INHERITAGE ACCOUNT OF ALLMERIC FINANCIAL LIFE INS & ANN CO, 497, 1998-05-07

INHERITAGE ACCOUNT OF ALLMERIC FINANCIAL LIFE INS & ANN CO
497, 1998-05-07

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VARIABLE INHEIRITAGE
(INDIVIDUAL JOINT SURVIVORSHIP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE)

Allmerica Financial Life Insurance and Annuity Company ("Company") issues the
individual joint survivorship flexible premium variable life insurance policies
("Policy" or "Policies") described in this Prospectus. The Policies are funded
by the Inheiritage Account ("Separate Account"), a separate investment account
of the Company. Life insurance coverage is provided for two Insureds, with Death
Proceeds payable at death of the last surviving Insured. Applicants must be Age
80 or under with respect to the younger Insured, and Age 85 or under with
respect to the older Insured.

The Policy permits you to allocate net premiums among up to 20 sub-accounts
("Sub-Accounts") of the Separate Account, a separate account of the Company, and
a fixed-interest account ("General Account") of the Company (collectively,
"Accounts"). Each Sub-Account invests its assets in a corresponding investment
portfolio of Allmerica Investment Trust ("Trust"), Variable Insurance Products
Fund ("Fidelity VIP"), Variable Insurance Products Fund II ("Fidelity VIP II"),
T. Rowe Price International Series, Inc. ("T. Rowe Price") or Delaware Group
Premium Fund, Inc. ("DGPF"). The following Underlying Funds are available under
the Policy (certain Funds may not be available in all states):

ALLMERICA INVESTMENT TRUST FIDELITY VIP
Select Aggressive Growth Fund Overseas Portfolio
Select Capital Appreciation Fund Equity-Income Portfolio
Select Value Opportunity Fund Growth Portfolio
Select Emerging Markets Fund High Income Portfolio
Select International Equity Fund
Select Growth Fund FIDELITY VIP II
Select Strategic Growth Fund Asset Manager Portfolio
Growth Fund
Equity Index Fund T. ROWE PRICE
Select Growth and Income Fund International Stock Portfolio
Investment Grade Income Fund
Government Bond Fund DGPF
Money Market Fund International Equity Series

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 FIDELITY VIP HIGH INCOME PORTFOLIO MAY INVEST 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 NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

THE POLICIES ARE OBLIGATIONS OF ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY
COMPANY AND ARE DISTRIBUTED BY ALLMERICA INVESTMENTS, INC. THE POLICIES ARE NOT
DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK OR CREDIT
UNION. THE POLICIES ARE NOT INSURED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT
INSURANCE CORPORATION (FDIC), OR ANY OTHER FEDERAL AGENCY. INVESTMENTS IN THE
CONTRACTS ARE SUBJECT TO VARIOUS RISKS, INCLUDING THE FLUCTUATION OF VALUE AND
POSSIBLE LOSS OF PRINCIPAL.

CORRESPONDENCE MAY BE MAILED TO
ALLMERICA LIFE, P.O. BOX 8014,
BOSTON, MA 02266-8014

DATED MAY 1, 1998
440 LINCOLN STREET
WORCESTER, MASSACHUSETTS 01653
(508) 855-1000
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(Continued from cover page)

Policyowners may, within limits, choose the amount of initial payment and vary
the frequency and amount of future payments. The Policy allows partial
withdrawals and full surrender of the Policy's Surrender Value, within limits.
The Policies are not suitable for short-term investment because of the
substantial nature of the surrender charge. If the Policyowner thinks about
surrendering the Policy, the lower deferred sales charges that apply during the
first two years from the date of issue or an increase in Face Amount should be
considered

In certain circumstances, the Policy may be considered a "modified endowment
contract." Under the Internal Revenue Code of 1986 ("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."

There is no guaranteed minimum Policy Value. The value of the 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, unless
the optional Guaranteed Death Benefit Rider is in effect.

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. You
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). The 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.

No claim is made that the Policy is in any way similar or comparable to a
systematic investment plan of a mutual fund.

IT MAY NOT BE ADVANTAGEOUS TO PURCHASE FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
AS A REPLACEMENT FOR YOUR CURRENT LIFE INSURANCE OR IF YOU ALREADY OWN A
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY.

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TABLE OF CONTENTS

<TABLE>
<S> <C>
SPECIAL TERMS............................................... 5
SUMMARY..................................................... 8
PERFORMANCE INFORMATION..................................... 18
DESCRIPTION OF THE COMPANY, THE SEPARATE ACCOUNT AND THE
UNDERLYING FUNDS........................................... 23
INVESTMENT OBJECTIVES AND POLICIES.......................... 25
INVESTMENT ADVISORY SERVICES................................ 27
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS........... 30
VOTING RIGHTS............................................... 30
THE POLICY.................................................. 31
Applying for the Policy................................... 31
Free-Look Period.......................................... 32
Conversion Privileges..................................... 33
Premium Payments.......................................... 33
Incentive Funding Discount................................ 34
Guaranteed Death Benefit Rider............................ 34
Paid-up Insurance Option.................................. 35
Allocation of Net Premiums................................ 36
Transfer Privilege........................................ 36
Death Proceeds............................................ 37
Sum Insured Options....................................... 38
Change in Sum Insured Option.............................. 41
Change in Face Amount..................................... 41
Policy Value and Surrender Value.......................... 42
Death Proceeds Payment Options............................ 44
Optional Insurance Benefits............................... 44
Policy Surrender.......................................... 44
Partial Withdrawals....................................... 45
CHARGES AND DEDUCTIONS...................................... 45
Tax Expense Charge........................................ 45
Premium Expense Charge.................................... 45
Monthly Deduction from Policy Value....................... 46
Charges Against Assets of the Separate Account............ 48
Surrender Charge.......................................... 49
Charges on Partial Withdrawals............................ 50
Transfer Charges.......................................... 51
Charge for Increase in Face Amount........................ 51
Other Administrative Charges.............................. 51
POLICY LOANS................................................ 52
POLICY TERMINATION AND REINSTATEMENT........................ 53
OTHER POLICY PROVISIONS..................................... 54
DIRECTORS AND PRINCIPAL OFFICERS OF THE COMPANY............. 57
DISTRIBUTION................................................ 58
SERVICES.................................................... 58
REPORTS..................................................... 58
LEGAL PROCEEDINGS........................................... 59
FURTHER INFORMATION......................................... 59
INDEPENDENT ACCOUNTANTS..................................... 59
FEDERAL TAX CONSIDERATIONS.................................. 59
The Company and the Separate Account...................... 59
Taxation of the Policies.................................. 60
Modified Endowment Contracts.............................. 61
</TABLE>

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<TABLE>
<S> <C>
Estate and Generation-Skipping Taxes...................... 61
MORE INFORMATION ABOUT THE GENERAL ACCOUNT.................. 62
FINANCIAL STATEMENTS........................................ 63
APPENDIX A -- OPTIONAL BENEFITS............................. A-1
APPENDIX B -- PAYMENT OPTIONS............................... B-1
APPENDIX C -- ILLUSTRATIONS................................. C-1
APPENDIX D -- CALCULATION OF MAXIMUM SURRENDER CHARGES...... D-1
</TABLE>

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SPECIAL TERMS

ACCUMULATION UNIT: A measure of your interest in a Sub-Account.

AGE: An Insured's age as of the nearest birthday measured from the 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: Allmerica Financial Life Insurance and Annuity 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, unless the Guaranteed Death Benefit rider is in
effect. If the Rider is in effect, the Death Proceeds will be the greater of (a)
the Face Amount as of the final Premium Payment Date, or (b) the Policy Value as
of the date due proof of death is received by the Company. This Rider may not be
available in all states.

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, unless the optional Guaranteed Death Benefit
Rider is in effect. This Rider may not be available in all states.

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 the 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.

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SEPARATE ACCOUNT: A Separate Account of the Company to which you 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 you pay 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 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 the 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 the Policy at any
time. It is equal to the sum of (a) the value of the Accumulation Units credited
to the Policy in the Sub-Accounts and (b) the accumulation in the General
Account credited to that Policy.

POLICYOWNER: the person, persons or entity entitled to exercise the rights and
privileges under the 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, you may specify from which
Sub-Account certain deductions will be made or to which Sub-Account Policy Value
will be allocated. If you do 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.

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SUB-ACCOUNT: A division of the Separate 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, the
Variable Insurance Products Fund II, the T. Rowe Price International Stock
Portfolio of T. Rowe Price International Series, Inc., or the Series of Delaware
Group Premium Fund.

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

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 the 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.

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

YOU OR YOUR: The Policyowner, as shown in the application or the latest change
filed with the Company.

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SUMMARY

The following is a summary of the individual joint survivorship flexible premium
variable life insurance policy sold by Allmerica Financial Life Insurance and
Annuity Company ("Company"). It highlights key points from the Prospectus which
follows. If you are considering the purchase of this product, you should read
the Prospectus carefully before making a decision. It offers a more complete
presentation of the topics presented here, and will help you better understand
the product. However, the Policy together with its attached application
constitutes the entire agreement between the Company and You.

FREE-LOOK PERIOD -- The Policy provides for an initial free-look period. You
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:

- 45 days after the application for the Policy is signed,

- 10 days after you receive the Policy (or, if required by state law, the
longer period indicated in your Policy), or

- 10 days after the Company mails or personally delivers a Notice of
Withdrawal Rights to you.

Upon returning the Policy, you will receive a refund equal to the sum of:

(1) the difference between the premium, including fees and charges paid,
and any amount allocated to the Separate Account, PLUS

(2) the value of the amounts allocated to the Separate Account, PLUS

(3) any fees or charges imposed on the amounts allocated to the Separate
Account.

The amount refunded in (1) above includes any premiums allocated to the
General Account. Where required by state law, however, the Company will refund
the entire amount of premiums paid. A free-look privilege also applies after a
requested increase in the 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, you may convert the Policy to a
non-variable flexible premium adjustable 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 the Face Amount. Where required by
state law, and at your request, the Company will issue a flexible premium
adjustable life insurance policy to you. The new policy will have the same
Face Amount, issue age, Date of Issue, and Premium Class as the original
Policy. See THE POLICY -- "Conversion Privileges."

ABOUT THE POLICY

The Policy allows you to make premium payments in any amount and frequency,
subject to certain limitations. As long as the Policy remains in force, it will
provide for:

- life insurance coverage on the named Insureds,

- Policy Value,

- surrender rights and partial withdrawal rights,

- loan privileges, and

- in some cases, additional insurance benefits available by rider for an
additional charge.

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LIFE INSURANCE

The Policy is a life insurance contract with death benefits, Policy Value, and
other features traditionally associated with life insurance. The Policy is a
"joint survivorship" Policy 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
Policy is "variable" because the Policy Value will increase or decrease
depending on the investment experience of the Sub-Accounts of the Separate
Account. Under some circumstances, the death benefit may vary with the
investment experience of the Sub-Accounts.

FLEXIBLE PREMIUM

The Policy is a "flexible premium" policy because, unlike traditional insurance
policies, there is no fixed schedule for premium payments. You may vary the
frequency and amount of future premium payments, subject to certain limits,
restrictions and conditions set by Company standards and federal tax laws.
Although you may establish a schedule of premium payments ("planned premium
payments"), failure to make the planned premium payments will not necessarily
cause the Policy to lapse. Because of the variable nature of the Policy, making
planned premium payments does not guarantee that the Policy will remain in
force. Thus, you may, but are not required to, pay additional premiums. If the
Guaranteed Death Benefit Rider is in effect, however, certain minimum premium
payment tests must be met. (This Rider may not be available in all states.)

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 you. During
the first 48 Policy months after the Date of Issue or the effective date of an
increase in the Face Amount, the Policy will not lapse if the total premiums
paid less the Debt, partial withdrawals and withdrawal charges are equal to or
exceed the sum of the Minimum Monthly Factor for the number of months the
Policy, increase in Face Amount, or the Policy Change which causes a change in
the Minimum Monthly Factor has been in force. Even during these periods,
however, making payments at least equal to the Minimum Monthly Factor will not
prevent the Policy from lapsing if the Debt equals or exceeds the Policy Value
less surrender charges.

CONDITIONAL INSURANCE

If at the time of application you make 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 of insurance 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 are met. If you do 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 to place
the insurance in force.

If any premiums are paid prior to the issuance of the Policy, such premiums will
be held in the Company's General Account. If your 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 Principal Office. IF THE POLICY
IS NOT ISSUED AND ACCEPTED, THE INITIAL PREMIUMS WILL BE RETURNED TO YOU WITHOUT
INTEREST.

GUARANTEED DEATH BENEFIT RIDER (MAY NOT BE AVAILABLE IN ALL STATES)

This Rider, which is available only at Date of Issue:

- guarantees that the Policy will not lapse, regardless of the investment
performance of the Separate Account; and

- provides a guaranteed death benefit.

In order to maintain the Rider, certain minimum premium payment tests must be
met on each Policy anniversary and within 48 months following the Date of Issue
and/or the date of any increase in Face Amount. In addition, a one-time
administrative charge of $25 will be deducted from the Policy Value when the
Rider is elected. Certain transactions, including Policy loans, partial
withdrawals, and changes in the Death Benefit Options, can result in the
termination of the Rider. If this Rider is terminated, it cannot be reinstated.

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MINIMUM MONTHLY FACTOR

The Minimum Monthly Factor is a monthly premium amount calculated by the Company
and specified in the Policy. If you pay 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. At all other
times, however, 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 period, if: (1) Debt exceeds the Policy Value less surrender charges,
or (2) Debt, partial withdrawal and partial withdrawal charges have reduced
premium payments below an amount equal to the Minimum Monthly Factor multiplied
by the number of months since the Date of Issue or the effective date of an
increase in the Face Amount, then making payments at least equal to the Minimum
Monthly Factor will not prevent the Policy from lapsing.

MINIMUM MONTHLY FACTOR

The Minimum Monthly Factor is a monthly premium amount calculated by the Company
and specified in your Policy. If you pay 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. At all
other times, however, 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 period, if Debt exceeds the Policy Value less surrender
charges, then making payments at least equal to the Minimum Monthly Factor will
not prevent the Policy from lapsing.

ALLOCATION OF INITIAL PREMIUMS

Upon completion of issuance procedures, delivery of the Policy, and receipt of
any additional premiums, if you have paid less than $10,000 of initial Net
Premiums, such Net Premiums will be allocated to the Sub-Accounts according to
your 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 -- "Applying for the Policy."

Net Premiums may be allocated to one or more Sub-Accounts of the Separate
Account, to the General Account, or to any combination of Accounts. You bear the
investment risks of amounts 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
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.

PARTIAL WITHDRAWALS

After the first Policy year, you 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. A partial withdrawal will not be
allowed under Option 1 if it would reduce the Face Amount below $100,000.

A transaction charge, which is described in CHARGES AND DEDUCTIONS -- "Charges
on Partial Withdrawals," will be assessed to reimburse the Company for the cost
of processing each partial withdrawal. A partial withdrawal charge also may 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 Withdrawals" and CHARGES AND DEDUCTIONS -- "Charges
on Partial Withdrawals."

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LOAN PRIVILEGE

You may borrow against the Policy Value. The total amount you may borrow is the
Loan Value. Loan Value in the first Policy year is 75% of an amount equal to the
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
the Policy Value less the surrender charge.

Policy loans will be allocated among the General Account and the Sub-Accounts in
accordance with your instructions. If no allocation is made by you, 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-Accounts
to the General Account, and will earn monthly interest at an effective annual
rate of at least 6%. Therefore, the Policy loan may have a permanent impact on
the Policy Value even though it eventually is 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 time of death.

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. You
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 you will
be allocated to the General Account or Sub-Accounts in accordance with your
instructions. If you do not specify an allocation, the Company will allocate the
loan repayment in accordance with your most recent premium allocation
instructions. See POLICY LOANS.

PREFERRED LOAN OPTION

A preferred loan option is available under the Policy. The preferred loan option
will be available upon Written Request. It may be revoked by you at any time. If
this option has been selected, after the tenth Policy anniversary the Policy
Value in the General Account equal to the loan amount will be credited with
interest at an effective annual yield of at least 7.5%. The Company's current
practice is to credit a rate of interest equal to the rate being charged for the
preferred loan. There is some uncertainty as to the tax treatment of preferred
loans. Consult a qualified tax adviser (and see FEDERAL TAX CONSIDERATIONS). THE
PREFERRED LOAN OPTION MAY NOT BE AVAILABLE IN ALL STATES.

POLICY LAPSE AND REINSTATEMENT

Except as otherwise provided in the optional Guaranteed Death Benefit Option,
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, if any, or

(b) Debt exceeds Policy Value less surrender charges.

A 62-day grace period applies to each situation.

Even if the situation described in (a) above exists, the Policy will not lapse
if you meet the so-called "Minimum Monthly Factor" test. The Minimum Monthly
Factor test is only used to determine whether the Policy will enter the grace
period during the first 48 months or within 48 months following an increase in
the Face Amount. Under the Minimum Monthly Factor test, the Company determines
two amounts:

- the sum of the payments your have made, MINUS any Debt, withdrawals and
withdrawal charges, and

- the amount of the Minimum Monthly Factor (the amount is shown on page 5 of
the Policy) MULTIPLIED by the number of months the Policy has been in
force or the number of months which have elapsed since the last increase
in the Face Amount.

The Company then compares the first amount to the second amount. The Policy will
not enter the grace period if the first amount is greater than the second
amount. If the Policy lapses, it may be reinstated within three years of the
date of default (but not later that the Final Premium Payment Date). In order to
reinstate, you must pay the reinstatement premium and provide satisfactory
Evidence of Insurability. The Company reserves the

11
<PAGE>
right to increase the Minimum Monthly Factor upon reinstatement. See POLICY
TERMINATION AND REINSTATEMENT.

In addition, if the Guaranteed Death Benefit Rider is in effect, the Company
guarantees that the Policy will not lapse, regardless of the investment
performance of the Separate Account. The Policy may lapse, however, under
certain circumstances. See THE POLICY -- "Guaranteed Death Benefit Rider." (This
Rider may not be available in all states.)

POLICY VALUE AND SURRENDER VALUE

The Policy Value is the total amount available for investment under the Policy
at any time. It is the sum of the value of all Accumulation Units in the
Sub-Accounts of the Separate 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-Accounts to which Policy Value has been
allocated, and partial withdrawals. The Policy Value may be relevant to the
computation of the Death Proceeds. You bear the entire investment risk for
amounts allocated to the Separate Account. The Company does not guarantee a
minimum Policy Value.

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

The minimum increase in Face Amount is $100,000 and any increase also may
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" and "Conversion Privileges."

ADDITIONAL INSURANCE BENEFITS

You have 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. (All riders may not be available in all
states.)

12
<PAGE>
The cost of these optional insurance benefits will be deducted from the Policy
Value as part of the Monthly Deduction. See CHARGES AND DEDUCTIONS -- "Monthly
Deduction from Policy Value."

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
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 Separate 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
Separate 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." This option may not
be available in all states.

POLICY FEES AND CHARGES

There are costs related to the insurance and investment features of the Policy.
Fees and charges to cover these costs are deducted in several ways.

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 cost ("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. See
CHARGES AND DEDUCTIONS -- "Tax Expense 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, 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 administrative
expenses, and a charge for the cost of any additional benefits provided by
rider. You may instruct the Company to deduct the Monthly Deduction from one
specific Sub-Account. If you do 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. See CHARGES AND DEDUCTIONS -- "Monthly Deduction from Policy
Value."

The MONTHLY COST OF INSURANCE CHARGE is determined by multiplying the Insurance
Amount at Risk 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.

A MONTHLY ADMINISTRATIVE CHARGE of $6 per month is made for administrative
expenses. The charge is 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, changes in Sum Insured
Option, and death claims. These charges also help cover the cost of providing
annual statements and responding to Policyowner inquiries.

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

13
<PAGE>
DEDUCTIONS FROM THE SEPARATE ACCOUNT

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

CHARGES OF THE UNDERLYING FUNDS

In addition to the charges described above, certain fees and expenses are
deducted from the assets of the Underlying Funds. The levels of fees and
expenses vary among the Underlying Funds. The following table shows the expenses
of the Underlying Funds for 1997. For more information concerning fees and
expenses, see the prospectuses of the Underlying Funds.

<TABLE>
<CAPTION>
MANAGEMENT FEE TOTAL
(AFTER ANY EXPENSES
VOLUNTARY OTHER FUND (AFTER ANY
UNDERLYING FUND WAIVER) EXPENSES APPLICABLE LIMITATIONS)
- ------------------------------------------------------ ------------------ --------------------- -----------------------
<S> <C> <C> <C>
Select Aggressive Growth Fund......................... 0.89%* 0.09% 0.98%(1)(3)
Select Capital Appreciation Fund...................... 0.95%* 0.15% 1.10%(1)
Select Value Opportunity Fund......................... 0.90%** 0.14% 1.04%(1)(3)
Select Emerging Markets Fund @........................ 1.35% 0.65% 2.00%(1)
Select International Equity Fund...................... 0.92%* 0.20% 1.12%(1)(3)
DGPF International Equity Series...................... 0.75%(4) 0.15% 0.90%(4)
Fidelity VIP Overseas Portfolio....................... 0.75% 0.17% 0.92%(2)
T. Rowe Price International Stock Portfolio........... 1.05% 0.00% 1.05%
Select Growth Fund.................................... 0.85% 0.08% 0.93%(1)(3)
Select Strategic Growth Fund @........................ 0.85% 0.13% 0.98%(1)
Growth Fund........................................... 0.46%* 0.06% 0.52%(1)(3)
Fidelity VIP Growth Portfolio......................... 0.60% 0.09% 0.69%(2)
Equity Index Fund..................................... 0.31% 0.13% 0.44%(1)
Select Growth and Income Fund......................... 0.70%* 0.07% 0.77%(1)(3)
Fidelity VIP Equity-Income Portfolio.................. 0.50% 0.08% 0.58%(2)
Fidelity VIP II Asset Manager Portfolio............... 0.55% 0.10% 0.65%(2)
Fidelity VIP High Income Portfolio.................... 0.59% 0.12% 0.71%
Investment Grade Income Fund.......................... 0.44%* 0.10% 0.54%(1)
Government Bond Fund.................................. 0.50% 0.17% 0.67%(1)
Money Market Fund..................................... 0.27% 0.08% 0.35%(1)
</TABLE>

* Effective September 1, 1997, the management fee rates for these funds were
revised. The management fee ratios shown in the table above have been adjusted
to assume that the revised rates took effect on January 1, 1997.

14
<PAGE>
(@) Select Emerging Markets Fund and Select Strategic Growth Fund commenced
operations in February, 1998. Expenses shown are annualized and are based on
estimated amounts for the current fiscal year. Actual expense may be greater or
less than shown.

** The Select Value Opportunity Fund was formerly known as the "Small-Mid Cap
Value Fund." Effective April 1, 1997, the management fee rate of the former
Small-Mid Cap Value Fund was revised. In addition, effective April 1, 1997 and
until further notice, the management fee rate has been voluntarily limited to an
annual rate of 0.90% of average daily net assets, and total expenses are limited
to 1.25% of average daily net assets. The management fee ratio shown above for
the Select Value Opportunity Fund has been adjusted to assume that the revised
rate and the voluntarily limitations took effect on January 1, 1997. Without
these adjustments, the management fee ratio and the total fund expense ratio
would have been 0.95% and 1.09%, respectively. The management fee limitation may
be terminated at any time.

(1) Until further notice, AFIMS has declared a voluntary expense limitation of
1.35% of average net assets for the Select Aggressive Growth Fund and Select
Capital Appreciation Fund, 1.50% for the Select International Equity Fund, 1.25%
for the Select Value Opportunity Fund, 1.20% for the Growth Fund and Select
Growth Fund, 1.10% for the Select Growth and Income, 1.00% for the Investment
Grade Income Fund and Government Bond Fund, and 0.60% for the Money Market Fund
and Equity Index Fund. The total operating expenses of these Funds of the Trust
were less than their respective expense limitations throughout 1997.

Until further notice, AFIMS has declared a voluntary expense limitation of 1.20%
of average daily net assets for the Select Strategic Growth Fund. In addition,
AFIMS has agreed to voluntarily waive its management fee to the extent that
expenses of the Select Emerging Markets Fund exceed 2.00% of the Fund's average
daily net assets, except that such waiver shall not exceed the net amount of
management fees earned by AFIMS from the Fund after subtracting fees paid by
AFIMS to a sub-adviser.

The declaration of a voluntary expense limitation in any year does not bind
AFIMS to declare future expense limitations with respect to these funds. These
limitations may be terminated at any time.

(2) A portion of the brokerage commissions that certain funds pay was used to
reduce funds expenses. In addition, certain funds have entered into arrangements
with their custodian and transfer agent whereby interest earned on uninvested
cash balances was used to reduce custodian and transfer agent expenses.
Including these reductions, the total operating expenses presented in the table
would have been 0.57% for Fidelity VIP Equity Income Portfolio, 0.67% for
Fidelity VIP Growth Portfolio, 0.90% for Fidelity VIP Overseas Portfolio and
0.64% for Fidelity VIP II Asset Manager Portfolio.

(3) These funds have entered into agreements with brokers whereby brokers rebate
a portion of commissions. Had these amounts been treated as reductions of
expenses, the total operating expenses ratios would have been 0.93% for the
Select Aggressive Growth Fund, 1.10% for the Select International Equity Fund,
0.91% for the Select Growth Fund, 0.50% for the Growth Fund, 0.98% for the
Select Value Opportunity Fund, and 0.74% for the Select Growth and Income Fund.

(4) Effective July 1, 1997, Delaware International Advisers Ltd., the investment
adviser for the International Equity Series, has agreed to limit total annual
expenses of the fund to 0.95%. This limitation replaces a prior limitation of
0.80% that expired on June 30, 1997. The new limitation will be in effect
through October 31, 1998. The fee ratios shown above have been adjusted to
assume that the new voluntarily limitation took effect on January 1, 1997. In
1997, the actual ratio of total annual expenses of the International Equity
Series was 0.85%, and the actual management fee ratio was 0.70%.

OTHER CHARGES (NON-PERIODIC)

TRANSACTION CHARGE ON PARTIAL WITHDRAWALS

A transaction charge is assessed at the time of each partial withdrawal to
reimburse the Company for the cost of processing the withdrawal. The transaction
charge is the smaller of 2% of the amount withdrawn or $25. In addition to the
transaction charge, a partial withdrawal charge also may be made under certain
circumstances. See CHARGES AND DEDUCTIONS -- "Charges on Partial Withdrawals."

15
<PAGE>
CHARGE FOR INCREASE IN THE FACE AMOUNT

For each increase in the Face Amount, a charge of $40 will be deducted from the
Policy Value. This charge is designed to reimburse the Company for underwriting
and administrative costs associated with the increase. See THE POLICY -- "Change
in the Face Amount" and CHARGES AND DEDUCTIONS -- "Charge for Increase in Face
Amount."

TRANSFER CHARGE

The first 12 transfers of Policy Value in the 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."

SURRENDER CHARGES

At any time that the Policy is in effect, the 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 imposed only if,
during its duration, you request a full surrender or a decrease in the Face
Amount.

SURRENDER CHARGE ON THE INITIAL 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 you surrender 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, but the deferred sales charge will not
exceed 25% of premiums received. See THE POLICY -- "Surrender," and CHARGES AND
DEDUCTIONS -- "Surrender Charge."

SURRENDER CHARGES FOR INCREASES IN FACE AMOUNT

A separate surrender charge will apply to and is calculated for each increase in
the 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. Such deferred sales charge
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 you surrender the Policy during the first two Policy years
following an increase in the Face Amount before making premium payments
associated with the increase in the Face Amount which are at least equal to one
Guideline Annual Premium, the deferred administrative

16
<PAGE>
charge will be $8.50 per thousand dollars of Face Amount increase, but the
deferred sales charge will not exceed 25% of premiums associated with the
increase.

SURRENDER CHARGES ON DECREASES IN FACE AMOUNT

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

TAX TREATMENT

The 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, you 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 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."

The Policy offered by this Prospectus may be considered a "modified endowment
contract" if it fails a "seven-pay" test at any time during the first seven
Policy years, or within seven years of a material change in the Policy. The
Policy fails to satisfy the seven-pay test if the cumulative premiums paid under
the Policy at any time during the first seven Policy years, or within seven
years of a material change in the Policy, 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."

17
<PAGE>
PERFORMANCE INFORMATION

The Policies were first offered to the public in 1994. The Company, however, may
advertise "Total Return" and "Average Annual Total Return" performance
information based on the periods that the Sub-Accounts have been in existence
(TABLES I[A] and I[B]), and based on the periods that the Underlying Funds have
been in existence (TABLES II[A] and II[B]). 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 TABLES I[A] and
II[A]) under a "representative" Policy that is surrendered at the end of the
applicable period. For more information on charges under the Policy, see CHARGES
AND DEDUCTIONS.

Performance information may be compared, in reports and promotional literature,
to: (1) the Standard & Poor's 500 Composite Stock Price 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; (2) 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 (3) 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.

At times, the Company also may advertise the ratings and other information
assigned to it by independent rating organizations such as A.M. Best Company
("A.M. Best"), Moody's Investors Services, Inc. ("Moody's"), Standard & Poor's
Insurance Rating Services ("S&P"), and Duff & Phelps. A.M. Best's and Moody's
ratings reflect their current opinions of the Company's relative financial
strength and operating performance in comparison to the norms of the life/health
insurance industry. S&P's and Duff & Phelps' ratings measure the ability of an
insurance company to meet its obligations under insurance policies it issues,
and do not measure the ability of such companies to meet other non-policy
obligations. The ratings also do not relate to the performance of the Underlying
Funds.

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.

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,
1997. "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.

18
<PAGE>
TABLE I(A)
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING DECEMBER 31, 1997
SINCE INCEPTION OF THE SUB-ACCOUNTS
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.

<TABLE>
<CAPTION>
10 YEARS
ONE-YEAR OR LIFE
TOTAL 5 OF FUND
UNDERLYING FUND RETURN YEARS (IF LESS)
<S> <C> <C> <C>
Select Emerging Markets Fund........................ N/A N/A N/A
Select Aggressive Growth Fund....................... -85.59% N/A -0.21%
Select Capital Appreciation Fund.................... -89.74% N/A -5.74%
Select Value Opportunity Fund....................... -79.82% N/A -0.01%
T. Rowe Price International Stock Portfolio......... -100.00% N/A -24.45%
Fidelity VIP Overseas Portfolio..................... -92.29% N/A -12.23%
Select International Equity Fund.................... -98.76% N/A -8.60%
DGPF International Equity Series.................... -96.92% N/A -9.66%
Fidelity VIP Growth Portfolio....................... -81.10% N/A 4.26%
Select Growth Fund.................................. -71.19% N/A 4.76%
Select Strategic Growth Fund........................ N/A N/A N/A
Growth Fund......................................... -79.55% N/A 4.96%
Equity Index Fund................................... -72.73% N/A 6.27%
Fidelity VIP Equity-Income Portfolio................ -76.77% N/A 5.33%
Select Growth and Income Fund....................... -82.01% N/A 3.14%
Fidelity VIP II Asset Manager Portfolio............. -83.76% N/A -5.32%
Fidelity VIP High Income Portfolio.................. -86.55% N/A -5.23%
Investment Grade Income Fund........................ -94.26% N/A -12.20%
Government Bond Fund................................ -96.45% N/A -16.04%
Money Market Fund................................... -97.99% N/A -16.92%
</TABLE>

The inception dates for the Sub-Accounts are: 5/26/94 for Money Market; 9/19/94
for Equity Index; 6/30/94 for Government Bond; 4/25/94 for Select Aggressive
Growth; 5/19/94 for Select Growth; 6/1/94 for Select Value Opportunity; 5/3/94
for Select International Equity; 4/30/95 for Select Capital Appreciation; 5/1/94
for Fidelity VIP Equity-Income, for Select Growth and Income, and for Investment
Grade Income; 5/11/94 for Fidelity VIP Growth, for Growth, for Fidelity VIP
Asset Manager, and for DGPF International Equity; 5/12/94 for Fidelity VIP High
Income; 4/28/94 for Fidelity VIP Overseas; and 7/2/95 for the T. Rowe Price
International Stock. The Select Emerging Markets Fund and the Select Strategic
Growth Fund commenced operations in February 1998.

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.

19
<PAGE>
TABLE I(B)
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING DECEMBER 31, 1997
SINCE INCEPTION OF THE SUB-ACCOUNTS
EXCLUDING MONTHLY POLICY CHARGES AND SURRENDER CHARGES

The following performance information is based on the periods that the
Sub-Accounts 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 POLICY 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.

<TABLE>
<CAPTION>
10 YEARS
ONE-YEAR OR LIFE
TOTAL 5 OF FUND
UNDERLYING FUND RETURN YEARS (IF LESS)
<S> <C> <C> <C>
Select Emerging Markets Fund............................. N/A N/A N/A
Select Aggressive Growth Fund............................ 17.36% N/A 16.37%
Select Capital Appreciation Fund......................... 12.98% N/A 21.46%
Select Value Opportunity Fund............................ 23.44% N/A 17.42%
T. Rowe Price International Stock Portfolio.............. 1.93% N/A 8.57%
Fidelity VIP Overseas Portfolio.......................... 10.29% N/A 7.00%
Select International Equity Fund......................... 3.46% N/A 9.91%
DGPF International Equity Series......................... 5.40% N/A 9.29%
Fidelity VIP Growth Portfolio............................ 22.09% N/A 20.40%
Select Growth Fund....................................... 32.55% N/A 21.00%
Select Strategic Growth Fund............................. N/A N/A N/A
Growth Fund.............................................. 23.73% N/A 20.98%
Equity Index Fund........................................ 30.92% N/A 25.14%
Fidelity VIP Equity-Income Portfolio..................... 26.66% N/A 21.04%
Select Growth and Income Fund............................ 21.13% N/A 19.24%
Fidelity VIP II Asset Manager Portfolio.................. 19.29% N/A 12.67%
Fidelity VIP High Income Portfolio....................... 16.34% N/A 12.77%
Investment Grade Income Fund............................. 8.21% N/A 7.10%
Government Bond Fund..................................... 5.90% N/A 5.67%
Money Market Fund........................................ 4.27% N/A 4.17%
</TABLE>

20
<PAGE>
TABLE II(A):
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING DECEMBER 31, 1997
SINCE INCEPTION OF THE UNDERLYING FUNDS
NET OF ALL CHARGES AND ASSUMING SURRENDER OF THE POLICY

<TABLE>
<CAPTION>
10 YEARS
ONE-YEAR OR LIFE
TOTAL 5 OF FUND
UNDERLYING FUND RETURN YEARS (IF LESS)
<S> <C> <C> <C>
Select Emerging Markets Fund.................... N/A N/A N/A
Select Aggressive Growth Fund................... -85.59% 7.32% 11.43%
Select Capital Appreciation Fund................ -89.74% N/A -5.65%
Select Value Opportunity Fund................... -79.82% N/A 5.77%
T. Rowe Price International Stock Portfolio..... -100.00% N/A -11.57%
Fidelity VIP Overseas Portfolio................. -92.29% 4.23% 6.17%
Select International Equity Fund................ -98.76% N/A -8.64%
DGPF International Equity Series................ -96.92% 1.35% 1.46%
Fidelity VIP Growth Portfolio................... -81.10% 8.70% 14.06%
Select Growth Fund.............................. -71.19% 5.43% 7.84%
Select Strategic Growth Fund.................... N/A N/A N/A
Growth Fund..................................... -79.55% 6.84% 13.99%
Equity Index Fund............................... -72.73% 10.44% 14.96%
Fidelity VIP Equity-Income Portfolio............ -76.77% 11.15% 13.57%
Select Growth and Income Fund................... -82.01% 7.07% 6.69%
Fidelity VIP II Asset Manager Portfolio......... -83.76% 2.91% 8.49%
Fidelity VIP High Income Portfolio.............. -86.55% 4.00% 9.52%
Investment Grade Income Fund.................... -94.26% -3.59% 5.71%
Government Bond Fund............................ -96.45% -5.47% -0.50%
Money Market Fund............................... -97.99% -7.01% 2.09%
</TABLE>

The inception dates for the Underlying Funds are: 4/29/85 for Growth, Investment
Grade Income 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 Select Value Opportunity; 5/01/94 for Select International
Equity; 4/28/95 for the Select Capital Appreciation; 10/09/86 for Fidelity VIP
Equity-Income and Fidelity VIP Growth; 9/19/85 for Fidelity VIP High Income;
1/28/87 for Fidelity VIP Overseas; 9/06/89 for Fidelity VIP II Asset Manager;
10/29/92 for DGPF International Equity; and 3/31/94 for the T. Rowe Price
International Stock. The Select Emerging Markets Fund and the Select Strategic
Growth Fund commenced operations in February 1998.

21
<PAGE>
TABLE II(B)
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING DECEMBER 31, 1997
SINCE INCEPTION OF THE UNDERLYING FUNDS
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 POLICY 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.

