be hereunto affixed and this certificate to be
signed by John M. Quinlan, its President, and Sheila B. St. Hilaire, its
Secretary, this 28th day of September, 1981.

/s/ John M. Quinlen
----------------------------------
By: John M. Quinlan
President

/s/ Sheila B. St. Hilaire
---------------------------------
(CORPORATE SEAL) By: Sheila B. St. Hilaire
Secretary

ATTEST: Ralph L. Diller, Asst. Secretary

<PAGE>
CERTIFICATE OF INCORPORATION

AMERICAN VARIABLE ANNUITY LIFE ASSURANCE COMPANY, INC.

KNOW ALL MEN BY THESE PRESENTS: EXHIBIT A

That the following Certificate of Incorporation of AMERICAN VARIABLE ANNUITY
LIFE ASSURANCE COMPANY, INC. shall henceforth be, and constitute the Certificate
of Incorporation of said Corporation as follows:

First: The name of the Corporation is American Variable Annuity Life
Assurance Company, Inc.

Second: Its registered office in the State of Delaware is located at No. 229
South State Street, Dover, County of Kent. The registered agent in
charge thereof at such address is The Prentice-Hall Corporation
System, Inc.

Third: The nature of the business or objects or purposes to be transacted,
promoted, or carried on by the Corporation are as follows:

(a) The insuring of lives of persons and every insurance pertaining
thereto or connected therewith, including accident and health
insurance and the granting or disposing of annuities and the
transacting of disability insurance, whether on a group,
individual, franchise or reinsurance basis, and any other type of
insurance or other business which may be or hereafter be lawfully
conducted by legal reserve life insurance companies organized
under the laws of the State of Delaware. Any such business may be
transacted on a variable basis stated in terms of units or
otherwise but payable in lawful currency, or on a fixed basis
stated in terms of predetermined amounts of lawful currency; the
Corporation may transact any such business in Delaware or
elsewhere.

(b) The Directors of the Corporation shall have the power to segregate
and hold separate from the other funds and assets of the
Corporation premiums or other funds received from the sale of
various types and classes of policies and annuity contracts; the
amount held may be invested in such proportions and in such manner
as determined by the Board of Directors of the Corporation or by a
committee thereof; except as may otherwise by required under
Subsection (c) hereof. The assets held in such separate account
or accounts shall not be chargeable with liabilities arising out
of any other business the Corporation may conduct, but shall be
held and applied exclusively for the benefit of the holders or
beneficiaries of those variable annuity contracts or life
insurance policies with respect to which the account or accounts
have been established;

(c) If a separate account is registered with an Agency of the Federal
Government having jurisdiction over such separate account or
contracts issued in connection therewith, provisions may be made
in the rules and regulations for such separate account for voting
by
<PAGE>

owners of a separate account contracts with respect to the
election of a board of managers for such account, ratification of
the selection of auditors for such account by such board, approval
of investment advisory service contracts for such account, and
such other matters as may be required by applicable law.

Fourth: The authorized capital stock of the Corporation shall be 10,000 shares
of $1,000 par value per share. Stock authorized but not issued may be
issued for such consideration as shall be fixed from time to time by
the Board of Directors, but the consideration shall at all times be
not less than the par value of said shares. When shares of stock
shall be issued, and paid for in cash at the rate determined by the
Board of Directors, such shares shall thereafter be nonassessable.

Fifth: The names and places of residence of the incorporators are as follows:

Ralph L. Diller, 11 Notre Dame Street, Leominster, Massachusetts
01543;
Gaynelle G. Jones, 8 Wabon Street, Dorchester, Massachusetts 02121;
Marilyn G. Quattrocchi, Harris Avenue, Lincoln, Rhode Island 02865

Sixth: The powers of the incorporators shall terminate upon the filing of
this Certificate of Incorporation, and the initial Board of Directors
of the Corporation shall be composed of:

Harold E. Ahlquist 75 Birchwood Drive
Holden, Massachusetts 01520

W. Douglas Bell 50 Wyndhurst Drive
Holden, Massachusetts 01520

Norman C. Cross 35 Leominster Road
Lunenburg, Massachusetts 01420

Roland A. Erickson 20 Church Street
Greenwich, Connecticut 06830

Frederick Fedeli 22 High Street
Southboro, Massachusetts 01772

John H. Freese 85 Wyndhurst Drive
Holden, Massachusetts 01520

Ralph F. Gow 14 Monmouth Road
Worcester, Massachusetts 01609

Paul R. O'Connell 34 Drury Lane
Worcester, Massachusetts 01609

and they shall serve until the Annual Meeting of the Corporation to be
held on the second Wednesday of April, 1975 and until their successors
shall have been elected and qualified.

Seventh: The following additional provisions not inconsistent with law are
hereby established for the management, conduct, and regulation of the
business and officers of the Corporation, and for creating, limiting,
defining, and

<PAGE>

regulating the powers of the Corporation and of its directors and
stockholders:

(a) The affairs and business of the Corporation shall be managed and
controlled by a Board of Directors consisting of not less than
three (3).

(b) The Directors shall be elected in such number, for such terms, and
in such manner as shall be provided in the By-laws and any
Director of the Corporation may be removed at any annual or
special meeting of stockholders by the same vote as that required
to elect a Director.

(c) Meetings of stockholders may be held outside the State of Delaware
if the By-laws so provide, in such place as shall be designated in
the notice of meeting. Except as otherwise required by law, the
presence in person or by proxy of the holders of a majority of the
shares of stock entitled to vote shall constitute a quorum at any
meeting of stockholders.

