<PAGE>
Supplement Dated May 19, 1998, to
The Prospectus dated May 1, 1998, for
THE EXCHEQUER VARIABLE ANNUITY
A FLEXIBLE PREMIUM DEFERRED COMBINATION
FIXED AND VARIABLE ANNUITY CONTRACT
issued by
Security Life of Denver Insurance Company
and its
Security Life Separate Account A1
THIS SUPPLEMENT UPDATES CERTAIN INFORMATION CONTAINED IN YOUR PROSPECTUS.
PLEASE READ IT CAREFULLY AND KEEP IT WITH YOUR PROSPECTUS FOR FUTURE REFERENCE.
The "Portfolio Annual Expenses" table with its accompanying notes and the
following related information on pages 10-12 are hereby deleted and replaced as
follows:
PORTFOLIO ANNUAL EXPENSES
(AS A PERCENTAGE OF PORTFOLIO AVERAGE NET ASSETS)/1/
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<CAPTION>
Total
Investment Portfolio
Portfolio Management Fees Other Expenses Expenses
--------- --------------- -------------- ---------
<S> <C> <C> <C>
AIM VARIABLE INSURANCE FUNDS, INC.
AIM VI - Government Securities 0.50% 0.37% 0.87%
THE ALGER AMERICAN FUND
Alger American Growth Portfolio 0.75% 0.04% 0.79%
Alger American Leveraged AllCap Portfolio 0.85% 0.15% 1.00%/3/
Alger American MidCap Growth Portfolio 0.80% 0.04% 0.84%
Alger American Small Capitalization Portfolio 0.85% 0.04% 0.89%
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
VIP Growth Portfolio 0.60% 0.09% 0.69%/4/
VIP Money Market Portfolio 0.21% 0.10% 0.31%
VIP Overseas Portfolio 0.75% 0.17% 0.92%/4/
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
VIP II Asset Manager Portfolio 0.55% 0.10% 0.65%/4/
VIP II Index 500 Portfolio 0.24% 0.04% 0.28%/5/
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF - High Yield Portfolio 0.60% 0.23% 0.83%/6, 9/
INVESCO VIF - Industrial Income Portfolio 0.75% 0.16% 0.91%/6, 8/
INVESCO VIF - Total Return Portfolio 0.75% 0.17% 0.92%/6, 7/
INVESCO VIF - Utilities Portfolio 0.60% 0.39% 0.99%/6, 10/
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C> <C>
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST/2/
Growth Portfolio 0.83% 0.07% 0.90%
Limited Maturity Bond Portfolio 0.65% 0.12% 0.77%
Partners Portfolio 0.80% 0.06% 0.86%
VAN ECK WORLDWIDE INSURANCE TRUST
Worldwide Emerging Markets Fund 0.80% 0.00% 0.80%/12/
Worldwide Hard Assets Fund 1.00% 0.17% 1.17%/11/
</TABLE>
/1/ The preceding Portfolio expense information was provided to us by the
Portfolios, and we have not independently verified such information. These
Portfolio expenses are not direct charges against Division assets or reduction
from Contract values; rather these Portfolio expenses are taken into
consideration in computing each underlying Portfolio's net asset value, which is
the share price used to calculate the unit values of the Divisions. For a more
complete description of the Portfolios' costs and expenses, see the prospectuses
for the Portfolios.
/2/ Neuberger & Berman Advisers Management Trust (the "Trust") is divided into
portfolios ("Portfolios"), each of which invests all of its net investable
assets in a corresponding series ("Series") of Advisers Managers Trust. The
figures reported under AInvestment Management and Administration Fees@ include
the aggregate of the administration fees paid by the Portfolio and the
management fees paid by its corresponding Series. Similarly, the AOther
Expenses@ includes all other expenses of the Portfolio and its corresponding
series. See "Expenses" in the Trust's Prospectus. Expenses may reflect expense
reimbursement. NBMI has voluntarily undertaken to limit the Portfolios'
compensation of NBMI and excluding taxes, interest, extraordinary expense,
brokerage commissions and transaction costs, that exceed 1% of the Portfolios'
average daily net asset value. These expense reimbursement policies are subject
to termination upon 60 days written notice to the Portfolios.