<TABLE>
<CAPTION>
10 YEARS
ONE-YEAR OR LIFE
TOTAL 5 OF FUND
UNDERLYING FUND RETURN YEARS (IF LESS)
<S> <C> <C> <C>
Select Emerging Markets Fund.......................... N/A N/A N/A
Select Aggressive Growth Fund......................... 17.36% 15.45% 18.19%
Select Capital Appreciation Fund...................... 12.98% N/A 21.47%
Select Value Opportunity Fund......................... 23.44% N/A 15.58%
T. Rowe Price International Stock Portfolio........... 1.93% N/A 6.82%
Fidelity VIP Overseas Portfolio....................... 10.29% 12.80% 8.36%
Select International Equity Fund...................... 3.46% N/A 9.86%
DGPF International Equity Series...................... 5.40% 10.36% 10.02%
Fidelity VIP Growth Portfolio......................... 22.09% 16.64% 15.84%
Select Growth Fund.................................... 32.55% 13.82% 15.03%
Select Strategic Growth Fund.......................... N/A N/A N/A
Growth Fund........................................... 23.73% 15.03% 15.77%
Equity Index Fund..................................... 30.92% 18.16% 18.30%
Fidelity VIP Equity-Income Portfolio.................. 26.66% 18.78% 15.37%
Select Growth and Income Fund......................... 21.13% 15.23% 14.03%
Fidelity VIP II Asset Manager Portfolio............... 19.29% 11.68% 11.43%
Fidelity VIP High Income Portfolio.................... 16.34% 12.60% 11.51%
Investment Grade Income Fund.......................... 8.21% 6.27% 7.93%
Government Bond Fund.................................. 5.90% 4.74% 5.66%
Money Market Fund..................................... 4.27% 3.50% 4.58%
</TABLE>

22
<PAGE>
DESCRIPTION OF THE COMPANY, THE SEPARATE ACCOUNT,
AND THE UNDERLYING FUNDS

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. As of December 31, 1997, the
Company had over $9.4 billion in assets. 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.

Effective October 1, 1995, the Company changed its name from SMA Life Assurance
Company to Allmerica Financial Life Insurance and Annuity Company. The Company
is an indirect wholly owned subsidiary of First Allmerica Financial Life
Insurance Company ("First Allmerica") which, in turn, is a wholly owned
subsidiary of Allmerica Financial Corporation ("AFC"). First Allmerica,
originally organized under the laws of Massachusetts in 1844 as a mutual life
insurance company and known as State Mutual Life Assurance Company of America,
converted to a stock life insurance company and adopted its present name on
October 16, 1995. First Allmerica is the fifth oldest life insurance company in
America.

The Company is a charter member of the Insurance Marketplace Standards
Association ("IMSA"). Companies that belong to IMSA subscribe to a rigorous set
of standards that cover the various aspects of sales and service for
individually sold life insurance and annuities. IMSA members have adopted
policies and procedures that demonstrate a commitment to honesty, fairness and
integrity in all customer contacts involving sales and service of individual
life insurance and annuity products.

THE SEPARATE ACCOUNT

The Separate Account was authorized by vote of the Board of Directors of the
Company on September 15, 1993. The Separate Account is registered with the
Securities and Exchange Commission ("SEC") 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
Separate Account or the Company by the SEC.

The assets used to fund the variable portion of the Policies are set aside in
the Separate 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 Separate Account may not be charged with any liabilities arising out of
any other business of the Company. Twenty Sub-Accounts of the Separate Account
are currently offered under the Policy. 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 Underlying Fund of one of the following investment companies:

- Allmerica Investment Trust

- Variable Insurance Products Fund

- Variable Insurance Products Fund II

- T. Rowe Price International Series, Inc.

- Delaware Group Premium Fund, Inc.

23
<PAGE>
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 Separate Account.

Each Sub-Account has two sub-divisions. One sub-division applies to Policies
during their first 15 Policy years, which are subject to a Separate Account
administrative charge. See CHARGES AND DEDUCTIONS -- "Charges Against Assets of
the Separate Account." Thereafter, such Policies are automatically allocated to
the second sub-division to account for the elimination of the Separate Account
administrative charge.

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

ALLMERICA INVESTMENT TRUST

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

The Trust was established by First Allmerica 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 the Company, or other
affiliated insurance companies. Thirteen investment portfolios of the Trust
("Funds") are available under the Policy, each issuing a series of shares: the
Select Aggressive Growth Fund, Select Capital Appreciation Fund, Select Value
Opportunity Fund, Select Emerging Markets Fund, Select International Equity
Fund, Select Growth Fund, Select Strategic Growth Fund, Growth Fund, Equity
Index Fund, Select Growth and Income Fund, Investment Grade Income Fund,
Government Bond Fund, and Money Market Fund.

Allmerica Financial Investment Management Services, Inc. ("AFIMS") 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 Underlying Funds. See INVESTMENT ADVISORY SERVICES -- "Investment Advisory
Services to the Trust."

FIDELITY VARIABLE INSURANCE PRODUCTS FUND

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

Various Fidelity companies perform certain activities required to operate
Fidelity VIP. FMR is one of America's largest investment management
organizations, and has its principal business address at 82 Devonshire Street,
Boston, Massachusetts. It is composed of a number of different companies which
provide a variety of financial services and products. FMR 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 Fidelity VIP, as part of their operating expenses, pay an
investment management fee to FMR. See "Investment Advisory Services to Fidelity
VIP and Fidelity VIP II."

24
<PAGE>
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II

Variable Insurance Products Fund II ("Fidelity VIP II"), managed by FMR (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 is registered with the SEC under the 1940 Act. One
of its investment portfolios is available under the Policy: the Fidelity VIP II
Asset Manager Portfolio. The Portfolios of Fidelity VIP II, as part of their
operating expenses, pay an investment management fee to FMR. See "Investment
Advisory Services to Fidelity VIP and Fidelity VIP II."

T. ROWE PRICE INTERNATIONAL SERIES, INC.

T. Rowe Price International Series, Inc. ("T. Rowe Price"), managed by Rowe
Price-Fleming International, Inc. ("Price-Fleming") (See "Investment Advisory
Services to T. Rowe Price"), is an open-end, diversified, management investment
company organized as a Maryland corporation in 1994 and is registered with the
SEC under the 1940 Act. One of its investment portfolios is available under the
Policy: the T. Rowe Price International Stock Portfolio. An affiliate of
Price-Fleming, T. Rowe Price Associates, Inc. serves as Sub-Adviser to the
Select Capital Appreciation Fund of the Trust

DELAWARE GROUP PREMIUM FUND, INC.

Delaware Group Premium Fund, Inc. ("DGPF") is an open-end, diversified
management investment company registered with the SEC under the 1940 Act. Such
registration does not involve supervision by the SEC 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 Policy: the International Equity
Series. 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.

SELECT AGGRESSIVE GROWTH FUND -- seeks above-average capital appreciation by
investing primarily in common stocks of companies which are believed to have
significant potential for capital appreciation.

SELECT CAPITAL APPRECIATION FUND -- 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 invests
primarily in common stock of industries and companies which are believed to be
experiencing favorable demand for their products and services, and which operate
in a favorable competitive environment and regulatory climate.

SELECT VALUE OPPORTUNITY FUND -- seeks long-term growth of capital by investing
primarily in a diversified portfolio of common stocks of small and mid-size
companies, whose securities at the time of purchase are considered by the
Sub-Adviser to be undervalued.

25
<PAGE>
SELECT EMERGING MARKETS FUND -- seeks long-term growth of capital by investing
in the world's emerging markets.

SELECT INTERNATIONAL EQUITY FUND -- seeks maximum long-term total return
(capital appreciation and income) primarily by investing in common stocks of
established non-U.S. companies.

DGPF INTERNATIONAL EQUITY SERIES -- 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.

FIDELITY VIP OVERSEAS PORTFOLIO -- 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.

T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO -- seeks long-term growth of capital
through investments primarily in common stocks of established, non-U.S.
companies.

SELECT GROWTH FUND -- seeks to achieve long-term 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 STRATEGIC GROWTH FUND -- seeks long-term growth of capital by investing
primarily in common stocks of established companies.

GROWTH FUND -- 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.

FIDELITY VIP GROWTH PORTFOLIO -- 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 also may be found
in other types of securities, including bonds and preferred stocks.

EQUITY INDEX FUND -- seeks to provide investment results that correspond to the
aggregate price and yield performance of a representative selection of United
States publicly traded common stocks. The Equity Index Fund seeks to achieve its
objective by attempting to replicate the aggregate price and yield performance
of the S&P 500 Stocks.

SELECT GROWTH AND INCOME FUND -- 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.

FIDELITY VIP EQUITY-INCOME PORTFOLIO -- seeks reasonable income by investing
primarily in income-producing equity securities. In choosing these securities,
the Portfolio also will 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 S&P 500. 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. See
"Risks of Lower-Rated Debt Securities" in the Fidelity VIP prospectus.

FIDELITY VIP II ASSET MANAGER PORTFOLIO -- seeks high total return with reduced
risk over the long term by allocating its assets among domestic and foreign
stocks, bonds and short-term money market instruments.

26
<PAGE>
FIDELITY VIP HIGH INCOME PORTFOLIO -- 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 often are considered to be speculative, and involve
greater risk of default or price changes than securities assigned a high quality
rating. See "Risks of Lower-Rated Debt Securities" in the Fidelity VIP
prospectus.

INVESTMENT GRADE INCOME FUND -- 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 capital appreciation) as is consistent with prudent
investment management.

GOVERNMENT BOND FUND -- 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, and in related options, futures and
repurchase agreements.

MONEY MARKET FUND -- is invested in a diversified portfolio of high-quality,
short-term money market instruments with the objective of obtaining maximum
current income consistent with the preservation of capital and liquidity.

CERTAIN UNDERLYING FUNDS HAVE INVESTMENT OBJECTIVES AND/OR POLICIES SIMILAR TO
THOSE OF OTHER UNDERLYING FUNDS. THEREFORE, TO CHOOSE THE SUB-ACCOUNTS WHICH
BEST WILL MEET YOUR NEEDS AND OBJECTIVES, CAREFULLY READ THE PROSPECTUSES OF THE
TRUST, FIDELITY VIP, FIDELITY VIP II, T. ROWE PRICE AND DGPF, ALONG WITH THIS
PROSPECTUS. IN SOME STATES, INSURANCE REGULATIONS MAY RESTRICT THE AVAILABILITY
OF PARTICULAR SUB-ACCOUNTS.

If required in your state, in the event of a material change in the investment
Policy of a Sub-Account or the Underlying Fund in which it invests, you will be
notified of the change. If you have Policy Value in that Sub-Account, the
Company will transfer it without charge on written request within sixty (60)
days of the later of (1) the effective date of such change in the investment
policy, or (2) your receipt of the notice of the right to transfer. You may then
change the percentages of your premium and deduction allocations.

INVESTMENT ADVISORY SERVICES

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
AFIMS to handle the day-to-day affairs of the Trust. AFIMS, subject to review by
the Trustees, is responsible for the general management of the Funds. AFIMS also
performs 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. Allmerica Asset Management, Inc., an indirect wholly owned
subsidiary of Allmerica Financial Corporation, is an affiliate of the Company.

Other than the expenses specifically assumed by AFIMS 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 ("1933 Act"), other fees
payable to the SEC, independent public accountant, legal and custodian fees,
association membership dues, taxes, interest, insurance premiums, brokerage
commissions, fees and expenses of the Trustees who are not affiliated with
AFIMS, expenses for proxies, prospectuses, reports to shareholders, and other
expenses.

27
<PAGE>
For providing its services under the Management Agreement, AFIMS will receive a
fee, computed daily at an annual rate based on the average daily net asset value
of each Fund as follows:

<TABLE>
<S> <C> <C>
Select Aggressive Growth Fund First $100 million 1.00%
Next $150 million 0.90%
Over $250 million 0.85%

Select Capital Appreciation Fund First $100 million 1.00%
Next $150 million 0.90%
Over $250 million 0.85%

Select Value Opportunity Fund First $100 million 1.00%
Next $150 million 0.85%
Next $250 million 0.80%
Next $250 million 0.75%
Over $750 million 0.70%

Select Emerging Markets Fund * 1.35%

Select International Equity Fund First $100 million 1.00%
Next $150 million 0.90%
Over $250 million 0.85%

Select Growth Fund *

Select Strategic Growth Fund * 0.85%

Growth Fund First $250 million 0.60%
Next $250 million 0.40%
Over $500 million 0.35%

Equity Index Fund First $50 million 0.35%
Next $200 million 0.30%
Over $250 million 0.25%

Select Growth and Income Fund First $100 million 0.75%
Next $150 million 0.70%
Over $250 million 0.65%

Investment Grade Income Fund First $50 million 0.50%
Next $50 million 0.45%
Over $100 million 0.40%

Government Bond Fund * 0.50%

Money Market Fund First $50 million 0.35%
Next $200 million 0.25%
Over $250 million 0.20%
</TABLE>

* For the Select Emerging Markets Fund, the Select Growth Fund, the Select
Strategic Growth Fund, and the Government Bond Fund, the investment management
fee does not vary according to the level of assets in the Fund. AFIMS' fee
computed for each Fund will be paid from the assets of such Fund.

Pursuant to the Management Agreement with the Trust, AFIMS 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 Agreements, the Sub-Advisers are
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

28
<PAGE>
changed without the approval of a majority in interest of the shareholders of
the affected Fund. AFIMS is solely responsible for the payment of all fees for
investment management services to the Sub-Advisers.

INVESTMENT ADVISORY SERVICES TO FIDELITY VIP AND FIDELITY VIP II FUNDS

For managing investments and business affairs, each Portfolio pays a monthly fee
to FMR. The prospectuses of Fidelity VIP and Fidelity VIP II contain additional
information concerning the Portfolios, including information about additional
expenses paid by the Portfolios, and should be read in conjunction with this
Prospectus.

The Fidelity VIP High Income Portfolio pays a monthly fee to FMR 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 FMR. 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 Fidelity VIP 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 fee rates of the Fidelity VIP Equity-Income, Fidelity VIP Growth, Fidelity
VIP II Asset Manager and Fidelity VIP Overseas Portfolios each are made of two
components:

1. A group fee rate based on the monthly average net assets of all of the
mutual funds advised by FMR. 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 Fidelity VIP Equity-Income
Portfolio, 0.30% for the Fidelity VIP Growth Portfolio, 0.25% for the
Fidelity VIP II Asset Manager Portfolio and 0.45% for the Fidelity VIP
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 Fidelity VIP High Income Portfolio may have a fee as high as 0.82% of
its average net assets. The Fidelity VIP Equity-Income Portfolio may have a fee
as high as 0.72% of its average net assets. The Fidelity VIP Growth Portfolio
may have a fee as high as 0.82% of its average net assets. The Fidelity VIP II
Asset Manager Portfolio may have a fee as high as 0.77% of its average net
assets. The Overseas Portfolio may have a fee 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 FMR.

INVESTMENT ADVISORY SERVICES TO T. ROWE PRICE

The Investment Adviser for the T. Rowe Price 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 $30 billion under management in its offices in
Baltimore, London, Tokyo, Hong Kong, Singapore and Buenos Aires. To cover
investment management and operating expenses, the T. Rowe Price 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

The 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

29
<PAGE>
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 Separate Account or the affected Sub-Account, the
Company may redeem the shares of that Underlying Fund and substitute shares of
another registered open-end management company. The Company will not substitute
any shares attributable to the Policy interest in a Sub-Account without notice
to you and prior approval of the SEC and state insurance authorities, to the
extent required by the 1940 Act or other applicable law. The Separate Account
may, to the extent permitted by law, purchase other securities for other
policies or permit a conversion between policies upon request by the
Policyowner.

The Company also reserves the right to establish additional Sub-Accounts of the
Separate Account, each of which would invest in shares corresponding to a new
Underlying Fund or in shares of another investment company. Subject to
applicable law and any required SEC 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 Fidelity VIP, Fidelity VIP II, T. Rowe
Price and the DGPF Series 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 Funds
do not currently foresee any such disadvantages, the Company and the respective
Trustees intend to monitor events in order to identify any material conflicts
and to determine what action, if any, should be taken. 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 expenses.

If any of these substitutions or changes is made, the Company may by 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 Separate Account or any Sub-Accounts 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.

30
<PAGE>
received from all persons with an interest in such Sub-Account who furnish
instructions to the Company. The Company will also vote shares that it owns and
which are not attributable to Policies in the same proportion.

The number of votes which the 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.

THE POLICY

APPLYING FOR THE POLICY

The Policy cannot be issued until the underwriting procedure has been completed.
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 Insured is insurable. This
process may involve medical examinations, and may require that further
information be provided by the proposed Policyowner before a determination of
insurability can be made. The Company reserves the right to reject an
application which does not meet its underwriting guidelines, but in underwriting
insurance, the Company complies with all applicable federal and state
prohibitions concerning unfair discrimination.

CONDITIONAL INSURANCE AGREEMENT

It is possible to obtain life insurance protection during the underwriting
process through a Conditional Insurance Agreement. If at the time of application
you make a payment equal to at least one "Minimum Monthly Factor" for the Policy
as applied for, the Company will provide fixed conditional insurance in the
amount of insurance applied for up to a maximum of $500,000, pending
underwriting approval. This coverage generally will 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 death 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.

PREMIUMS HELD IN THE GENERAL ACCOUNT PENDING UNDERWRITING APPROVAL

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 by you, the
initial premium held in the General Account will be credited with interest at a
specified rate, beginning not later than the date of receipt of the premium at
the Principal Office. IF THE POLICY IS NOT ISSUED, THE PREMIUMS WILL BE RETURNED
TO YOU WITHOUT INTEREST.

31
<PAGE>
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 when the Delivery Receipt is
returned to the Principal Office. For all other Policyowners, the date the
Company transfers the initial net premium from the General Account to the
selected Sub-Accounts depends on the premium amount. If the initial net premiums
are less than $10,000, the amounts held in the General Account will be allocated
to the selected Sub-Accounts 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 the Policy's Delivery Receipt to the
Principal Office. The entire amount held in the General Account for allocation
to the Separate Account then will be allocated to the Sub-Accounts according to
your instructions.

FREE-LOOK PERIOD

The Policy provides for an initial "free-look" period. You 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:

- 45 days after the application for the Policy are signed, or

- 10 days after you receive the Policy (or longer if required by state law),
or

- 10 days after the Company mails or personally delivers a notice of
withdrawal rights to you.

When you return the Policy, the Company will mail within seven days a refund
equal to the sum of:

(1) the difference between the premiums, including fees and charges paid, and
any amounts allocated to the Separate Account, plus

(2) the value of the amounts allocated to the Separate Account, PLUS

(3) any fees or charges imposed on the amounts allocated to the Separate
Account.

The amount refunded in (1) 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 your bank.

FREE LOOK WITH FACE AMOUNT INCREASES

After an increase in the Face Amount, the Company will mail or personally
deliver a notice of a "free look" with respect to the increase. You will have
the right to cancel the increase before the latest of:

- 45 days after the application for the increase is signed, or

- 10 days after you receive the new specification pages issued for the
increase (or longer if required by state law), or

- 10 days after the Company mails or delivers a notice of withdrawal rights
to you.

Upon canceling the increase, you 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 you so request. The Company also will waive any
surrender charge calculated for the increase.

32
<PAGE>
CONVERSION PRIVILEGES

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

Where required by state law, at your request the Company will issue a flexible
premium adjustable life insurance policy to you. The new policy will have the
same Face Amount, Issue Ages, Date of Issue, and Premium Class as the original
Policy.

PREMIUM PAYMENTS

Premium payments are payable to the Company, and may be mailed to the Principal
Office or paid through one of the Company's authorized agents. All premium
payments after the initial premium payment are credited to the Separate Account
or the General Account as of date of receipt at the Principal Office.

PREMIUM FLEXIBILITY

Unlike conventional insurance policies, the Policy does not obligate you to pay
premiums in accordance with a rigid and inflexible premium schedule. You 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.

You also may 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.

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

Premiums are not limited as to frequency and number. No premium payment may be
less than $100, however, 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.

MINIMUM MONTHLY FACTOR

If, in the first 48 Policy months following issue or an increase in the Face
Amount, you make premium payments, less partial withdrawals and partial
withdrawal charges, at least equal to the sum of the Minimum Monthly Factor 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, and Debt does
not exceed Policy Value less surrender charges, 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 THE FACE AMOUNT, MAKING MONTHLY
PAYMENTS AT LEAST EQUAL TO THE MINIMUM MONTHLY FACTOR DOES NOT GUARANTEE THAT
THE POLICY WILL REMAIN IN FORCE.

33
<PAGE>
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 accept only
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 ("IRS") rules. Notwithstanding
the current maximum premium limitations, however, 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% during any Policy
year for which you qualify 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 Code)
accumulated from the Date of Issue to the date of qualification. The incentive
funding discount is not available in all states.

The amount needed to qualify 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. If the Company receives the proceeds from a policy
issued by an unaffiliated company to be exchanged for the Policy, however, 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.

GUARANTEED DEATH BENEFIT RIDER (MAY NOT BE AVAILABLE IN ALL STATES)

An optional Guaranteed Death Benefit Rider is available only at issue of the
Policy. If this Rider is in effect, the Company:

- guarantees that the Policy will not lapse, regardless of the investment
performance of the Separate Account, and

- provides a guaranteed death benefit.

In order to maintain the Guaranteed Death Benefit Rider, certain minimum premium
payment tests must be met on each Policy anniversary and within 48 months
following the Date of Issue and/or the date of any increase in the Face Amount,
as described below. In addition, a one-time administrative charge of $25 will be
deducted from the Policy Value when the Rider is elected. Certain transactions,
including Policy loans, partial withdrawals, and changes in Sum Insured Options,
can result in the termination of the Rider. If this Rider is terminated, it
cannot be reinstated.

GUARANTEED DEATH BENEFIT TESTS

While the Guaranteed Death Benefit Rider is in effect, the Policy will not lapse
if the following two tests are met:

1. Within 48 months following the Date of Issue of the Policy or of any
increase in the Face Amount, the sum of the premiums paid, less any debt,
partial withdrawals and withdrawal charges, must be greater than the Minimum
Monthly Factors (if any) multiplied by the number of months which have
elapsed since the Date of Issue or the effective date of increase; and

2. On each Policy anniversary, (a) must exceed (b) where, since the Date of
Issue:

(a) is the sum of your premiums, less any withdrawals, partial withdrawal
charges and Debt which is classified as a preferred loan; and

(b) is the sum of the minimum guaranteed Death Benefit premiums, as shown on
the specifications page of the Policy.

34
<PAGE>
GUARANTEED DEATH BENEFIT

If the Guaranteed Death Benefit Rider is in effect on the Final Premium Payment
Date, guaranteed Death Proceeds will be provided as long as the Rider is in
force. The Death Proceeds will be the greater of:

- the Face Amount as of the Final Premium Payment Date; or

- the Policy Value as of the date due proof of death is received by the
Company.

TERMINATION OF THE GUARANTEED DEATH BENEFIT RIDER

The Guaranteed Death Benefit Rider will end and may not be reinstated on the
first to occur of the following:

- foreclosure of a Policy loan, or

- the date on which the sum of your payments does not meet or exceed the
applicable Guaranteed Death Benefit test (above), or

- any Policy change that results in a negative guideline level premium, or

- the effective date of a change from Sum Insured Option 2 to Sum Insured
Option 1, if such change occurs within five Policy years of the Final
Premium Payment Date, or

- a request for a partial withdrawal or preferred loan is made after the
Final Premium Payment Date.

It is possible that the Policy Value will not be sufficient to keep the Policy
in force on the first Monthly Payment Date following the date the Rider
terminates. The net amount payable to keep the Policy in force will never exceed
the surrender charge plus three Monthly Deductions.

PAID-UP INSURANCE OPTION

Upon Written Request, the Policyowner may exercise a paid-up insurance option.
Paid-up life insurance is fixed insurance, usually having a reduced Face Amount,
for the lifetime of the insured with no further premiums due. If the Policyowner
elects this option, certain Policyowner rights and benefits may be limited.

The paid-up fixed insurance will be in the amount, up to the Face Amount of the
Policy, that the Surrender Value of the Policy can purchase for a net single
premium at the Insureds' Ages and Premium Class on the date this option is
elected. The Company will transfer any Policy Value in the Separate Account to
the General Account on the date it receives the written request to elect the
option. If the Surrender Value exceeds the net single premium necessary for the
fixed insurance, the Company will pay the excess to the Policyowner. The net
single premium is based on the Commissioners 1980 Standard Ordinary Mortality
Tables, Smoker or Non-Smoker, Male, Female (or Table B for unisex policies) with
increases in the 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 AND BENEFITS WILL BE AFFECTED:

- As described above, the paid-up insurance benefit is computed differently
from the Net Death Benefit, and the death benefit options will not apply.

- The Company will transfer the Policy Value in the Separate Account to the
General Account on the date it receives the Written Request to elect the
option. The Company will not allow transfers of Policy Value from the
General Account back to the Separate Account.

- The Policyowner may not make further premium payments.

- The Policyowner may not increase or decrease the Face Amount or make
partial withdrawals.

- Riders will continue only with the Company's consent.

35
<PAGE>
After electing paid-up fixed insurance, the Policyowner may surrender the Policy
for its net cash value. The cash value is equal to the net single premium for
paid-up insurance at the Insureds' Ages. The net cash value is the cash value
less any outstanding loans.

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 the Policy, you indicate the
initial allocation of Net Premiums among the General Account and the
Sub-Accounts of the Separate Account. You may allocate premiums to one or more
Sub-Accounts, but may not have Policy Value in more than 20 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%.

FUTURE CHANGES ALLOWED

You may change the allocation of future Net Premiums at any time pursuant to
written or telephone request. An allocation change will be effective as of the
date of receipt of the notice at the Principal Office. Currently, no charge is
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.

If allocation changes by telephone are elected by the Policyowner, a properly
completed authorization form must be on file before telephone requests will be
honored. The policy of the Company and its agents and affiliates is that they
will not be responsible for losses resulting from acting upon telephone requests
reasonably believed to be genuine. The Company will employ reasonable procedures
to confirm that instructions communicated by telephone are genuine; otherwise,
the Company may be liable for any losses due to unauthorized or fraudulent
instructions.

The procedures the Company follows for telephone transactions include requiring
callers to identify themselves by name, and to identify the Policyowner by name,
date of birth and social security number. All transfer instructions by telephone
are tape recorded.

INVESTMENT RISK

The Policy Value in the Sub-Accounts will vary with their investment experience;
you bear this investment risk. The investment performance may affect the Death
Proceeds as well. Policyowners periodically should 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, you 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 Accounts next computed
after receipt of the transfer order. The Company will make transfers pursuant to
written or telephone request. As discussed in THE POLICY -- "Allocation of Net
Premiums," a properly completed authorization form must be on file at the
Principal Office before telephone requests will be honored.

Currently, transfers involving the General Account are permitted only if:

- there has been at least a 90-day period since the last transfer from the
General Account, and

- 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.

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<PAGE>
DOLLAR-COST AVERAGING OPTION AND AUTOMATIC REBALANCING OPTION

You may have automatic transfers of at least $100 a month made on a periodic
basis:

- from the Sub-Accounts which invest in the Money Market Fund and Government
Bond Fund of the Trust, respectively, to one or more of the other
Sub-Accounts ("Dollar-Cost Averaging Option"), or

- to reallocate Policy Value among the Sub-Accounts ("Automatic Rebalancing
Option").

Automatic transfers may be made on a monthly, bi-monthly, quarterly, semi-annual
or annual schedule. Generally, all transfers will be processed on the 15th of
each scheduled month. If the 15th is not a business day, however, or is the
Monthly Payment Date, the automatic transfer will be processed on the next
business day. The Dollar-Cost Averaging Option and the Automatic Rebalancing
Option may not be in effect at the same time.

TRANSFER PRIVILEGE SUBJECT TO POSSIBLE LIMITS

The transfer privilege is subject to the Company's consent. The Company reserves
the right to impose limitations on transfers including, but not limited to:

- the minimum amount that may be transferred,

- the minimum amount that may remain in a Sub-Account following a transfer
from that Sub-Account,

- the minimum period of time between transfers involving the General
Account, and

- the maximum amount that may be transferred each time from the General
Account.

Currently, the first 12 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 12 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 12 free transfers.

DEATH PROCEEDS

The Policy provides for the payment of the Death Proceeds 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, due proof of such death must be received at the Principal Office. As
long as the Policy remains in force (see POLICY TERMINATION AND REINSTATEMENT),
the Company will pay the Death Proceeds to the named Beneficiary, upon due proof
of the death of the last surviving Insured.

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:

- 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

- any additional insurance on the Insureds' lives that is provided by rider;
minus

- 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.

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<PAGE>
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. You designate the desired Sum Insured Option in the applications. You 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 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.

GUIDELINE MINIMUM SUM INSURED -- TABLE 1
(AGE OF YOUNGER INSURED ON DEATH OF LAST SURVIVING INSURED)
<TABLE>
<CAPTION>
Age Percentage
- ------------------------------- --------------
<S> <C>
under 60....................... 300%
60............................. 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%

<CAPTION>
Age Percentage
- ------------------------------- --------------
<S> <C>
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............................. 100%
Over 95........................ 100%
</TABLE>

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<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
(AGE OF YOUNGER INSURED ON DEATH OF LAST SURVIVING INSURED)
<TABLE>
<CAPTION>
Age Percentage
- ------------------------------- --------------
<S> <C>
thru 40........................ 250%
41............................. 243%
42............................. 236%
43............................. 229%
44............................. 222%
45............................. 215%
46............................. 209%
47............................. 203%
48............................. 197%
49............................. 191%
50............................. 185%
51............................. 178%
52............................. 171%
53............................. 164%
54............................. 157%
55............................. 150%
56............................. 146%
57............................. 142%
58............................. 138%
59............................. 134%
60............................. 130%

<CAPTION>
Age Percentage
- ------------------------------- --------------
<S> <C>
61............................. 128%
62............................. 126%
63............................. 124%
64............................. 122%
65............................. 120%
66............................. 119%
67............................. 118%
68............................. 117%
69............................. 116%
70............................. 115%
71............................. 113%
72............................. 111%
73............................. 109%
74............................. 107%
75 thru 90..................... 105%
91............................. 104%
92............................. 103%
93............................. 102%
94............................. 101%
95............................. 100%
</TABLE>

* For a period of 90 days after a state insurance department has approved the
use of GUIDELINE MINIMUM SUM INSURED -- TABLE 2, the Company will permit
Policyowners 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.

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 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, you should select Option 1.

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ILLUSTRATIONS

For purposes of this illustration, assume that the younger Insured is under the
Age of 40, that there is no outstanding Debt, and that GUIDELINE MINIMUM SUM
INSURED -- TABLE I applies.

ILLUSTRATION OF OPTION 1

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).

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, and that GUIDELINE MINIMUM
INSURED -- TABLE 1 applies.

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.

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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.

CHANGE FROM OPTION 1 TO OPTION 2

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."

CHANGE FROM OPTION 2 TO OPTION 1

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

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

CHANGE IN FACE AMOUNT

Subject to certain limitations, you 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 you 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 IN FACE AMOUNT

Along with the Written Request for an increase, you 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. You 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

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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
$40 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" and "Surrender Charge."

After increasing the Face Amount, you will have the right (1) during a free-look
period, to have the increase canceled 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" and
"Conversion Privileges." A refund of charges which would not have been deducted
but for the increase will be made at your request.

DECREASES IN THE FACE AMOUNT

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 IRS rules, the decrease may be limited or Policy Value may
be returned to you (at your election) to the extent necessary to meet the
requirements. A return of Policy Value may result in tax liability to you.

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 the 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:

- the Face Amount provided by the most recent increase;

- the next most recent increases successively; and

- the initial Face Amount.

This order will also be used to determine whether a surrender charge will be
deducted and in what amount. If you request a decrease in the Face Amount, the
amount of any surrender charge deducted will reduce the current Policy Value.
You 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:

- your accumulation in the General Account, PLUS

- the value of the Accumulation Units in the Sub-Accounts.

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The Policy Value is used in determining the Surrender Value (the Policy Value
less any Debt and applicable surrender charges). There is no guaranteed minimum
Policy Value. Because the Policy Value on any date depends upon a number of
variables, it cannot be predetermined.

The Policy Value and the 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 Separate Account; see THE
POLICY -- "Applying for the Policy") less any Monthly Deductions due. On each
Valuation Date after the Date of Issue the Policy Value will be:

- 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

- 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-Accounts selected by you. 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 Principal Office. The number of Accumulation
Units will remain fixed unless changed by a subsequent split of Accumulation
Unit value, transfer, partial withdrawal or Policy 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 Separate 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:

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(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;

(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
0.90% 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 0.90%; and

(d) is the Separate 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 15 Policy
years.

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

DEATH PROCEEDS PAYMENT OPTIONS

During the Insureds' lifetimes, you 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 the 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."

POLICY SURRENDER

You 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 the 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.

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PARTIAL WITHDRAWALS

Any time after the first Policy year, you 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 you wish to receive and the Accounts from which such amount is to
be withdrawn. You may allocate the amount withdrawn among the Sub-Accounts and
the General Account. If you do 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 you plus the transaction charge
and any applicable partial withdrawal charge as described under CHARGES AND
DEDUCTIONS -- "Charges on Partial Withdrawals." 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 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.

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.

Certain of the charges and deductions described below may be reduced for
Policies issued to employees of First Allmerica and its affiliates located at
First Allmerica's home office (or at off-site locations if such employees are on
First Allmerica's home office payroll); directors of the Company and its
affiliates and subsidiaries; employees and registered representatives of any
broker-dealer that has entered into a sales agreement with the Company or
Allmerica Investments, Inc. ("Allmerica Investments") to sell the Policies, and
any spouses or children of the above persons. The Cost of Insurance Charges may
be reduced, and no surrender charges, partial withdrawal charges or front-end
sales loads will be imposed (and no commissions will be paid), where the
Policyowner as of the date of application is within these categories.

TAX EXPENSE CHARGE

A charge will be deducted from each premium payment for the actual state and
local premium taxes paid by the Company and a charge of 1% of premiums to
compensate the Company for federal taxes imposed for deferred acquisition cost
("DAC") taxes. The premium tax deduction will change if there is a change in tax
rates or if the applicable jurisdiction changes (the Company should be notified
of any change in address as soon as possible). 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.

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.

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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 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 $40 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 your instructions or, if no
allocation is specified, the Company will make a Pro-Rata Allocation. If the
Sub-Account you specify 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 you 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 you select 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 you select 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 Policyowners
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 you select Sum Insured Option 2, the monthly insurance charge for each
increase in Face Amount (other than an increase caused by a change in the Sum
Insured Option) will be equal to the cost of insurance rate applicable to that
increase multiplied by the increase in Face Amount. If you select 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.

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EFFECT OF THE GUIDELINE MINIMUM SUM INSURED

If the Guideline Minimum Sum Insured is in effect under either Option, a monthly
cost of insurance charge also will be calculated for that additional portion of
the Sum Insured which is required to comply with the Guideline rules. 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), MINUS

- the greater of the Face Amount or the Policy Value (if you selected Sum
Insured Option 1)

- the Face Amount PLUS the Policy Value (if you 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 above. The monthly cost of insurance charge also will be adjusted for
any decreases in the Face Amount. See THE POLICY -- "Change in Face Amount."

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
in the Policy. These guaranteed rates are based on the 1980 Commissioners
Standard Ordinary Mortality Table D, Smoker or Non-Smoker, 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 Policy, 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 you 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 you request, 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.

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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 SEPARATE 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
Separate 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.

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.

SEPARATE ACCOUNT ADMINISTRATIVE CHARGE

During the first 15 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 Separate 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 Separate 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 Separate Account administrative charge
is imposed after the 15 Policy year.

OTHER CHARGES AND EXPENSES

Because the Sub-Accounts purchase shares of the Underlying Funds, the value of
the Accumulation Units of the Sub-Accounts will reflect the investment advisory
fee and other expenses incurred by the Underlying Funds. The prospectuses and
statements of additional information of the Trust, Fidelity VIP, Fidelity VIP
II, T. Rowe Price, 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.

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<PAGE>
SURRENDER CHARGE

The Policy provides for a contingent surrender charge. A surrender charge may be
deducted if you request 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. 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.

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 you surrender 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.

SEPARATE SURRENDER CHARGE FOR EACH FACE AMOUNT INCREASE

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 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 you surrender 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

49
<PAGE>
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.

ALLOCATION OF POLICY VALUE AND PREMIUMS UPON AN INCREASE IN FACE AMOUNT

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
Face Amount 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.

POSSIBLE SURRENDER CHARGE ON A DECREASE IN THE FACE AMOUNT

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 the 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 WITHDRAWALS

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 you 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 charges 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 you could
withdraw in subsequent Policy years would not be increased by the amount you did
not withdraw in the second Policy year.

50
<PAGE>
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 administrative charge component. The
partial withdrawal charge deducted will decrease existing surrender charges in
the following order:

- first, the surrender charge for the most recent increase in the Face
Amount;

- second, the surrender charge for the next most recent increases
successively;

- last, the surrender charge for the initial Face Amount.

TRANSFER CHARGES

The first 12 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 never
will 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."

You may have automatic transfers of at least $100 a month made on a periodic
basis:

- from the Sub-Accounts which invest in the Money Market Fund and Government
Bond Fund of the Trust to one or more of the other Sub-Accounts; or

- to reallocate Policy Value among the Sub-Accounts.

The first automatic transfer counts as one transfer towards the 12 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 you utilize the Conversion Privilege, Loan Privilege or reallocate 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 12 free transfers in a Policy year. See THE
POLICY -- "Conversion Privileges," and POLICY LOANS.

CHARGE FOR INCREASE IN FACE AMOUNT

For each increase in the Face Amount you request, a transaction charge of $40
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.