Eighth: The Corporation shall have perpetual existence unless sooner
terminated by the affirmative vote of the holders of two-thirds (2/3)
of the issued and outstanding stock.

Ninth: These Articles of Incorporation may be amended by written
authorization of the holders of a majority of the shares of stock
outstanding and entitled to vote or by affirmative vote of such a
majority voting at a lawful meeting of such stockholders provided
notice given for such meeting includes due notice of the proposal to
amend.

We, the undersigned, for the purpose of forming a corporation under the laws of
the State of Delaware, do make, file, and record this Certificate, and do
certify that the facts herein stated are true; and we have accordingly hereunto
set our respective hands.

Dated at July 26, 1974.

Ralph L. Diller

Gaynelle G. Jones

Marilyn G. Quattrocchi

<PAGE>
Commonwealth of Massachusetts )
)ss
County of Worcester )

Be it remembered, that on this 26th day of July, 1974, there personally appeared
before me, the undersigned, a notary public, Ralph L. Diller, Gaynelle G. Jones,
Marilyn G. Quattrocchi, parties to the foregoing Certificate of Incorporation,
known to me personally to be such, and I having first made known to them and
each of them the contents of said Certificate, they did each severally
acknowledge that they signed, sealed, and delivered the same as their voluntary
act and deed, and each deposed that the facts therein stated were truly set
forth.

Given under my hand and seal of office the day of the year aforesaid.

Robert G. Juneau
Notary Public

My Commission Expires: May 30, 1980

<PAGE>

AGREEMENT OF MERGER

AMERICAN VARIABLE ANNUITY LIFE ASSURANCE COMPANY
(AN ARKANSAS COMPANY)

AND

AMERICAN VARIABLE ANNUITY LIFE ASSURANCE COMPANY, INC.
(A DELAWARE COMPANY)

This Agreement and Plan of Merger (hereinafter referred to as "Agreement")
made as of this 23rd day of September, 1974, between American Variable Annuity
Life Assurance Company (hereinafter referred to as AVA Co.), a stock insurance
company incorporated and existing under the laws of the State of Arkansas and
having its principal place of business in Little Rock, Arkansas, and American
Variable Annuity Life Assurance Company, Inc. (hereinafter referred to as AVA,
Inc.), a stock insurance company incorporated and existing under the laws of the
State of Delaware and having its registered office in Dover, Delaware and its
principal place of business in Worcester, Massachusetts. (Said companies being
sometimes hereinafter called "Constituent Companies").

Whereas, the purpose of this Agreement is to accomplish the transfer of the
domicile of AVA Co. from the State of Arkansas to the State of Delaware through
the utilization of the merger statutes of the respective states, and

Whereas, after full consideration, the Boards of Directors of the
Constituent Companies have deemed it is in the best interests of the Companies
and their shareholders that the Constituent Companies be merged as a single
company and the Surviving Company of said merger comprise the same business
enterprise as AVA Co.

WITNESSETH:

IN CONSIDERATION of the terms and of the mutual agreements, covenants, and
provisions herein contained, and pursuant to the laws of Arkansas and of
Delaware, this Agreement of Merger is made and entered into by and between the
Board of Directors of the said AVA Co. and the Board of Directors of the said
AVA, Inc., do hereby agree as follows:

(1) At the effective date and time set forth herein, AVA Co. is hereby
merged into and with AVA, Inc. with AVA, Inc. the surviving and continuing
company under the laws of the State of Delaware. At the effective date of
merger AVA, Inc. shall assume the name of American Variable Annuity Life
Assurance Company (hereinafter referred to as the "Surviving Company").

(2) The Surviving Company shall continue as a stock insurance company,
and shall have the objects and purposes stated in its Certificate of
Incorporation, Exhibit A annexed, and in general terms have the power and
authority to transact any business which AVA Co. is empowered and authorized to
transact, and shall have the authority to transact any business which domestic
life and health insurance companies are now or hereafter may be authorized to
transact under the laws of the State of Delaware.

(3) At the said effective date and time, and by operation of the
applicable

<PAGE>

laws and statutes of the State of Arkansas and the State of Delaware relating to
the merger of stock insurance corporations, all of the rights and assets of AVA
Co. including without limitation assets tangible and intangible, real and
personal, of whatsoever kind and character and wheresoever located, including
all separate accounts of AVA Co., shall become the assets of the Surviving
Company.

(4) At the effective date and time and by operation of the applicable
laws and statutes of the State of Arkansas and the State of Delaware, the
Surviving Company shall assume and shall be liable and responsible for any and
all of the legal liabilities and legal obligations of AVA Co. then outstanding,
including without limitation, all liabilities for taxes, all liabilities under
insurance contracts theretofore issued or then on binder, and all other legal
liabilities and obligations of AVA Co.

(5) Prior to the merger, the Board of Directors of AVA, Inc. shall
adopt a resolution to be effective at the time of the merger providing that such
separate account or accounts as may be established and maintained by AVA Co. at
the time of the merger shall be deemed to be separate accounts of the Surviving
Company pursuant to the provisions of Delaware law and that the existence of
such separate account or accounts shall continue uninterrupted.

(6) The Surviving Company, through its appropriate officers and
directors, is hereby authorized in the name of either of the Constituent
Companies or in its own name, to execute, acknowledge, and deliver all
instruments of further assurance and to do all other such acts or things as it
may, at any time, deem necessary or desirable to vest in the Surviving Company
any property or rights of any of the merged corporations, or to carry out any of
the purposes expressed in this Agreement.