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<PAGE>
POLICY LOANS

You may borrow against the Policy Value. Policy loans may be obtained by request
to the Company on the sole security of the 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 the Policy
Value reduced by applicable surrender charges. There is no minimum limit on the
amount of the loan.

The loan amount normally will be paid within seven days after the Company
receives the loan request at the 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 you do 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. The 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 canceled. This will reduce the Policy Value in these Sub-Accounts. These
transactions are not treated as transfers for purposes of the transfer charge.

LOAN AMOUNT EARNS INTEREST IN GENERAL ACCOUNT

As long as the Policy is in force, the Policy Value in the General Account equal
to the loan amount will be credited with interest at an effective annual yield
of at least 6.00% per year.

PREFERRED LOAN OPTION

A preferred loan option is available under the Policy. The preferred loan option
will be available upon Written Request. It may be revoked by you at any time. If
this option has been selected, after the tenth Policy anniversary the Policy
Value in the General Account that is equal to the loan amount will be credited
with interest at an effective annual yield of at least 7.5%. The Company's
current practice is to credit a rate of interest equal to the rate being charged
for the preferred loan.

There is some uncertainty as to the tax treatment of preferred loans. Consult a
qualified tax adviser (and see FEDERAL TAX CONSIDERATIONS). THE PREFERRED LOAN
OPTION IS NOT AVAILABLE IN ALL STATES.

LOAN INTEREST CHARGED

Outstanding Policy loans are charged interest. 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
will bear interest at the same rate. If the new loan amount exceeds the Policy
Value in the General Account after the due and unpaid interest is added to the
loan amount, the Company will transfer Policy Value equal to that excess loan
amount from the Policy Value in each Sub-Account to the 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 LOANS

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

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<PAGE>
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 you and any assignee. If you do 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-Accounts 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 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) the Debt exceeds the Policy Value less surrender charges.

If one of these situations occurs, the Policy will be in default. You then will
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 you 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 still will 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.

LIMITED 48-MONTH GUARANTEE

Except for the situation described in (b) above, the Policy is guaranteed not to
lapse during the first 48 months after the Date of Issue or the effective date
of an increase in the Face Amount if you make a minimum amount of premium
payments. The minimum amount paid, minus the Debt, partial withdrawals and
partial withdrawal charges, must be at least equal to the sum of the Minimum
Monthly Factor for the number of months the Policy, increase in Face Amount, or
a Policy Change which causes a change in the Minimum Monthly Factor has been in
force. 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 either or both the Insureds is alive,
the terminated Policy may be reinstated any time within three years after the
date of default and before the Final Premium Payment Date.

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<PAGE>
The reinstatement will be effective on the Monthly Payment Date following the
date you submit the following to the Company:

- a written application for reinstatement,

- Evidence of Insurability showing that the Insureds is insurable according
to the Company's underwriting rules, and

- 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 fewer than 48 Monthly Deductions have been
made since the Date of Issue or the effective date of an increase in the Face
Amount, you must pay the lesser of the amount shown in (1) or (2). Under (1),
the minimum amount payable is the Minimum Monthly Factor for the three-month
period beginning on the date of reinstatement. Under (2), 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, you 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 the 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 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.

You 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 applications for the Policy. The Policyowner is
generally entitled to exercise all rights under the 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.

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<PAGE>
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, you may change any
Beneficiary unless you have declared a Beneficiary to be irrevocable. If no
Beneficiary is alive when the last surviving Insured dies, the Policyowner (or
the Policyowner'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 you have 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 the 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 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, you must mail to the Principal Office due proof of
such death.

AGE

If the Age of either Insured as stated in the application for the Policy is not
correct, benefits under the 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 Policyowner may assign the 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
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.

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<PAGE>
POSTPONEMENT OF PAYMENTS

Payments of any amount due from the Separate 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 for 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 Separate 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 your 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.

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<PAGE>
DIRECTORS AND PRINCIPAL OFFICERS OF THE COMPANY

<TABLE>
<CAPTION>
NAME AND POSITION PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- ---------------------------------- --------------------------------------------------------
<S> <C>
Bruce C. Anderson Director of First Allmerica since 1996; Vice President,
Director First Allmerica since 1984

Abigail M. Armstrong Secretary of First Allmerica since 1996; Counsel, First
Secretary and Counsel Allmerica since 1991

Robert E. Bruce Director and Chief Information Officer of First
Director, Vice President and Allmerica since 1997; Vice President of First Allmerica
Chief Information Officer since 1995; Corporate Manager, Digital Equipment
Corporation 1979 to 1995

John P. Kavanaugh
Director, Vice President and Director and Chief Investment Officer of First Allmerica
Chief Investment Officer since 1996; Vice President, First Allmerica since 1991

John F. Kelly Director of First Allmerica since 1996; General Counsel
Director, Senior Vice President since 1981; Senior Vice President since 1986; and
and General Counsel Assistant Secretary since 1991

J. Barry May Director of First Allmerica since 1996; Director and
Director President, The Hanover Insurance Company since 1996;
Vice President, The Hanover Insurance Company, 1993 to
1996; General Manager, The Hanover Insurance Company
1989 to 1993

James R. McAuliffe Director of First Allmerica since 1996; Director since
Director 1992, President since 1994, and CEO since 1996, of
Citizens Insurance Company of America; Vice President
1982 to 1994, and Chief Investment Officer 1986 to 1994,
of First Allmerica

John F. O'Brien
Director and Chairman of the Director, Chairman of the Board, President and Chief
Board Executive Officer, First Allmerica since 1989

Edward J. Parry, III Director and Chief Financial Officer of First Allmerica
Director, Vice President and since 1996; Vice President and Treasurer, First
Treasurer, and Chief Financial Allmerica since 1993
Officer

Richard M. Reilly Director of First Allmerica since 1996; Vice President,
Director, President and Chief First Allmerica since 1990; Director, Allmerica
Executive Officer Investments, Inc. since 1990; Director and President,
Allmerica Financial Investment Management Services, Inc.
since 1990

Eric A. Simonsen Director of First Allmerica since 1996; Vice President,
Director and Vice President First Allmerica since 1990; Chief Financial Officer,
First Allmerica 1990 to 1996

Phillip E. Soule Director of First Allmerica since 1996; Vice President,
Director First Allmerica since 1987
</TABLE>

57
<PAGE>
DISTRIBUTION

Allmerica Investments, Inc. ("Allmerica Investments"), an indirect subsidiary of
First Allmerica, acts as the principal underwriter of the Policies pursuant to a
Sales and Administrative Services Agreement with the Company and the Separate
Account. Allmerica Investments is registered with the SEC as a broker-dealer,
and is a member of the National Association of Securities Dealers, Inc. The
Policies are sold by agents of the Company who are registered representatives of
Allmerica Investments, or of broker-dealers which have entered into selling
agreements with Allmerica Investments.

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% of any additional premiums. Certain registered
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% of first-year or
14% 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 you or to the
Separate Account. Any surrender charge assessed on the Policy will be retained
by the Company except for amounts it may pay to Allmerica Investments for
services it performs and expenses it may incur as principal underwriter and
general distributor services.

SERVICES

The Company receives fees from the investment advisers or other service
providers of certain Underlying Funds in return for providing certain services
to Policyowners. Currently, the Company receives service fees with respect to
the Fidelity VIP Overseas Portfolio, Fidelity VIP Equity-Income Portfolio,
Fidelity VIP Growth Portfolio, Fidelity VIP High Income Portfolio, and Fidelity
VIP II Asset Manager Portfolio, at an annual rate of 0.10% of the aggregate net
asset value, respectively, of the shares of such Underlying Funds held by the
Separate Account. With respect to the T. Rowe Price International Stock
Portfolio, the Company receives service fees at an annual rate of 0.15% of the
aggregate net asset value of shares held by the Separate Account. The Company
may in the future render services for which it will receive compensation from
the investment advisers or other service providers of other Underlying Funds.

REPORTS

The Company will maintain the records relating to the Separate Account. You 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 you, loan repayments, lapse, termination for any
reason, and reinstatement. An annual statement will also be sent to you 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 loans.

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

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<PAGE>
LEGAL PROCEEDINGS

There are no legal proceedings pending to which the Separate Account is a party,
or to which the assets of the Separate 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 Separate Account.

FURTHER INFORMATION

A Registration Statement under the 1933 Act relating to this offering has been
filed with the SEC. Certain portions of the Registration Statement and
amendments have been omitted from this Prospectus pursuant to the rules and
regulations of the SEC. 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 SEC's principal office in
Washington, DC, upon payment of the SEC's prescribed fees.

INDEPENDENT ACCOUNTANTS

The financial statements of the Company as of December 31, 1997 and 1996 and for
each of the two years in the period ended December 31, 1997, and the financial
statements of the Inheiritage Account of the Company as of December 31, 1997 and
for the periods indicated, included in this Prospectus constituting part of this
Registration Statement, have been so included in reliance on the reports 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.

FEDERAL TAX CONSIDERATIONS

The effect of federal income taxes on the value of the 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 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 SEPARATE ACCOUNT

The Company is taxed as a life insurance company under Subchapter L of 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 Separate Account. Based on these expectations, no
charge is made for federal income taxes which may be attributable to the
Separate Account.

The Company will review periodically the question of a charge to the Separate
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

59
<PAGE>
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 Separate 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
Separate 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 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 the 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 the 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 Department 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 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 the Policyowner
from being considered the owner of the assets of the Separate Account.

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 15 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.

SPLIT OPTION RIDER/EXCHANGE OPTION RIDER

The Split Option Rider permits the 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 the Policy split will be
treated as a non-taxable exchange under Section 1035 of the Code. Unless the
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.

60
<PAGE>
POLICY LOANS

The Company believes that non-preferred loans received under the Policy will be
treated as an indebtedness of the Policyowner for federal income tax purposes.
Under current law, these loans will not constitute income for the Policyowner
while the Policy is in force (but see "Modified Endowment Contracts"). There is
a risk, however, that a preferred loan may be characterized by the IRS as a
withdrawal and taxed accordingly. At the present time, the IRS has not issued
any guidance on whether loans with the attributes of a preferred loan should be
treated differently than a non-preferred loan. This lack of specific guidance
makes the tax treatment of preferred loans uncertain. In the event pertinent IRS
guidelines are issued in the future, you may revoke your request for a preferred
loan.

Section 264 of the Code restricts the deduction of interest on Policy loans.
Consumer interest paid on Policy loans under an individually owned Policy is not
tax deductible. Generally, no tax deduction for interest is allowed on Policy
loans if the Insured is an officer or employee of, or is financially interested
in, any business carried on by the taxpayer. There is an exception to this rule
which permits a deduction for interest on loans up to $50,000 related to any
policies covering the greater of (1) five individuals, or (2) the lesser of (a)
5% of the total number of officers and employees of the corporation, or (b) 20
individuals.

MODIFIED ENDOWMENT CONTRACTS

The Technical and Miscellaneous Revenue Act of 1988 ("1988 Act") adversely
affects the tax treatment of distributions under so-called "modified endowment
contracts." Under the 1988 Act, any life insurance policy, including the Policy
offered by this Prospectus, that fails to satisfy a "seven-pay" test is
considered a modified endowment contract. The Policy fails to satisfy the
seven-pay test if the cumulative premiums paid under the policy at any time
during the first seven policy years, or within seven years of a material change
in the Policy, 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
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 Surrender
Value 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 seven-pay test. If the Policy does not satisfy the seven-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. 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

61
<PAGE>
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, you 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 the1933 Act or the 1940 Act. Accordingly, the
disclosures in this section have not been reviewed by the SEC. 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 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 you 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. YOU
ASSUME THE RISK THAT INTEREST CREDITED MAY NOT EXCEED THE GUARANTEED MINIMUM
RATE.

62
<PAGE>
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 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%,
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 an individual joint survivorship 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 Separate
Account. For complete details regarding the General Account, see the Policy
itself.

TRANSFERS, SURRENDERS, PARTIAL WITHDRAWALS AND POLICY LOANS

If the 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 the 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 12 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 or more, the Company will pay interest at least
equal to an effective annual yield of 3.5% 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 Separate 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
Separate Account.

63
<PAGE>
ALLMERICA FINANCIAL
LIFE INSURANCE AND
ANNUITY COMPANY

FINANCIAL STATEMENTS
DECEMBER 31, 1997
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholder of
Allmerica Financial Life Insurance and Annuity Company

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, of shareholder's equity, and of cash flows
present fairly, in all material respects, the financial position of Allmerica
Financial Life Insurance and Annuity Company at December 31, 1997 and 1996, and
the results of their operations and their cash flows for the years then ended 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.

/s/ Price Waterhouse LLP

PRICE WATERHOUSE LLP

Boston, Massachusetts

February 3, 1998
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

(AN INDIRECT WHOLLY OWNED SUBSIDIARY OF ALLMERICA FINANCIAL CORPORATION)

CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
(IN MILLIONS) 1997 1996
------------------------------------------------------- ------ ------
<S> <C> <C>
REVENUES
Premiums............................................. $ 22.8 $ 32.7
Universal life and investment product policy
fees............................................. 212.2 176.2
Net investment income.............................. 164.2 171.7
Net realized investment gains (losses)............. 2.9 (3.6)
Other income....................................... 1.4 0.9
------ ------
Total revenues................................. 403.5 377.9
------ ------
BENEFITS, LOSSES AND EXPENSES
Policy benefits, claims, losses and loss adjustment
expenses......................................... 187.8 192.6
Policy acquisition expenses........................ 2.8 49.9
Loss from cession of disability income business.... 53.9 --
Other operating expenses........................... 101.3 86.6
------ ------
Total benefits, losses and expenses............ 345.8 329.1
------ ------
Income before federal income taxes..................... 57.7 48.8
------ ------
FEDERAL INCOME TAX EXPENSE (BENEFIT)
Current............................................ 13.9 26.9
Deferred........................................... 7.1 (9.8)
------ ------
Total federal income tax expense............... 21.0 17.1
------ ------
Net income............................................. $ 36.7 $ 31.7
------ ------
------ ------
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-1
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

(AN INDIRECT WHOLLY OWNED SUBSIDIARY OF ALLMERICA FINANCIAL CORPORATION)

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
(IN MILLIONS) 1997 1996
------------------------------------------------------- ---------- ---------
<S> <C> <C>
ASSETS
Investments:
Fixed maturities at fair value (amortized cost of
$1,340.5 and $1,660.2)........................... $ 1,402.5 $ 1,698.0
Equity securities at fair value (cost of $34.4 and
$33.0)........................................... 54.0 41.5
Mortgage loans..................................... 228.2 221.6
Real estate........................................ 12.0 26.1
Policy loans....................................... 140.1 131.7
Other long term investments........................ 20.3 7.9
---------- ---------
Total investments.............................. 1,857.1 2,126.8
---------- ---------
Cash and cash equivalents............................ 31.1 18.8
Accrued investment income............................ 34.2 37.7
Deferred policy acquisition costs.................... 765.3 632.7
Reinsurance receivables on paid and unpaid losses,
benefits and unearned premiums..................... 251.1 81.5
Other assets......................................... 10.7 8.2
Separate account assets.............................. 7,567.3 4,524.0
---------- ---------
Total assets................................... $ 10,516.8 $ 7,429.7
---------- ---------
---------- ---------
LIABILITIES
Policy liabilities and accruals:
Future policy benefits............................. $ 2,097.3 $ 2,171.3
Outstanding claims, losses and loss adjustment
expenses......................................... 18.5 16.1
Unearned premiums.................................. 1.8 2.7
Contractholder deposit funds and other policy
liabilities...................................... 32.5 32.8
---------- ---------
Total policy liabilities and accruals.......... 2,150.1 2,222.9
---------- ---------
Expenses and taxes payable........................... 77.6 77.3
Reinsurance premiums payable......................... 4.9 --
Deferred federal income taxes........................ 75.9 60.2
Separate account liabilities......................... 7,567.3 4,523.6
---------- ---------
Total liabilities.............................. 9,875.8 6,884.0
---------- ---------
Commitments and contingencies (Note 13)
SHAREHOLDER'S EQUITY
Common stock, $1,000 par value, 10,000 shares
authorized, 2,521 and 2,518 shares issued and
outstanding........................................ 2.5 2.5
Additional paid in capital........................... 386.9 346.3
Unrealized appreciation on investments, net.......... 38.5 20.5
Retained earnings.................................... 213.1 176.4
---------- ---------
Total shareholder's equity..................... 641.0 545.7
---------- ---------
Total liabilities and shareholder's equity..... $ 10,516.8 $ 7,429.7
---------- ---------
---------- ---------
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-2
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

(AN INDIRECT WHOLLY OWNED SUBSIDIARY OF ALLMERICA FINANCIAL CORPORATION)

CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
(IN MILLIONS) 1997 1996
------------------------------------------------------- ------ ------
<S> <C> <C>
COMMON STOCK
Balance at beginning of period..................... $ 2.5 $ 2.5
Issued during year................................. -- --
------ ------
Balance at end of period........................... 2.5 2.5
------ ------
ADDITIONAL PAID IN CAPITAL
Balance at beginning of period..................... 346.3 324.3
Contribution from Parent........................... 40.6 22.0
------ ------
Balance at end of period........................... 386.9 346.3
------ ------
RETAINED EARNINGS
Balance at beginning of period..................... 176.4 144.7
Net income......................................... 36.7 31.7
------ ------
Balance at end of period........................... 213.1 176.4
------ ------
NET UNREALIZED APPRECIATION ON INVESTMENTS
Balance at beginning of period..................... 20.5 23.8
Net appreciation (depreciation) on available for
sale securities.................................. 27.0 (5.1)
(Provision) benefit for deferred federal income
taxes............................................ (9.0) 1.8
------ ------
Balance at end of period........................... 38.5 20.5
------ ------
Total shareholder's equity..................... $641.0 $545.7
------ ------
------ ------
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-3
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

(AN INDIRECT WHOLLY OWNED SUBSIDIARY OF ALLMERICA FINANCIAL CORPORATION)

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
(IN MILLIONS) 1997 1996
------------------------------------------------------- ------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income......................................... $ 36.7 $ 31.7
Adjustments to reconcile net income to net cash
used in operating activities:
Net realized gains............................. (2.9) 3.6
Net amortization and depreciation.............. -- 3.5
Loss from cession of disability income
business..................................... 53.9 --
Deferred federal income taxes.................. 7.1 (9.8)
Payment related to cession of disability income
business..................................... (207.0) --
Change in deferred acquisition costs........... (181.3) (66.8)
Change in premiums and notes receivable, net of
reinsurance payable.......................... 3.9 (0.2)
Change in accrued investment income............ 3.5 1.2
Change in policy liabilities and accruals,
net.......................................... (72.4) (39.9)
Change in reinsurance receivable............... 22.1 (1.5)
Change in expenses and taxes payable........... 0.2 32.3
Separate account activity, net................. 0.4 10.5
Other, net..................................... (7.5) (0.2)
------- -------
Net used in operating activities........... (343.3) (35.6)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposals and maturities of
available-for-sale fixed maturities.............. 909.7 809.4
Proceeds from disposals of equity securities....... 2.4 1.5
Proceeds from disposals of other investments....... 23.7 17.4
Proceeds from mortgages matured or collected....... 62.9 34.0
Purchase of available-for-sale fixed maturities.... (579.7) (795.8)
Purchase of equity securities...................... (3.2) (13.2)
Purchase of other investments...................... (79.4) (36.2)
Other investing activities, net.................... -- (2.0)
------- -------
Net cash provided by investing activities...... 336.4 15.1
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of stock and capital paid
in............................................... 19.2 22.0
------- -------
Net cash provided by financing activities...... 19.2 22.0
------- -------
Net change in cash and cash equivalents................ 12.3 1.5
Cash and cash equivalents, beginning of period......... 18.8 17.3
------- -------
Cash and cash equivalents, end of period............... $ 31.1 $ 18.8
------- -------
------- -------
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid...................................... $ -- $ 3.4
Income taxes paid.................................. $ 5.4 $ 16.5
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-4
<PAGE>
NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

Allmerica Financial Life Insurance and Annuity Company ("AFLIAC" or the
"Company") is organized as a stock life insurance company, and is a wholly-owned
subsidiary of SMA Financial Corporation ("SMAFCO"), which is wholly owned by
First Allmerica Financial Life Insurance Company ("FAFLIC"). FAFLIC is a
wholly-owned subsidiary of Allmerica Financial Corporation ("AFC").

The consolidated financial statements of AFLIAC include the accounts of Somerset
Square, Inc., a wholly-owned non-insurance company and its results of operations
for the month of December, 1997. Somerset Square, Inc. was transferred from
SMAFCO effective November 30, 1997. (See Significant Transactions.)

The Statutory stockholder's equity of the Company is being maintained at a
minimum level of 5% of general account assets by FAFLIC in accordance with a
policy established by vote of FAFLIC's Board of Directors.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates. Certain reclassifications have been
made to the 1996 financial statements in order to conform to the 1997
presentation.

B. VALUATION OF INVESTMENTS

In accordance with the provisions of Statement of Financial Accounting Standards
No. 115 ("Statement No. 115"), "ACCOUNTING FOR CERTAIN INVESTMENTS IN DEBT AND
EQUITY SECURITIES", the Company is required to classify its investments into one
of three categories: held-to-maturity, available-for-sale or trading. The
Company determines the appropriate classification of debt securities at the time
of purchase and reevaluates such designation as of each balance sheet date.

Mortgage loans on real estate are stated at unpaid principal balances, net of
unamortized discounts and reserves. Reserves on mortgage loans are based on
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 establishing reserves, management considers, among other things, the
estimated fair value of the underlying collateral.

Fixed maturities and mortgage loans that are delinquent are placed on
non-accrual status, and thereafter interest income is recognized only when cash
payments are received.

Policy loans are carried principally at unpaid principal balances.

During 1997, the Company committed to a plan to dispose of all real estate
assets by the end of 1998. As a result of this decision real estate held by the
Company and real estate joint ventures were written down to the estimated fair
value less cost to sell. Depreciation is not recorded on these assets while they
are held for disposal.

Realized investment gains and losses, other than those related to separate
accounts for which the Company does not bear the investment risk, are reported
as a component of revenues based upon specific identification of the investment
assets sold. When an other-than-temporary impairment of the value of a specific
investment

F-5
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

or a group of investments is determined, a realized investment loss is recorded.
Changes in the valuation allowance for mortgage loans and real estate are
included in realized investment gains or losses.

C. FINANCIAL INSTRUMENTS

In the normal course of business, the Company enters into transactions involving
various types of financial instruments, including debt, investments such as
fixed maturities, mortgage loans and equity securities, and investment and loan
commitments. These instruments involve credit risk and also may be subject to
risk of loss due to interest rate fluctuation. The Company evaluates and
monitors each financial instrument individually and, when appropriate, obtains
collateral or other security to minimize losses.

D. CASH AND CASH EQUIVALENTS

Cash and cash equivalents includes cash on hand, amounts due from banks and
highly liquid debt instruments purchased with an original maturity of three
months or less.

E. DEFERRED POLICY ACQUISITION COSTS

Acquisition costs consist of commissions, underwriting costs and other costs,
which vary with, and are primarily related to, the production of revenues.
Acquisition costs related to universal life products, variable annuities and
contractholder deposit funds are deferred and amortized in proportion to total
estimated gross profits from investment yields, mortality, surrender charges and
expense margins over the expected life of the contracts. This amortization is
reviewed annually and adjusted retrospectively when the Company revises its
estimate of current or future gross profits to be realized from this group of
products, including realized and unrealized gains and losses from investments.
Acquisition costs related to fixed annuities and other life insurance products
are deferred and amortized, generally in proportion to the ratio of annual
revenue to the estimated total revenues over the contract periods based upon the
same assumptions used in estimating the liability for future policy benefits.

Deferred acquisition costs for each product are reviewed to determine if they
are recoverable from future income, including investment income. If such costs
are determined to be unrecoverable, they are expensed at the time of
determination. Although realization of deferred policy acquisition costs is not
assured, management believes it is more likely than not that all of these costs
will be realized. The amount of deferred policy acquisition costs considered
realizable, however, could be reduced in the near term if the estimates of gross
profits or total revenues discussed above are reduced. The amount of
amortization of deferred policy acquisition costs could be revised in the near
term if any of the estimates discussed above are revised.

F. SEPARATE ACCOUNTS

Separate account assets and liabilities represent segregated funds administered
and invested by the Company for the benefit of certain pension, variable annuity
and variable life insurance contractholders. Assets consist principally of
bonds, common stocks, mutual funds, 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
shareholder's equity or net investment income.

G. POLICY LIABILITIES AND ACCRUALS

Future policy benefits are liabilities for life, health and annuity products.
Such liabilities are established in amounts adequate to meet the estimated
future obligations of policies in force. The liabilities associated with
traditional life insurance products are computed using the net level premium
method for individual life and annuity policies, and are based upon estimates as
to future investment yield, mortality and withdrawals that include provisions
for adverse deviation. Future policy benefits for individual life insurance and
annuity policies are computed using interest rates ranging from 2 1/2% to 6% for
life insurance and 2% to 9 1/2% for

F-6
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

annuities. Mortality, morbidity and withdrawal assumptions for all policies are
based on the Company's own experience and industry standards. Liabilities for
universal life include deposits received from customers and investment earnings
on their fund balances, less administrative charges. Universal life fund
balances are also assessed mortality and surrender charges. Individual health
benefit liabilities for active lives are estimated using the net level premium
method, and assumptions as to future morbidity, withdrawals and interest which
provide a margin for adverse deviation. Benefit liabilities for disabled lives
are estimated using the present value of benefits method and experience
assumptions as to claim terminations, expenses and interest.

Liabilities for outstanding claims, losses and loss adjustment expenses are
estimates of payments to be made for reported claims and estimates of claims
incurred but not reported. These liabilities are determined using case basis
evaluations and statistical analyses and represent estimates of the ultimate
cost of all claims incurred but not paid. These estimates are continually
reviewed and adjusted as necessary; such adjustments are reflected in current
operations.

Premiums for individual accident and health insurance are reported as earned on
a pro-rata basis over the contract period.

The unexpired portion of these premiums is recorded as unearned premiums.

Contractholder deposit funds and other policy liabilities include
investment-related products and consist of deposits received from customers and
investment earnings on their fund balances.

All policy liabilities and accruals are based on the various estimates discussed
above. Although the adequacy of these amounts cannot be assured, management
believes that it is more likely than not that policy liabilities and accruals
will be sufficient to meet future obligations of policies in force. The amount
of liabilities and accruals, however, could be revised in the near term if the
estimates discussed above are revised.

H. PREMIUM AND FEE REVENUE AND RELATED EXPENSES

Premiums for individual life and health insurance and individual annuity
products, excluding universal life and investment-related products, are
considered revenue when due. Individual accident and health insurance premiums
are recognized as revenue over the related contract periods. Benefits, losses
and related expenses are matched with premiums, resulting in their recognition
over the lives of the contracts. This matching is accomplished through the
provision for future benefits, estimated and unpaid losses and amortization of
deferred policy acquisition costs. Revenues for investment-related products
consist of net investment income and contract charges assessed against the fund
values. Related benefit expenses primarily consist of net investment income
credited to the fund values after deduction for investment and risk charges.
Revenues for universal life and group variable universal life products consist
of net investment income, and mortality, administration and surrender charges
assessed against the fund values. Related benefit expenses include universal
life benefits in excess of fund values and net investment income credited to
universal life fund values. Certain policy charges that represent compensation
for services to be provided in future periods are deferred and amortized over
the period benefited using the same assumptions used to amortize capitalized
acquisition costs.

I. FEDERAL INCOME TAXES

AFC, its life insurance subsidiaries, FAFLIC and AFLIAC, and its non-life
insurance domestic subsidiaries file a life-nonlife 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 insurance company taxable
operating losses that can be applied to offset life insurance company taxable
income. Allmerica P&C and its subsidiaries will be included in the AFC
consolidated return as part of the

F-7
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

non-life insurance company subgroup for the period July 17, 1997 through
December 31, 1997. For the period January 1, 1997 through July 16, 1997,
Allmerica P&C and its subsidiaries will file a separate consolidated United
States Federal income tax return.

The Board of Directors has delegated to AFC management, the development and
maintenance of appropriate Federal Income Tax allocation policies and
procedures, which are subject to written agreement between the companies. The
Federal income tax for all subsidiaries in the consolidated return of AFC is
calculated on a separate return basis. Any current tax liability is paid to AFC.
Tax benefits resulting from taxable operating losses or credits of AFC's
subsidiaries are not reimbursed to the subsidiary until such losses or credits
can be utilized by the subsidiary on a separate return basis.

Deferred income taxes are generally recognized when assets and liabilities have
different values for financial statement and tax reporting purposes, and for
other temporary taxable and deductible differences as defined by Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS No.
109). These differences result primarily from loss reserves, policy acquisition
expenses, and unrealized appreciation/depreciation on investments.

J. NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, the FASB issued Statement No. 131, DISCLOSURES ABOUT SEGMENTS OF
AN ENTERPRISE AND RELATED INFORMATION. This statement establishes standards for
the way that public enterprises report information about operating segments in
annual financial statements and requires that selected information about those
operating segments be reported in interim financial statements. This statement
supersedes Statement No. 14, FINANCIAL REPORTING FOR SEGMENTS OF A BUSINESS
ENTERPRISE. Statement No. 131 requires that all public enterprises report
financial and descriptive information about their reportable operating segments.
Operating segments are defined as components of an enterprise about which
separate financial information is available that is evaluated regularly by the
chief operating decision maker in deciding how to allocate resources and in
assessing performance. This statement is effective for fiscal years beginning
after December 15, 1997. The Company anticipates no impact from the adoption of
Statement No. 131.

In June 1997, the FASB also issued Statement No. 130, REPORTING COMPREHENSIVE
INCOME, which established standards for the reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. All items that are required to be recognized under
accounting standards as components of comprehensive income are to be reported in
a financial statement that is displayed with the same prominence as other
financial statements. This statement stipulates that comprehensive income
reflect the change in equity of an enterprise during a period from transactions
and other events and circumstances from non-owner sources. This statement is
effective for fiscal years beginning after December 15, 1997. The Company
anticipates that the adoption of Statement No. 130 will result primarily in
reporting the changes in unrealized gains and losses on investments in debt and
equity securities in comprehensive income.

2. SIGNIFICANT TRANSACTIONS

On April 14, 1997, the Company entered into an agreement in principle to
transfer the Company's individual disability income under a 100% coinsurance
agreement to Metropolitan Life Insurance Company. The coinsurance agreement
became effective October 1, 1997. The transaction has resulted in the
recognition of a $53.9 million pre-tax loss in the first quarter of 1997.

During the 4th quarter of 1997, SMAFCO contributed $40.6 million of additional
paid in capital to the Company. The nature of the contribution was $19.2 million
in cash and $21.4 million in other assets including Somerset Square, Inc.

F-8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Effective January 1, 1998, the Company entered into an agreement with
Reinsurance Group of America, Inc. to reinsure the mortality risk on the
universal life and variable universal life blocks of business. Management
believes that this agreement will not have a material effect on the results of
operations or financial position of the Company.

3. INVESTMENTS

A. SUMMARY OF INVESTMENTS

The Company accounts for its investments, all of which are classified as
available-for-sale, in accordance with the provisions of SFAS No. 115.

The amortized cost and fair value of available-for-sale fixed maturities and
equity securities were as follows:

<TABLE>
<CAPTION>
1997
--------------------------------------------
GROSS GROSS
DECEMBER 31, AMORTIZED UNREALIZED UNREALIZED FAIR
(IN MILLIONS) COST (1) GAINS LOSSES VALUE
- ---------------------------------------- ---------- -------- --------- --------
<S> <C> <C> <C> <C>
U.S. Treasury securities and U.S.
government and agency securities....... $ 6.3 $ .5 $-- $ 6.8
States and political subdivisions....... 2.8 .2 -- 3.0
Foreign governments..................... 50.1 2.0 -- 52.1
Corporate fixed maturities.............. 1,147.5 58.7 3.3 1,202.9
Mortgage-backed securities.............. 133.8 5.2 1.3 137.7
---------- -------- --------- --------
Total fixed maturities
available-for-sale..................... $1,340.5 $66.6 $ 4.6 $1,402.5
---------- -------- --------- --------
Equity securities....................... $ 34.4 $19.9 $ 0.3 $ 54.0
---------- -------- --------- --------
---------- -------- --------- --------

1996
--------------------------------------------
U.S. Treasury securities and U.S.
government and agency securities....... $ 15.7 $ 0.5 $ 0.2 $ 16.0
States and political subdivisions....... 8.9 1.6 -- 10.5
Foreign governments..................... 53.2 2.9 -- 56.1
Corporate fixed maturities.............. 1,437.2 38.6 6.1 1,469.7
Mortgage-backed securities.............. 145.2 2.2 1.7 145.7
---------- -------- --------- --------
Total fixed maturities
available-for-sale..................... $1,660.2 $45.8 $ 8.0 $1,698.0
---------- -------- --------- --------
Equity securities....................... $ 33.0 $10.2 $ 1.7 $ 41.5
---------- -------- --------- --------
---------- -------- --------- --------
</TABLE>

(1) Amortized cost for fixed maturities and cost for equity securities.

In connection with AFLIAC's voluntary withdrawal of its license in New York,
AFLIAC 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 liabilities of AFLIAC for New
York policyholders, claimants and creditors. At December 31, 1997, the amortized
cost and market value of these assets on deposit were $276.8 million and $291.7
million, respectively. At December 31, 1996, the amortized cost and market value
of these assets on deposit were $284.9 million and $292.2 million, respectively.
In addition, fixed maturities, excluding those securities on deposit in New
York, with an amortized cost of $4.2 million were on deposit with various state
and governmental authorities at December 31, 1997 and 1996.

There were no contractual fixed maturity investment commitments at December 31,
1997 and 1996, respectively.

F-9
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The amortized cost and fair value by maturity periods for fixed maturities are
shown below. Actual maturities may 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
obligations back to the issuers. Mortgage backed securities are included in the
category representing their ultimate maturity.

<TABLE>
<CAPTION>
1997
--------------------
DECEMBER 31, AMORTIZED FAIR
(IN MILLIONS) COST VALUE
- ------------------------------------------------------------ --------- ---------
<S> <C> <C>
Due in one year or less..................................... $ 63.0 $ 63.5
Due after one year through five years....................... 328.8 343.9
Due after five years through ten years...................... 649.5 679.9
Due after ten years......................................... 299.2 315.2
--------- ---------
Total....................................................... $1,340.5 $1,402.5
--------- ---------
--------- ---------
</TABLE>

The proceeds from voluntary sales of available-for-sale securities and the gross
realized gains and gross realized losses on those sales were as follows:

<TABLE>
<CAPTION>
PROCEEDS
FROM
FOR THE YEARS ENDED DECEMBER 31, VOLUNTARY GROSS GROSS
(IN MILLIONS) SALES GAINS LOSSES
- ------------------------------------------------------------ ---------- ------ ------
<S> <C> <C> <C>
1997
Fixed maturities............................................ $702.9 $ 11.4 $ 5.0
Equity securities........................................... $ 1.3 $ 0.5 $ --

1996
Fixed maturities............................................ $496.6 $ 4.3 $ 8.3
Equity securities........................................... $ 1.5 $ 0.4 $ 0.1
</TABLE>

Unrealized gains and losses on available-for-sale and other securities, are
summarized as follows:

<TABLE>
<CAPTION>
EQUITY
SECURITIES
FOR THE YEAR ENDED DECEMBER 31, FIXED AND OTHER
(IN MILLIONS) MATURITIES (1) TOTAL
- ------------------------------------------------------- ------------ ---------- ------
<S> <C> <C> <C>
1997
Net appreciation, beginning of year.................... $12.7 $7.8 $ 20.5
Net appreciation on available-for-sale securities...... 24.3 12.5 36.8
Net depreciation from the effect on deferred policy
acquisition costs and on policy liabilities........... (9.8) -- (9.8)
Provision for deferred federal income taxes............ (5.1) (3.9) (9.0)
------ ----- ------
9.4 8.6 18.0
------ ----- ------
Net appreciation, end of year.......................... $22.1 $16.4 $ 38.5
------ ----- ------
------ ----- ------
</TABLE>

(1) Includes net appreciation on other investments of $11.1 million in 1997, and
$2.2 million in 1996.

F-10
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

<TABLE>
<CAPTION>
EQUITY
SECURITIES
FOR THE YEAR ENDED DECEMBER 31, 1996 FIXED AND OTHER
(IN MILLIONS) MATURITIES (1) TOTAL
- ------------------------------------------------------- ---------- ----------- ------
<S> <C> <C> <C>
Net appreciation, beginning of year.................... $20.4 $3.4 $ 23.8
Net (depreciation) appreciation on available-for-sale
securities............................................ (20.8) 6.7 (14.1)
Net appreciation from the effect on deferred policy
acquisition costs and on policy liabilities........... 9.0 -- 9.0
Benefit (provision) for deferred federal income
taxes................................................. 4.1 (2.3) 1.8
---------- ----- ------
(7.7) 4.4 (3.3)
---------- ----- ------
Net appreciation, end of year.......................... $12.7 $7.8 $ 20.5
---------- ----- ------
---------- ----- ------
</TABLE>

(1) Includes net appreciation on other investments of $11.1 million in 1997, and
$2.2 million in 1996.

B. MORTGAGE LOANS AND REAL ESTATE

AFLIAC's mortgage loans and real estate 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
generally are no more than 75% of the property's value at the time the original
loan is made.