(7) The registered office of the Surviving Company in Delaware shall be
in Dover, County of Kent, Delaware. The principal office of the Surviving
Company shall be in the City of Worcester, in the County of Worcester,
Massachusetts.

(8) The present By-Laws of AVA, Inc. set forth in Exhibit 3, shall be
the By-Laws of the Surviving Company unless and until altered, amended or
repealed in the manner therein provided.

(9) All shares if authorized and outstanding capital stock of AVA,
Inc., such stock being owned in its entirety AVA Co., shall be cancelled on the
effective date of the merger.

(10) All shares of authorized and outstanding capital stock of AVA Co.
owned in its entirety by State Mutual Life Assurance Company of America, shall
be cancelled effective the date of the merger and stock of the Surviving Company
shall be issued to State Mutual in amounts equivalent to the stock owned in AVA
Co. prior to the merger.

(11) The Constituent Companies agree to do and perform each and every
act required by the laws of Delaware and Arkansas to effectuate such merger.

(12) The proper officers of the respective companies hereto are
authorized and directed from time to time, as the occasion may arise, to do all
acts and to execute and acknowledge all affidavits, deeds, contracts,
assurances, assignments and instruments in writing, and to sign and deliver all
checks on the bank accounts of the respective parties hereto, and do anything
else deemed necessary or proper to

<PAGE>

carry out the provisions of this Agreement, and to affix the corporate seals of
the respective parties to any such instrument in writing.

(13) The merger shall become effective at the close of business December
31, 1974.

(14) In order to clarify the intention of the parties hereto or to
effect or facilitate the filing, recording or official approval of this
Agreement and Plan of Merger and the consummation hereof in accordance with the
purpose and intent of this Agreement, any of the terms or conditions of this
Agreement may be, at any time prior to the merger, amended by mutual agreement
of the Constituent Companies by action duly taken by the respective Boards of
Directors.

(15) This Agreement shall be contingent upon approval by the
shareholders of the Constituent Companies and upon approval by a majority of the
variable annuity contract owners of AVA Co. as the term majority is defined in
the By-Laws and Regulations of its separate account American Variable Annuity
Fund.

(16) This Agreement shall be and become void and of no effect and the
merger contemplated hereby shall be deemed to be abandoned if a majority of the
Board of Directors of either Constituent Companies, at a meeting thereof duly
called and held, shall be resolution deem that it is inadvisable to consummate
the merger.

(17) This Agreement shall further be contingent upon obtaining necessary
approval from the Commissioners of Insurance in the States of Arkansas and
Delaware and the approval of the appropriate governmental regulatory agencies.

(18) No director or officer of either of the Constituent Companies or of
any parent corporation or subsidiary insurer, shall receive any fee, commission,
other compensation or valuable consideration whatever other than regular salary
directly or indirectly, for in any manner aiding, promoting or assisting in the
merger.

(19) Without further action of the shareholders of AVA Co. or AVA, Inc.
or the Boards of Directors of the Constituent Companies, the officers of the
Surviving Company shall be the officers of AVA, Inc. immediately prior to the
merger and there shall be eight initial directors of the Surviving Company whose
names and addresses are as follows:

Harold E. Ahlquist, Jr. Member
75 Birchwood Drive
Holden MA 01520

W. Douglas Bell Chairman
50 Wyndhurst Drive
Holden MA 01520

Norman C. Cross Member
38 Dusty Miller Road
Falmouth MA 02540

Roland A. Erickson Member
101 M Lewis Street
Greenwich CT 06830

<PAGE>

Frederick Fedeli Member
22 High Street
Southboro MA 01772

John H. Freese Member
85 Wyndhurst Drive
Holden MA 01520

Ralph F. Gow Member
14 Monmouth Road
Worcester MA 01609

Paul R. O'Connell Member
34 Drury Lane
Worcester MA 01609

IN WITNESS WHEREOF, American Variable Annuity Life Assurance Company and
American Variable Annuity Life Assurance Company, Inc. have caused this
Agreement to be executed in their corporate names by their respective officers
and who by majorities of their Boards of Directors on this 23rd day of
September, 1974.

AMERICAN VARIABLE ANNUITY LIFE
ASSURANCE COMPANY

(Corporate Seal) By: John H. Freese, President

Attest: Ralph L. Diller, Secretary

Directors of American Variable Annuity Life Assurance Company:

Harold E. Ahlquist, Jr. Frederick Fedeli

W. Douglas Bell John H. Freese

Norman C. Cross Ralph G. Gow

Roland A. Erickson Paul R. O'Connell

AMERICAN VARIABLE ANNUITY LIFE
ASSURANCE COMPANY, INC.

/s/ John H. Freese
--------------------------------
(Corporate Seal) By: John H. Freese, President

Attest: Ralph L. Diller, Secretary

<PAGE>

Directors of American Variable Annuity Life Assurance Company, Inc.:

Harold E. Ahlquist, Jr. Frederick Fedeli

W. Douglas Bell John H. Freese

Norman C. Cross Ralph F. Gow

Roland A. Erickson Paul R. O'Connell

<PAGE>

CERTIFICATE OF OWNERSHIP AND MERGER

MERGING

AMERICAN VARIABLE ANNUITY LIFE ASSURANCE COMPANY

INTO

AMERICAN VARIABLE ANNUITY LIFE ASSURANCE COMPANY, INC.