The carrying values of mortgage loans and real estate investments net of
applicable reserves were as follows:

<TABLE>
<CAPTION>
DECEMBER 31
(IN MILLIONS) 1997 1996
- ------------------------------------------------------- ------ ------
<S> <C> <C>
Mortgage loans......................................... $228.2 $221.6
Real estate:
Held for sale........................................ 12.0 26.1
Held for production of income........................ -- --
------ ------
Total real estate.................................. $ 12.0 $ 26.1
------ ------
Total mortgage loans and real estate................... $240.2 $247.7
------ ------
------ ------
</TABLE>

Reserves for mortgage loans were $9.4 million and $9.5 million at December 31,
1997 and 1996, respectively.

During 1997, the Company committed to a plan to dispose of all real estate
assets by the end of 1998. As a result, real estate assets with a carrying
amount of $15.7 million were written down to the estimated fair value less cost
to sell of $12.0 million, and a net realized investment loss of $3.7 million was
recognized. Depreciation is not recorded on these assets while they are held for
disposal.

There were no non-cash investing activities, including real estate acquired
through foreclosure of mortgage loans, in 1997. During 1996, non-cash investing
activities included real estate acquired through foreclosure of mortgage loans,
which had a fair value of $0.9 million.

At December 31, 1997, contractual commitments to extend credit under commercial
mortgage loan agreements amounted to approximately $18.7 million. These
commitments generally expire within one year.

F-11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Mortgage loans and real estate investments comprised the following property
types and geographic regions:

<TABLE>
<CAPTION>
DECEMBER 31,
(IN MILLIONS) 1997 1996
- ------------------------------------------------------- ------ ------
<S> <C> <C>
Property type:
Office building...................................... $101.7 $ 86.1
Residential.......................................... 19.3 39.0
Retail............................................... 42.2 55.9
Industrial/warehouse................................. 61.9 52.6
Other................................................ 24.5 25.3
Valuation allowances................................. (9.4) (11.2)
------ ------
Total.................................................. $240.2 $247.7
------ ------
------ ------
Geographic region:
South Atlantic....................................... $ 68.7 $ 72.9
Pacific.............................................. 56.6 37.0
East North Central................................... 61.4 58.3
Middle Atlantic...................................... 29.8 35.0
West South Central................................... 6.9 5.7
New England.......................................... 12.4 21.9
Other................................................ 13.8 28.1
Valuation allowances................................. (9.4) (11.2)
------ ------
Total.................................................. $240.2 $247.7
------ ------
------ ------
</TABLE>

At December 31, 1997, scheduled mortgage loan maturities were as follows: 1998
- -- $52.0 million; 1999 -- $17.1 million; 2000 -- $46.3 million; 2001 -- $7.0
million; 2002 -- $11.7 million; and $94.1 million thereafter. Actual maturities
could differ from contractual maturities because borrowers may have the right to
prepay obligations with or without prepayment penalties and loans may be
refinanced. During 1997, the Company did not refinance any mortgage loans based
on terms which differed from those granted to new borrowers.

C. INVESTMENT VALUATION ALLOWANCES

Investment valuation allowances which have been deducted in arriving at
investment carrying values as presented in the balance sheet and changes thereto
are shown below.

<TABLE>
<CAPTION>
BALANCE
FOR THE YEAR ENDED DECEMBER 31, AT BALANCE AT
(IN MILLIONS) JANUARY 1 ADDITIONS DEDUCTIONS DECEMBER 31
- --------------------------------------------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1997
Mortgage loans............................... $ 9.5 $1.1 $1.2 $ 9.4
Real estate.................................. 1.7 3.7 5.4 --
--------- --- --- -----
Total.................................... $11.2 $4.8 $6.6 $ 9.4
--------- --- --- -----
--------- --- --- -----

1996
Mortgage loans............................... $12.5 $4.5 $7.5 $ 9.5
Real estate.................................. 2.1 -- 0.4 1.7
--------- --- --- -----
Total.................................... $14.6 $4.5 $7.9 $11.2
--------- --- --- -----
--------- --- --- -----
</TABLE>

F-12
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Deductions of $5.4 million to the investment valuation allowance related to real
estate in 1997 primarily reflect writedowns to the estimated fair value less
cost to sell pursuant to the aforementioned 1997 plan of disposal.

The carrying value of impaired loans was $20.6 million and $21.5 million, with
related reserves of $7.1 million and $7.3 million as of December 31, 1997 and
1996, respectively. All impaired loans were reserved as of December 31, 1997 and
1996.

The average carrying value of impaired loans was $19.8 million and $26.3
million, with related interest income while such loans were impaired of $2.2
million and $3.4 million as of December 31, 1997 and 1996, respectively.

D. OTHER

At December 31, 1997, AFLIAC had no concentration of investments in a single
investee exceeding 10% of shareholder's equity.

4. INVESTMENT INCOME AND GAINS AND LOSSES

A. NET INVESTMENT INCOME

The components of net investment income were as follows:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31
(IN MILLIONS) 1997 1996
- -------------------------------------------------- ------ ------
<S> <C> <C>
Fixed maturities.................................. $130.0 $137.2
Mortgage loans.................................... 20.4 22.0
Equity securities................................. 1.3 0.7
Policy loans...................................... 10.8 10.2
Real estate....................................... 3.9 6.2
Other long-term investments....................... 1.0 0.8
Short-term investments............................ 1.4 1.4
------ ------
Gross investment income........................... 168.8 178.5
Less investment expenses.......................... (4.6) (6.8)
------ ------
Net investment income............................. $164.2 $171.7
------ ------
------ ------
</TABLE>

At December 31, 1997, mortgage loans on non-accrual status were $2.8 million,
which were all restructured loans. There were no fixed maturities on non-accrual
status at December 31, 1997. The effect of non-accruals, compared with amounts
that would have been recognized in accordance with the original terms of the
investment, had no impact in 1997, and reduced net income by $0.1 million in
1996.

The payment terms of mortgage loans may from time to time be restructured or
modified. The investment in restructured mortgage loans, based on amortized
cost, amounted to $21.1 million and $25.4 million at December 31, 1997 and 1996,
respectively. Interest income on restructured mortgage loans that would have
been recorded in accordance with the original terms of such loans amounted to
$1.9 million and $3.6 million in 1997 and 1996, respectively. Actual interest
income on these loans included in net investment income aggregated $2.1 million
and $2.2 million in 1997 and 1996, respectively.

There were no fixed maturities or mortgage loans which were non-income producing
for the twelve months ended December 31, 1997.

F-13
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

B. REALIZED INVESTMENT GAINS AND LOSSES

Realized gains (losses) on investments were as follows:

5. FAIR VALUE DISCLOSURES OF FINANCIAL INSTRUMENTS

SFAS 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 realized 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:

CASH AND CASH EQUIVALENTS

For these short-term investments, the carrying amount approximates fair value.

FIXED MATURITIES

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.

EQUITY SECURITIES

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 are
limited to the lesser of the present value of the cash flows or book value.

F-14
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

REINSURANCE RECEIVABLES

The carrying amount of the reinsurance receivable for outstanding claims, losses
and loss adjustment expenses reported in the balance sheet approximates fair
value.

POLICY LOANS

The carrying amount reported in the balance sheet approximates fair value since
policy loans have no defined maturity dates and are inseparable from the
insurance contracts.

INVESTMENT CONTRACTS (WITHOUT MORTALITY FEATURES)

Fair values for the Company's liabilities under investment type contracts are
estimated based on current surrender values.

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

<TABLE>
<CAPTION>
1997 1996
--------------------- ---------------------
DECEMBER 31, CARRYING FAIR CARRYING FAIR
(IN MILLIONS) VALUE VALUE VALUE VALUE
- -------------------------------------------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
FINANCIAL ASSETS
Cash and cash equivalents....................... $ 31.1 $ 31.1 $ 18.8 $ 18.8
Fixed maturities................................ 1,402.5 1,402.5 1,698.0 1,698.0
Equity securities............................... 54.0 54.0 41.5 41.5
Mortgage loans.................................. 228.2 239.8 221.6 229.3
Policy loans.................................... 140.1 140.1 131.7 131.7
Reinsurance receivables......................... 251.1 251.1 72.5 72.5
--------- --------- --------- ---------
$2,107.0 $2,118.6 $2,184.1 $2,191.8
--------- --------- --------- ---------
--------- --------- --------- ---------
FINANCIAL LIABILITIES
Individual annuity contracts.................... 876.0 850.6 910.2 885.9
Supplemental contracts without life
contingencies................................. 15.3 15.3 15.9 15.9
Other individual contract deposit funds......... 0.3 0.3 0.3 0.3
--------- --------- --------- ---------
$ 891.6 $ 866.2 $ 926.4 $ 902.1
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>

6. DEBT

In 1997 the Company incurred no debt. During 1996, the Company utilized
repurchase agreements to finance certain investments.

Interest expense was $3.4 million in 1996, relating to the repurchase
agreements, and is recorded in other operating expenses.

F-15
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

7. FEDERAL INCOME TAXES

Provisions for federal income taxes have been calculated in accordance with the
provisions of SFAS No. 109. A summary of the federal income tax expense
(benefit) in the statement of income is shown below:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
(IN MILLIONS) 1997 1996
- -------------------------------------------------- ------ ------
<S> <C> <C>
Federal income tax expense (benefit)
Current......................................... $ 13.9 $ 26.9
Deferred........................................ 7.1 (9.8)
------ ------
Total............................................. $ 21.0 $ 17.1
------ ------
------ ------
</TABLE>

The provision for federal income taxes does not materially differ from the
amount of federal income tax determined by applying the appropriate U.S.
statutory income tax rate to income before federal income taxes. The deferred
tax (assets) liabilities are comprised of the following at December 31, 1997:

<TABLE>
<CAPTION>
DECEMBER 31,
(IN MILLIONS) 1997 1996
- -------------------------------------------------- ------- -------
<S> <C> <C>
Deferred tax (assets) liabilitie
Loss reserves................................... $(175.8) $(137.0)
Deferred acquisition costs...................... 226.4 186.9
Investments, net................................ 27.0 14.2
Bad debt reserve................................ (2.0) (1.1)
Other, net...................................... 0.3 (2.8)
------- -------
Deferred tax liability, net..................... $ 75.9 $ 60.2
------- -------
------- -------
</TABLE>

Gross deferred income tax liabilities totaled $253.7 million and $201.1 million
at December 31, 1997 and 1996. Gross deferred income tax assets totaled $177.8
million and $140.9 at December 31, 1997 and 1996.

Management believes, based on the Company's recent earnings history and its
future expectations, that the Company's taxable income in future years will be
sufficient to realize all deferred tax assets. In determining the adequacy of
future income, management considered the future reversal of its existing
temporary differences and available tax planning strategies that could be
implemented, if necessary.

The Company's federal income tax returns are routinely audited by the IRS, and
provisions are routinely made in the financial statements in anticipation of the
results of these audits. The IRS has examined the life-nonlife consolidated
group's federal income tax returns through 1991. The Company is currently
considering its response to certain adjustments proposed by the IRS with respect
to the life-nonlife consolidated group's federal income tax returns for 1989,
1990, and 1991. In management's opinion, adequate tax liabilities have been
established for all years. However, the amount of these tax liabilities could be
revised in the near term if estimates of the Company's ultimate liability are
revised.

8. RELATED PARTY TRANSACTIONS

The Company has no employees of its own, but has agreements under which FAFLIC
provides management, space and other services, including accounting, electronic
data processing, human resources, legal and other staff functions. Charges for
these services are based on full cost including all direct and indirect overhead
costs, and amounted to $124.1 million and $112.4 million in 1997 and 1996. The
net amounts payable to FAFLIC and affiliates for accrued expenses and various
other liabilities and receivables were $15.0 million and $13.3 million at
December 31, 1997 and 1996.

F-16
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

9. DIVIDEND RESTRICTIONS

Delaware has enacted laws governing the payment of dividends to stockholders 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 policyholders' 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
statutory earned surplus would also require the prior approval of the Delaware
Commissioner of Insurance.

At January 1, 1998, AFLIAC could pay dividends of $33.9 million to FAFLIC
without prior approval.

10. REINSURANCE

In the normal course of business, the Company seeks to reduce the loss that may
arise from events that cause unfavorable underwriting results by reinsuring
certain levels of risk in various areas of exposure with other insurance
enterprises or reinsurers. Reinsurance transactions are accounted for in
accordance with the provisions of SFAS No. 113.

Amounts recoverable from reinsurers are estimated in a manner consistent with
the claim liability associated with the reinsured policy. Reinsurance contracts
do not relieve the Company from its obligations to policyholders. Failure of
reinsurers to honor their obligations could result in losses to the Company;
consequently, allowances are established for amounts deemed uncollectible. The
Company determines the appropriate amount of reinsurance based on evaluation of
the risks accepted and analyses prepared by consultants and reinsurers and on
market conditions (including the availability and pricing of reinsurance). The
Company also believes that the terms of its reinsurance contracts are consistent
with industry practice in that they contain standard terms with respect to lines
of business covered, limit and retention, arbitration and occurrence. Based on
its review of its reinsurers' financial statements and reputations in the
reinsurance marketplace, the Company believes that its reinsurers are
financially sound.

The effects of reinsurance were as follows:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31
(IN MILLIONS) 1997 1996
- -------------------------------------------------- ------- -------
<S> <C> <C>
Insurance premiums:
Direct.......................................... $ 48.8 $ 53.3
Assumed......................................... 2.6 3.1
Ceded........................................... (28.6) (23.7)
------- -------
Net premiums...................................... $ 22.8 $ 32.7
------- -------
------- -------
Insurance and other individual policy benefits,
claims, losses and loss adjustment expenses:
Direct.......................................... $ 226.0 $ 206.4
Assumed......................................... 4.2 4.5
Ceded........................................... (42.4) (18.3)
------- -------
Net policy benefits, claims, losses and loss
adjustment expenses.............................. $ 187.8 $ 192.6
------- -------
------- -------
</TABLE>

F-17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

11. DEFERRED POLICY ACQUISITION EXPENSES

The following reflects the changes to the deferred policy acquisition asset:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31
(IN MILLIONS) 1997 1996
- -------------------------------------------------- ------- -------
<S> <C> <C>
Balance at beginning of year...................... $ 632.7 $ 555.7
Acquisition expenses deferred................... 184.1 116.6
Amortized to expense during the year............ (53.0) (49.9)
Adjustment to equity during the year............ (10.2) 10.3
Adjustment for cession of disability income
insurance..................................... (38.6) --
Adjustment for revision of universal life and
variable universal life insurance mortality
assumptions................................... 50.3 --
------- -------
Balance at end of year............................ $ 765.3 $ 632.7
------- -------
------- -------
</TABLE>

On October 1, 1997, the Company revised the mortality assumptions for universal
life and variable universal life product lines. These revisions resulted in a
$50.3 million recapitalization of deferred policy acquisition costs.

12. LIABILITIES FOR INDIVIDUAL ACCIDENT AND HEALTH BENEFITS

The Company regularly updates its estimates of liabilities for future policy
benefits and outstanding claims, losses and loss adjustment expenses as new
information becomes available and further events occur which may impact the
resolution of unsettled claims. Changes in prior estimates are reflected in
results of operations in the year such changes are determined to be needed and
recorded.

The liability for future policy benefits and outstanding claims, losses and loss
adjustment expenses related to the Company's accident and health business was
$219.9 million and $226.2 million at December 31, 1997 and 1996. Accident and
health claim liabilities have been re-estimated for all prior years and were
increased by $-0- million in 1997 and $3.2 million in 1996. Due to the
reinsurance agreement whereby the Company has ceded substantially all of its
accident and health business to the Metropolitan, management believes that no
material adverse development of losses will occur. However, the amount of the
liabilities could be revised in the near term if the estimates are revised.

13. CONTINGENCIES

REGULATORY AND INDUSTRY DEVELOPMENTS

Unfavorable economic conditions may contribute to an increase in the number of
insurance companies that are under regulatory supervision. This may result in an
increase in mandatory assessments by state guaranty funds, or voluntary payments
by solvent insurance companies to cover losses to policyholders of insolvent or
rehabilitated companies. Mandatory assessments, which are subject to statutory
limits, can be partially recovered through a reduction in future premium taxes
in some states. The Company is not able to reasonably estimate the potential
effect on it of any such future assessments or voluntary payments.

LITIGATION

In July 1997, a lawsuit was instituted in Louisiana against Allmerica Financial
Corp. and certain of its subsidiaries by individual plaintiffs alleging fraud,
unfair or deceptive acts, breach of contract, misrepresentation and related
claims in the sale of life insurance policies. In October 1997, plaintiffs
voluntarily dismissed the Louisiana suit and refiled the action in Federal
District Court in Worcester, Massachusetts. The plaintiffs

F-18
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

seek to be certified as a class. The case is in the early stages of discovery
and the Company is evaluating the claims. Although the Company believes it has
meritorious defenses to plaintiffs' claims, there can be no assurance that the
claims will be resolved on a basis which is satisfactory to the Company.

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. However, liabilities
related to these proceedings could be established in the near term if estimates
of the ultimate resolution of these proceedings are revised.

YEAR 2000

The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
computer programs that have date-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities. Although the Company does not
believe that there is a material contingency associated with the Year 2000
project, there can be no assurance that exposure for material contingencies will
not arise.

14. STATUTORY FINANCIAL INFORMATION

The Company is required to file annual statements with state regulatory
authorities prepared on an accounting basis prescribed or permitted by such
authorities (statutory basis). Statutory surplus differs from shareholder's
equity reported in accordance with generally accepted accounting principles for
stock life insurance companies primarily because policy acquisition costs are
expensed when incurred, investment reserves are based on different assumptions,
life insurance reserves are based on different assumptions and income tax
expense reflects only taxes paid or currently payable. Statutory net income and
surplus are as follows:

<TABLE>
<CAPTION>
(IN MILLIONS) 1997 1996
- -------------------------------------------------- ------- -------
<S> <C> <C>
Statutory net income.............................. $ 31.5 $ 5.4
Statutory Surplus................................. $ 307.1 $ 234.0
------- -------
------- -------
</TABLE>

F-19
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of Allmerica Financial Life Insurance and Annuity
Company and Policyowners of the Inheiritage Account of Allmerica Financial Life
Insurance and Annuity 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 each of the Sub-Accounts
(Growth, Investment Grade Income, Money Market, Equity Index, Government Bond,
Select Aggressive Growth, Select Growth, Select Growth and Income, Select Value
Opportunity, Select Income, Select International Equity, Select Capital
Appreciation, Fidelity VIP High Income, Fidelity VIP Equity-Income, Fidelity VIP
Growth, Fidelity VIP Overseas, Fidelity VIP II Asset Manager, T. Rowe Price
International Stock, and DGPF International Equity) constituting the Inheiritage
Account of Allmerica Financial Life Insurance and Annuity Company at December
31, 1997, 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 Allmerica Financial Life Insurance and Annuity Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
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 investments at December 31, 1997 by correspondence with the
Funds, provide a reasonable basis for the opinion expressed above.

/s/ Price Waterhouse LLP

PRICE WATERHOUSE LLP

Boston, Massachusetts

March 25, 1998
<PAGE>
INHEIRITAGE ACCOUNT
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SELECT
INVESTMENT GOVERNMENT AGGRESSIVE
GROWTH GRADE INCOME MONEY MARKET EQUITY INDEX BOND GROWTH
----------- ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in shares of Allmerica
Investment Trust...................... $2,753,445 $ 931,262 $1,557,657 $1,728,941 $ 181,315 $3,576,537
Investments in shares of Fidelity
Variable Insurance Products
Funds (VIP)........................... -- -- -- -- -- --
Investment in shares of T. Rowe Price
International Series, Inc............. -- -- -- -- -- --
Investment in shares of Delaware Group
Premium Fund, Inc..................... -- -- -- -- -- --
----------- ------------ ------------ ------------ ----------- -----------
Total assets.......................... 2,753,445 931,262 1,557,657 1,728,941 181,315 3,576,537

LIABILITIES: -- -- -- -- -- --
----------- ------------ ------------ ------------ ----------- -----------
Net assets............................ $2,753,445 $ 931,262 $1,557,657 $1,728,941 $ 181,315 $3,576,537
----------- ------------ ------------ ------------ ----------- -----------
----------- ------------ ------------ ------------ ----------- -----------
Net asset distribution by category:
Variable life policies................ $2,753,445 $ 931,262 $1,557,657 $1,728,941 $ 181,315 $3,576,537
----------- ------------ ------------ ------------ ----------- -----------
----------- ------------ ------------ ------------ ----------- -----------

Units outstanding, December 31, 1997.... 1,376,172 724,294 1,344,701 828,467 149,463 2,046,255
Net asset value per unit, December 31,
1997.................................. $ 2.000800 $1.285751 $ 1.158367 $ 2.086916 $1.213113 $ 1.747845

<CAPTION>
SELECT
GROWTH AND SELECT VALUE SELECT
SELECT GROWTH INCOME OPPORTUNITY* INCOME
------------- ----------- ------------ ---------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of Allmerica
Investment Trust...................... $1,881,673 $1,892,616 $1,978,502 $ 90,995
Investments in shares of Fidelity
Variable Insurance Products
Funds (VIP)........................... -- -- -- --
Investment in shares of T. Rowe Price
International Series, Inc............. -- -- -- --
Investment in shares of Delaware Group
Premium Fund, Inc..................... -- -- -- --
------------- ----------- ------------ ---------
Total assets.......................... 1,881,673 1,892,616 1,978,502 90,995
LIABILITIES: -- -- -- --
------------- ----------- ------------ ---------
Net assets............................ $1,881,673 $1,892,616 $1,978,502 $ 90,995
------------- ----------- ------------ ---------
------------- ----------- ------------ ---------
Net asset distribution by category:
Variable life policies................ $1,881,673 $1,892,616 $1,978,502 $ 90,995
------------- ----------- ------------ ---------
------------- ----------- ------------ ---------
Units outstanding, December 31, 1997.... 944,279 992,880 1,113,098 83,988
Net asset value per unit, December 31,
1997.................................. $ 1.992708 $ 1.906189 $ 1.777474 $1.083425
</TABLE>

* Name changed. See Note 1.

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

SA-1
<PAGE>
INHEIRITAGE ACCOUNT
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SELECT SELECT FIDELITY FIDELITY FIDELITY
INTERNATIONAL CAPITAL VIP VIP VIP
EQUITY APPRECIATION HIGH INCOME EQUITY-INCOME GROWTH
-------------- ------------- -------------- ------------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in shares of Allmerica
Investment Trust.......................... $2,895,776 $1,825,150 $ -- $ -- $ --
Investments in shares of Fidelity Variable
Insurance Products Funds (VIP)............ -- -- 1,828,496 4,832,383 3,804,492
Investment in shares of T. Rowe Price
International Series, Inc................. -- -- -- -- --
Investment in shares of Delaware Group
Premium Fund, Inc......................... -- -- -- -- --
-------------- ------------- -------------- ------------- -----------
Total assets.............................. 2,895,776 1,825,150 1,828,496 4,832,383 3,804,492

LIABILITIES: -- -- -- -- --
-------------- ------------- -------------- ------------- -----------
Net assets................................ $2,895,776 $1,825,150 $1,828,496 $4,832,383 $3,804,492
-------------- ------------- -------------- ------------- -----------
-------------- ------------- -------------- ------------- -----------
Net asset distribution by category:
Variable life policies.................... $2,895,776 $1,825,150 $1,828,496 $4,832,383 $3,804,492
-------------- ------------- -------------- ------------- -----------
-------------- ------------- -------------- ------------- -----------

Units outstanding, December 31, 1997........ 2,049,283 1,084,387 1,181,030 2,399,383 1,935,926
Net asset value per unit, December 31,
1997...................................... $ 1.413068 $ 1.683117 $ 1.548221 $ 2.014010 $ 1.965205

<CAPTION>
FIDELITY FIDELITY T. ROWE PRICE DGPF
VIP VIP II INTERNATIONAL INTERNATIONAL
OVERSEAS ASSET MANAGER STOCK EQUITY
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of Allmerica
Investment Trust.......................... $ -- $ -- $ -- $ --
Investments in shares of Fidelity Variable
Insurance Products Funds (VIP)............ 674,824 721,505 -- --
Investment in shares of T. Rowe Price
International Series, Inc................. -- -- 935,366 --
Investment in shares of Delaware Group
Premium Fund, Inc......................... -- -- -- 809,488
------------- -------------- -------------- --------------
Total assets.............................. 674,824 721,505 935,366 809,488
LIABILITIES: -- -- -- --
------------- -------------- -------------- --------------
Net assets................................ $ 674,824 $ 721,505 $ 935,366 $ 809,488
------------- -------------- -------------- --------------
------------- -------------- -------------- --------------
Net asset distribution by category:
Variable life policies.................... $ 674,824 $ 721,505 $ 935,366 $ 809,488
------------- -------------- -------------- --------------
------------- -------------- -------------- --------------
Units outstanding, December 31, 1997........ 526,215 467,442 761,555 585,977
Net asset value per unit, December 31,
1997...................................... $ 1.282412 $ 1.543519 $ 1.228233 $ 1.381433
</TABLE>

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

SA-2
<PAGE>
INHEIRITAGE ACCOUNT
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
INVESTMENT GRADE
GROWTH INCOME
FOR THE YEAR ENDED DECEMBER 31, FOR THE YEAR ENDED DECEMBER 31,
------------------------------------ -----------------------------------
1997 1996 1995 1997 1996 1995
--------- --------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends................. $ 31,372 $ 19,523 $ 8,374 $ 50,621 $ 29,860 $ 14,621
--------- --------- -------- -------- --------- --------
EXPENSES:
Mortality and expense risk
fees.................... 18,158 8,082 2,845 6,698 3,961 1,689
Administrative expense
fees.................... 5,122 2,279 790 1,889 1,117 469
--------- --------- -------- -------- --------- --------
Total expenses.......... 23,280 10,361 3,635 8,587 5,078 2,158
--------- --------- -------- -------- --------- --------
Net investment income
(loss).................. 8,092 9,162 4,739 42,034 24,782 12,463
--------- --------- -------- -------- --------- --------

REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Realized gain
distributions from
portfolio sponsors...... 431,686 116,489 39,863 -- -- --
Net realized gain (loss)
from sales of
investments............. 23,025 6,206 871 1,716 118 170
--------- --------- -------- -------- --------- --------
Net realized gain
(loss)................ 454,711 122,695 40,734 1,716 118 170
Net unrealized gain
(loss).................. (71,668) 24,343 35,675 18,269 (11,188) 13,405
--------- --------- -------- -------- --------- --------
Net realized and
unrealized gain (loss)
on investments........ 383,043 147,038 76,409 19,985 (11,070) 13,575
--------- --------- -------- -------- --------- --------
Net increase (decrease)
in net assets from
operations............ $ 391,135 $ 156,200 $ 81,148 $ 62,019 $ 13,712 $ 26,038
--------- --------- -------- -------- --------- --------
--------- --------- -------- -------- --------- --------

MONEY MARKET EQUITY INDEX
FOR THE YEAR ENDED DECEMBER 31, FOR THE YEAR ENDED DECEMBER 31,
---------------------------------- -----------------------------------
1997 1996 1995 1997 1996 1995
-------- -------- -------- --------- -------- --------
<S> <C><C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends................. $ 75,584 $ 32,250 $ 32,514 $ 16,809 $ 7,765 $ 628
-------- -------- -------- --------- -------- --------
EXPENSES:
Mortality and expense risk
fees.................... 12,569 5,620 5,092 10,805 3,711 801
Administrative expense
fees.................... 3,546 1,585 1,415 3,047 1,047 223
-------- -------- -------- --------- -------- --------
Total expenses.......... 16,115 7,205 6,507 13,852 4,758 1,024
-------- -------- -------- --------- -------- --------
Net investment income
(loss).................. 59,469 25,045 26,007 2,957 3,007 (396)
-------- -------- -------- --------- -------- --------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Realized gain
distributions from
portfolio sponsors...... -- -- -- 46,480 8,556 6,164
Net realized gain (loss)
from sales of
investments............. -- -- -- 40,082 13,582 650
-------- -------- -------- --------- -------- --------
Net realized gain
(loss)................ -- -- -- 86,562 22,138 6,814
Net unrealized gain
(loss).................. -- -- -- 214,373 53,897 17,486
-------- -------- -------- --------- -------- --------
Net realized and
unrealized gain (loss)
on investments........ -- -- -- 300,935 76,035 24,300
-------- -------- -------- --------- -------- --------
Net increase (decrease)
in net assets from
operations............ $ 59,469 $ 25,045 $ 26,007 $ 303,892 $ 79,042 $ 23,904
-------- -------- -------- --------- -------- --------
-------- -------- -------- --------- -------- --------
</TABLE>

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

SA-3
<PAGE>
INHEIRITAGE ACCOUNT
STATEMENTS OF OPERATIONS (CONTINUED)
<TABLE>
<CAPTION>
GOVERNMENT BOND SELECT AGGRESSIVE GROWTH
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, DECEMBER 31,
---------------------------- -------------------------------
1997 1996 1995 1997 1996 1995
-------- -------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends................. $ 10,918 $ 9,371 $ 4,876 $ -- $ -- $ --
-------- -------- -------- --------- --------- ---------
EXPENSES:
Mortality and expense risk
fees.................... 1,719 1,395 779 24,141 10,984 4,636
Administrative expense
fees.................... 485 394 216 6,809 3,098 1,288
-------- -------- -------- --------- --------- ---------
Total expenses.......... 2,204 1,789 995 30,950 14,082 5,924
-------- -------- -------- --------- --------- ---------
Net investment income
(loss).................. 8,714 7,582 3,881 (30,950) (14,082) (5,924)
-------- -------- -------- --------- --------- ---------

REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Realized gain
distributions from
portfolio sponsors...... -- -- -- 276,322 110,059 --
Net realized gain (loss)
from sales of
investments............. 645 416 2,220 21,985 14,437 2,278
-------- -------- -------- --------- --------- ---------
Net realized gain
(loss)................ 645 416 2,220 298,307 124,496 2,278
Net unrealized gain
(loss).................. 1,985 (2,658) 3,911 178,576 65,265 135,550
-------- -------- -------- --------- --------- ---------
Net realized and
unrealized gain (loss)
on investments........ 2,630 (2,242) 6,131 476,883 189,761 137,828
-------- -------- -------- --------- --------- ---------
Net increase (decrease)
in net assets from
operations............ $ 11,344 $ 5,340 $ 10,012 $ 445,933 $ 175,679 $ 131,904
-------- -------- -------- --------- --------- ---------
-------- -------- -------- --------- --------- ---------

<CAPTION>
SELECT GROWTH SELECT GROWTH AND INCOME
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------------------ ------------------------------
1997 1996 1995 1997 1996 1995
--------- --------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends................. $ 5,433 $ 1,447 $ 25 $ 19,498 $ 10,564 $ 5,462
--------- --------- -------- --------- --------- --------
EXPENSES:
Mortality and expense risk
fees.................... 10,338 2,634 1,047 12,838 6,466 2,675
Administrative expense
fees.................... 2,916 743 291 3,621 1,824 743
--------- --------- -------- --------- --------- --------
Total expenses.......... 13,254 3,377 1,338 16,459 8,290 3,418
--------- --------- -------- --------- --------- --------
Net investment income
(loss).................. (7,821) (1,930) (1,313) 3,039 2,274 2,044
--------- --------- -------- --------- --------- --------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Realized gain
distributions from
portfolio sponsors...... 94,924 69,328 -- 160,094 70,770 19,216
Net realized gain (loss)
from sales of
investments............. 2,956 8,490 1,936 9,161 5,532 1,275
--------- --------- -------- --------- --------- --------
Net realized gain
(loss)................ 97,880 77,818 1,936 169,255 76,302 20,491
Net unrealized gain
(loss).................. 221,502 (25,800) 18,467 91,787 50,803 53,136
--------- --------- -------- --------- --------- --------
Net realized and
unrealized gain (loss)
on investments........ 319,382 52,018 20,403 261,042 127,105 73,627
--------- --------- -------- --------- --------- --------
Net increase (decrease)
in net assets from
operations............ $ 311,561 $ 50,088 $ 19,090 $ 264,081 $ 129,379 $ 75,671
--------- --------- -------- --------- --------- --------
--------- --------- -------- --------- --------- --------
</TABLE>

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

SA-4
<PAGE>
INHEIRITAGE ACCOUNT
STATEMENTS OF OPERATIONS (CONTINUED)
<TABLE>
<CAPTION>
SELECT VALUE OPPORTUNITY* SELECT INTERNATIONAL EQUITY
FOR THE YEAR ENDED SELECT INCOME FOR THE YEAR ENDED
DECEMBER 31, FOR THE PERIOD DECEMBER 31,
------------------------------ 1/21/97** TO ----------------------------
1997 1996 1995 12/31/97 1997 1996 1995
--------- --------- -------- -------------------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends................. $ 10,855 $ 6,031 $ 3,401 $ 2,772 $ 65,152 $ 21,949 $ 3,495
--------- --------- -------- ------- -------- -------- --------
EXPENSES:
Mortality and expense risk
fees.................... 12,654 5,802 2,801 363 19,115 6,466 1,757
Administrative expense
fees.................... 3,569 1,636 778 103 5,391 1,824 488
--------- --------- -------- ------- -------- -------- --------
Total expenses.......... 16,223 7,438 3,579 466 24,506 8,290 2,245
--------- --------- -------- ------- -------- -------- --------
Net investment income
(loss).................. (5,368) (1,407) (178) 2,306 40,646 13,659 1,250
--------- --------- -------- ------- -------- -------- --------

REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Realized gain
distributions from
portfolio sponsors...... 260,710 38,292 12,734 -- 90,833 2,581 1,315
Net realized gain (loss)
from sales of
investments............. 36,135 10,246 1,180 1,822 18,453 6,398 1,625
--------- --------- -------- ------- -------- -------- --------
Net realized gain
(loss)................ 296,845 48,538 13,914 1,822 109,286 8,979 2,940
Net unrealized gain
(loss).................. 7,494 107,671 34,744 51 (105,756) 128,190 29,470
--------- --------- -------- ------- -------- -------- --------
Net realized and
unrealized gain (loss)
on investments........ 304,339 156,209 48,658 1,873 3,530 137,169 32,410
--------- --------- -------- ------- -------- -------- --------
Net increase (decrease)
in net assets from
operations............ $ 298,971 $ 154,802 $ 48,480 $ 4,179 $ 44,176 $150,828 $ 33,660
--------- --------- -------- ------- -------- -------- --------
--------- --------- -------- ------- -------- -------- --------

<CAPTION>
SELECT CAPITAL APPRECIATION
FOR THE YEAR ENDED
DECEMBER 31, FOR THE PERIOD
------------------- 4/28/95** TO
1997 1996 12/31/95
--------- -------- ----------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends................. $ -- $ -- $ 2,887
--------- -------- -------
EXPENSES:
Mortality and expense risk
fees.................... 11,854 4,971 370
Administrative expense
fees.................... 3,343 1,402 103
--------- -------- -------
Total expenses.......... 15,197 6,373 473
--------- -------- -------
Net investment income
(loss).................. (15,197) (6,373) 2,414
--------- -------- -------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Realized gain
distributions from
portfolio sponsors...... -- 1,660 --
Net realized gain (loss)
from sales of
investments............. 12,285 1,850 219
--------- -------- -------
Net realized gain
(loss)................ 12,285 3,510 219
Net unrealized gain
(loss).................. 217,381 6,909 12,788
--------- -------- -------
Net realized and
unrealized gain (loss)
on investments........ 229,666 10,419 13,007
--------- -------- -------
Net increase (decrease)
in net assets from
operations............ $ 214,469 $ 4,046 $15,421
--------- -------- -------
--------- -------- -------
</TABLE>

* Name changed. See Note 1.