American Variable Annuity Life Assurance Company, a corporation organized under
the laws of the State of Arkansas does hereby certify:

FIRST: That it was organized pursuant to the provisions of the Arkansas
Insurance Laws on the 23rd day of January, 1967.

SECOND: That it owns all of the outstanding shares of capital stock of
American Variable Annuity Life Assurance Company, Inc., a corporation organized
pursuant to the provisions of the General Corporation Laws of the State of
Delaware on the 26th day of July, 1974.

THIRD: That its Board of Directors at a meeting held on the 30th day of July,
1974 determined to merge the Corporation into said American Variable Annuity
Life Assurance company, Inc. and did adopt the following resolution:

"RESOLVED: That subject to the approval of State Mutual Life
Assurance Company of America as the sole shareholder of the
company and the approval of the company's variable annuity
contract owners, the company enter into a merger agreement with
its wholly owned subsidiary, American Variable Annuity Life
Assurance Company, Inc. effective with the close of business,
December 31, 1974. The appropriate officers of the company are
hereby authorized to execute the merger agreement substantially
in the form attached hereto and take whatever action may be
necessary to carry out the terms of said merger agreement."

FOURTH: That the attached copy of the Agreement of Merger is the same as that
approved and authorized by resolution of the Board of Directors of the Company
on July 30,1974.

FIFTH: That the sole stockholder of the Company, State Mutual Life Assurance
Company of America, at a stockholder meeting duly called and held on August 16,
1974 for the purpose of approving the merger voted to approve the merger of the
Company into its wholly owned subsidiary, American Variable Annuity Life
Assurance Company, Inc. pursuant to the Agreement of Merger as authorized by the
Board of Directors of the Company on July 30, 1974.

SIXTH: That pursuant to the Agreement of Merger approved and authorized by
the Company's Board of Directors, the merger of American Variable Annuity Life
Assurance Company into American Variable Annuity Life Assurance Company, Inc.
shall be effective at the close of business December 31, 1974.

SEVENTH: That pursuant to the Agreement of Merger approved and authorized by
the Company's Board of Directors, the surviving company shall, effective with
the

<PAGE>

merger, assume the name American Variable Annuity Life Assurance Company.

IN WITNESS WHEREOF, said American Variable Annuity Life Assurance Company, has
caused this Certificate of Ownership and Merger to be signed by John H. Freese,
its President, and Ralph L. Diller, its Secretary, and its corporate seal to be
affixed thereto this 5th day of December, A.D. 1974.

AMERICAN VARIABLE ANNUITY LIFE
ASSURANCE COMPANY

By: /s/ John H. Freese
--------------------------------
President

By: /s/ Ralph L. Diller
--------------------------------
Secretary

(CORPORATE SEAL)

<PAGE>

STATE OF MASSACHUSETTS

COUNTY OF WORCESTER

BE IT REMEMBERED that on this 5th day of December, 1974, personally came
before me, a Notary Public in and for the County and State aforesaid, John H.
Freese, President and Ralph L. Diller, Secretary of American Variable Annuity
Life Assurance Company, a corporation of the State of Arkansas, and they duly
executed said certificate before me and severally acknowledged the said
certificate to be their act and deed and the act and deed of said corporation
and the facts stated therein are true; that the signatures of the said officers
are in the handwriting of each of said officers respectively; and that the seal
affixed to said certificate is the common or corporate seal of said corporation.

IN WITNESS WHEREOF, I have hereunto set my hand and seal of office the day
and year aforesaid.

Ethel Demark
Notary Public

(SEAL)
<PAGE>
BYLAWS
of
Allmerica Financial Life Insurance and Annuity Company
(Effective October 1, 1995)

ARTICLE I
Meetings of Stockholders

1. The Annual Meeting shall be held on the second Wednesday of April of each
year but if that day is a legal holiday at the place of meeting, the meeting
shall be held on the next following business day not a holiday. If more than
fifteen months are allowed to elapse without an annual stockholders' meeting
being held, any stockholder may call such a meeting to be held. The place of
any Annual Meeting may be outside of the State of Delaware and shall be fixed
from time to time by the Board of Directors.

2. The business to be transacted at the Annual Meeting shall be the election
of Directors, to receive and consider reports of the Corporation's Officers, and
such other business as shall properly be brought before the meeting.

3. At least ten days notice of each Annual Meeting, unless waived in writing,
stating the place, day, and hour thereof shall be given by the Secretary to each
stockholder by mailing postage prepaid to his address as it appears on the
Corporation's books; and no amendments to the Corporation's Articles of
Incorporation may be made at any meeting of the stockholders unless the proposal
to so amend is included in the notice of the meeting.

4. At any time upon written request of the President, any Director, or
stockholders holding in the aggregate one-third of the voting rights of all
stock outstanding, it shall be the duty of the Secretary to call a special
meeting of stockholders to be held at any such time as the Secretary may fix in
the written notice thereof, not less than five nor more than sixty days after
the receipt of request. If the Secretary fails to issue such call, the Director
or stockholders making the request may do so. The notice shall state the
purpose of the meeting and no business of which notice is not so given shall be
transacted at such meeting.

5. The presence in person or by proxy of the holders of the majority of the
shares of stock outstanding and entitled to vote shall constitute a quorum. The
stockholders present at a duly organized meeting can continue to do business
until adjournment notwithstanding the withdrawal of stockholders leaving less
than a quorum.