** Date of initial investment.

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

SA-5
<PAGE>
INHEIRITAGE ACCOUNT
STATEMENTS OF OPERATIONS (CONTINUED)
<TABLE>
<CAPTION>
FIDELITY VIP HIGH INCOME FIDELITY VIP EQUITY-INCOME
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------------------- -------------------------------
1997 1996 1995 1997 1996 1995
--------- -------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends................. $ 68,437 $ 24,380 $ 4,862 $ 47,892 $ 2,207 $ 19,286
--------- -------- -------- --------- --------- ---------
EXPENSES:
Mortality and expense risk
fees.................... 11,594 4,702 1,284 32,764 18,682 6,818
Administrative expense
fees.................... 3,270 1,326 357 9,241 5,269 1,894
--------- -------- -------- --------- --------- ---------
Total expenses.......... 14,864 6,028 1,641 42,005 23,951 8,712
--------- -------- -------- --------- --------- ---------
Net investment income
(loss).................. 53,573 18,352 3,221 5,887 (21,744) 10,574
--------- -------- -------- --------- --------- ---------

REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Realized gain
distributions from
portfolio sponsors...... 8,459 4,770 -- 240,792 63,257 18,534
Net realized gain (loss)
from sales of
investments............. 27,979 1,765 1,048 33,101 20,770 5,061
--------- -------- -------- --------- --------- ---------
Net realized gain
(loss)................ 36,438 6,535 1,048 273,893 84,027 23,595
Net unrealized gain
(loss).................. 103,123 35,447 16,928 568,672 197,470 178,135
--------- -------- -------- --------- --------- ---------
Net realized and
unrealized gain (loss)
on investments........ 139,561 41,982 17,976 842,565 281,497 201,730
--------- -------- -------- --------- --------- ---------
Net increase (decrease)
in net assets from
operations............ $ 193,134 $ 60,334 $ 21,197 $ 848,452 $ 259,753 $ 212,304
--------- -------- -------- --------- --------- ---------
--------- -------- -------- --------- --------- ---------

<CAPTION>
FIDELITY VIP GROWTH FIDELITY VIP OVERSEAS
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------------------- ----------------------------
1997 1996 1995 1997 1996 1995
--------- --------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends................. $ 16,453 $ 3,226 $ 1,827 $ 10,056 $ 7,002 $ 1,302
--------- --------- --------- -------- -------- --------
EXPENSES:
Mortality and expense risk
fees.................... 27,500 16,095 6,109 5,647 5,779 4,128
Administrative expense
fees.................... 7,756 4,540 1,697 1,593 1,630 1,146
--------- --------- --------- -------- -------- --------
Total expenses.......... 35,256 20,635 7,806 7,240 7,409 5,274
--------- --------- --------- -------- -------- --------
Net investment income
(loss).................. (18,803) (17,409) (5,979) 2,816 (407) (3,972)
--------- --------- --------- -------- -------- --------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Realized gain
distributions from
portfolio sponsors...... 73,646 81,468 -- 39,918 7,703 1,302
Net realized gain (loss)
from sales of
investments............. 47,664 9,689 4,162 13,234 26,178 1,200
--------- --------- --------- -------- -------- --------
Net realized gain
(loss)................ 121,310 91,157 4,162 53,152 33,881 2,502
Net unrealized gain
(loss).................. 495,681 129,705 157,014 (4,255) 36,231 43,023
--------- --------- --------- -------- -------- --------
Net realized and
unrealized gain (loss)
on investments........ 616,991 220,862 161,176 48,897 70,112 45,525
--------- --------- --------- -------- -------- --------
Net increase (decrease)
in net assets from
operations............ $ 598,188 $ 203,453 $ 155,197 $ 51,713 $ 69,705 $ 41,553
--------- --------- --------- -------- -------- --------
--------- --------- --------- -------- -------- --------
</TABLE>

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

SA-6
<PAGE>
INHEIRITAGE ACCOUNT
STATEMENTS OF OPERATIONS (CONTINUED)
<TABLE>
<CAPTION>
FIDELITY VIP II
ASSET MANAGER T. ROWE PRICE INTERNATIONAL STOCK
FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE
DECEMBER 31, DECEMBER 31, PERIOD
------------------------------ ------------------- 6/30/95**
1997 1996 1995 1997 1996 TO 12/31/95
--------- --------- -------- -------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends................. $ 19,924 $ 19,446 $ 7,071 $ 8,506 $ 3,136 $ --
--------- --------- -------- -------- --------- ------
EXPENSES:
Mortality and expense risk
fees.................... 5,709 5,090 3,680 5,600 1,506 114
Administrative expense
fees.................... 1,610 1,435 1,022 1,580 425 32
--------- --------- -------- -------- --------- ------
Total expenses.......... 7,319 6,525 4,702 7,180 1,931 146
--------- --------- -------- -------- --------- ------
Net investment income
(loss).................. 12,605 12,921 2,369 1,326 1,205 (146)
--------- --------- -------- -------- --------- ------

REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Realized gain
distributions from
portfolio sponsors...... 49,980 16,035 -- 12,051 1,864 --
Net realized gain (loss)
from sales of
investments............. 10,245 19,047 2,905 5,743 786 25
--------- --------- -------- -------- --------- ------
Net realized gain
(loss)................. 60,225 35,082 2,905 17,794 2,650 25
Net unrealized gain
(loss).................. 38,982 23,161 56,562 (26,790) 17,465 1,602
--------- --------- -------- -------- --------- ------
Net realized and
unrealized gain (loss)
on investments......... 99,207 58,243 59,467 (8,996) 20,115 1,627
--------- --------- -------- -------- --------- ------
Net increase (decrease)
in net assets from
operations............. $ 111,812 $ 71,164 $ 61,836 $ (7,670) $ 21,320 $ 1,481
--------- --------- -------- -------- --------- ------
--------- --------- -------- -------- --------- ------

<CAPTION>
DGPF
INTERNATIONAL EQUITY
FOR THE YEAR ENDED
DECEMBER 31,
----------------------------
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends................. $ 12,296 $ 5,126 $ 1,280
-------- -------- --------
EXPENSES:
Mortality and expense risk
fees.................... 5,326 1,812 904
Administrative expense
fees.................... 1,502 511 252
-------- -------- --------
Total expenses.......... 6,828 2,323 1,156
-------- -------- --------
Net investment income
(loss).................. 5,468 2,803 124
-------- -------- --------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Realized gain
distributions from
portfolio sponsors...... -- 1,379 480
Net realized gain (loss)
from sales of
investments............. 5,350 3,693 414
-------- -------- --------
Net realized gain
(loss)................. 5,350 5,072 894
Net unrealized gain
(loss).................. (2,688) 28,077 11,496
-------- -------- --------
Net realized and
unrealized gain (loss)
on investments......... 2,662 33,149 12,390
-------- -------- --------
Net increase (decrease)
in net assets from
operations............. $ 8,130 $ 35,952 $ 12,514
-------- -------- --------
-------- -------- --------
</TABLE>

** Date of initial investment.

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

SA-7
<PAGE>
INHEIRITAGE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GROWTH INVESTMENT GRADE INCOME
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
-------------------------------- ------------------------------
1997 1996 1995 1997 1996 1995
---------- ---------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............ $ 8,092 $ 9,162 $ 4,739 $ 42,034 $ 24,782 $ 12,463
Net realized gain (loss)................ 454,711 122,695 40,734 1,716 118 170
Net unrealized gain (loss).............. (71,668) 24,343 35,675 18,269 (11,188) 13,405
---------- ---------- -------- -------- -------- ----------
Net increase (decrease) in net assets
from operations....................... 391,135 156,200 81,148 62,019 13,712 26,038
---------- ---------- -------- -------- -------- ----------
FROM CAPITAL TRANSACTIONS:
Net premiums............................ 570,987 347,739 133,682 240,396 172,317 129,213
Terminations............................ (38,859) (11,851) (725) (5,462) -- (186)
Insurance and other charges............. (37,276) (20,067) (11,360) (19,344) (13,470) (8,150)
Other transfers from (to) the General
Account of Allmerica Financial Life
Insurance and Annuity Company
(Sponsor)............................. 515,258 326,702 209,080 62,479 87,357 109,773
Net increase (decrease) in investment by
Allmerica Financial Life Insurance and
Annuity Company (Sponsor)............. -- -- -- -- -- --
---------- ---------- -------- -------- -------- ----------
Net increase (decrease) in net assets
from capital transactions............. 1,010,110 642,523 330,677 278,069 246,204 230,650
---------- ---------- -------- -------- -------- ----------
Net increase (decrease) in net assets... 1,401,245 798,723 411,825 340,088 259,916 256,688

NET ASSETS:
Beginning of period....................... 1,352,200 553,477 141,652 591,174 331,258 74,570
---------- ---------- -------- -------- -------- ----------
End of period............................. $2,753,445 $1,352,200 $553,477 $931,262 $591,174 $331,258
---------- ---------- -------- -------- -------- ----------
---------- ---------- -------- -------- -------- ----------

<CAPTION>
MONEY MARKET EQUITY INDEX
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
--------------------------------- --------------------------------
1997 1996 1995 1997 1996 1995
---------- ---------- --------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............ $ 59,469 $ 25,045 $ 26,007 $ 2,957 $ 3,007 $ (396)
Net realized gain (loss)................ -- -- -- 86,562 22,138 6,814
Net unrealized gain (loss).............. -- -- -- 214,373 53,897 17,486
---------- ---------- --------- ---------- -------- ----------
Net increase (decrease) in net assets
from operations....................... 59,469 25,045 26,007 303,892 79,042 23,904
---------- ---------- --------- ---------- -------- ----------
FROM CAPITAL TRANSACTIONS:
Net premiums............................ 1,862,402 1,964,968 744,319 431,987 130,549 62,224
Terminations............................ (105,934) (894) -- (3,898) -- --
Insurance and other charges............. (71,152) (21,620) (20,544) (13,877) (4,347) (738)
Other transfers from (to) the General
Account of Allmerica Financial Life
Insurance and Annuity Company
(Sponsor)............................. (1,272,972) (1,289,730) (838,979) 419,958 181,481 92,359
Net increase (decrease) in investment by
Allmerica Financial Life Insurance and
Annuity Company (Sponsor)............. -- -- -- -- -- --
---------- ---------- --------- ---------- -------- ----------
Net increase (decrease) in net assets
from capital transactions............. 412,344 652,724 (115,204) 834,170 307,683 153,845
---------- ---------- --------- ---------- -------- ----------
Net increase (decrease) in net assets... 471,813 677,769 (89,197) 1,138,062 386,725 177,749
NET ASSETS:
Beginning of period....................... 1,085,844 408,075 497,272 590,879 204,154 26,405
---------- ---------- --------- ---------- -------- ----------
End of period............................. $1,557,657 $1,085,844 $ 408,075 $1,728,941 $590,879 $204,154
---------- ---------- --------- ---------- -------- ----------
---------- ---------- --------- ---------- -------- ----------
</TABLE>

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

SA-8
<PAGE>
INHEIRITAGE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
SELECT
GOVERNMENT BOND AGGRESSIVE GROWTH
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
---------------------------- ----------------------------------
1997 1996 1995 1997 1996 1995
-------- -------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............ $ 8,714 $ 7,582 $ 3,881 $ (30,950) $ (14,082) $ (5,924)
Net realized gain (loss)................ 645 416 2,220 298,307 124,496 2,278
Net unrealized gain (loss).............. 1,985 (2,658) 3,911 178,576 65,265 135,550
-------- -------- -------- ---------- ---------- ----------
Net increase (decrease) in net assets
from operations....................... 11,344 5,340 10,012 445,933 175,679 131,904
-------- -------- -------- ---------- ---------- ----------
FROM CAPITAL TRANSACTIONS:
Net premiums............................ 134,405 82,419 54,632 850,410 375,474 214,367
Terminations............................ (63) -- -- (23,475) (15,451) (127)
Insurance and other charges............. (11,345) (4,957) (4,440) (34,391) (18,608) (9,429)
Other transfers from (to) the General
Account of Allmerica Financial Life
Insurance and Annuity Company
(Sponsor)............................. (124,316) 12,389 (93,667) 706,773 313,228 232,987
Net increase (decrease) in investment by
Allmerica Financial Life Insurance and
Annuity Company (Sponsor)............. -- -- -- -- -- --
-------- -------- -------- ---------- ---------- ----------
Net increase (decrease) in net assets
from capital transactions............. (1,319) 89,851 (43,475) 1,499,317 654,643 437,798
-------- -------- -------- ---------- ---------- ----------
Net increase (decrease) in net assets... 10,025 95,191 (33,463) 1,945,250 830,322 569,702

NET ASSETS:
Beginning of period....................... 171,290 76,099 109,562 1,631,287 800,965 231,263
-------- -------- -------- ---------- ---------- ----------
End of period............................. $181,315 $171,290 $ 76,099 $3,576,537 $1,631,287 $800,965
-------- -------- -------- ---------- ---------- ----------
-------- -------- -------- ---------- ---------- ----------

<CAPTION>
SELECT
SELECT GROWTH GROWTH AND INCOME
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------------------ ----------------------------------
1997 1996 1995 1997 1996 1995
---------- -------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............ $ (7,821) $ (1,930) $ (1,313) $ 3,039 $ 2,274 $ 2,044
Net realized gain (loss)................ 97,880 77,818 1,936 169,255 76,302 20,491
Net unrealized gain (loss).............. 221,502 (25,800) 18,467 91,787 50,803 53,136
---------- -------- -------- ---------- ---------- ----------
Net increase (decrease) in net assets
from operations....................... 311,561 50,088 19,090 264,081 129,379 75,671
---------- -------- -------- ---------- ---------- ----------
FROM CAPITAL TRANSACTIONS:
Net premiums............................ 489,937 122,752 56,664 335,796 216,938 106,450
Terminations............................ (2,969) (1,127) -- (2,655) (110) (539)
Insurance and other charges............. (18,331) (10,137) (7,124) (21,783) (14,986) (7,742)
Other transfers from (to) the General
Account of Allmerica Financial Life
Insurance and Annuity Company
(Sponsor)............................. 610,195 159,746 61,986 295,757 176,324 209,887
Net increase (decrease) in investment by
Allmerica Financial Life Insurance and
Annuity Company (Sponsor)............. -- -- -- -- -- --
---------- -------- -------- ---------- ---------- ----------
Net increase (decrease) in net assets
from capital transactions............. 1,078,832 271,234 111,526 607,115 378,166 308,056
---------- -------- -------- ---------- ---------- ----------
Net increase (decrease) in net assets... 1,390,393 321,322 130,616 871,196 507,545 383,727
NET ASSETS:
Beginning of period....................... 491,280 169,958 39,342 1,021,420 513,875 130,148
---------- -------- -------- ---------- ---------- ----------
End of period............................. $1,881,673 $491,280 $169,958 $1,892,616 $1,021,420 $513,875
---------- -------- -------- ---------- ---------- ----------
---------- -------- -------- ---------- ---------- ----------
</TABLE>

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

SA-9
<PAGE>
INHEIRITAGE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
SELECT VALUE OPPORTUNITY* SELECT INCOME SELECT INTERNATIONAL EQUITY
YEAR ENDED PERIOD YEAR ENDED
DECEMBER 31, FROM DECEMBER 31,
------------------------------ 1/21/97** --------------------------------
1997 1996 1995 TO 12/31/97 1997 1996 1995
---------- -------- -------- ------------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............ $ (5,368) $ (1,407) $ (178) $ 2,306 $ 40,646 $ 13,659 $ 1,250
Net realized gain (loss)................ 296,845 48,538 13,914 1,822 109,286 8,979 2,940
Net unrealized gain (loss).............. 7,494 107,671 34,744 51 (105,756) 128,190 29,470
---------- -------- -------- ------------- ---------- ---------- --------
Net increase (decrease) in net assets
from operations....................... 298,971 154,802 48,480 4,179 44,176 150,828 33,660
---------- -------- -------- ------------- ---------- ---------- --------
FROM CAPITAL TRANSACTIONS:
Net premiums............................ 426,674 150,169 121,457 31,497 840,919 330,608 86,660
Terminations............................ (3,636) (1,360) -- -- (4,475) (10,864) --
Insurance and other charges............. (11,382) (4,493) (1,943) (531) (26,182) (11,901) (5,519)
Other transfers from (to) the General
Account of Allmerica Financial Life
Insurance and Annuity Company
(Sponsor)............................. 389,460 95,834 146,281 55,850 859,535 358,332 169,160
Net increase (decrease) in investment by
Allmerica Financial Life Insurance and
Annuity Company (Sponsor)............. -- -- -- -- -- (132) --
---------- -------- -------- ------------- ---------- ---------- --------
Net increase (decrease) in net assets
from capital transactions............. 801,116 240,150 265,795 86,816 1,669,797 666,043 250,301
---------- -------- -------- ------------- ---------- ---------- --------
Net increase (decrease) in net assets... 1,100,087 394,952 314,275 90,995 1,713,973 816,871 283,961

NET ASSETS:
Beginning of period....................... 878,415 483,463 169,188 -- 1,181,803 364,932 80,971
---------- -------- -------- ------------- ---------- ---------- --------
End of period............................. $1,978,502 $878,415 $483,463 $90,995 $2,895,776 $1,181,803 $364,932
---------- -------- -------- ------------- ---------- ---------- --------
---------- -------- -------- ------------- ---------- ---------- --------

<CAPTION>
SELECT CAPITAL APPRECIATION
YEAR ENDED PERIOD
DECEMBER 31, FROM
---------------------- 4/28/95**
1997 1996 TO 12/31/95
---------- ---------- -------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............ $ (15,197) $ (6,373) $ 2,414
Net realized gain (loss)................ 12,285 3,510 219
Net unrealized gain (loss).............. 217,381 6,909 12,788
---------- ---------- -------------
Net increase (decrease) in net assets
from operations....................... 214,469 4,046 15,421
---------- ---------- -------------
FROM CAPITAL TRANSACTIONS:
Net premiums............................ 537,854 315,826 40,487
Terminations............................ (18,442) (789) --
Insurance and other charges............. (10,760) (4,359) (298 )
Other transfers from (to) the General
Account of Allmerica Financial Life
Insurance and Annuity Company
(Sponsor)............................. 133,063 502,302 96,424
Net increase (decrease) in investment by
Allmerica Financial Life Insurance and
Annuity Company (Sponsor)............. -- (294) 200
---------- ---------- -------------
Net increase (decrease) in net assets
from capital transactions............. 641,715 812,686 136,813
---------- ---------- -------------
Net increase (decrease) in net assets... 856,184 816,732 152,234
NET ASSETS:
Beginning of period....................... 968,966 152,234 --
---------- ---------- -------------
End of period............................. $1,825,150 $ 968,966 $152,234
---------- ---------- -------------
---------- ---------- -------------
</TABLE>

* Name changed. See Note 1.

** Date of initial investment.

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

SA-10
<PAGE>
INHEIRITAGE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
FIDELITY VIP HIGH INCOME FIDELITY VIP EQUITY-INCOME
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------------------ ------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1997 1996 1995 1997 1996 1995
---------- -------- -------- ---------- ---------- ------------
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............ $ 53,573 $ 18,352 $ 3,221 $ 5,887 $ (21,744) $ 10,574
Net realized gain (loss)................ 36,438 6,535 1,048 273,893 84,027 23,595
Net unrealized gain (loss).............. 103,123 35,447 16,928 568,672 197,470 178,135
---------- -------- -------- ---------- ---------- ------------
Net increase (decrease) in net assets
from operations....................... 193,134 60,334 21,197 848,452 259,753 212,304
---------- -------- -------- ---------- ---------- ------------
FROM CAPITAL TRANSACTIONS:
Net premiums............................ 528,737 227,688 111,201 1,110,022 718,282 382,477
Terminations............................ (21,270) (3,177) (94) (57,841) (19,458) (227)
Insurance and other charges............. (20,126) (10,650) (7,407) (66,454) (41,332) (22,799)
Other transfers from (to) the General
Account of Allmerica Financial Life
Insurance and Annuity Company
(Sponsor)............................. 312,682 270,808 103,466 289,347 486,242 402,823
Net increase (decrease) in investment by
Allmerica Financial Life Insurance and
Annuity Company (Sponsor)............. -- -- -- -- -- --
---------- -------- -------- ---------- ---------- ------------
Net increase (decrease) in net assets
from capital transactions............. 800,023 484,669 207,166 1,275,074 1,143,734 762,274
---------- -------- -------- ---------- ---------- ------------
Net increase (decrease) in net assets... 993,157 545,003 228,363 2,123,526 1,403,487 974,578

NET ASSETS:
Beginning of period....................... 835,339 290,336 61,973 2,708,857 1,305,370 330,792
---------- -------- -------- ---------- ---------- ------------
End of period............................. $1,828,496 $835,339 $290,336 $4,832,383 $2,708,857 $1,305,370
---------- -------- -------- ---------- ---------- ------------
---------- -------- -------- ---------- ---------- ------------

<CAPTION>
FIDELITY VIP GROWTH FIDELITY VIP OVERSEAS
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
---------------------------------- ------------------------------
<S> <C> <C> <C> <C> <C> <C>
1997 1996 1995 1997 1996 1995
---------- ---------- ---------- -------- -------- ----------
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............ $ (18,803) $ (17,409) $ (5,979) $ 2,816 $ (407) $ (3,972)
Net realized gain (loss)................ 121,310 91,157 4,162 53,152 33,881 2,502
Net unrealized gain (loss).............. 495,681 129,705 157,014 (4,255) 36,231 43,023
---------- ---------- ---------- -------- -------- ----------
Net increase (decrease) in net assets
from operations....................... 598,188 203,453 155,197 51,713 69,705 41,553
---------- ---------- ---------- -------- -------- ----------
FROM CAPITAL TRANSACTIONS:
Net premiums............................ 779,115 617,121 330,994 124,750 142,056 152,554
Terminations............................ (56,581) (14,686) (711) (11,669) (3,164) (129)
Insurance and other charges............. (46,966) (30,687) (15,176) (9,180) (10,402) (6,693)
Other transfers from (to) the General
Account of Allmerica Financial Life
Insurance and Annuity Company
(Sponsor)............................. 163,885 507,481 320,660 (35,855) (218,254) 79,493
Net increase (decrease) in investment by
Allmerica Financial Life Insurance and
Annuity Company (Sponsor)............. -- -- -- -- -- --
---------- ---------- ---------- -------- -------- ----------
Net increase (decrease) in net assets
from capital transactions............. 839,453 1,079,229 635,767 68,046 (89,764) 225,225
---------- ---------- ---------- -------- -------- ----------
Net increase (decrease) in net assets... 1,437,641 1,282,682 790,964 119,759 (20,059) 266,778
NET ASSETS:
Beginning of period....................... 2,366,851 1,084,169 293,205 555,065 575,124 308,346
---------- ---------- ---------- -------- -------- ----------
End of period............................. $3,804,492 $2,366,851 $1,084,169 $674,824 $555,065 $575,124
---------- ---------- ---------- -------- -------- ----------
---------- ---------- ---------- -------- -------- ----------
</TABLE>

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

SA-11
<PAGE>
INHEIRITAGE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
FIDELITY VIP II ASSET
MANAGER T. ROWE PRICE INTERNATIONAL STOCK
YEAR ENDED YEAR ENDED PERIOD
DECEMBER 31, DECEMBER 31, FROM
---------------------------- ------------------ 6/30/95**
1997 1996 1995 1997 1996 TO 12/31/95
-------- -------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............ $ 12,605 $ 12,921 $ 2,369 $ 1,326 $ 1,205 $ (146)
Net realized gain (loss)................ 60,225 35,082 2,905 17,794 2,650 25
Net unrealized gain (loss).............. 38,982 23,161 56,562 (26,790) 17,465 1,602
-------- -------- -------- -------- -------- -------------
Net increase (decrease) in net assets
from operations....................... 111,812 71,164 61,836 (7,670) 21,320 1,481
-------- -------- -------- -------- -------- -------------
FROM CAPITAL TRANSACTIONS:
Net premiums............................ 93,609 117,653 161,011 333,744 83,905 13,744
Terminations............................ (52,989) -- -- (3,009) (405) --
Insurance and other charges............. (19,243) (12,984) (6,384) (6,416) (1,672) (179)
Other transfers from (to) the General
Account of Allmerica Financial Life
Insurance and Annuity Company
(Sponsor)............................. 52,212 (167,641) (7,034) 268,399 194,183 37,941
Net increase (decrease) in investment by
Allmerica Financial Life Insurance and
Annuity Company (Sponsor)............. -- (129) -- -- -- --
-------- -------- -------- -------- -------- -------------
Net increase (decrease) in net assets
from capital transactions............. 73,589 (63,101) 147,593 592,718 276,011 51,506
-------- -------- -------- -------- -------- -------------
Net increase (decrease) in net assets... 185,401 8,063 209,429 585,048 297,331 52,987

NET ASSETS:
Beginning of period....................... 536,104 528,041 318,612 350,318 52,987 --
-------- -------- -------- -------- -------- -------------
End of period............................. $721,505 $536,104 $528,041 $935,366 $350,318 $52,987
-------- -------- -------- -------- -------- -------------
-------- -------- -------- -------- -------- -------------

DGPF INTERNATIONAL EQUITY
YEAR ENDED
DECEMBER 31,
----------------------------
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............ $ 5,468 $ 2,803 $ 124
Net realized gain (loss)................ 5,350 5,072 894
Net unrealized gain (loss).............. (2,688) 28,077 11,496
-------- -------- --------
Net increase (decrease) in net assets
from operations....................... 8,130 35,952 12,514
-------- -------- --------
FROM CAPITAL TRANSACTIONS:
Net premiums............................ 253,032 81,837 40,691
Terminations............................ (18,839) (193) (481)
Insurance and other charges............. (6,477) (1,890) (1,222)
Other transfers from (to) the General
Account of Allmerica Financial Life
Insurance and Annuity Company
(Sponsor)............................. 259,107 45,531 41,677
Net increase (decrease) in investment by
Allmerica Financial Life Insurance and
Annuity Company (Sponsor)............. -- -- --
-------- -------- --------
Net increase (decrease) in net assets
from capital transactions............. 486,823 125,285 80,665
-------- -------- --------
Net increase (decrease) in net assets... 494,953 161,237 93,179
NET ASSETS:
Beginning of period....................... 314,535 153,298 60,119
-------- -------- --------
End of period............................. $809,488 $314,535 $153,298
-------- -------- --------
-------- -------- --------
</TABLE>

** Date of initial investment.

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

SA-12
<PAGE>
INHEIRITAGE ACCOUNT

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

NOTE 1 -- ORGANIZATION

The Inheiritage Account (Inheiritage) is a separate investment account of
Allmerica Financial Life Insurance and Annuity 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 certain
flexible premium variable life policies issued by the Company. The Company is a
wholly-owned subsidiary of First Allmerica Financial Life Insurance Company
(First Allmerica). First Allmerica is a wholly-owned subsidiary of Allmerica
Financial Corporation (AFC). 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
nineteen Sub-Accounts under the contracts. 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 First Allmerica, or of the Variable Insurance Products Fund
(Fidelity VIP), or the Variable Insurance Products Fund II (Fidelity VIP II)
managed by Fidelity Management & Research Company (FMR), or of T. Rowe Price
International Series, Inc. (T. Rowe Price) managed by Rowe Price-Fleming
International, Inc. or of the Delaware Group Premium Fund, Inc. (DGPF) managed
by Delaware International Advisers, Ltd. The Trust, Fidelity VIP, Fidelity VIP
II, T. Rowe Price, and DGPF (the Funds) are open-end, diversified management
investment companies registered under the 1940 Act.

Effective April 1, 1997, the investment portfolio of the Trust, which was
formerly known as Small Cap Value Fund, changed its name to Small-Mid Cap Value
Fund. At the Meeting of Shareholders of the Small Cap Value Fund, held on March
18, 1997, shareholders approved the name change and the revisions in the
investment objective of the Fund from investing primarily in small cap value
stocks to investing primarily in small and mid-cap value stocks. Effective
January 9, 1998, this portfolio changed its name to Select Value Opportunity
Fund.

Certain prior year balances have been reclassified to conform with current year
presentation.

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, Fidelity VIP, Fidelity VIP II, T.
Rowe Price, or DGPF. Net realized gains and losses on securities sold are
determined using 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, Fidelity
VIP, Fidelity VIP II, T. Rowe Price, 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 (the Code) and files a consolidated
federal income tax return with First Allmerica. The Company anticipates no tax
liability resulting from the operations of Inheiritage. Therefore, no provision
for income taxes has been charged against Inheiritage.

SA-13
<PAGE>
INHEIRITAGE ACCOUNT

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997

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, Fidelity VIP, Fidelity VIP II, T.
Rowe Price, and DGPF at December 31, 1997 were as follows:

<TABLE>
<CAPTION>
PORTFOLIO INFORMATION
------------------------------------
<S> <C> <C> <C>
NET ASSET
NUMBER OF AGGREGATE VALUE
INVESTMENT PORTFOLIO SHARES COST PER SHARE
- -------------------------------------------------------- ----------- ---------- -----------
ALLMERICA INVESTMENT TRUST:
Growth................................................ 1,139,671 $2,772,785 $ 2.416
Investment Grade Income............................... 837,466 912,290 1.112
Money Market.......................................... 1,557,657 1,557,657 1.000
Equity Index.......................................... 628,021 1,443,729 2.753
Government Bond....................................... 173,176 179,786 1.047
Select Aggressive Growth.............................. 1,607,432 3,197,199 2.225
Select Growth......................................... 1,039,024 1,668,418 1.811
Select Growth and Income.............................. 1,219,469 1,702,327 1.552
Select Value Opportunity*............................. 1,216,791 1,832,354 1.626
Select Income......................................... 89,036 90,944 1.022
Select International Equity........................... 2,159,415 2,846,983 1.341
Select Capital Appreciation........................... 1,075,516 1,588,072 1.697
FIDELITY VARIABLE INSURANCE PRODUCTS FUND:
High Income........................................... 134,646 1,673,152 13.580
Equity-Income......................................... 199,027 3,892,008 24.280
Growth................................................ 102,547 3,013,738 37.100
Overseas.............................................. 35,147 609,156 19.200
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II:
Asset Manager......................................... 40,061 611,035 18.010
T. ROWE PRICE INTERNATIONAL SERIES, INC.:
International Stock................................... 73,420 943,090 12.740
DELAWARE GROUP PREMIUM FUND, INC.:
DGPF International Equity............................. 52,158 773,815 15.520
</TABLE>

* Name changed. See Note 1.

NOTE 4 -- RELATED PARTY TRANSACTIONS

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 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 years
ended December 31, 1997, 1996, and 1995, these monthly deductions from
sub-account policy values amounted to $451,214, $238,545, and $137,108,
respectively. These amounts are included on the statements of changes in net
assets in Insurance and other charges.

SA-14
<PAGE>
INHEIRITAGE ACCOUNT

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997

NOTE 4 -- RELATED PARTY TRANSACTIONS (CONTINUED)

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 risk 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 and paid to the Company on a
daily basis.

Allmerica Investments, Inc., (Allmerica Investments), a wholly-owned subsidiary
of First Allmerica, 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 and to certain independent broker-dealers by the Company. As the
current series of policies have a surrender charge, no deduction is made for
sales charges at the time of the sale. For the years ended December 31, 1997,
1996 and 1995, the Company received $93,139, $21,515 and $1,739, respectively,
for surrender charges applicable to Inheiritage.

NOTE 5 -- DIVERSIFICATION REQUIREMENTS

Under the provisions of Section 817(h) of the 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 The 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.

SA-15
<PAGE>
INHEIRITAGE ACCOUNT

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997

NOTE 6 -- PURCHASES AND SALES OF SECURITIES

Cost of purchases and proceeds from sales of the Trust, Fidelity VIP, Fidelity
VIP II, T. Rowe Price, and DGPF shares by Inheiritage during the year ended
December 31, 1997 were as follows:

<TABLE>
<CAPTION>
INVESTMENT PORTFOLIO PURCHASES SALES
- ------------------------------------------------------------------- ----------- ----------
<S> <C> <C>
ALLMERICA INVESTMENT TRUST:
Growth........................................................... $ 1,653,441 $ 203,553
Investment Grade Income.......................................... 488,107 168,005
Money Market..................................................... 3,131,056 2,659,243
Equity Index..................................................... 1,109,526 225,919
Government Bond.................................................. 146,687 139,293
Select Aggressive Growth......................................... 1,939,163 194,475
Select Growth.................................................... 1,222,415 56,480
Select Growth and Income......................................... 836,417 66,169
Select Value Opportunity*........................................ 1,302,889 246,431
Select Income.................................................... 217,833 128,711
Select International Equity...................................... 2,006,490 205,214
Select Capital Appreciation...................................... 1,015,683 389,165
FIDELITY VARIABLE INSURANCE PRODUCTS FUND:
High Income...................................................... 1,457,196 595,141
Equity-Income.................................................... 1,779,256 257,503
Growth........................................................... 1,185,040 290,743
Overseas......................................................... 249,012 138,232
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II:
Asset Manager.................................................... 232,107 95,933
T. ROWE PRICE INTERNATIONAL SERIES, INC.:
International Stock.............................................. 715,986 109,891
DELAWARE GROUP PREMIUM FUND, INC.:
DGPF International Equity........................................ 561,551 69,260
----------- ----------
Totals........................................................... $21,249,855 $6,239,361
----------- ----------
----------- ----------
</TABLE>

* Name changed. See Note 1.

SA-16
<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, your agent should
be contacted.

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

SPLIT OPTION RIDER/EXCHANGE OPTION RIDER

This Rider, available only at Date of Issue, permits you 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 you 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.

GUARANTEED DEATH BENEFIT RIDER

This Rider, WHICH IS AVAILABLE ONLY AT DATE OF ISSUE, (a) guarantees that
the Policy will not lapse, regardless of the performance of the Separate
Account, and (b) provides a guaranteed net death benefit.

Certain Riders May Not Be Available In All States

A-1
<PAGE>
APPENDIX B
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 you do 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 Policy; 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 is based on the investment
experience of the Separate Account.

<TABLE>
<C> <S>
Option A: PAYMENTS FOR A SPECIFIED NUMBER OF YEARS. The Company will make equal
payments for any selected number of years (not greater than 30). 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).

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.

B-1
<PAGE>
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(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 than Option E. A
lump sum payment will be made to the surviving payee under Option E or the
succeeding payee under Option B.

B-2
<PAGE>
APPENDIX C
ILLUSTRATIONS
SURRENDER VALUE, POLICY VALUES AND DEATH BENEFITS

The following tables illustrate the way in which the Policy's Sum Insured and
Policy Value could vary over an extended period of time.

ASSUMPTIONS

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 tables also illustrate the guaranteed cost of insurance rates and the
current cost of insurance rates.

The tables illustrate the Policy Values that would result based upon the
assumptions that no Policy loans have been made, that you have not requested an
increase or decrease in the initial Face Amount, that no partial withdrawals
have been made, and that no transfers above 12 have been made in any Policy year
(so that no transaction or transfer charges have been incurred).

The tables assume that all premiums are allocated to and remain in the Separate
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 second column of the tables
shows the amount which would accumulate if an amount equal to the Guideline
Annual Premium were invested each year to earn interest (after taxes) at 5%
compounded annually.

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 the Policy's
total Policy Value among the Sub-Accounts of the Separate 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.

DEDUCTIONS FOR CHARGES

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. The amounts shown also, and the daily charge against the Separate
Account for mortality and expense risks and for the Separate Account
administrative charge (for the first 15 Policy years only). In both the Current
Cost of Insurance Charges illustrations and Guaranteed Cost of Insurance Charges
illustrations, the Separate Account charges currently are equivalent to an
effective annual rate of 1.15% of the average daily value of the assets in the
Separate Account in the first fifteen Policy Years, and 0.90% thereafter

The amounts shown in the tables also take into account the Underlying Fund
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 Fund. The actual fees
and expenses of each Underlying Fund vary, and in 1997 ranged from an annual
rate of 0.35% to an annual rate of 2.00% 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.

AFIMS has declared a voluntary expense limitation of 1.35% of average net assets
for the Select Aggressive Growth Fund and Select Capital Appreciation Fund,
1.50% for the Select International Equity Fund, 1.25% for the Select Value
Opportunity Fund, 1.20% for the Growth Fund and Select Growth Fund, 1.10% for
the Select Growth and Income, 1.00% for the Investment Grade Income Fund and
Government Bond Fund, and

C-1
<PAGE>
0.60% for the Money Market Fund and Equity Index Fund. The total operating
expenses of these Funds of the Trust were less than their respective expense
limitations throughout 1997. These limitations may be terminated at any time.

Until further notice, AFIMS has declared a voluntary expense limitation of 1.20%
of average daily net assets for the Select Strategic Growth Fund. In addition,
the AFIMS has agreed to voluntarily waive its management fee to the extent that
expenses of the Select Emerging Markets Fund exceed 2.00% of the Fund's average
daily net assets, except that such waiver shall not exceed the net amount of
management fees earned by AFIMS from the Fund after subtracting fees paid by
AFIMS to a sub-adviser. These limitations may be terminated at any time.

Effective July 1, 1997, Delaware International Advisers Ltd., the investment
adviser for the International Equity Series, has agreed to limit total annual
expenses of the fund to 0.95%. This limitation replaces a prior limitation of
0.80% that expired on June 30, 1997. The new limitation will be in effect
through October 31, 1998. In 1997, the actual ratio of total annual expenses of
the International Equity Series was 0.85%.

NET ANNUAL RATES OF INVESTMENT

Taking into account the Separate Account mortality and expense risk charge of
0.90%, the Separate Account administrative charge of 0.25%, and the assumed
0.85% charge for Underlying Fund 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% and 10.00%, respectively, during the first 15 Policy
years and (-1.75%), 4.25% and 10.25%, respectively, thereafter.

The hypothetical returns shown in the table do not reflect any charges for
income taxes against the Separate Account since no charges are currently made.
However, if in the future such charges are made, in order to produce illustrated
death benefits and Policy 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.

UPON REQUEST, THE COMPANY WILL PROVIDE A COMPARABLE ILLUSTRATION BASED UPON THE
PROPOSED INSUREDS' AGES AND UNDERWRITING CLASSIFICATIONS, AND THE REQUESTED FACE
AMOUNT, SUM INSURED OPTION, AND RIDERS.

C-2
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE INHEIRITAGE

INSURED 1: UNISEX NON-SMOKER ISSUE AGE 55
INSURED 2: UNISEX NON-SMOKER ISSUE AGE 55
$1,000,000 SUM INSURED OPTION 1

CURRENT COST OF INSURANCE CHARGES

<TABLE>
<CAPTION>
PREMIUMS HYPOTHETICAL 0% HYPOTHETICAL 6% HYPOTHETICAL 12%
PAID PLUS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
INTEREST --------------------------------- --------------------------------- ---------------------------------
POLICY AT 5% SURRENDER POLICY DEATH SURRENDER POLICY DEATH SURRENDER POLICY DEATH
YEAR PER YEAR (1) VALUE VALUE (2) BENEFIT VALUE VALUE (2) BENEFIT VALUE VALUE (2) BENEFIT
- ------ ------------ --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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 80,833 95,653 1,000,000
8 100,266 52,213 65,893 1,000,000 73,221 86,901 1,000,000 101,037 114,717 1,000,000
9 115,779 60,231 72,771 1,000,000 86,597 99,137 1,000,000 122,984 135,524 1,000,000
10 132,068 67,919 79,319 1,000,000 100,276 111,676 1,000,000 146,842 158,242 1,000,000
11 149,171 76,297 85,417 1,000,000 115,290 124,410 1,000,000 173,831 182,951 1,000,000
12 167,130 84,175 91,015 1,000,000 130,455 137,295 1,000,000 202,975 209,815 1,000,000
13 185,986 91,508 96,068 1,000,000 145,729 150,289 1,000,000 234,463 239,023 1,000,000
14 205,786 98,242 100,522 1,000,000 161,066 163,346 1,000,000 268,509 270,789 1,000,000
15 226,575 104,317 104,317 1,000,000 176,413 176,413 1,000,000 305,354 305,354 1,000,000
16 248,404 107,680 107,680 1,000,000 189,902 189,902 1,000,000 343,785 343,785 1,000,000
17 271,324 110,187 110,187 1,000,000 203,274 203,274 1,000,000 385,737 385,737 1,000,000
18 295,390 111,790 111,790 1,000,000 216,490 216,490 1,000,000 431,628 431,628 1,000,000
19 320,660 112,271 112,271 1,000,000 229,362 229,362 1,000,000 481,839 481,839 1,000,000
20 347,193 111,442 111,442 1,000,000 241,727 241,727 1,000,000 536,864 536,864 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 1,000,000 100,276 111,676 1,000,000 146,842 158,242 1,000,000
Age 70 226,575 104,317 104,317 1,000,000 176,413 176,413 1,000,000 305,354 305,354 1,000,000
Age 75 347,193 111,442 111,442 1,000,000 241,727 241,727 1,000,000 536,864 536,864 1,000,000
</TABLE>

(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.

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, POLICY VALUE, AND DEATH BENEFIT FOR THE POLICY WOULD BE DIFFERENT FROM
THOSE SHOWN IF THE ACTUAL RATES OF INVESTMENT RETURN AVERAGED 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 POLICY VALUE
TRANSFERRED TO THE GENERAL 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.

C-3
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE INHEIRITAGE

INSURED 1: UNISEX NON-SMOKER ISSUE AGE 55
INSURED 2: UNISEX NON-SMOKER ISSUE AGE 55
$1,000,000 SUM INSURED OPTION 1

GUARANTEED COST OF INSURANCE CHARGES

<TABLE>
<CAPTION>
PREMIUMS
PAID HYPOTHETICAL 0% HYPOTHETICAL 6% HYPOTHETICAL 12%
PLUS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
INTEREST --------------------------------- --------------------------------- ---------------------------------
POLICY AT 5% SURRENDER POLICY DEATH SURRENDER POLICY DEATH SURRENDER POLICY DEATH
YEAR PER YEAR (1) VALUE VALUE (2) BENEFIT VALUE VALUE (2) BENEFIT VALUE VALUE (2) BENEFIT
- ------ ------------ --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 10,500 0 9,205 1,000,000 0 9,774 1,000,000 0 10,343 1,000,000
2 21,525 5,366 18,081 1,000,000 7,073 19,789 1,000,000 8,850 21,565 1,000,000
3 33,101 7,613 26,613 1,000,000 11,029 30,029 1,000,000 14,726 33,726 1,000,000
4 45,256 16,542 34,782 1,000,000 22,237 40,477 1,000,000 28,650 46,890 1,000,000
5 58,019 25,467 42,567 1,000,000 34,010 51,110 1,000,000 44,025 61,125 1,000,000
6 71,420 33,977 49,937 1,000,000 45,935 61,895 1,000,000 60,535 76,495 1,000,000
7 85,491 42,032 56,852 1,000,000 57,970 72,790 1,000,000 78,245 93,065 1,000,000
8 100,266 49,581 63,261 1,000,000 70,059 83,739 1,000,000 97,216 110,896 1,000,000
9 115,779 56,548 69,088 1,000,000 82,121 94,661 1,000,000 117,494 130,034 1,000,000
10 132,068 62,847 74,247 1,000,000 94,059 105,459 1,000,000 139,123 150,523 1,000,000
11 149,171 69,524 78,644 1,000,000 106,910 116,030 1,000,000 163,293 172,413 1,000,000
12 167,130 75,329 82,169 1,000,000 119,409 126,249 1,000,000 188,911 195,751 1,000,000
13 185,986 80,153 84,713 1,000,000 131,431 135,991 1,000,000 216,046 220,606 1,000,000
14 205,786 83,874 86,154 1,000,000 142,834 145,114 1,000,000 244,775 247,055 1,000,000
15 226,575 86,341 86,341 1,000,000 153,449 153,449 1,000,000 275,179 275,179 1,000,000
16 248,404 85,293 85,293 1,000,000 161,160 161,160 1,000,000 305,748 305,748 1,000,000
17 271,324 82,396 82,396 1,000,000 167,493 167,493 1,000,000 338,187 338,187 1,000,000
18 295,390 77,452 77,452 1,000,000 172,214 172,214 1,000,000 372,690 372,690 1,000,000
19 320,660 69,872 69,872 1,000,000 174,721 174,721 1,000,000 409,254 409,254 1,000,000
20 347,193 59,062 59,062 1,000,000 174,395 174,395 1,000,000 447,978 447,978 1,000,000
Age 60 58,019 25,467 42,567 1,000,000 34,010 51,110 1,000,000 44,025 61,125 1,000,000
Age 65 132,068 62,847 74,247 1,000,000 94,059 105,459 1,000,000 139,123 150,523 1,000,000
Age 70 226,575 86,341 86,341 1,000,000 153,449 153,449 1,000,000 275,179 275,179 1,000,000
Age 75 347,193 59,062 59,062 1,000,000 174,395 174,395 1,000,000 447,978 447,978 1,000,000
</TABLE>

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

C-4
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE INHEIRITAGE

INSURED 1: UNISEX NON-SMOKER ISSUE AGE 55
INSURED 2: UNISEX NON-SMOKER ISSUE AGE 55
$1,000,000 SUM INSURED OPTION 2

CURRENT COST OF INSURANCE CHARGES

<TABLE>
<CAPTION>
PREMIUMS
PAID HYPOTHETICAL 0% HYPOTHETICAL 6% HYPOTHETICAL 12%
PLUS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
INTEREST --------------------------------- --------------------------------- ---------------------------------
POLICY AT 5% SURRENDER POLICY DEATH SURRENDER POLICY DEATH SURRENDER POLICY DEATH
YEAR PER YEAR (1) VALUE VALUE (2) BENEFIT VALUE VALUE (2) BENEFIT VALUE VALUE (2) BENEFIT
- ------ ------------ --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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 21,700 1,021,700
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 17,020 35,260 1,035,260 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 62,101 78,061 1,078,061
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 1,086,644 100,685 114,365 1,114,365
9 115,779 59,959 72,499 1,072,499 86,210 98,750 1,098,750 122,435 134,975 1,134,975
10 132,068 67,540 78,940 1,078,940 99,715 111,115 1,111,115 146,013 157,413 1,157,413
11 149,171 75,772 84,892 1,084,892 114,484 123,604 1,123,604 172,593 181,713 1,181,713
12 167,130 83,458 90,298 1,090,298 129,311 136,151 1,136,151 201,147 207,987 1,207,987
13 185,986 90,540 95,100 1,095,100 144,128 148,688 1,148,688 231,802 236,362 1,236,362
14 205,786 96,959 99,239 1,099,239 158,861 161,141 1,161,141 264,689 266,969 1,266,969
15 226,575 102,641 102,641 1,102,641 173,416 173,416 1,173,416 299,940 299,940 1,299,940
16 248,404 105,518 105,518 1,105,518 185,878 185,878 1,185,878 336,198 336,198 1,336,198
17 271,324 107,430 107,430 1,107,430 197,926 197,926 1,197,926 375,199 375,199 1,375,199
18 295,390 108,322 108,322 1,108,322 209,467 209,467 1,209,467 417,146 417,146 1,417,146
19 320,660 107,952 107,952 1,107,952 220,211 220,211 1,220,211 462,066 462,066 1,462,066
20 347,193 106,114 106,114 1,106,114 229,890 229,890 1,229,890 510,021 510,021 1,510,021
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 99,715 111,115 1,111,115 146,013 157,413 1,157,413
Age 70 226,575 102,641 102,641 1,102,641 173,416 173,416 1,173,416 299,940 299,940 1,299,940
Age 75 347,193 106,114 106,114 1,106,114 229,890 229,890 1,229,890 510,021 510,021 1,510,021
</TABLE>

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

C-5
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE INHEIRITAGE

INSURED 1: UNISEX NON-SMOKER ISSUE AGE 55
INSURED 2: UNISEX NON-SMOKER ISSUE AGE 55
$1,000,000 SUM INSURED OPTION 2

GUARANTEED COST OF INSURANCE CHARGES

<TABLE>
<CAPTION>
PREMIUMS HYPOTHETICAL 0% HYPOTHETICAL 6% HYPOTHETICAL 12%
PAID PLUS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
INTEREST --------------------------------- --------------------------------- ---------------------------------
POLICY AT 5% SURRENDER POLICY DEATH SURRENDER POLICY DEATH SURRENDER POLICY DEATH
YEAR PER YEAR (1) VALUE VALUE (2) BENEFIT VALUE VALUE (2) BENEFIT VALUE VALUE (2) BENEFIT
- ------ ------------ --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 10,500 0 9,204 1,009,204 0 9,773 1,009,773 0 10,342 1,010,342
2 21,525 5,362 18,078 1,018,078 7,070 19,785 1,019,785 8,846 21,561 1,021,561
3 33,101 7,602 26,602 1,026,602 11,016 30,016 1,030,016 14,711 33,711 1,033,711
4 45,256 16,515 34,755 1,034,755 22,205 40,445 1,040,445 28,612 46,852 1,046,852
5 58,019 25,411 42,511 1,042,511 33,941 51,041 1,051,041 43,941 61,041 1,061,041
6 71,420 33,875 49,835 1,049,835 45,806 61,766 1,061,766 60,371 76,331 1,076,331
7 85,491 41,862 56,682 1,056,682 57,745 72,565 1,072,565 77,950 92,770 1,092,770
8 100,266 49,310 62,990 1,062,990 69,689 83,369 1,083,369 96,711 110,391 1,110,391
9 115,779 56,137 68,677 1,068,677 81,537 94,077 1,094,077 116,666 129,206 1,129,206
10 132,068 62,243 73,643 1,073,643 93,167 104,567 1,104,567 137,807 149,207 1,149,207
11 149,171 68,660 77,780 1,077,780 105,583 114,703 1,114,703 161,256 170,376 1,170,376
12 167,130 74,125 80,965 1,080,965 117,485 124,325 1,124,325 185,833 192,673 1,192,673
13 185,986 78,516 83,076 1,083,076 128,705 133,265 1,133,265 211,494 216,054 1,216,054
14 205,786 81,698 83,978 1,083,978 139,053 1,333 1,141,333 238,170 240,450 1,240,450
15 226,575 83,512 83,512 1,083,512 148,301 148,301 1,148,301 265,760 265,760 1,265,760
16 248,404 81,673 81,673 1,081,673 154,248 154,248 1,154,248 292,474 292,474 1,292,474
17 271,324 77,840 77,840 1,077,840 158,326 158,326 1,158,326 319,660 319,660 1,319,660
18 295,390 71,831 71,831 1,071,831 160,229 160,229 1,160,229 347,126 347,126 1,347,126
19 320,660 63,063 63,063 1,063,063 159,226 159,226 1,159,226 374,231 374,231 1,374,231
20 347,193 50,998 50,998 1,050,998 154,585 154,585 1,154,585 400,301 400,301 1,400,301
Age 60 58,019 25,411 42,511 1,042,511 33,941 51,041 1,051,041 43,941 61,041 1,061,041
Age 65 132,068 62,243 73,643 1,073,643 93,167 104,567 1,104,567 137,807 149,207 1,149,207
Age 70 226,575 83,512 83,512 1,083,512 148,301 148,301 1,148,301 265,760 265,760 1,265,760
Age 75 347,193 50,998 50,998 1,050,998 154,585 154,585 1,154,585 400,301 400,301 1,400,301
</TABLE>

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

C-6
<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 Nonforfeiture 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 the 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).

D-1
<PAGE>
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.

INITIAL MAXIMUM SURRENDER CHARGE PER $1,000 FACE AMOUNT

<TABLE>
<CAPTION>
Younger Initial Younger Initial Younger Initial
Issue Surrender Issue Surrender Issue Surrender
Age Charge Age Charge 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>

EXAMPLES

For the purposes of these examples, assume that two non-smokers, 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 (19.00 X 1,000) $19,000.00

D-2
<PAGE>
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,
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.

D-3
<PAGE>
ALLMERICA SELECT INHEIRITAGE
(INDIVIDUAL JOINT SURVIVORSHIP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE)

Allmerica Financial Life Insurance and Annuity Company ("Company") issues
Allmerica Select Inheiritage, the individual joint survivorship flexible premium
variable life insurance policies ("Policy" or "Policies") described in this
Prospectus. The Policies are funded by the Inheiritage Account ("Separate
Account"), a separate investment account of the Company. Life insurance coverage
is provided for two Insureds, with Death Proceeds payable at death of the last
surviving Insured. Applicants must be Age 80 or under with respect to the
younger Insured, and Age 85 or under with respect to the older Insured.

The Policies permit allocations to the following Funds of Allmerica Investment
Trust ("Trust"), Fidelity Variable Insurance Products Fund ("Fidelity VIP"), and
T. Rowe Price International Series, Inc. ("T. Rowe Price"). Certain Funds may
not be available in all states.

FUND INVESTMENT ADVISER
Select Emerging Markets Fund Schroder Capital Management
International Inc.
Select International Equity Fund Bank of Ireland Asset Management
(U.S.) Limited
T. Rowe Price International Stock Rowe Price-Fleming International,
Portfolio Inc.
Select Aggressive Growth Fund Nicholas-Applegate Capital
Management, L.P.
Select Capital Appreciation Fund T. Rowe Price Associates, Inc.
Select Value Opportunity Fund Cramer Rosenthal McGlynn, LLC
Select Growth Fund Putnam Investment Management, Inc.
Select Strategic Growth Fund Cambiar Investors, Inc.
Fidelity VIP Growth Portfolio Fidelity Management and Research
Company
Select Growth and Income Fund John A. Levin & Co., Inc.
Fidelity VIP Equity-Income Fidelity Management and Research
Portfolio Company
Fidelity VIP High Income Portfolio Fidelity Management and Research
Company
Select Income Fund Standish, Ayer & Wood, Inc.
Money Market Fund Allmerica Asset Management, Inc.

THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY CURRENT PROSPECTUSES OF THE
ALLMERICA INVESTMENT TRUST, VARIABLE INSURANCE PRODUCTS FUND, AND T. ROWE PRICE
INTERNATIONAL SERIES, INC. THE FIDELITY VIP HIGH INCOME PORTFOLIO MAY INVEST 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, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

THE POLICIES ARE OBLIGATIONS OF ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY
COMPANY, AND ARE DISTRIBUTED BY ALLMERICA INVESTMENTS, INC. THE POLICIES ARE NOT
DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK OR CREDIT
UNION. THE POLICIES ARE NOT INSURED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT
INSURANCE CORPORATION (FDIC), OR ANY OTHER FEDERAL AGENCY. INVESTMENTS IN THE
POLICIES ARE SUBJECT TO VARIOUS RISKS, INCLUDING THE FLUCTUATION OF VALUE AND
POSSIBLE LOSS OF PRINCIPAL.

CORRESPONDENCE MAY BE MAILED TO
SELECT INHEIRITAGE, P.O. BOX 8179,
BOSTON MA 02266-8179

DATED MAY 1, 1998
440 LINCOLN STREET
WORCESTER, MASSACHUSETTS 01653
(508) 855-1000
<PAGE>
(Continued from cover page)

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, unless the optional
Guaranteed Death Benefit Rider is in effect This Rider may not be available in
all states.

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.

No claim is made that the Policy is in any way similar or comparable to a
systematic investment plan of a mutual fund.

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.

2
<PAGE>
TABLE OF CONTENTS

<TABLE>
<S> <C>
SPECIAL TERMS..................................... 5
SUMMARY........................................... 8
PERFORMANCE INFORMATION........................... 17
DESCRIPTION OF THE COMPANY, THE SEPARATE ACCOUNT,
AND THE UNDERLYING FUNDS......................... 22
INVESTMENT OBJECTIVES AND POLICIES................ 24
INVESTMENT ADVISORY SERVICES...................... 25
ADDITION, DELETION OR SUBSTITUTION OF
INVESTMENTS...................................... 28
VOTING RIGHTS..................................... 29
THE POLICY........................................ 30
Applying for the Policy......................... 30
Free-Look Period................................ 31
Conversion Privileges........................... 31
Premium Payments................................ 32
Incentive Funding Discount...................... 33
Guaranteed Death Benefit Rider.................. 33
Paid-up Insurance Option........................ 34
Allocation of Net Premiums...................... 35
Transfer Privilege.............................. 35
Death Proceeds.................................. 36
Sum Insured Options............................. 37
Change in Sum Insured Option.................... 40
Change in Face Amount........................... 40
Policy Value and Surrender Value................ 41
Death Proceeds Payment Options.................. 43
Optional Insurance Benefits..................... 43
Policy Surrender................................ 43
Partial Withdrawals............................. 44
CHARGES AND DEDUCTIONS............................ 44
Tax Expense Charge.............................. 44
Premium Expense Charge.......................... 44
Monthly Deduction from Policy Value............. 45
Charges Against Assets of the Separate
Account....................................... 46
Surrender Charge................................ 47
Charges on Partial Withdrawals.................. 49
Transfer Charges................................ 50
Charge for Increase in Face Amount.............. 50
Other Administrative Charges.................... 50
POLICY LOANS...................................... 50
POLICY TERMINATION AND REINSTATEMENT.............. 52
OTHER POLICY PROVISIONS........................... 53
DIRECTORS AND PRINCIPAL OFFICERS OF THE COMPANY... 55
DISTRIBUTION...................................... 56
SERVICES.......................................... 56
REPORTS........................................... 56
LEGAL PROCEEDINGS................................. 57
FURTHER INFORMATION............................... 57
INDEPENDENT ACCOUNTANTS........................... 57
</TABLE>

3
<PAGE>
<TABLE>
<S> <C>
FEDERAL TAX CONSIDERATIONS........................ 57
The Company and the Separate Account............ 57
Taxation of the Policies........................ 58
Modified Endowment Contracts.................... 59
Estate and Generation-Skipping Taxes............ 59
MORE INFORMATION ABOUT THE GENERAL ACCOUNT........ 60
FINANCIAL STATEMENTS.............................. 61
APPENDIX A -- OPTIONAL BENEFITS................... A-1
APPENDIX B -- PAYMENT OPTIONS..................... B-1
APPENDIX C -- ILLUSTRATIONS....................... C-1
APPENDIX D -- CALCULATION OF MAXIMUM SURRENDER
CHARGES.......................................... D-1
</TABLE>

4
<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 the 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: Allmerica Financial Life Insurance and Annuity 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, unless the Guaranteed Death Benefit Rider is in
effect. If the Rider is in effect, the Death Proceeds will be the greater of (a)
the Face Amount as of the Final Premium Payment Date, or (b) the Policy Value as
of the date due proof of death is received by the Company. This Rider may not be
available in all states.

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 specifications pages 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 the 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 Table D, Smoker or Non-Smoker, 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.

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

5
<PAGE>
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.
Making payments at least equal to the Minimum Monthly Factors, however, 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 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 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
the 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 the Policy at any
time. It is equal to the sum of (a) the value of the Accumulation Units credited
to the Policy in the Sub-Accounts, and (b) the accumulation in the General
Account credited to the Policy.

POLICYOWNER: The person, persons or entity entitled to exercise the rights and
privileges under the Policy.

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 you do 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 a 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 policy
liabilities are not chargeable with liabilities arising out of any other
business which the Company may conduct.

SUB-ACCOUNT: A division of the Separate 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
T. Rowe Price International Series, Inc.

6
<PAGE>
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 ("FUNDS"): The Funds of Allmerica Investment Trust, the
Portfolios of the Variable Insurance Products Fund and T. Rowe Price
International Series.

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.

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

YOU OR YOUR: The Policyowner, as shown in the application or the latest change
filed with the Company.

7
<PAGE>
SUMMARY

The following is a summary of the individual joint survivorship flexible premium
variable life insurance policy sold by Allmerica Financial Life Insurance and
Annuity Company ("Company"). It highlights key points from the Prospectus which
follows. If you are considering the purchase of this product, you should read
the Prospectus carefully before making a decision. It offers a more complete
presentation of the topics presented here, and will help you better understand
the product. However, the Policy, together with its attached application,
constitutes the entire agreement between you and the Company.

- 45 days after the applications for the Policy are signed,

- 10 days after you receive the Policy (or, if required by state law, the
longer period indicated in the Policy), or

- 10 days after the Company mails or personally delivers a Notice of
Withdrawal Rights to you.

Upon returning the Policy, you will receive a refund equal to the sum of:

(1) the difference between the premium, including fees and charges paid,
and any amount allocated to the Separate Account, PLUS

(2) the value of the amounts allocated to the Separate Account, PLUS

(3) any fees or charges imposed on the amounts allocated to the Separate
Account.

CONVERSION PRIVILEGES -- During the first 24 Policy months after the Date of
Issue, subject to certain restrictions, you may convert the Policy to a
non-variable flexible premium adjustable 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 the Face Amount. Where required by
state law, and at your request, the Company will issue a flexible premium
adjustable life insurance policy to you. The new policy will have the same
Face Amount, issue Age, Date of Issue, and Premium Class as the original
Policy. See THE POLICY -- "Conversion Privileges."

ABOUT THE POLICY

The Policy allows you to make premium payments in any amount and frequency,
subject to certain limitations. As long as the Policy remains in force, it will
provide for:

- life insurance coverage on the named Insureds,

- Policy Value,

- surrender rights and partial withdrawal rights,

8
<PAGE>
- loan privileges, and

- in some cases, additional insurance benefits available by rider for an
additional charge.

LIFE INSURANCE

The Policy is a life insurance contract with death benefits, Policy Value, and
other features traditionally associated with life insurance. The Policy is a
"joint survivorship" policy 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
Policy is "variable" because the Policy Value will increase or decrease
depending on the investment experience of the Sub-Accounts of the Separate
Account. Under some circumstances, the death benefit may vary with the
investment experience of the Sub-Accounts.

FLEXIBLE PREMIUM

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 you. During
the first 48 Policy months after the Date of Issue or the effective date of an
increase in the Face Amount, the Policy will not lapse if the total premiums
paid less the Debt, partial withdrawals and withdrawal charges are equal to or
exceed the sum of the Minimum Monthly Factor for the number of months the
Policy, increase in the Face Amount, or a Policy Change which causes a change in
the Minimum Monthly Factor, has been in force. Even during these periods,
however, making payments at least equal to the Minimum Monthly Factor will not
prevent the Policy from lapsing if the Debt equals or exceeds the Policy Value
less surrender charges.

CONDITIONAL INSURANCE

If any premiums are paid prior to the issuance of the Policy, such premiums will
be held in the General Account. If your 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 Principal Office. IF THE POLICY IS NOT ISSUED AND
ACCEPTED, THE INITIAL PREMIUMS WILL BE RETURNED TO YOU WITHOUT INTEREST.

GUARANTEED DEATH BENEFIT RIDER (MAY NOT BE AVAILABLE IN ALL STATES)

This Rider, WHICH IS AVAILABLE ONLY AT DATE OF ISSUE:

- guarantees that the Policy will not lapse regardless of the investment
performance of the Separate Account; and

- provides a guaranteed death benefit.

9
<PAGE>
In order to maintain the Rider, certain minimum premium payment tests must be
met on each Policy anniversary and within 48 months following the Date of Issue
and/or the date of any increase in the Face Amount. In addition, a one-time
administrative charge of $25 will be deducted from the Policy Value when the
Rider is elected. Certain transactions, including Policy loans, partial
withdrawals, and changes in the Death Benefit Options, can result in the
termination of the Rider. If this Rider is terminated, it cannot be reinstated.

MINIMUM MONTHLY FACTOR

ALLOCATION OF INITIAL PREMIUMS

Upon completion of issuance procedures, delivery of the Policy, and receipt of
any additional premiums, if you have paid less than $10,000 of initial Net
Premiums, such Net Premiums will be allocated to the Sub-Accounts according to
your instructions. If initial Net Premiums equal or exceed $10,000 or if, during
the first year, the Policy provides for planned premium payments 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 -- "Applying for a Policy."

Net premiums may be allocated to one or more Sub-Accounts of the Separate
Account, to the General Account, or to any combination of Accounts. You bear the
investment risks of amounts allocated to the Sub-Accounts. Allocations may be
made to no more than 20 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
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.

PARTIAL WITHDRAWALS

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

LOAN PRIVILEGE

10
<PAGE>
and interest on Debt to the end of the Policy year. Thereafter, Loan Value is
90% of an amount equal to the Policy Value less the surrender charge.

Policy loans will be allocated among the General Account and the Sub-Accounts in
accordance with your instructions. If no allocation is made by you, 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 eventually is 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 time of death.

PREFERRED LOAN OPTION

A preferred loan option is available under the Policy. The preferred loan option
will be available upon Written Request. It may be revoked by you at any time. If
this option has been selected, after the tenth Policy anniversary the Policy
Value in the General Account equal to the loan amount will be credited with
interest at an effective annual yield of at least 7.5%. The Company's current
practice is to credit a rate of interest equal to the rate being charged for the
preferred loan. There is some uncertainty as to the tax treatment of preferred
loans. Consult a qualified tax adviser (and see FEDERAL TAX CONSIDERATIONS). The
preferred loan option may not be available in all states.

POLICY LAPSE AND REINSTATEMENT

Except as otherwise provided in the optional Guaranteed Death Benefit Rider, 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, if any; or

(b) Debt exceeds Policy Value less surrender charges.

A 62-day grace period applies to each situation.

- the sum of the payments you have made, MINUS any Debt, withdrawals and
withdrawal charges, and

- the amount of the Minimum Monthly Factor (the amount is shown on page 5 of
the Policy) MULTIPLIED by the number of months the Policy has been in
force, or the number of months which have elapsed since the last increase
in the Face Amount.

The Company then compares the first amount to the second amount. The Policy will
not enter the grace period if the first amount is greater than the second
amount. If the Policy lapses, it may be reinstated within three years of the
date of default (but not later than the Final Premium Payment Date). In order to
reinstate, you must pay the reinstatement premium and provide satisfactory
Evidence of Insurability. The Company reserves

11
<PAGE>
the right to increase the Minimum Monthly Factor upon reinstatement. See POLICY
TERMINATION AND REINSTATEMENT.

POLICY VALUE AND SURRENDER VALUE

The Policy Value is the total amount available for investment under the Policy
at any time. It is the sum of the value of all Accumulation Units in the
Sub-Accounts of the Separate Account and all accumulations in the General
Account 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. You bear the entire investment risk for amounts allocated to the
Separate Account. The Company does not guarantee a minimum Policy Value.

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 the 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.

FLEXIBILITY TO ADJUST SUM INSURED

Subject to certain limitations, you 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. Any change in the Face Amount will
affect 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 the Face Amount is $10,000,
and any increase also may require additional Evidence of Insurability. 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" and "Conversion Privileges."

ADDITIONAL INSURANCE BENEFITS

You have the flexibility to add additional insurance benefits by rider. These
include the Split Option Rider, Other Insured Rider, Guaranteed Death Benefit
Rider, and Four-Year Term Rider. See APPENDIX A -- OPTIONAL BENEFITS. (All
riders may not be available in all states.)

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<PAGE>
The cost of these optional insurance benefits will be deducted from the Policy
Value as part of the Monthly Deduction. See CHARGES AND DEDUCTIONS -- "Monthly
Deduction from Policy Value."

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
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 Separate 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
Separate 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." This option may not
be available in all states.

POLICY FEES AND CHARGES

THERE ARE COSTS RELATED TO THE INSURANCE AND INVESTMENT FEATURES OF THE POLICY.
FEES AND CHARGES TO COVER THESE COSTS ARE DEDUCTED IN SEVERAL WAYS.

TAX EXPENSE CHARGE

PREMIUM EXPENSE CHARGE

MONTHLY DEDUCTIONS FROM POLICY VALUE

As noted above, certain ADDITIONAL INSURANCE RIDER BENEFITS are available under
the Policy for an additional monthly charge. See APPENDIX A -- OPTIONAL
BENEFITS.

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<PAGE>
DEDUCTIONS FROM THE SEPARATE ACCOUNT

A daily charge, currently equivalent to an effective annual rate of 1.15% of the
average daily net asset value of each Sub-Account of the Separate Account, is
imposed to compensate the Company for its assumption of certain mortality and
expense risks and for administrative costs associated with the Separate Account.
The rate is 0.90% for the mortality and expense risk and 0.25% for the Separate
Account administrative charge. The administrative charge is eliminated after the
15th Policy year. See CHARGES AND DEDUCTIONS -- "Charges Against Assets of the
Separate Account."

CHARGES OF THE UNDERLYING FUNDS

<TABLE>
<CAPTION>
TOTAL FUND
EXPENSES
MANAGEMENT FEE (AFTER ANY
(AFTER ANY OTHER FUND APPLICABLE
UNDERLYING FUND VOLUNTARY WAIVER) EXPENSES REIMBURSEMENTS)
- ------------------------------------------------------------------ ------------------ ------------- -----------------
<S> <C> <C> <C>
Select Emerging Markets Fund @.................................... 1.35% 0.65% 2.00%(1)
Select International Equity Fund.................................. 0.92%* 0.20% 1.12%(1)(3)
T. Rowe Price International Stock Portfolio....................... 1.05% 0.00% 1.05%
Select Aggressive Growth Fund..................................... 0.89%* 0.09% 0.98%(1)(3)
Select Capital Appreciation Fund.................................. 0.95%* 0.15% 1.10%(1)
Select Value Opportunity Fund..................................... 0.90%** 0.14% 1.04%(1)(3)
Select Growth Fund................................................ 0.85% 0.08% 0.93%(1)(3)
Select Strategic Growth Fund @.................................... 0.85% 0.13% 0.98%(1)
Fidelity VIP Growth Portfolio..................................... 0.60% 0.09% 0.69%(2)
Select Growth and Income Fund..................................... 0.70%* 0.07% 0.77%(1)(3)
Fidelity VIP Equity-Income Portfolio.............................. 0.50% 0.08% 0.58%(2)
Fidelity VIP High Income Portfolio................................ 0.59% 0.12% 0.71%
Select Income Fund................................................ 0.58%* 0.13% 0.71%(1)
Money Market Fund................................................. 0.27% 0.08% 0.35%(1)
</TABLE>

(@) Select Emerging Markets Fund and Select Strategic Growth Fund commenced
operations in February, 1998. Expenses shown are annualized and are based on
estimated amounts for the current fiscal year. Actual expense may be greater or
less than shown.

** The Select Value Opportunity Fund was formerly known as the "Small-Mid Cap
Value Fund." Effective April 1, 1997, the management fee rate of the former
Small-Mid Cap Value Fund was revised. In addition, effective April 1, 1997 and
until further notice, the management fee rate has been voluntarily limited to an
annual rate of 0.90% of average daily net assets, and total expenses are limited
to 1.25% of average daily net assets. The management fee ratio shown above for
the Select Value Opportunity Fund has been adjusted to assume that the revised
rate and the voluntarily limitations that took effect on January 1, 1997.
Without these adjustments, the management fee ratio and the total fund expense
ratio would have been 0.95% and 1.09%, respectively. The management fee
limitation may be terminated at any time.

(1) Until further notice, AFIMS has declared a voluntary expense limitation of
1.35% of average net assets for the Select Aggressive Growth Fund and Select
Capital Appreciation Fund, 1.50% for the Select International Equity Fund, 1.25%
for the Select Value Opportunity Fund, 1.20% for the Select Growth Fund, 1.10%
for the Select Growth and Income, 1.00% for the Select Income Fund, and 0.60%
for the Money Market Fund. The total operating expenses of these Funds of the
Trust were less than their respective expense limitations throughout 1997.

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<PAGE>
Until further notice, AFIMS has declared a voluntary expense limitation of 1.20%
of average daily net assets for the Select Strategic Growth Fund. In addition,
AFIMS has agreed to voluntarily waive its management fee to the extent that
expenses of the Select Emerging Markets Fund exceed 2.00% of the Fund's average
daily net assets, except that such waiver shall not exceed the net amount of
management fees earned by AFIMS from the Fund after subtracting fees paid by
AFIMS to a sub-adviser.

The declaration of a voluntary expense limitation in any year does not bind
AFIMS to declare future expense limitations with respect to these funds. These
limitations may be terminated at any time.

(2) A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, certain funds have entered into arrangements
with their custodian and transfer agent whereby interest earned on uninvested
cash balances was used to reduce custodian and transfer agent expenses.
Including these reductions, the total operating expenses presented in the table
would have been 0.57% for Fidelity VIP Equity-Income Portfolio, and 0.67% for
Fidelity VIP Growth Portfolio.

(3) These funds have entered into agreements with brokers whereby brokers rebate
a portion of commissions. Had these amounts been treated as reductions of
expenses, the total operating expenses ratios would have been 0.93% for the
Select Aggressive Growth Fund, 0.98% for the Select Value Opportunity Fund,
1.10% for the Select International Equity Fund, 0.91% for the Select Growth
Fund, 0.98% for the Select Value Opportunity Fund, and 0.74% for the Select
Growth and Income Fund.

OTHER CHARGES (NON-PERIODIC)

TRANSACTION CHARGE ON PARTIAL WITHDRAWALS

A transaction charge is assessed at the time of each partial withdrawal to
reimburse the Company for the cost of processing the withdrawal. The transaction
charge is the smaller of 2% of the amount withdrawn, or $25. In addition to the
transaction charge, a partial withdrawal charge also may be made under certain
circumstances. See CHARGES AND DEDUCTIONS -- "Charges on Partial Withdrawals."

CHARGE FOR INCREASE IN FACE AMOUNT

For each increase in the Face Amount, a charge of $40 will be deducted from the
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 12 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."

SURRENDER CHARGES

At any time that the 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 the Face Amount. The
duration of the surrender charge is 15 years. The surrender charge is imposed
only if, during its duration, you request a full surrender of the Policy or a
decrease in the Face Amount.

SURRENDER CHARGE ON THE INITIAL 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. Such deferred sales charge
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 the initial Face Amount, as indicated in
APPENDIX D -- CALCULATION OF MAXIMUM SURRENDER CHARGES.

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<PAGE>
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 you surrender 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 the initial Face Amount, but the deferred sales charge will
not exceed 25% of premiums received. See THE POLICY -- "Policy Surrender," and
CHARGES AND DEDUCTIONS -- "Surrender Charge."

SURRENDER CHARGES FOR INCREASES IN FACE AMOUNT

A separate surrender charge will apply to, and is calculated for, each increase
in the 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. Such deferred sales charge
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 you surrender the Policy during the first two Policy years
following an increase in the Face Amount before making premium payments
associated with the increase in the Face Amount which are at least equal to one
Guideline Annual Premium, the deferred administrative charge will be $8.50 per
thousand dollars of the Face Amount increase, but the deferred sales charge will
not exceed 25% of premiums associated with the increase.

SURRENDER CHARGES ON DECREASES IN FACE AMOUNT

TAX TREATMENT

The 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, you 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 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."

The Policy offered by this Prospectus may be considered a "modified endowment
contract" if it fails a "seven-pay" test at any time during the first seven
Policy years, or within seven years of a material change in the Policy. The
Policy fails to satisfy the seven-pay test if the cumulative premiums paid under
the Policy at any time during the first seven Policy years, or within seven
years of a material change in the Policy, 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."

16
<PAGE>
PERFORMANCE INFORMATION

The Policies were first offered to the public in 1994. The Company, however, may
advertise "Total Return" and "Average Annual Total Return" performance
information based on the periods that the Sub-Accounts have been in existence
(Tables 1A and 1B), and based on the periods that the Underlying Funds have been
in existence (Tables IIA and IIB). 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 TABLES IA and IIA) under a
"representative" Policy that is surrendered at the end of the applicable period.
For more information on charges under the Policy, see CHARGES AND DEDUCTIONS.

Performance information may be compared, in reports and promotional literature,
to: (1) the Standard & Poor's 500 Composite Stock Price 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; (2) 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 (3) 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, 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.

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,
1997. "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.

17
<PAGE>
TABLE I(A)
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING DECEMBER 31, 1997
SINCE INCEPTION OF THE SUB-ACCOUNTS
NET OF ALL CHARGES AND ASSUMING SURRENDER OF THE POLICY

The following performance information is based on the periods that the
Sub-Accounts 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.