<PAGE>

6. If a meeting cannot be organized because a quorum has not attended, those
present may adjourn the meeting to such time as they may determine, but in the
case of any meeting called for the election of any Director, the adjournment
must be to the next day and those who attend the adjourned meeting although less
than a quorum as otherwise provided herein shall nevertheless constitute a
quorum for the purpose of electing a Director.

7. If any necessary Officer fails to attend a stockholders' meeting any
stockholder present may be elected to act temporarily in lieu of such absent
Officer.

8. An annual or special meeting of stockholders may be adjourned to another
date without new notice being given.

9. Any action required or permitted to be taken at any annual meeting or
special meeting of the stockholders may be taken without a meeting, without
prior notice, if a consent in writing setting forth the actions so taken is
signed by the holders of all of the outstanding stock of the Company.

ARTICLE II
Stockholders Voting and Other Rights

1. At each meeting of stockholders and upon each proposal presented at each
meeting each stockholder of record shall be entitled to one vote for each share
of stock standing in his name on the books of the Corporation on the record date
as hereafter established.

2. A stockholder may vote or be represented at any stockholders' meeting in
person or by written proxy, which may be revoked at will. The revocation of a
proxy shall not be effective until written notice thereof has been filed with
the Secretary of the Corporation.

3. Unless otherwise provided by law, the Articles of Incorporation, or these
Bylaws, all questions shall be determined by the holders of a majority of the
capital stock voting thereon.

4. The following shall be referred to as a record event:
(a) a meeting of stockholders,
(b) the payment of any dividend,
(c) the allotment of rights,
(d) a change, conversion, or exchange of capital stock.

-2-
<PAGE>

ARTICLE III
Directors

1. The number of Directors which shall constitute the whole Board shall be not
less than three nor more than fifteen. The Directors shall be elected at the
Annual Meeting of Stockholders except as hereinafter provided, and each Director
elected shall hold office for one year or until his successor is elected and
qualified. The Directors need not be stockholders or residents of the State of
Delaware.

2. Vacancies in the Board of Directors may be filled by the remaining members
of the Board, and each person so elected shall be a Director until his successor
is elected by the stockholders at the next Annual Meeting of Stockholders or at
any special meeting of stockholders called for that purpose and held prior to
such Annual Meeting.

3. The Board of Directors may establish the position of Chairman of the Board
and Vice Chairman of the Board and shall choose from among its members for such
positions. The Chairman of the Board as so chosen shall preside at meetings of
the Board and perform such other duties as are assigned to him by the Board. If
the Chairman is absent or unable to discharge the duties of his office, the Vice
Chairman may act in his stead.

4. The Board of Directors shall determine the amount of any expense
reimbursement or remuneration to be paid to its members for attendance at
meetings.

ARTICLE IV
Meetings of the Board of Directors

1. The Board of Directors may hold meetings, both regular and special, either
within or without the State of Delaware.

2. The Board of Directors shall hold an organizational meeting immediately
after the Annual Meeting of Stockholders or at such time as may be fixed by
written consent of a majority of all Directors or by notice given by the
President or Secretary.

3. Regular meetings of the Board of Directors may be held without notice at
such time and at such place as shall from time to time be determined by
resolution of the Board of Directors.

4. Special meetings of the Board may be called by the President on five days
notice to each Director. Special meetings shall be called by the President or
Secretary on like notice on the written request of a majority of the entire
Board of Directors. The notice shall indicate the purpose, time, and place of
the special meeting.

-3-
<PAGE>

5. At the meeting of the Board, a majority or five of the Directors, whichever
is less, shall constitute a quorum for the transaction of business. The
concurrence of a majority of Directors present at any meeting at which there is
a quorum shall constitute the act of the Board of Directors except as may be
otherwise provided by law.

6. Any action required or permitted to be taken at any meeting of the Board of
Directors or of any committee thereof may be taken without a meeting, if written
consent thereto is signed by all members of the Board or such Committee, as the
case may be, and such written consent is filed with the minutes of the
proceedings of the Board or Committee.

ARTICLE V
Committees

1. The Board of Directors may elect, from its membership, a Finance Committee
of not less than five Directors, who shall have charge of the investment, sale,
loan, or deposit of funds under the ownership, direction, or control of the
Corporation.

2. The Board may also appoint from its own members, and where permitted by
law, from the Officers and/or employees, other standing committees and temporary
committees, vesting such committees with such powers and prescribing such duties
as the Board shall determine.

3. Each Committee shall keep regular minutes of its meetings and cause them to
be recorded in books to be kept for that purpose and shall report to the Board
from time to time as the Board may request.

ARTICLE VI
Officers

1. The Board of Directors shall choose a President, who shall be a Director, a
Secretary, and a Treasurer. The Directors may also choose one or more Vice
Presidents, Assistant Secretaries, and Assistant Treasurers and such other
Officers as may be deemed necessary. Any vacancy occurring in any office of the
Corporation shall be filled by the Board of Directors.

2. Any person may hold two (2) or more offices, except that the President
shall not be also the Secretary or Assistant Secretary.

3. The Officers shall hold office for one year and until their successors are
elected and qualified but the Board may remove any officer at will.

-4-
<PAGE>

ARTICLE VII
Duties of Officers

1. The Chief Executive Officer of the Corporation shall be the Chairman of the
Board, or the President, as determined by the Directors, and shall, subject to
the Board of Directors, direct and manage the affairs of the Corporation. If
the Chairman of the Board and Vice Chairman of the Board are both absent or
unable to discharge their duties, the President may fulfill the duties of the
Chairman of the Board.