<TABLE>
<CAPTION>
10 YEARS
ONE-YEAR OR LIFE OF
TOTAL 5 SUB-ACCOUNT
UNDERLYING FUND RETURN YEARS (IF LESS)
<S> <C> <C> <C>
Select Emerging Markets Fund N/A N/A N/A
Select Aggressive Growth Fund -85.59% N/A -0.21%
Select Capital Appreciation Fund -89.74% N/A -5.74%
Select Value Opportunity Fund -79.82% N/A -0.01%
T. Rowe Price International Stock Portfolio -100.00% N/A -24.45%
Select International Equity Fund -98.76% N/A -8.60%
Fidelity VIP Growth Portfolio -81.10% N/A 4.26%
Select Growth Fund -71.19% N/A 4.76%
Select Strategic Growth Fund N/A N/A N/A
Fidelity VIP Equity-Income Portfolio -76.77% N/A 5.33%
Select Growth and Income Fund -82.01% N/A 3.14%
Fidelity VIP High Income Portfolio -86.55% N/A -5.23%
Select Income Fund N/A N/A -94.47%
Money Market Fund -97.99% N/A -16.92%
</TABLE>

The inception dates for the Sub-Accounts are: 4/25/94 for Select Aggressive
Growth; 5/3/94 for Select International Equity; 5/1/94 for Fidelity VIP
Equity-Income and for Select Growth and Income; 5/11/94 for Fidelity VIP Growth;
5/12/94 for Fidelity VIP High Income; 5/19/94 for Select Growth; 5/26/94 for
Money Market; 6/1/94 for Select Value Opportunity; 4/30/95 for Select Capital
Appreciation; 7/2/95 for the T. Rowe Price International Stock; and 1/21/97 for
Select Income. The Select Emerging Markets Fund and the Select Strategic Growth
Fund commenced operations in February 1998.

18
<PAGE>
TABLE I(B)
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING DECEMBER 31, 1997
SINCE INCEPTION OF THE SUB-ACCOUNTS
EXCLUDING MONTHLY POLICY CHARGES AND SURRENDER CHARGES

The following performance information is based on the periods that the
Sub-Accounts 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 POLICY 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.

<TABLE>
<CAPTION>
10 YEARS
ONE-YEAR OR LIFE OF
TOTAL SUB-ACCOUNTS
UNDERLYING FUND RETURN 5 YEARS (IF LESS)
<S> <C> <C> <C>
Select Emerging Markets Fund N/A N/A N/A
Select Aggressive Growth Fund 17.36% N/A 16.37%
Select Capital Appreciation Fund 12.98% N/A 21.46%
Select Value Opportunity Fund 23.44% N/A 17.42%
T. Rowe Price International Stock Portfolio 1.93% N/A 8.57%
Select International Equity Fund 3.46% N/A 9.91%
Fidelity VIP Growth Portfolio 22.09% N/A 20.40%
Select Growth Fund 32.55% N/A 21.00%
Select Strategic Growth Fund N/A N/A N/A
Fidelity VIP Equity-Income Portfolio 26.66% N/A 21.04%
Select Growth and Income Fund 21.13% N/A 19.24%
Fidelity VIP High Income Portfolio 16.34% N/A 12.77%
Select Income Fund N/A N/A 8.34%
Money Market Fund 4.27% N/A 4.17%
</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.

19
<PAGE>
TABLE II(A):
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING DECEMBER 31, 1997
SINCE INCEPTION OF THE UNDERLYING FUNDS
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.

<TABLE>
<CAPTION>
10 YEARS
ONE-YEAR OR LIFE
TOTAL 5 OF FUND
UNDERLYING FUND RETURN YEARS (IF LESS)
<S> <C> <C> <C>
Select Emerging Markets Fund N/A N/A N/A
Select Aggressive Growth Fund -85.59% 7.32% 11.43%
Select Capital Appreciation Fund -89.74% N/A -5.65%
Select Value Opportunity Fund -79.82% N/A 5.77%
T. Rowe Price International Stock Portfolio -100.00% N/A -11.57%
Select International Equity Fund -98.76% N/A -8.64%
Fidelity VIP Growth Portfolio -81.10% 8.70% 14.06%
Select Growth Fund -71.19% 5.43% 7.84%
Select Strategic Growth Fund N/A N/A N/A
Fidelity VIP Equity-Income Portfolio -76.77% 11.15% 13.57%
Select Growth and Income Fund -82.01% 7.07% 6.69%
Fidelity VIP High Income Portfolio -86.55% 4.00% 9.52%
Select Income Fund -94.54% -4.37% -3.64%
Money Market Fund -97.99% -7.01% 2.09%
</TABLE>

The inception dates for the Underlying Funds are: 4/29/85 for Money Market;
9/19/85 for Fidelity VIP High Income; 10/09/86 for Fidelity VIP Equity-Income
and Fidelity VIP Growth; 8/21/92 for Select Aggressive Growth, Select Growth,
Select Growth and Income, and Select Income; 4/30/93 for Select Value
Opportunity; 3/31/94 for the T. Rowe Price International Stock; 5/02/94 for
Select International Equity; and 4/28/95 for the Select Capital Appreciation.
The Select Emerging Markets Fund and the Select Strategic Growth Fund commenced
operations in February 1998.

20
<PAGE>
TABLE II(B)
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING DECEMBER 31, 1997
SINCE INCEPTION OF THE UNDERLYING FUNDS
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 POLICY 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.

<TABLE>
<CAPTION>
10 YEARS
ONE-YEAR OR LIFE
TOTAL OF FUND
UNDERLYING FUND RETURN 5 YEARS (IF LESS)
<S> <C> <C> <C>
Select Emerging Markets Fund N/A N/A N/A
Select Aggressive Growth Fund 17.36% 15.45% 18.19%
Select Capital Appreciation Fund 12.98% N/A 21.47%
Select Value Opportunity Fund 23.44% N/A 15.58%
T. Rowe Price International Stock Portfolio 1.93% N/A 6.82%
Select International Equity Fund 3.46% N/A 9.86%
Fidelity VIP Growth Portfolio 22.09% 16.64% 15.84%
Select Growth Fund 32.55% 13.82% 15.03%
Select Strategic Growth Fund N/A N/A N/A
Fidelity VIP Equity-Income Portfolio 26.66% 18.78% 15.37%
Select Growth and Income Fund 21.13% 15.23% 14.03%
Fidelity VIP High Income Portfolio 16.34% 12.60% 11.51%
Select Income Fund 7.91% 5.63% 5.28%
Money Market Fund 4.27% 3.50% 4.58%
</TABLE>

21
<PAGE>
DESCRIPTION OF THE COMPANY, THE SEPARATE ACCOUNT,
AND THE UNDERLYING FUNDS

THE COMPANY

THE SEPARATE ACCOUNT

The assets used to fund the variable portion of the Policies are set aside in
the Separate 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 Separate Account may not be charged with any liabilities arising out of
any other business of the Company. Fourteen Sub-Accounts of the Separate Account
are currently offered under the Policy. 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 of the Allmerica Investment Trust, the
Variable Insurance Products Fund, or the T. Rowe Price International Series,
Inc. ("Underlying Funds").

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 Separate Account.

22
<PAGE>
allocated to the second sub-division to account for the elimination of the
Separate Account administrative charge.

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

ALLMERICA INVESTMENT TRUST

The Trust was established by the Company 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 the Company or other
affiliated insurance companies. Ten investment portfolios ("Funds") of the Trust
are available under the Policies, each issuing a series of shares: Select
Emerging Markets Fund, Select International Equity Fund, Select Aggressive
Growth Fund, Select Capital Appreciation Fund, Select Value Opportunity Fund,
Select Growth Fund, Select Strategic Growth Fund, Select Growth and Income Fund,
Select Income Fund and Money Market Fund.

Allmerica Financial Investment Management Services, Inc. ("AFIMS") 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."

FIDELITY VARIABLE INSURANCE PRODUCTS FUND

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

Various Fidelity companies perform certain activities required to operate VIP.
FMR is one of America's largest investment management organizations, and has its
principal business address at 82 Devonshire Street, Boston, Massachusetts. It is
composed of a number of different companies which provide a variety of financial
services and products. FMR 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 VIP, as part of their operating
expenses, pay an investment management fee to FMR. See "Investment Advisory
Services to VIP."

T. ROWE PRICE INTERNATIONAL SERIES, INC.

T. Rowe Price International Series, Inc. ("T. Rowe Price"), managed by Rowe
Price-Fleming International, Inc. ("Price-Fleming"), is an open-end, diversified
management investment company organized in 1994 as a Maryland corporation, and
is registered with the SEC under the 1940 Act. One of its investment portfolios
is available under the Policies: the T. Rowe Price International Stock
Portfolio. (See "Investment Advisory Services to T. Rowe Price"). An affiliate
of Price-Fleming, T. Rowe Price Associates, Inc. serves as Sub-Adviser to the
Select Capital Appreciation Fund of the Trust.

23
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES

A summary of investment objectives of the Funds is set forth below. BEFORE
INVESTING, READ CAREFULLY THE PROSPECTUSES OF THE TRUST, VIP AND T. ROWE PRICE
THAT ACCOMPANY THIS PROSPECTUS. THE PROSPECTUSES OF THE TRUST, VIP AND T. ROWE
PRICE CONTAIN MORE DETAILED INFORMATION ON THE FUNDS' INVESTMENT OBJECTIVES,
RESTRICTIONS, RISKS AND EXPENSES. Statements of Additional Information for the
Funds are available on request. The investment objectives of the Funds may not
be achieved. Policy Value may be less than the aggregate payments made under the
Policy.

SELECT EMERGING MARKETS FUND -- seeks long-term growth of capital by investing
in the world's emerging markets. The Sub-Adviser for the Select Emerging Markets
Fund is Schroder Capital Management International Inc.

SELECT INTERNATIONAL EQUITY FUND -- seeks maximum long-term total return
(capital appreciation and income) primarily by investing in common stocks of
established non-U.S. companies. The Sub-Adviser for the Select International
Equity Fund is Bank of Ireland Asset Management (U.S.) Limited.

T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO -- seeks long-term growth of capital
through investments primarily in common stocks of established, non-U.S.
companies. The Manager of the Portfolio is Rowe Price-Fleming International,
Inc.

SELECT AGGRESSIVE GROWTH FUND -- seeks above-average capital appreciation by
investing primarily in common stocks of companies that are believed to have
significant potential for capital appreciation. The Sub-Adviser for the Select
Aggressive Growth Fund is Nicholas-Applegate Capital Management, L.P.

SELECT CAPITAL APPRECIATION FUND -- 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 T. Rowe Price Associates, Inc.

SELECT VALUE OPPORTUNITY FUND -- seeks long-term growth of capital by investing
primarily in a diversified portfolio of common stocks of small and mid-size
companies whose securities at the time of purchase are considered by the
Sub-Adviser to be undervalued. The Sub-Adviser for the Select Value Opportunity
Fund is Cramer Rosenthal McGlynn, LLC.

SELECT GROWTH FUND -- seeks to achieve growth of capital by investing in a
diversified portfolio consisting primarily of common stocks selected for their
long-term growth potential. The Sub-Adviser for the Select Growth Fund is Putnam
Investment Management, Inc.

SELECT STRATEGIC GROWTH FUND -- seeks long-term growth of capital by investing
primarily in common stocks of established companies. The Sub-Adviser for the
Select Strategic Growth Fund is Cambiar Investors, Inc.

24
<PAGE>
FIDELITY VIP EQUITY-INCOME PORTFOLIO -- seeks reasonable income by investing
primarily in income-producing equity securities. In choosing these securities,
the Portfolio also will 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 S&P 500. The Portfolio may invest in high-yielding,
lower-rated 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, see "Risks of Lower-Rated Debt Securities"
in the Fidelity VIP prospectus.

FIDELITY VIP HIGH INCOME PORTFOLIO -- 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 Fidelity VIP prospectus.

SELECT INCOME FUND -- seeks a high level of current income. The Fund will invest
primarily in investment-grade, fixed-income securities. The Sub-Adviser for the
Select Income Fund is Standish, Ayer & Wood, Inc.

MONEY MARKET FUND -- seeks to obtain maximum current income consistent with the
preservation of capital and liquidity. Allmerica Asset Management, Inc. is the
Sub-Adviser of the Money Market Fund.

If there is a material change in the investment policy of a Fund, we will notify
you of the change. If you have Policy Value allocated to that Fund, you may,
without charge, reallocate the Policy Value to another Fund or to the General
Account. We must receive your Written Request within 60 days of the latest of
the:

- Effective date of the change in the investment policy, or

- Receipt of the notice of your right to transfer.

INVESTMENT ADVISORY SERVICES

BARRA RogersCasey, Inc. ("BARRA RogersCasey"), a pension consulting firm,
assists the Company in the selection of the Policy's Funds. In addition, BARRA
RogersCasey assists the Trust in the selection of investment advisers for the
Funds of the Trust. BARRA RogersCasey provides consulting services to pension
plans representing hundreds of billions of dollars in total assets. In its
consulting capacity, BARRA RogersCasey monitors the investment performance of
over 1000 investment advisers. BARRA RogersCasey is wholly-controlled by BARRA,
Inc. As a consultant, BARRA RogersCasey has no decision-making authority with
respect to the Funds, and is not responsible for advice provided to the Funds by
AFIMS or the other investment advisers.

Each investment adviser is selected by using strict objective, quantitative, and
qualitative criteria, with special emphasis on the investment adviser's record
in managing similar portfolios. In consultation with BARRA RogersCasey, a
committee monitors and evaluates the ongoing performance of all of the Funds.
The committee may recommend the replacement of an investment adviser of one of
the Funds of the Trust, or the addition or deletion of Funds. The committee
includes members who may be affiliated or unaffiliated with the Company and the
Trust.

25
<PAGE>
The following are the investment advisers of the Funds:

<TABLE>
<CAPTION>
FUND INVESTMENT ADVISER
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Select Emerging Markets Fund Schroder Capital Management International Inc.
Select International Equity Fund Bank of Ireland Asset Management (U.S.) Limited
T. Rowe Price International Stock Portfolio Rowe Price-Fleming International, Inc.
Select Aggressive Growth Fund Nicholas-Applegate Capital Management, L.P.
Select Capital Appreciation Fund T. Rowe Price Associates, Inc.
Select Value Opportunity Fund Cramer Rosenthal McGlynn, LLC
Select Growth Fund Putnam Investment Management, Inc.
Select Strategic Growth Fund Cambiar Investors, Inc.
Fidelity VIP Growth Portfolio Fidelity Management and Research Company
Select Growth and Income Fund John A. Levin & Co., Inc.
Fidelity VIP Equity-Income Portfolio Fidelity Management and Research Company
Fidelity VIP High Income Portfolio Fidelity Management and Research Company
Select Income Fund Standish, Ayer & Wood, Inc.
Money Market Fund Allmerica Asset Management, Inc.
</TABLE>

INVESTMENT ADVISORY SERVICES TO THE TRUST

The Trustees have responsibility for the supervision of the affairs of the
Trust. The Trustees have entered into a management agreement with Allmerica
Financial Investment Management Services, Inc. ("AFIMS"), an indirectly wholly
owned subsidiary of the Company. AFIMS, subject to Trustee review, is
responsible for the daily affairs of the Trust and the general management of the
Funds. AFIMS performs 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
AFIMS.

The Trust bears all expenses incurred in its operation, other than the expenses
AFIMS assumes under the management agreement. Trust expenses include:

- Costs to register and qualify the Trust's shares under the Securities Act
of 1933 ("1933 Act"),

- Other fees payable to the SEC,

- Independent public accountant, legal and custodian fees,

- Association membership dues, taxes, interest, insurance payments and
brokerage commissions,

- Fees and expenses of the Trustees who are not affiliated with AFIMS,

- Expenses for proxies, prospectuses, reports to shareholders and other
expenses.

Under the Management Agreement with the Trust, AFIMS has entered into agreements
with investment advisers ("Sub-Advisers") selected by AFIMS and Trustees in
consultation with BARRA RogersCasey, Inc. Under each Sub-Adviser Agreement, the
Sub-Adviser is authorized to engage in portfolio transactions on behalf of the
Fund, subject to the Trustee's instructions. The terms of a Sub-Adviser
Agreement cannot be materially changed without the approval of a majority in
interest of the shareholders of the Fund. The Sub-Advisers (other than Allmerica
Asset Management, Inc.) are not affiliated with the Company or the Trust.

26
<PAGE>
For providing its services under the management agreement, AFIMS receives a fee,
computed daily at an annual rate based on the average daily net asset value of
each Fund as follows:

<TABLE>
<S> <C> <C>
Select Emerging Markets Fund * 1.35 %

Select International Equity Fund First $100 million 1.00 %
Next $150 million 0.90 %
Over $250 million 0.85 %

Select Aggressive Growth Fund First $100 million 1.00 %
Next $150 million 0.90 %
Over $250 million 0.85 %

Select Capital Appreciation Fund First $100 million 1.00 %
Next $150 million 0.90 %
Over $250 million 0.85 %

Select Value Opportunity Fund First $100 million 1.00 %
Next $150 million 0.85 %
Next $250 million 0.80 %
Next $250 million 0.75 %
Over $750 million 0.70 %

Select Growth Fund * 0.85 %

Select Strategic Growth Fund * 0.85 %

Select Growth and Income Fund First $100 million 0.75 %
Next $150 million 0.70 %
Over $250 million 0.65 %

Select Income Fund First $50 million 0.60 %
Next $50 million 0.55 %
Over $100 million 0.45 %

Money Market Fund First $50 million 0.35 %
Next $200 million 0.25 %
Over $250 million 0.20 %
</TABLE>

* For the Select Emerging Markets Fund, the Select Growth Fund, and the Select
Strategic Growth Fund, the investment management fee does not vary according to
the level of assets in the Fund. AFIMS's investment fee, computed for each Fund,
will be paid from the assets of such Fund.

AFIMS is solely responsible for the payment of all fees to Sub-Advisers for
their investment management services. Sub-Adviser fees, described in the Trust's
prospectus, in no way increase the costs that the Funds, the Separate Account
and Policyowners bear.

INVESTMENT ADVISORY SERVICES TO FIDELITY VIP FUNDS

Fidelity Management and Research Company ("FMR") is the investment adviser of
VIP. FMR is one of America's largest investment management organizations, and
has its principal business address at 82 Devonshire Street, Boston,
Massachusetts. It is composed of a number of different companies which provide a
variety of financial services and products. FMR 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.

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<PAGE>
For managing investments and business affairs, each Portfolio pays a monthly fee
to FMR. The prospectus of Fidelity VIP contains additional information
concerning the Portfolios, including information concerning additional expenses
paid by the Portfolios, and should be read in conjunction with this Prospectus.

The Fidelity VIP High Income Portfolio pays a monthly fee to FMR 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 FMR. 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 Fidelity VIP 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 Fidelity VIP Growth and the Fidelity VIP Equity-Income 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 FMR. 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 0.30% for the Fidelity VIP Growth
Portfolio, and 0.20% for the Fidelity VIP Equity-Income 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 Fidelity VIP High Income Portfolio may have a fee as high as 0.82%.
The Fidelity VIP Growth Portfolio may have a fee as high as 0.82% of its average
net assets. The Fidelity VIP Equity-Income Portfolio may have a fee as high as
0.72% of its average net assets.

INVESTMENT ADVISORY SERVICES TO T. ROWE PRICE

The Investment Adviser for the T. Rowe Price 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 $30 billion under management in its offices
in Baltimore, London, Tokyo, Hong Kong, Singapore and Buenos Aires.

To cover investment management and operating expenses, the T. Rowe Price
International Stock Portfolio pays Price-Fleming a single, all-inclusive fee of
1.05% of its average daily net assets.

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 Separate Account or the affected Sub-Account, the
Company may redeem the shares of that Underlying Fund and substitute shares of
another registered open-end management company. The Company will not substitute
any shares attributable to the Policy interest in a Sub-Account without notice
to you and prior approval of the SEC

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<PAGE>
and state insurance authorities, to the extent required by the 1940 Act or other
applicable law. The Separate 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.

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 Fidelity VIP and of T. Rowe Price 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 Funds do not currently foresee any such
disadvantages, the Company and the respective Trustees intend to monitor events
in order to identify any material conflicts and to determine what action, if
any, should be taken. 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 expenses.

If any of these substitutions or changes is made, the Company may, by
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 Separate 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 who
furnish instructions to the Company. The Company will also vote shares 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.

29
<PAGE>
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.

THE POLICY

APPLYING FOR THE POLICY

The Policy cannot be issued until the underwriting procedure has been completed.
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 medical examinations, and may require that further
information be provided by the proposed Policyowner before a determination of
insurability can be made. The Company reserves the right to reject an
application which does not meet its underwriting guidelines, but in underwriting
insurance, the Company complies with all applicable federal and state
prohibitions concerning unfair discrimination.

CONDITIONAL INSURANCE AGREEMENT

PREMIUMS HELD IN THE GENERAL ACCOUNT PENDING UNDERWRITING APPROVAL

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

If the Policy is issued to the trustee of an employee benefit plan, the amounts
held in the General Account will be allocated to the Sub-Accounts according to
the Policyowner's instructions when the Delivery Receipt is returned to the
Principal Office. For all other Policyowners, the date the Company transfers the
initial net premium from the General Account to the selected Sub-Accounts
depends on the premium amount. If the initial net premiums are less than
$10,000, the amounts held in the General Account will be allocated to the
selected Sub-Accounts 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 the Policy's Delivery Receipt to the Principal
Office. The entire amount held in the General Account for allocation to the
Separate Account then will be allocated to the Sub-Accounts according to your
instructions.

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<PAGE>
FREE-LOOK PERIOD

The Policy provides for an initial "free-look" period. You 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:

- 45 days after the application for the Policy is signed, or

- 10 days after you receive the Policy (or longer if required by state law),
or

- 10 days after the Company mails or personally delivers a notice of
withdrawal rights to you.

When you return the Policy, the Company will, within seven days, mail a refund
equal to the sum of:

(1) the difference between the premiums, including fees and charges paid, and
any amounts allocated to the Separate Account, PLUS

(2) the value of the amounts allocated to the Separate Account, PLUS

(3) any fees or charges imposed on the amounts allocated to the Separate
Account.

FREE LOOK WITH FACE AMOUNT INCREASES

- 45 days after the application for the increase is signed, or

- 10 days after you receive the new specifications pages issued for the
increase (or longer if required by state law), or

- 10 days after the Company mails or delivers a notice of withdrawal rights
to you.

Upon cancelling the increase, you will receive a credit to your Policy Value of
charges which would not have been deducted but for the increase. The amount to
be credited will be refunded if you so request. The Company also will 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 the Face Amount (assuming the Policy is in force), you
may convert your Policy without Evidence of Insurability to a flexible premium
adjustable life insurance policy with fixed and guaranteed minimum benefits.
Assuming that there have been no increases in the initial Face Amount, you can
accomplish this within 24 months after the Date of Issue by transferring,
without charge, the Policy Value in the Separate Account to the General Account
and by simultaneously changing your premium allocation instructions to allocate
future premium payments to the General Account. Within 24 months after the
effective date of each increase, you can transfer, without charge, all or part
of the Policy Value in the Separate Account to the General Account and
simultaneously change your premium allocation instructions to allocate all or
part of future premium payments to the General Account.

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<PAGE>
Where required by state law, the Company will, at your request, issue a flexible
premium adjustable life insurance policy to you. The new policy will have the
same Face Amount, issue Age, Date of Issue, and Premium Classes as the original
Policy.

PREMIUM PAYMENTS

PREMIUM FLEXIBILITY

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

Premiums are not limited as to frequency and number. No premium payment,
however, 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.

MINIMUM MONTHLY FACTOR

If, in the first 48 Policy months following issue or an increase in the Face
Amount, you make premium payments, less partial withdrawals and partial
withdrawal charges, at least equal to the sum of the Minimum Monthly Factor, for
the number of months the Policy, increase in the Face Amount, or Policy Change
which causes a change in the Minimum Monthly Factor has been in force, and Debt
does not exceed Policy Value less surrender charges, 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 THE FACE AMOUNT, MAKING
MONTHLY PAYMENTS AT LEAST EQUAL TO THE MINIMUM MONTHLY FACTOR 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 accept only
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 ("IRS") rules. Notwithstanding
the current maximum premium limitations, however, 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.

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<PAGE>
INCENTIVE FUNDING DISCOUNT

The amount needed to qualify 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. If, however, 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.

GUARANTEED DEATH BENEFIT RIDER (May not be available in all states)

An optional Guaranteed Death Benefit Rider is available only at issue of the
Policy. If this Rider is in effect, the Company:

- guarantees that the Policy will not lapse, regardless of the investment
performance of the Separate Account, and

- provides a guaranteed death benefit.

GUARANTEED DEATH BENEFIT TESTS

While the Guaranteed Death Benefit Rider is in effect, the Policy will not lapse
if the following two tests are met:

(1) Within 48 months following the Date of Issue of the Policy or of any
increase in the Face Amount, the sum of the premiums paid, less any Debt,
partial withdrawals and withdrawal charges, must be greater than the Minimum
Monthly Factors (if any) multiplied by the number of months which have
elapsed since the Date of Issue or the effective date of increase; and

(2) On each Policy anniversary, (a) must exceed (b) where, since the Date of
Issue:

(a) is the sum of your premiums, less any withdrawals, partial withdrawal
charges and Debt which is classified as a preferred loan; and

(b) is the sum of the minimum Guaranteed Death Benefit premiums, as shown on
the specifications page of the Policy.

GUARANTEED DEATH BENEFIT

- the Face Amount as of the Final Premium Payment Date; or

- the Policy Value as of the date due proof of death is received by the
Company.

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<PAGE>
TERMINATION OF THE GUARANTEED DEATH BENEFIT RIDER

The Guaranteed Death Benefit Rider will end and may not be reinstated on the
first to occur of the following:

- foreclosure of a Policy loan, or

- the date on which the sum of your payments does not meet or exceed the
applicable Guaranteed Death Benefit test (above), or

- any Policy change that results in a negative guideline level premium, or

- the effective date of a change from Sum Insured Option 2 to Sum Insured
Option 1, if such change occurs within five Policy years of the Final
Premium Payment Date, or

- a request for a partial withdrawal or preferred loan is made after the
Final Premium Payment Date.

PAID-UP INSURANCE OPTION

Upon Written Request, a Policyowner may exercise a Paid-Up Insurance option.
Paid-up life insurance is fixed insurance, usually having a reduced Face Amount,
for the lifetime of the Insured with no further premiums due. If the Policyowner
elects this option, certain Policyowner rights and benefits may be limited.

The paid-up fixed insurance will be in the amount, up to the Face Amount of the
Policy, that the Surrender Value of the Policy can purchase for a net single
premium at the Insureds' Ages and Premium Class on the date this option is
elected. The Company will transfer any Policy Value in the Separate Account to
the General Account on the date it receives the Written Request to elect the
option. If the Surrender Value exceeds the net single premium necessary for the
fixed insurance, the Company will pay the excess to the Policyowner. The net
single premium is based on the Commissioners 1980 Standard Ordinary Mortality
Table D, Smoker or Non-Smoker with increases in the 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 AND BENEFITS WILL BE AFFECTED:

- As described above, the Paid-Up Insurance benefit is computed differently
from the net death benefit, and the death benefit options will not apply.

- The Policyowner may not make further premium payments.

- The Policyowner may not increase or decrease the Face Amount or make
partial withdrawals.

- Riders will continue only with the Company's consent.

After electing paid-up fixed insurance, the Policyowner may surrender the Policy
for its net cash value. The cash value is equal to the net single premium for
Paid-Up Insurance at the Insureds' attained Ages. The net cash value is the cash
value less any outstanding loans.

34
<PAGE>
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 the Policy, you may indicate the
initial allocation of Net Premiums among the General Account and the
Sub-Accounts of the Separate Account. You may allocate premiums to one or more
Sub-Accounts, but may not have Policy Value in more than 20 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%.

FUTURE CHANGES ALLOWED

INVESTMENT RISK

TRANSFER PRIVILEGE

Subject to the Company's then current rules, you may at any time transfer the
Policy Value among the Sub-Accounts or between a Sub-Account and the General
Account. The Policy Value held in the General Account to secure a Policy loan,
however, 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. As discussed in THE POLICY -- "Allocation of Net
Premiums," a properly completed authorization form must be on file at the
Principal Office before telephone requests will be honored.

Currently, transfers involving the General Account are permitted only if:

- there has been at least a 90-day period since the last transfer from the
General Account, and

- 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.

35
<PAGE>
DOLLAR-COST AVERAGING OPTION AND AUTOMATIC REBALANCING OPTION

You may have automatic transfers of at least $100 a month made on a periodic
basis:

- from the Sub-Account which invests in the Money Market Fund of the Trust
to one or more of the other Sub-Accounts ("Dollar-Cost Averaging Option"),
or

- to reallocate Policy Value among the Sub-Accounts ("Automatic Rebalancing
Option").

TRANSFER PRIVILEGE SUBJECT TO POSSIBLE LIMITS

The transfer privilege is subject to the Company's consent. The Company reserves
the right to impose limitations on transfers including, but not limited to:

- the minimum amount that may be transferred,

- the minimum amount that may remain in a Sub-Account following a transfer
from that Sub-Account,

- the minimum period of time between transfers involving the General
Account, and

- the maximum amount that may be transferred each time from the General
Account.

DEATH PROCEEDS

The Policy provides for the payment of the Death Proceeds 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, due proof of such death must be received at the Principal Office. As
long as the Policy remains in force (see POLICY TERMINATION AND REINSTATEMENT),
the Company will pay the Death Proceeds of the Policy to the named Beneficiary
upon due proof of the death of the last surviving Insured.

Normally, the Company will 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:

- 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

- any additional insurance on the Insureds' lives that is provided by rider;
minus

36
<PAGE>
- 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. 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. You designate the desired Sum Insured Option in the application. You may
change the option once per Policy year by Written Request. There is no charge
for a change in option.

GUIDELINE MINIMUM SUM INSURED

The Guideline Minimum Sum Insured is equal to a percentage of the Policy Value
as set forth in the Table below. The Guideline Minimum Sum Insured is determined
in accordance with 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.

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

*For a period of 90 days after a state insurance department has approved the use
of GUIDELINE MINIMUM SUM INSURED -- TABLE 2, the Company will permit
Policyowners 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.

For any Face Amount, the amount of the Sum Insured and 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. The cost of insurance included in the Monthly Deduction will be
greater, however, 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."

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<PAGE>
ILLUSTRATIONS

For purposes of this illustration, assume that the younger Insured is under the
Age of 40, that there is no outstanding Debt, and that GUIDELINE MINIMUM SUM
INSURED -- TABLE 1 applies.

ILLUSTRATION OF OPTION 1

Under Option 1, a Policy with a $300,000 Face Amount generally will have a Sum
Insured equal to $300,000. However, because the Sum Insured must be equal to or
greater than 300% of the 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).

Similarly, so long as the Policy Value exceeds $100,000, each dollar taken out
of the 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 the
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, that there is no outstanding Debt, and that GUIDELINE MINIMUM INSURED
- -- TABLE 1 applies.

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 a Policy
Value of $50,000 will produce a Sum Insured of $350,000 ($300,000 + $50,000);a
Policy Value of $80,000 will produce a Sum Insured of $380,000 ($300,000 +
$80,000); a 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); a Policy Value of $250,000 will produce a Guideline Minimum Sum Insured
of $750,000 ($250,000 x 3.00); and a Policy Value of $300,000 will produce a
Guideline Minimum Sum Insured of $900,000 ($300,000 x 3.00).

Similarly, if the Policy Value exceeds $150,000, each dollar taken out of the
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, the Policy Value multiplied by
the applicable percentage is less than the Face Amount plus the Policy Value,
then the Sum Insured will be the current Face Amount plus the Policy Value.

39
<PAGE>
$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 the Policy Value or the Policy Value multiplied by the applicable
percentage.

CHANGE IN SUM INSURED OPTION

CHANGE FROM OPTION 1 TO OPTION 2

CHANGE FROM OPTION 2 TO OPTION 1

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. The change in
option, however, will affect the determination of the Sum Insured from that
point on, since the Policy Value no longer will 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 Separate 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 subsequent Monthly Deductions, compared to
what such charge would have been if no such change were made.

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

CHANGE IN FACE AMOUNT

Subject to certain limitations, you may increase or decrease the specified Face
Amount at any time by submitting a Written Request to the Company. Any increase
or decrease in the specified Face Amount requested by you 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 IN FACE AMOUNT

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the Face Amount may not be for less than $100,000. You 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 the Face Amount, a transaction charge
of $40 will be deducted from the 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" and "Surrender Charge."

After increasing the Face Amount, you will have the right (a) 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 (b)
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" and "Conversion Privileges." A refund of charges which would not have
been deducted but for the increase will be made at your request.

DECREASES IN FACE AMOUNT

The minimum amount for a decrease in the 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 the Face Amount, the Policy would not comply with the maximum
premium limitation applicable under the IRS rules, the decrease may be limited
or Policy Value may be returned to you (at your election) to the extent
necessary to meet the requirements. A return of Policy Value may result in a tax
liability to you.

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:

- the Face Amount provided by the most recent increase,

- the next most recent increases successively; and

- the initial Face Amount.

This order also will be used to determine whether a surrender charge will be
deducted and in what amount. If you request a decrease in the Face Amount, the
amount of any surrender charge deducted will reduce the current Policy Value.
You 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:

- your accumulation in the General Account, PLUS

- the value of the Accumulation Units in the Sub-Accounts.

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The Policy Value is used in determining the Surrender Value (the Policy Value
less any Debt and applicable surrender charges). There is no guaranteed minimum
Policy Value. Because the Policy Value on any date depends upon a number of
variables, it cannot be predetermined.

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 Separate Account; see THE
POLICY -- "Applying for a Policy") less any Monthly Deductions due. On each
Valuation Date after the Date of Issue the Policy Value will be:

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

THE ACCUMULATION UNIT

Each Net Premium is allocated to the Sub-Account(s) selected by you. 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.

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NET INVESTMENT FACTOR

(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;

(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 0.90%; and

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

DEATH PROCEEDS PAYMENT OPTIONS

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."

POLICY SURRENDER

You 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 the Face
Amount. See CHARGES AND DEDUCTIONS -- "Surrender Charge."

The proceeds on surrender may be paid in a lump sum or under one of the payment
options described in APPENDIX B -- PAYMENT OPTIONS. Normally, the Company will
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."

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

PARTIAL WITHDRAWALS

Any time after the first Policy year, you 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 you wish to receive and the Accounts from which such amount is to
be withdrawn. You may allocate the amount withdrawn among the Sub-Accounts and
the General Account. If you do 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 you plus the transaction charge
and any applicable partial withdrawal charge as described under CHARGES AND
DEDUCTIONS -- "Charges on Partial Withdrawals." Normally, the Company will 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 payment
under certain circumstances as described in OTHER POLICY PROVISIONS --
"Postponement of Payments." For important tax consequences which may result from
partial withdrawals, see FEDERAL TAX CONSIDERATIONS.

CHARGES AND DEDUCTIONS

Certain of the charges and deductions described below may be reduced for
Policies issued to employees of the Company and its affiliates located at the
Company's home office (or at off-site locations if such employees are on the
Company's home office payroll); directors of the Company and its affiliates and
subsidiaries; employees and registered representatives of any broker-dealer that
has entered into a sales agreement with the Company or Allmerica Investments,
Inc. to sell the Policies, and any spouses or children of the above persons. The
cost of insurance charges may be reduced, and no surrender charges, partial
withdrawal charges or front-end sales loads will be imposed (and no commissions
will be paid), where the Policyowner as of the date of application is within
these categories.

TAX EXPENSE CHARGE

A charge will be deducted from each premium payment for the actual state and
local premium taxes paid by the Company and a charge of 1% of premiums to
compensate the Company for federal taxes imposed for deferred acquisition costs
("DAC") taxes. The premium tax deduction will change if there is a change in tax
rates or if the applicable jurisdiction changes (the Company should be notified
of any change in address as soon as possible). 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.

PREMIUM EXPENSE CHARGE

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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 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 $40 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 your instruction or, if no
allocation is specified, the Company will make a Pro-Rata Allocation. If the
Sub-Account you specify 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. If on subsequent Monthly Payment Dates there is
sufficient Policy Value in the Sub-Account you specified, however, 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 the 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 you select Sum Insured Option 2, the monthly insurance charge for each
increase in Face Amount (other than an increase caused by a change in the Sum
Insured Option) will be equal to the cost of insurance rate applicable to that
increase multiplied by the increase in the Face Amount. If you select 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.

EFFECT OF THE GUIDELINE MINIMUM SUM INSURED

- multiplying the cost of insurance rate applicable to the initial Face
Amount times the Guideline Minimum Sum Insured (Policy Value times the
applicable percentage), MINUS

- the greater of the Face Amount or the Policy Value (if you selected Sum
Insured Option 1)

- the Face Amount PLUS the Policy Value (if you selected Sum Insured
Option 2).

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

COST OF INSURANCE RATES

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 Policy, 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 non-smokers. Non-smoking 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 non-smoker. The Company
will provide notice to you of the opportunity for an Insured to be classified as
a non-smoker 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 the Face Amount. For each increase in the
Face Amount that you request, 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 the 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 SEPARATE 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
Separate Account.

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MORTALITY AND EXPENSE RISK CHARGE

SEPARATE ACCOUNT ADMINISTRATIVE CHARGE

During the first 15 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 Separate 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 Separate 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 Separate Account administrative charge
is imposed after the 15th Policy year.