2. If the President is absent or unable to discharge the duties of his office,
a Vice President may act in his stead. The Chairman of the Board, if he is the
Chief Executive Officer, the President, or any one of the Vice Presidents shall
have the authority to transfer securities, execute releases, extensions, partial
releases, or assignments without recourse of mortgages, to execute deeds and
other instruments or documents, including contracts or insurance and annuities,
on the part of the Company and whenever necessary to affix the Seal of the
Company to the same. The Chairman of the Board, the President, or any Vice
President may, whenever necessary, delegate this authority to perform any of the
acts referred to in this paragraph to any person pursuant to a special power-of-
attorney.

3. The Secretary shall keep a list of stockholders and of the number of shares
standing in the name of each and a record of the transfers thereof. He shall
keep a record of the votes and all other proceedings of all meetings of the
Directors and stockholders; and such other books and records as the Chief
Executive Officer or Directors may require. He shall give, or cause to be
given, notice of all meetings of stockholders and special meetings of the Board
of Directors. He shall have custody of the corporate records and Corporate Seal
and shall have the authority to affix the same to any instrument requiring it;
and when so affixed, it may be attested by his signature or the signature of an
Assistant Secretary; he shall also perform all acts usually incident to the
office of Secretary.

4. If the Secretary is absent or unable to discharge the duties of his office,
an Assistant Secretary may act.

5. The Treasurer shall have charge of all monies and securities of the
Company; and he shall collect all profits from investments which the Company
records establish to be due.

6. The Treasurer shall have authority to transfer securities, to execute
releases, extensions, partial releases, and assignments without recourse of
mortgages, to execute deeds and other instruments or documents on behalf of the
Company, and whenever necessary, to affix the Seal of the Company to the same.
He shall have the power to vote on behalf of the Company in any case where

-5-

<PAGE>

the Company as the holder of any securities had the authority to vote.

7. If the Treasurer is absent or unable to discharge the duties of his office,
an Assistant Treasurer may act.

ARTICLE VIII
Indemnification of Directors and Officers

Each Director and each Officer of the Corporation, whether or not in
office, (and his executors or administrators), shall be indemnified or
reimbursed by the Corporation against all expenses actually and necessarily
incurred by him in the defense or reasonable settlement of any action, suit, or
proceeding in which he is made a party by reason of his being or having been a
Director or Officer of the Corporation, including any sums paid in settlement or
to discharge judgment, except in relation to matters as to which he shall be
finally adjudged in such action, suit, or proceeding to be liable for negligence
or misconduct in the performance of his duties as such Director or Officer; and
the foregoing right of indemnification or reimbursement shall not affect any
other rights to which he may be entitled under the Articles of Incorporation,
any statute, bylaw, agreement, vote of stockholders, or otherwise.

ARTICLE IX
Notice

Whenever any notice is required to be given under the provisions of
statutes, the Articles of Incorporation, or these Bylaws, a waiver thereof, in
writing signed by the person or persons entitled to such notice, whether before
or after the time stated therein, shall be deemed equivalent to the giving of
such notice. Attendance at any meeting shall constitute a waiver of notice
unless attendance is for the purpose of objecting to the transaction of
business.

ARTICLE X
Corporate Seal

The Corporation's Corporate Seal shall contain the words, "Allmerica
Financial Life Insurance and Annuity Company," surrounding the words, "Corporate
Seal," and the same may be altered by the Board of Directors.

-6-
<PAGE>

ARTICLE XI
Amendment

These Bylaws may be amended or repealed by the Directors or by majority
vote of the shares of stock outstanding and entitled to vote.

-7-

<PAGE>

EXHIBIT 3
September 25, 1995
SMA Life Assurance Company
440 Lincoln Street
Worcester MA 01653

Gentlemen:

In my capacity as Counsel of SMA Life Assurance Company (the "Company"), I have
participated in the preparation of the Post-Effective Amendment to the
Registration Statement for the Inheiritage Account on Form S-6 under the
Securities Act of 1933, with respect to the Company's Second-To-Die Flexible
Premium Variable Life Insurance Policies.

I am of the following opinion:

1. The Inheiritage Account is a separate account of the Company validly
existing pursuant to the Delaware Insurance Code and the regulations issued
thereunder.

2. The assets held in the Inheiritage Account equal to the reserves in other
policy liabilities of the Policies which are supported by the Inheiritage
Account are not chargeable with liabilities arising out of any other
business the Company may conduct.

3. The Policies, when issued in accordance with the Prospectus contained in
the Registration Statement and upon compliance with applicable local law,
will be legal and binding obligations of the Company in accordance with
their terms and when sold will be legally issued, fully paid and non-
assessable.

In arriving at the foregoing opinion, I have made such examination of law and
examined such records and other documents as in my judgment are necessary or
appropriate.

I hereby consent to the filing of this opinion as an exhibit to the Post-
Effective Amendment to the Registration Statement of the Inheiritage Account on
Form S-6 filed under the Securities Act of 1933.

Very truly yours,

/s/ Sheila B. St. Hilaire
Sheila B. St. Hilaire
Counsel

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this Post-
Effective Amendment No. 3 to the Registration Statement on Form S-6 of our
reports dated February 13, 1995, relating to the financial statements of SMA
Life Assurance Company and the financial statements of the Inheiritage Account
of SMA Life Assurance Company, both of which appear in such Prospectus. We
also consent to the reference to us under the heading "Independent Accountants"
in such Prospectus.

/s/ Price Waterhouse LLP
Price Waterhouse LLP
Boston, Massachusetts
September 25, 1995

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 34
<NAME> SMA INHEIRITAGE SUB-ACCOUNT 001

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 149,077
<INVESTMENTS-AT-VALUE> 141,388
<RECEIVABLES> 264
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 141,652
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 136,657
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (7,689)
<NET-ASSETS> 141,652
<DIVIDEND-INCOME> 7,437
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 354
<NET-INVESTMENT-INCOME> 7,083
<REALIZED-GAINS-CURRENT> 1
<APPREC-INCREASE-CURRENT> (7,689)
<NET-CHANGE-FROM-OPS> (605)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 141,652
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 70,826
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .052
<PER-SHARE-GAIN-APPREC> (.016)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.036
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 35
<NAME> SMA INHEIRITAGE SUB-ACCOUNT 002

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 76,103
<INVESTMENTS-AT-VALUE> 74,589
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 74,589
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 19
<TOTAL-LIABILITIES> 19
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 74,852
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,514)
<NET-ASSETS> 74,570
<DIVIDEND-INCOME> 1,762
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 93
<NET-INVESTMENT-INCOME> 1,669
<REALIZED-GAINS-CURRENT> (51)
<APPREC-INCREASE-CURRENT> (1,514)
<NET-CHANGE-FROM-OPS> 104
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 74,570
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 37,285
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .022
<PER-SHARE-GAIN-APPREC> (.026)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> .996
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 36
<NAME> SMA INHEIRITAGE SUB-ACCOUNT 003

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 497,732
<INVESTMENTS-AT-VALUE> 497,732
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 74,589
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 460
<TOTAL-LIABILITIES> 460
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 487,790
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 497,272
<DIVIDEND-INCOME> 7,247
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,789
<NET-INVESTMENT-INCOME> 5,458
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 5,458
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 497,272
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 248,636
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .019
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.019
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 37
<NAME> SMA INHEIRITAGE SUB-ACCOUNT 004

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 26,973
<INVESTMENTS-AT-VALUE> 26,429
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 26,429
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 24
<TOTAL-LIABILITIES> 24
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 26,967
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (544)
<NET-ASSETS> 26,405
<DIVIDEND-INCOME> 541
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 50
<NET-INVESTMENT-INCOME> 491
<REALIZED-GAINS-CURRENT> (7)
<APPREC-INCREASE-CURRENT> (544)
<NET-CHANGE-FROM-OPS> (60)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 26,405
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 13,203
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .018
<PER-SHARE-GAIN-APPREC> (.039)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> .979
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 38
<NAME> SMA INHEIRITAGE SUB-ACCOUNT 005

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 111,387
<INVESTMENTS-AT-VALUE> 109,678
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 109,678
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 116
<TOTAL-LIABILITIES> 116
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 109,393
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,709)
<NET-ASSETS> 109,562
<DIVIDEND-INCOME> 2,198
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 256
<NET-INVESTMENT-INCOME> 1,942
<REALIZED-GAINS-CURRENT> 47
<APPREC-INCREASE-CURRENT> (1,709)
<NET-CHANGE-FROM-OPS> 280
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 109,562
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 54,781
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .018
<PER-SHARE-GAIN-APPREC> (.016)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.002
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 39
<NAME> SMA INHEIRITAGE SUB-ACCOUNT 006

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 230,871
<INVESTMENTS-AT-VALUE> 230,817
<RECEIVABLES> 446
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 231,263
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 238,034
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (54)
<NET-ASSETS> 231,263
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 473
<NET-INVESTMENT-INCOME> (473)
<REALIZED-GAINS-CURRENT> 268
<APPREC-INCREASE-CURRENT> (54)
<NET-CHANGE-FROM-OPS> (259)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 231,263
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 115,632
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> (.028)
<PER-SHARE-GAIN-APPREC> (.000)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> .972
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 40
<NAME> SMA INHEIRITAGE SUB-ACCOUNT 007

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 40,175
<INVESTMENTS-AT-VALUE> 39,261
<RECEIVABLES> 81
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 39,342
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 38,885
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (914)
<NET-ASSETS> 39,342
<DIVIDEND-INCOME> 119
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 83
<NET-INVESTMENT-INCOME> 36
<REALIZED-GAINS-CURRENT> (31)
<APPREC-INCREASE-CURRENT> (914)
<NET-CHANGE-FROM-OPS> (909)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 39,342
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 19,671
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .036
<PER-SHARE-GAIN-APPREC> (.024)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.012
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 41
<NAME> SMA INHEIRITAGE SUB-ACCOUNT 008

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 135,702
<INVESTMENTS-AT-VALUE> 130,265
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 130,148
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 117
<TOTAL-LIABILITIES> 117
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 127,750
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (5,437)
<NET-ASSETS> 130,148
<DIVIDEND-INCOME> 3,878
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 458
<NET-INVESTMENT-INCOME> 3,420
<REALIZED-GAINS-CURRENT> 290
<APPREC-INCREASE-CURRENT> (5,437)
<NET-CHANGE-FROM-OPS> (1,727)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 130,148
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 65,074
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .027
<PER-SHARE-GAIN-APPREC> (.009)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.018
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 42
<NAME> SMA INHEIRITAGE SUB-ACCOUNT 009