OTHER CHARGES AND EXPENSES

Because the Sub-Accounts purchase shares of the Underlying Funds, the value of
the Accumulation Units of the Sub-Accounts will reflect the investment advisory
fee and other expenses incurred by the Underlying Funds. The prospectuses and
statements of additional information of the Trust, Fidelity VIP, and T. Rowe
Price contain additional information concerning such fees and expenses.

Currently, no charges are 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-Accounts 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 surrender charge may be
deducted if you request a full surrender of the Policy or a decrease in the 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. 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.

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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

SEPARATE SURRENDER CHARGE FOR EACH FACE AMOUNT INCREASE

A separate surrender charge will apply to and is calculated for each increase in
the 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. Such deferred
sales charge 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. 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 you surrender the Policy during the first two Policy years following an
increase in the 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 the 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.

Allocation of Policy Value and Premiums Upon an Increase in Face Amount
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 whereby the Policy Value will be allocated
between the initial Face Amount and the increase. Subsequent premium payments
are allocated between the initial Face Amount and the increase.

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the increase will equal the portion of the 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.

POSSIBLE SURRENDER CHARGE ON A DECREASE IN THE FACE AMOUNT

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 WITHDRAWALS

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 also may be deducted from the Policy Value. For each
partial withdrawal you 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.

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 administrative charge component. The
partial withdrawal charge deducted will decrease existing surrender charges in
the following order:

- first, the surrender charge for the most recent increase in the Face
Amount;

- second, the surrender charge for the next most recent increases
successively;

- last, the surrender charge for the initial Face Amount.

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TRANSFER CHARGES

You may have automatic transfers of at least $100 a month made on a periodic
basis:

- from the Sub-Account which invests in the Money Market Fund of the Trust
to one or more of the other Sub-Accounts; or

- to reallocate Policy Value among the Sub-Accounts.

The first automatic transfer counts as one transfer towards the 12 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 you utilize the Conversion Privilege, Loan Privilege, or reallocate Policy
Value within 20 days of the Date of Issue, any resulting transfer of Policy
Value from the Sub-Accounts to the General Account will be free of charge and in
addition to the 12 free transfers in a Policy year. See THE POLICY --
"Conversion Privileges," and POLICY LOANS.

CHARGE FOR INCREASE IN FACE AMOUNT

For each increase in the Face Amount that you request, a transaction charge of
$40 will be deducted from the 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. Currently, no such charges are imposed, and any such
charge is guaranteed not to exceed $25.

POLICY LOANS

You may borrow against the Policy Value. Policy loans may be obtained by request
to the Company on the sole security of the Policy. The total amount which may be
borrowed is the Loan Value. In the first Policy year, the Loan Value is 75% of
the Policy Value reduced by applicable surrender charges, as well as Monthly
Deductions and interest on Policy loans to the end of the Policy year. The Loan
Value in the second Policy year and thereafter is 90% of an amount equal to the
Policy Value reduced by applicable surrender charges. There is no minimum limit
on the amount of the loan.

Normally, the loan amount will be paid within seven days after the Company
receives the loan request at the Principal Office, but the Company may delay
payments under certain circumstances. See OTHER POLICY PROVISIONS --
"Postponement of Payments."

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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.

LOAN AMOUNT EARNS INTEREST IN GENERAL ACCOUNT

As long as the Policy is in force, the Policy Value in the General Account equal
to the loan amount will be credited with interest at an effective annual yield
of at least 6.00%.

PREFERRED LOAN OPTION -- A preferred loan option is available under the Policy.
The preferred loan option will be available upon Written Request. It may be
revoked by you at any time. If this option has been selected, after the tenth
Policy anniversary the Policy Value in the General Account that is equal to the
loan amount will be credited with interest at an effective annual yield of at
least 7.5%. Our current practice is to credit a rate of interest equal to the
rate being charged for the preferred loan.

There is some uncertainty as to the tax treatment of preferred loans. Consult a
qualified tax adviser (and see FEDERAL TAX CONSIDERATIONS). The preferred loan
option may not be available in all states.

LOAN INTEREST CHARGED

Outstanding Policy loans are charged interest. 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
will bear interest at the same rate. If the new loan amount exceeds the Policy
Value in the General Account after the due and unpaid interest is added to the
loan amount, the Company will transfer the Policy Value equal to that excess
loan amount from the Policy Value in each Sub-Account to the 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 LOANS

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

If the 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 you and any assignee. If you do 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 surrender or the death of the last surviving Insured.

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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) the Debt exceeds the Policy Value less surrender charges.

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.

LIMITED 48-MONTH GUARANTEE

Except for the situation described in (b) above, the Policy is guaranteed not to
lapse during the first 48 months after the Date of Issue or the effective date
of an increase in the Face Amount if you make a minimum amount of premium
payments. The minimum amount paid, minus the Debt, partial withdrawals and
partial withdrawal charges, must be at least equal to the sum of the Minimum
Monthly Factor for the number of months the Policy, increase in the Face Amount,
or a Policy Change which causes a change in the Minimum Monthly Factor has been
in force. 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 any time within three 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 you submit the
following to the Company:

- a written application for reinstatement,

- Evidence of Insurability showing that the Insureds are insurable according
to the Company's underwriting rules, and

- 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

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(2). Under (1), the minimum amount payable is the Minimum Monthly Factor for the
three-month period beginning on the date of reinstatement. Under (2), 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 or any increase in the Face Amount, you must pay the amount
shown in (2) above. The Company reserves the right to increase the Minimum
Monthly Factor upon reinstatement.

SURRENDER CHARGE

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 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.

You 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

53
<PAGE>
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 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, generally within two years from the effective date of any increase in
the Sum Insured, the Company's liability 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, you must mail to the Principal Office due proof of
such death.

AGE

If the Age of either Insured as stated in the application for the 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 Policyowner 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 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 Separate 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 for 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 Separate 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 your bank.

54
<PAGE>
DIRECTORS AND PRINCIPAL OFFICERS OF THE COMPANY

<TABLE>
<CAPTION>
NAME AND POSITION
WITH COMPANY PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- ---------------------------------- --------------------------------------------------------
<S> <C>
Bruce C. Anderson Director of First Allmerica since 1996; Vice President,
Director and Vice President First Allmerica since 1984

Abigail M. Armstrong Secretary of First Allmerica since 1996; Counsel, First
Secretary and Counsel Allmerica since 1991

John P. Kavanaugh Director and Chief Investment Officer of First Allmerica
Director, Vice President and since 1996; Vice President, First Allmerica since 1991
Chief Investment Officer

John F. Kelly Director since 1996; General Counsel since 1981; Senior
Director, Senior Vice President, Vice President since 1986; and Assistant Secretary since
General Counsel and Assistant 1991, all of First Allmerica
Secretary

J. Barry May Director of First Allmerica since 1996; Director of
Director Citizens Insurance Company and President, The Hanover
Insurance Company since 1996; Vice President, The
Hanover Insurance Company, 1993 to 1996; General
Manager, The Hanover Insurance Company, 1989 to 1993

James R. McAuliffe Director of First Allmerica since 1996; Director since
Director 1992, President since 1994, and CEO since 1996 of
Citizens Insurance Company of America; Vice President
1982 to 1994, and Chief Investment Officer 1986 to 1994,
of First Allmerica

John F. O'Brien Director, Chairman of the Board, President and Chief
Director, Chairman of the Board, Executive Officer, First Allmerica since 1989
President and Chief Executive
Officer

Edward J. Parry, III Director and Chief Financial Officer of First Allmerica
Director, Vice President, Chief since 1996; Vice President and Treasurer, First
Financial Officer and Treasurer Allmerica since 1993; Assistant Vice President, First
Allmerica 1992 to 1993

Eric A. Simonsen Director of First Allmerica since 1996; Vice President,
Director and Vice President First Allmerica since 1990; Chief Financial Officer,
First Allmerica 1990 to 1996

Phillip E. Soule Director of First Allmerica since 1996; Vice President,
Director and Vice President First Allmerica since 1987
</TABLE>

55
<PAGE>
DISTRIBUTION

Allmerica Investments, Inc. ("Allmerica Investments"), an indirect subsidiary of
First Allmerica, acts as the principal underwriter of the Policies pursuant to a
Sales and Administrative Services Agreement with the Company and the Separate
Account. Allmerica Investments is registered with the SEC as a broker-dealer and
is a member of the National Association of Securities Dealers, Inc. ("NASD").
The Policies are sold by agents of the Company who are registered
representatives of Allmerica Investments or of broker-dealers which have selling
agreements with Allmerica Investments.

The Company pays commissions to broker-dealers which sell the Policy based on a
commission schedule. After the Date of Issue or an increase in Face Amount,
commissions will be 90% of the first-year payments up to a payment amount we
established and 4% of any excess. Commissions will be 2% for subsequent
payments, plus 0.25% of unloaned Policy Value. To the extent permitted by NASD
rules, promotional incentives or payments may also be provided to broker-dealers
based on sales volumes, the assumption of wholesaling functions or other
sales-related criteria. Other payments may be made for other services that do
not directly involve the sale of the Policies. These services may include the
recruitment and training of personnel, production of promotional literature, and
similar services.

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 Policyowners or
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 for
services it performs and expenses it may incur as principal underwriter and
general distributor.

SERVICES

The Company receives fees from the investment advisers or other service
providers of certain Underlying Funds in return for providing certain services
to Policyowners. Currently, the Company receives service fees with respect to
the Fidelity VIP Equity-Income Portfolio, Fidelity VIP Growth Portfolio and
Fidelity VIP High Income Portfolio, at an annual rate of 0.10% of the aggregate
net asset value, respectively, of the shares of such Underlying Funds held by
the Separate Account. With respect to the T. Rowe Price International Stock
Portfolio, the Company receives service fees at an annual rate of 0.15% of the
aggregate net asset value of shares held by the Separate Account. The Company
may in the future render services for which it will receive compensation from
the investment advisers or other service providers of other Underlying Funds.

REPORTS

In addition, you will be sent periodic reports containing financial statements
and other information for the Separate Account and the Underlying Funds as
required by the 1940 Act.

56
<PAGE>
LEGAL PROCEEDINGS

FURTHER INFORMATION

INDEPENDENT ACCOUNTANTS

The financial statements of the Company as of December 31, 1997 and 1996 and for
each of the two years in the period ended December 31, 1997, and the financial
statements of the Inheiritage Account of the Company as of December 31, 1997 and
the periods indicated, 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.

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 IRS. Moreover, no
attempt has been made to consider any applicable state or other tax laws.

THE COMPANY AND THE SEPARATE ACCOUNT

The Company is taxed as a life insurance company under Subchapter L of the Code,
and files a consolidated tax return with its parent and affiliates. Because the
Company does not expect to incur any income tax upon the earnings or realized
capital gains attributable to the Separate Account, no charge is made for
federal income taxes which may be attributable to the Separate Account.

The Company periodically will review the question of a charge to the Separate
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

57
<PAGE>
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 Separate 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 Separate 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 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 Department 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 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 Separate Account.

SPLIT OPTION RIDER/EXCHANGE OPTION RIDER

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 non-taxable 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.

58
<PAGE>
POLICY LOANS

The Company believes that non-preferred loans received under the Policy will be
treated as an indebtedness of the Policyowner for federal income tax purposes.
Under current law, these loans will not constitute income for the Policyowner
while the Policy is in force (but see "Modified Endowment Contracts"). There is
a risk, however, that a preferred loan may be characterized by the IRS as a
withdrawal and be taxed accordingly. At the present time, the IRS has not issued
any guidance on whether loans with the attributes of a preferred loan should be
treated differently than a non-preferred loan. This lack of specific guidance
makes the tax treatment of preferred loans uncertain. In the event pertinent IRS
guidelines are issued in the future, you may revoke your request for a preferred
loan.

MODIFIED ENDOWMENT CONTRACTS

The Technical and Miscellaneous Revenue Act of 1988 ("1988 Act") adversely
affects the tax treatment of distributions under so-called "modified endowment
contracts." Under the 1988 Act, any life insurance policy, including the Policy
offered by this Prospectus, that fails to satisfy a "seven-pay" test is
considered a modified endowment contract. A policy fails to satisfy the
seven-pay test if the cumulative premiums paid under the policy at any time
during the first seven policy years or within seven years of a material change
in the policy 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.

ESTATE AND GENERATION-SKIPPING TAXES

Federal estate tax is integrated with federal gift tax under a unified rate
schedule. In general, estates less than $625,000 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

59
<PAGE>
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, you 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 1933 Act or the 1940 Act. Accordingly,
the disclosures in this section have not been reviewed by the SEC. 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 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.

GENERAL ACCOUNT VALUE

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. YOU
ASSUME THE RISK THAT INTEREST CREDITED MAY NOT EXCEED THE GUARANTEED MINIMUM
RATE.

60
<PAGE>
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. Such Policy Value, however, will 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%,
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

TRANSFERS, SURRENDERS, PARTIAL WITHDRAWALS AND POLICY LOANS

Policy loans also may 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. If payment is
delayed for 30 days or more, however, the Company will pay interest at least
equal to an effective annual yield of 3.5% 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

61
<PAGE>
ALLMERICA FINANCIAL
LIFE INSURANCE AND
ANNUITY COMPANY

FINANCIAL STATEMENTS
DECEMBER 31, 1997
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholder of
Allmerica Financial Life Insurance and Annuity Company

/s/ Price Waterhouse LLP

PRICE WATERHOUSE LLP

Boston, Massachusetts

February 3, 1998
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

(AN INDIRECT WHOLLY OWNED SUBSIDIARY OF ALLMERICA FINANCIAL CORPORATION)

CONSOLIDATED STATEMENTS OF INCOME

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-1
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

(AN INDIRECT WHOLLY OWNED SUBSIDIARY OF ALLMERICA FINANCIAL CORPORATION)

CONSOLIDATED BALANCE SHEETS

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-2
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

(AN INDIRECT WHOLLY OWNED SUBSIDIARY OF ALLMERICA FINANCIAL CORPORATION)

CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-3
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

(AN INDIRECT WHOLLY OWNED SUBSIDIARY OF ALLMERICA FINANCIAL CORPORATION)

CONSOLIDATED STATEMENTS OF CASH FLOWS

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-4
<PAGE>
NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

B. VALUATION OF INVESTMENTS

Fixed maturities and mortgage loans that are delinquent are placed on
non-accrual status, and thereafter interest income is recognized only when cash
payments are received.

Policy loans are carried principally at unpaid principal balances.

F-5
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

C. FINANCIAL INSTRUMENTS

D. CASH AND CASH EQUIVALENTS

Cash and cash equivalents includes cash on hand, amounts due from banks and
highly liquid debt instruments purchased with an original maturity of three
months or less.

E. DEFERRED POLICY ACQUISITION COSTS

F. SEPARATE ACCOUNTS

G. POLICY LIABILITIES AND ACCRUALS

F-6
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Premiums for individual accident and health insurance are reported as earned on
a pro-rata basis over the contract period.

The unexpired portion of these premiums is recorded as unearned premiums.

Contractholder deposit funds and other policy liabilities include
investment-related products and consist of deposits received from customers and
investment earnings on their fund balances.

H. PREMIUM AND FEE REVENUE AND RELATED EXPENSES

I. FEDERAL INCOME TAXES

F-7
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

J. NEW ACCOUNTING PRONOUNCEMENTS

2. SIGNIFICANT TRANSACTIONS

F-8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

3. INVESTMENTS

A. SUMMARY OF INVESTMENTS

The Company accounts for its investments, all of which are classified as
available-for-sale, in accordance with the provisions of SFAS No. 115.

The amortized cost and fair value of available-for-sale fixed maturities and
equity securities were as follows:

(1) Amortized cost for fixed maturities and cost for equity securities.

There were no contractual fixed maturity investment commitments at December 31,
1997 and 1996, respectively.

F-9
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The proceeds from voluntary sales of available-for-sale securities and the gross
realized gains and gross realized losses on those sales were as follows:

1996
Fixed maturities............................................ $496.6 $ 4.3 $ 8.3
Equity securities........................................... $ 1.5 $ 0.4 $ 0.1
</TABLE>

Unrealized gains and losses on available-for-sale and other securities, are
summarized as follows:

(1) Includes net appreciation on other investments of $11.1 million in 1997, and
$2.2 million in 1996.

F-10
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(1) Includes net appreciation on other investments of $11.1 million in 1997, and
$2.2 million in 1996.

B. MORTGAGE LOANS AND REAL ESTATE

The carrying values of mortgage loans and real estate investments net of
applicable reserves were as follows:

Reserves for mortgage loans were $9.4 million and $9.5 million at December 31,
1997 and 1996, respectively.

At December 31, 1997, contractual commitments to extend credit under commercial
mortgage loan agreements amounted to approximately $18.7 million. These
commitments generally expire within one year.

F-11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Mortgage loans and real estate investments comprised the following property
types and geographic regions:

C. INVESTMENT VALUATION ALLOWANCES

Investment valuation allowances which have been deducted in arriving at
investment carrying values as presented in the balance sheet and changes thereto
are shown below.

F-12
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

D. OTHER

At December 31, 1997, AFLIAC had no concentration of investments in a single
investee exceeding 10% of shareholder's equity.

4. INVESTMENT INCOME AND GAINS AND LOSSES

A. NET INVESTMENT INCOME

The components of net investment income were as follows:

There were no fixed maturities or mortgage loans which were non-income producing
for the twelve months ended December 31, 1997.

F-13
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

B. REALIZED INVESTMENT GAINS AND LOSSES

Realized gains (losses) on investments were as follows:

5. FAIR VALUE DISCLOSURES OF FINANCIAL INSTRUMENTS

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

CASH AND CASH EQUIVALENTS

For these short-term investments, the carrying amount approximates fair value.

FIXED MATURITIES

EQUITY SECURITIES

MORTGAGE LOANS

F-14
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

REINSURANCE RECEIVABLES

The carrying amount of the reinsurance receivable for outstanding claims, losses
and loss adjustment expenses reported in the balance sheet approximates fair
value.

POLICY LOANS

The carrying amount reported in the balance sheet approximates fair value since
policy loans have no defined maturity dates and are inseparable from the
insurance contracts.

INVESTMENT CONTRACTS (WITHOUT MORTALITY FEATURES)

Fair values for the Company's liabilities under investment type contracts are
estimated based on current surrender values.

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

6. DEBT

In 1997 the Company incurred no debt. During 1996, the Company utilized
repurchase agreements to finance certain investments.

Interest expense was $3.4 million in 1996, relating to the repurchase
agreements, and is recorded in other operating expenses.

F-15
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

7. FEDERAL INCOME TAXES

8. RELATED PARTY TRANSACTIONS

F-16
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

9. DIVIDEND RESTRICTIONS

Delaware has enacted laws governing the payment of dividends to stockholders by
insurers. These laws affect
the dividend paying ability of the Company.

At January 1, 1998, AFLIAC could pay dividends of $33.9 million to FAFLIC
without prior approval.

10. REINSURANCE

The effects of reinsurance were as follows:

F-17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

11. DEFERRED POLICY ACQUISITION EXPENSES

The following reflects the changes to the deferred policy acquisition asset:

12. LIABILITIES FOR INDIVIDUAL ACCIDENT AND HEALTH BENEFITS

13. CONTINGENCIES

REGULATORY AND INDUSTRY DEVELOPMENTS

LITIGATION

F-18
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEAR 2000

14. STATUTORY FINANCIAL INFORMATION

F-19
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of Allmerica Financial Life Insurance and Annuity
Company and Policyowners of the Inheiritage Account of Allmerica Financial Life
Insurance and Annuity Company

/s/ Price Waterhouse LLP

PRICE WATERHOUSE LLP

Boston, Massachusetts

* Name changed. See Note 1.

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

SA-2
<PAGE>
INHEIRITAGE ACCOUNT
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
INVESTMENT GRADE INCOME
GROWTH
FOR THE YEAR ENDED DECEMBER 31, FOR THE YEAR ENDED DECEMBER 31,
------------------------------------ -----------------------------------
1997 1996 1995 1997 1996 1995
--------- --------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends................. $ 31,372 $ 19,523 $ 8,374 $ 50,621 $ 29,860 $ 14,621
--------- --------- -------- -------- --------- --------
EXPENSES:
Mortality and expense risk
fees.................... 18,158 8,082 2,845 6,698 3,961 1,689
Administrative expense
fees.................... 5,122 2,279 790 1,889 1,117 469
--------- --------- -------- -------- --------- --------
Total expenses.......... 23,280 10,361 3,635 8,587 5,078 2,158
--------- --------- -------- -------- --------- --------
Net investment income
(loss).................. 8,092 9,162 4,739 42,034 24,782 12,463
--------- --------- -------- -------- --------- --------

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

* Name changed. See Note 1.

** Date of initial investment.

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

** Date of initial investment.

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

* Name changed. See Note 1.

** Date of initial investment.

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

** Date of initial investment.

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

SA-12
<PAGE>
INHEIRITAGE ACCOUNT

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

NOTE 1 -- ORGANIZATION

Certain prior year balances have been reclassified to conform with current year
presentation.

NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES

SA-13
<PAGE>
INHEIRITAGE ACCOUNT

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997

NOTE 3 -- INVESTMENTS

* Name changed. See Note 1.

NOTE 4 -- RELATED PARTY TRANSACTIONS

SA-14
<PAGE>
INHEIRITAGE ACCOUNT

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997

NOTE 4 -- RELATED PARTY TRANSACTIONS (CONTINUED)

NOTE 5 -- DIVERSIFICATION REQUIREMENTS

SA-15
<PAGE>
INHEIRITAGE ACCOUNT

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997

NOTE 6 -- PURCHASES AND SALES OF SECURITIES

Cost of purchases and proceeds from sales of the Trust, Fidelity VIP, Fidelity
VIP II, T. Rowe Price, and DGPF shares by Inheiritage during the year ended
December 31, 1997 were as follows:

* Name changed. See Note 1.

SA-16
<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, your representative
should be contacted.

The following supplemental benefits are available for issue under the Policies
for an additional charge. CERTAIN OF THESE RIDERS MAY NOT BE AVAILABLE IN ALL
STATES.

SPLIT OPTION RIDER/EXCHANGE OPTION RIDER

This Rider, available only at Date of Issue, permits you 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 you 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.

GUARANTEED DEATH BENEFIT RIDER

This Rider, WHICH IS AVAILABLE ONLY AT DATE OF ISSUE, (a) guarantees that
the Policy will not lapse regardless of the performance of the Separate
Account, and (b) provides a guaranteed net death benefit.

A-1
<PAGE>
APPENDIX B
PAYMENT OPTIONS

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 is based on the investment
experience of the Separate Account.

(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).

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.

B-1
<PAGE>
SELECTION OF PAYMENT OPTIONS

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 the
Policy matures by death or otherwise, unless another date is designated.
Payments under Option C begin at the end of the first payment period.

B-2
<PAGE>
APPENDIX C
ILLUSTRATIONS
SURRENDER VALUE, POLICY VALUES AND DEATH BENEFITS

The following tables illustrate the way in which the Sum Insured and the Policy
Value could vary over an extended period of time.

ASSUMPTIONS

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 tables also illustrate the guaranteed cost of insurance rates and the
current cost of insurance rates.

The tables assume that all premiums are allocated to and remain in the Separate
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 second column of the tables
shows the amount which would accumulate if an amount equal to the Guideline
Annual Premium were invested each year to earn interest (after taxes) at 5%
compounded annually.

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 Separate 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.

DEDUCTIONS FOR CHARGES

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. The amounts shown also take into account the daily charge against
the Separate Account for mortality and expense risks and for the Separate
Account administrative charge. In both the Current Cost of Insurance Charges
illustrations and the Guaranteed Cost of Insurance Charges illustrations, the
Separate Account charges currently are equivalent to an effective annual rate of
1.15% of the average daily value of the assets in the Separate Account in the
first fifteen Policy Years, and 0.90% thereafter

The amounts shown in the tables also take into account the Underlying Fund
advisory fees and operating expenses, which are assumed to be at an annual rate
of 0.95% of the average daily net assets of the Underlying Funds. The actual
fees and expenses of each Underlying Fund vary, and in 1997 ranged from an
annual rate of 0.35% to an annual rate of 2.00% of average daily net assets. The
fees and expenses associated with your Policy may be more or less than 0.95% in
the aggregate, depending upon how you make allocations of Policy Value among the
Sub-Accounts.

AFIMS has declared a voluntary expense limitation of 1.35% of average net assets
for the Select Aggressive Growth Fund and Select Capital Appreciation Fund,
1.50% for the Select International Equity Fund, 1.25% for the Select Value
Opportunity Fund, 1.20% for the Growth Fund and Select Growth Fund, 1.10% for
the Select Growth and Income, 1.00% for the Select Income Fund, and 0.60% for
the Money Market Fund. The

C-1
<PAGE>
total operating expenses of these Funds of the Trust were less than their
respective expense limitations throughout 1997. These limitations may be
terminated at any time.

Until further notice, AFIMS has declared a voluntary expense limitation of 1.20%
of average daily net assets for the Select Strategic Growth Fund. In addition,
the manager has agreed to voluntarily waive its management fee to the extent
that expenses of the Select Emerging Markets Fund exceed 2.00% of the Fund's
average daily net assets, except that such waiver shall not exceed the net
amount of management fees earned by AFIMS from the Fund after subtracting fees
paid by AFIMS to a sub-adviser. These limitations may be terminated at any time.

NET ANNUAL RATES OF INVESTMENT

Taking into account the Separate Account mortality and expense risk charge of
0.90%, the Separate Account administrative charge of 0.25% (for the first 15
years only), and the assumed 0.95% charge for Underlying Fund advisory fees and
operating expenses, the gross annual rates of investment return of 0%, 6% and
12% correspond to net annual rates of -2.10%, 3.90% and 9.90%, respectively,
during the first 15 Policy years and -1.85%, 4.15% and 10.15%, respectively,
thereafter.

C-2
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
ALLMERICA SELECT INHEIRITAGE

INSURED #1: UNISEX NONSMOKER ISSUE AGE 55
INSURED #1: UNISEX NONSMOKER ISSUE AGE 55
SPECIFIED FACE AMOUNT $1,000,000
SUM INSURED OPTION 1

CURRENT COST OF INSURANCE

6 71,420 35,047 51,007 1,000,000 47,167 63,127 1,000,000 61,954 77,914 1,000,000
7 85,491 43,636 58,456 1,000,000 59,847 74,667 1,000,000 80,447 95,267 1,000,000
8 100,266 51,911 65,591 1,000,000 72,821 86,501 1,000,000 100,507 114,187 1,000,000
9 115,779 59,860 72,400 1,000,000 86,084 98,624 1,000,000 122,277 134,817 1,000,000
10 132,068 67,474 78,874 1,000,000 99,635 111,035 1,000,000 145,920 157,320 1,000,000

11 149,171 75,772 84,892 1,000,000 114,502 123,622 1,000,000 172,649 181,769 1,000,000
12 167,130 83,567 90,407 1,000,000 129,501 136,341 1,000,000 201,481 208,321 1,000,000
13 185,986 90,811 95,371 1,000,000 144,589 149,149 1,000,000 232,598 237,158 1,000,000
14 205,786 97,453 99,733 1,000,000 159,720 162,000 1,000,000 266,205 268,485 1,000,000
15 226,575 103,434 103,434 1,000,000 174,837 174,837 1,000,000 302,532 302,532 1,000,000

16 248,404 106,697 106,697 1,000,000 188,068 188,068 1,000,000 340,349 340,349 1,000,000
17 271,324 109,102 109,102 1,000,000 201,156 201,156 1,000,000 381,578 381,578 1,000,000
18 295,390 110,601 110,601 1,000,000 214,059 214,059 1,000,000 426,623 426,623 1,000,000
19 320,660 110,977 110,977 1,000,000 226,587 226,587 1,000,000 475,842 475,842 1,000,000
20 347,193 110,042 110,042 1,000,000 238,573 238,573 1,000,000 529,704 529,704 1,000,000

Age 60 58,019 26,151 43,251 1,000,000 34,782 51,882 1,000,000 44,896 61,996 1,000,000
Age 65 132,068 67,474 78,874 1,000,000 99,635 111,035 1,000,000 145,920 157,320 1,000,000
Age 70 226,575 103,434 103,434 1,000,000 174,837 174,837 1,000,000 302,532 302,532 1,000,000
Age 75 347,193 110,042 110,042 1,000,000 238,573 238,573 1,000,000 529,704 529,704 1,000,000
</TABLE>

(1) Assumes a $10,000 premium is paid at the beginning of each Policy year and
earns interest 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.

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, POLICY VALUE, AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM
THOSE SHOWN IF THE ACTUAL RATES OF INVESTMENT RETURN AVERAGED 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 POLICY 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.

C-3
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
ALLMERICA SELECT INHEIRITAGE

INSURED #1: UNISEX NONSMOKER ISSUE AGE 55
INSURED #1: UNISEX NONSMOKER ISSUE AGE 55
SPECIFIED FACE AMOUNT $1,000,000
SUM INSURED OPTION 1

GUARANTEED MONTHLY INSURANCE PROTECTION CHARGES

6 71,420 33,798 49,758 1,000,000 45,716 61,676 1,000,000 60,267 76,227 1,000,000
7 85,491 41,798 56,618 1,000,000 57,672 72,492 1,000,000 77,866 92,686 1,000,000
8 100,266 49,286 62,966 1,000,000 69,668 83,348 1,000,000 96,698 110,378 1,000,000
9 115,779 56,189 68,729 1,000,000 81,623 94,163 1,000,000 116,807 129,347 1,000,000
10 132,068 62,418 73,818 1,000,000 93,439 104,839 1,000,000 138,229 149,629 1,000,000

11 149,171 69,022 78,142 1,000,000 106,152 115,272 1,000,000 162,152 171,272 1,000,000
12 167,130 74,751 81,591 1,000,000 118,497 125,337 1,000,000 187,476 194,316 1,000,000
13 185,986 79,497 84,057 1,000,000 130,349 134,909 1,000,000 214,262 218,822 1,000,000
14 205,786 83,139 85,419 1,000,000 141,564 143,844 1,000,000 242,580 244,860 1,000,000
15 226,575 85,527 85,527 1,000,000 151,972 151,972 1,000,000 272,502 272,502 1,000,000

16 248,404 84,397 84,397 1,000,000 159,453 159,453 1,000,000 302,499 302,499 1,000,000
17 271,324 81,421 81,421 1,000,000 165,535 165,535 1,000,000 334,266 334,266 1,000,000
18 295,390 76,400 76,400 1,000,000 169,981 169,981 1,000,000 367,982 367,982 1,000,000
19 320,660 68,747 68,747 1,000,000 172,190 172,190 1,000,000 403,618 403,618 1,000,000
20 347,193 57,870 57,870 1,000,000 171,537 171,537 1,000,000 441,248 441,248 1,000,000

Age 60 58,019 25,336 42,436 1,000,000 33,856 50,956 1,000,000 43,845 60,945 1,000,000
Age 65 132,068 62,418 73,818 1,000,000 93,439 104,839 1,000,000 138,229 149,629 1,000,000
Age 70 226,575 85,527 85,527 1,000,000 151,972 151,972 1,000,000 272,502 272,502 1,000,000
Age 75 347,193 57,870 57,870 1,000,000 171,537 171,537 1,000,000 441,248 441,248 1,000,000
</TABLE>

(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.

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, POLICY VALUE, AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM
THOSE SHOWN IF THE ACTUAL RATES OF INVESTMENT RETURN AVERAGED 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 POLICY 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.

C-4
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
ALLMERICA SELECT INHEIRITAGE

INSURED #1: UNISEX NONSMOKER ISSUE AGE 55
INSURED #1: UNISEX NONSMOKER ISSUE AGE 55
SPECIFIED FACE AMOUNT $1,000,000
SUM INSURED OPTION 2

CURRENT COST OF INSURANCE CHARGES

6 71,420 34,969 50,929 1,050,929 47,069 63,029 1,063,029 61,830 77,790 1,077,790
7 85,491 43,512 58,332 1,058,332 59,683 74,503 1,074,503 80,232 95,052 1,095,052
8 100,266 51,724 65,404 1,065,404 72,564 86,244 1,086,244 100,157 113,837 1,113,837
9 115,779 59,590 72,130 1,072,130 85,699 98,239 1,098,239 121,731 134,271 1,134,271
10 132,068 67,097 78,497 1,078,497 99,077 110,477 1,110,477 145,096 156,496 1,156,496

11 149,171 75,251 84,371 1,084,371 113,702 122,822 1,122,822 171,420 180,540 1,180,540
12 167,130 82,854 89,694 1,089,694 128,366 135,206 1,135,206 199,667 206,507 1,206,507
13 185,986 89,851 94,411 1,094,411 143,002 147,562 1,147,562 229,959 234,519 1,234,519
14 205,786 96,181 98,461 1,098,461 157,534 159,814 1,159,814 262,420 264,700 1,264,700
15 226,575 101,773 101,773 1,101,773 171,869 171,869 1,171,869 297,173 297,173 1,297,173

16 248,404 104,557 104,557 1,104,557 184,087 184,087 1,184,087 332,842 332,842 1,332,842
17 271,324 106,375 106,375 1,106,375 195,868 195,868 1,195,868 371,160 371,160 1,371,160
18 295,390 107,172 107,172 1,107,172 207,119 207,119 1,207,119 412,315 412,315 1,412,315
19 320,660 106,710 106,710 1,106,710 217,551 217,551 1,217,551 456,323 456,323 1,456,323
20 347,193 104,784 104,784 1,104,784 226,895 226,895 1,226,895 503,228 503,228 1,503,228

Age 60 58,019 26,106 43,206 1,043,206 34,727 51,827 1,051,827 44,829 61,929 1,061,929
Age 65 132,068 67,097 78,497 1,078,497 99,077 110,477 1,110,477 145,096 156,496 1,156,496
Age 70 226,575 101,773 101,773 1,101,773 171,869 171,869 1,171,869 297,173 297,173 1,297,173
Age 75 347,193 104,784 104,784 1,104,784 226,895 226,895 1,226,895 503,228 503,228 1,503,228
</TABLE>

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

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, POLICY VALUE, AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM
THOSE SHOWN IF THE ACTUAL RATES OF INVESTMENT RETURN AVERAGED 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 POLICY 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.

C-5
<PAGE>
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
ALLMERICA SELECT INHEIRITAGE

INSURED #1: UNISEX NONSMOKER ISSUE AGE 55
INSURED #1: UNISEX NONSMOKER ISSUE AGE 55
SPECIFIED FACE AMOUNT $1,000,000
SUM INSURED OPTION 2

GUARANTEED COST OF INSURANCE CHARGES

6 71,420 33,696 49,656 1,049,656 45,587 61,547 1,061,547 60,104 76,064 1,076,064
7 85,491 41,628 56,448 1,056,448 57,448 72,268 1,072,268 77,572 92,392 1,092,392
8 100,266 49,017 62,697 1,062,697 69,300 82,980 1,082,980 96,196 109,876 1,109,876
9 115,779 55,780 68,320 1,068,320 81,042 93,582 1,093,582 115,983 128,523 1,128,523
10 132,068 61,818 73,218 1,073,218 92,552 103,952 1,103,952 136,921 148,321 1,148,321

11 149,171 68,164 77,284 1,077,284 104,835 113,955 1,113,955 160,130 169,250 1,169,250
12 167,130 73,556 80,396 1,080,396 116,589 123,429 1,123,429 184,422 191,262 1,191,262
13 185,986 77,874 82,434 1,082,434 127,646 132,206 1,132,206 209,748 214,308 1,214,308
14 205,786 80,983 83,263 1,083,263 137,817 140,097 1,140,097 236,036 238,316 1,238,316
15 226,575 82,725 82,725 1,082,725 146,875 146,875 1,146,875 263,177 263,177 1,263,177

16 248,404 80,816 80,816 1,080,816 152,616 152,616 1,152,616 289,368 289,368 1,289,368
17 271,324 76,918 76,918 1,076,918 156,474 156,474 1,156,474 315,955 315,955 1,315,955
18 295,390 70,849 70,849 1,070,849 158,147 158,147 1,158,147 342,737 342,737 1,342,737
19 320,660 62,031 62,031 1,062,031 156,905 156,905 1,156,905 369,065 369,065 1,369,065
20 347,193 49,927 49,927 1,049,927 152,018 152,018 1,152,018 394,258 394,258 1,394,258

Age 60 58,019 25,280 42,380 1,042,380 33,787 50,887 1,050,887 43,761 60,861 1,060,861
Age 65 132,068 61,818 73,218 1,073,218 92,552 103,952 1,103,952 136,921 148,321 1,148,321
Age 70 226,575 82,725 82,725 1,082,725 146,875 146,875 1,146,875 263,177 263,177 1,263,177
Age 75 347,193 49,927 49,927 1,049,927 152,018 152,018 1,152,018 394,258 394,258 1,394,258
</TABLE>

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

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, POLICY VALUE, AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM
THOSE SHOWN IF THE ACTUAL RATES OF INVESTMENT RETURN AVERAGED 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 POLICY 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.

C-6
<PAGE>
APPENDIX D
CALCULATION OF MAXIMUM SURRENDER CHARGES

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

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.

D-1
<PAGE>
INITIAL MAXIMUM SURRENDER CHARGE PER $1,000 FACE AMOUNT

<TABLE>
<CAPTION>
Younger Initial Younger Initial Initial
Issue Surrender Issue Surrender Younger Issue Surrender
Age Charge Age Charge 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>

EXAMPLES

(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 (19.00 X 1,000) $19,000.00

D-2
<PAGE>
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:

D-3