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 172,649
<INVESTMENTS-AT-VALUE> 168,888
<RECEIVABLES> 300
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 169,188
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 173,602
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (3,761)
<NET-ASSETS> 169,188
<DIVIDEND-INCOME> 743
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 455
<NET-INVESTMENT-INCOME> 288
<REALIZED-GAINS-CURRENT> 78
<APPREC-INCREASE-CURRENT> (3,761)
<NET-CHANGE-FROM-OPS> (3,395)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 169,188
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 84,594
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .001
<PER-SHARE-GAIN-APPREC> (.026)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> .975
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 43
<NAME> SMA INHEIRITAGE SUB-ACCOUNT 011

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 84,157
<INVESTMENTS-AT-VALUE> 81,046
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 81,046
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 75
<TOTAL-LIABILITIES> 75
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 84,533
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (3,111)
<NET-ASSETS> 80,971
<DIVIDEND-INCOME> 176
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 192
<NET-INVESTMENT-INCOME> (16)
<REALIZED-GAINS-CURRENT> (39)
<APPREC-INCREASE-CURRENT> (3,111)
<NET-CHANGE-FROM-OPS> (3,166)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 80,971
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 40,486
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .000
<PER-SHARE-GAIN-APPREC> (.042)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> .958
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 44
<NAME> SMA INHEIRITAGE SUB-ACCOUNT 102

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 62,128
<INVESTMENTS-AT-VALUE> 61,973
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 61,973
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 62,596
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (155)
<NET-ASSETS> 61,973
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 146
<NET-INVESTMENT-INCOME> (146)
<REALIZED-GAINS-CURRENT> (6)
<APPREC-INCREASE-CURRENT> (155)
<NET-CHANGE-FROM-OPS> (307)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 61,973
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 30,987
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> (.002)
<PER-SHARE-GAIN-APPREC> (.008)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> .990
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 45
<NAME> SMA INHEIRITAGE SUB-ACCOUNT 103

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 334,403
<INVESTMENTS-AT-VALUE> 330,500
<RECEIVABLES> 292
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 330,792
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 313,937
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (3,903)
<NET-ASSETS> 330,792
<DIVIDEND-INCOME> 2,581
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 903
<NET-INVESTMENT-INCOME> 1,678
<REALIZED-GAINS-CURRENT> 478
<APPREC-INCREASE-CURRENT> (3,903)
<NET-CHANGE-FROM-OPS> (1,747)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 330,792
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 165,396
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .065
<PER-SHARE-GAIN-APPREC> (.012)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.053
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 46
<NAME> SMA INHEIRITAGE SUB-ACCOUNT 104

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 284,581
<INVESTMENTS-AT-VALUE> 292,936
<RECEIVABLES> 269
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 293,205
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 276,444
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 8,355
<NET-ASSETS> 293,205
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,069
<NET-INVESTMENT-INCOME> (1,069)
<REALIZED-GAINS-CURRENT> 1,050
<APPREC-INCREASE-CURRENT> 8,355
<NET-CHANGE-FROM-OPS> 8,336
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 293,205
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 146,603
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> (.004)
<PER-SHARE-GAIN-APPREC> .065
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.061
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 47
<NAME> SMA INHEIRITAGE SUB-ACCOUNT 105

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 317,308
<INVESTMENTS-AT-VALUE> 307,978
<RECEIVABLES> 368
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 308,346
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 321,831
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (9,330)
<NET-ASSETS> 308,346
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 929
<NET-INVESTMENT-INCOME> (929)
<REALIZED-GAINS-CURRENT> (15)
<APPREC-INCREASE-CURRENT> (9,330)
<NET-CHANGE-FROM-OPS> (10,274)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 0
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<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 308,346
<ACCUMULATED-NII-PRIOR> 0
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<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 154,173
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> (.003)
<PER-SHARE-GAIN-APPREC> (.039)
<PER-SHARE-DIVIDEND> 0
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<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> .958
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 48
<NAME> SMA INHEIRITAGE SUB-ACCOUNT 106

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 327,049
<INVESTMENTS-AT-VALUE> 318,813
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 318,813
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 201
<TOTAL-LIABILITIES> 201
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 322,579
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (8,236)
<NET-ASSETS> 318,612
<DIVIDEND-INCOME> 22
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 727
<NET-INVESTMENT-INCOME> (705)
<REALIZED-GAINS-CURRENT> (44)
<APPREC-INCREASE-CURRENT> (8,236)
<NET-CHANGE-FROM-OPS> (8,985)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 318,612
<ACCUMULATED-NII-PRIOR> 0
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<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 159,306
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> (.002)
<PER-SHARE-GAIN-APPREC> (.010)
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<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> .988
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 49
<NAME> SMA INHEIRITAGE SUB-ACCOUNT 207

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 61,385
<INVESTMENTS-AT-VALUE> 60,173
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<TOTAL-LIABILITIES> 54
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 61,279
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
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<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,212)
<NET-ASSETS> 60,119
<DIVIDEND-INCOME> 0
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<EXPENSES-NET> 238
<NET-INVESTMENT-INCOME> (238)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (1,212)
<NET-CHANGE-FROM-OPS> (1,450)
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<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 60,119
<ACCUMULATED-NII-PRIOR> 0
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<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 30,060
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> (.004)
<PER-SHARE-GAIN-APPREC> (.015)
<PER-SHARE-DIVIDEND> 0
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<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> .981
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>