/3/ The Alger American Leverage AllCap Portfolio's "Other Expenses" includes
0.04% of interest expense.
/4/ 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 whereby credits realized, as a result of uninvested cash
balances were used to reduce custodian expenses. Including these reductions,
the total operating expenses presented in the table would have been 0.67% for
Growth Portfolio, 0.90% for Overseas Portfolio, and 0.64% for Asset Manager
Portfolio.
/5/ FMR agreed to reimburse a portion of Index 500 Portfolio's expenses during
the period. Without this reimbursement, the funds' management fee, other
expenses and total expenses would have been 0.27%, 0.13% and 0.40% respectively.
/6/ The Portfolios' custodian fees were reduced under an expense offset
arrangement. In addition, certain expenses of the Portfolios' are being
absorbed voluntarily by INVESCO Funds Group, Inc. ("IFG"). The above ratios
reflect total expenses, less expenses absorbed by IFG, prior to any expense
offset.
/7/ Various expenses of the Portfolio were voluntarily absorbed by IFG for the
years ended December 31, 1997, 1996 and 1995. If such expenses had not been
voluntarily absorbed, the ratio of expenses to average net assets would have
been 1.10%, 1.30% and 2.51%, respectively, and the ratio of net investment
income to average net assets would have been 2.89%, 3.08% and 2.41%,
respectively.
/8/ Various expenses of the Portfolios were voluntarily absorbed by IFG for the
years ended December 31, 1997, 1996 and 1995. If such expenses had not been
voluntarily absorbed, the ratio of expenses to average net assets would have
been 0.97%, 1.19%, and 2.31%, respectively, and the ratio of net investment
income to average net assets would have been 2.12%, 2.63% and 2.22%,
respectively.
/9/ Various expenses of the Portfolios were voluntarily absorbed by IFG for the
years ended December 31, 1997, 1996 and 1995. If such expenses had not been
voluntarily absorbed, the ratio of expenses to average net assets would have
been 0.94%, 1.32% and 2.71%, respectively, and the ratio of net investment
income to average net assets would have been 8.56%, 8.74% and 7.05%,
respectively.
/10/ Various expenses of the Portfolios were voluntarily absorbed by IFG for the
years ended December 31, 1997, 1996 and 1995. If such expenses had not been
voluntarily absorbed, the ratio of expenses to average net assets would have
been 2.07%, 5.36% and 57.13%, respectively, and the ratio of net investment
income to average net assets would have been 1.84%, (1.28%) and (52.86%)
respectively.
/11/ Various expenses of the Portfolio were voluntarily absorbed by the
Portfolio's investment manager. Absent such reimbursement, "Investment
Management Fees," "Other Expenses" and "Total Portfolio Expenses" would have
been 1.0%, 0.18%, and 1.18%, respectively.
/12/ Various expenses of the Portfolio were voluntarily absorbed by the
Portfolio's investment manager. Absent such reimbursement, "Investment
Management Fees," "Other Expenses" and "Total Portfolio Expenses" would have
been 1.0%, 0.34%, and 1.34%, respectively.
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The following examples depict the dollar amount of expenses that would be
incurred under this Contract assuming a $1,000 initial Purchase Payment and 5%
annual return on assets. The expense amounts presented are derived from a
formula which allows the maximum $30 annual administrative charge to be
expressed as a percentage of the average Contract account size for existing
Contracts. Because the average Contract account size is greater than $1,000,
the expense effect of the annual administrative charge is reduced accordingly.
Taxes on Purchase Payments may also be applicable but are not reflected in the
expenses below. See Taxes on Purchase Payments, page 35. The Enhanced
Death Benefit Risk Charge and the annual administrative charge do not
apply during the Annuity Period.
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<CAPTION>
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IF YOU SURRENDER YOUR CONTRACT AT IF YOU DO NOT SURRENDER YOUR
THE END OF THE STATED PERIOD. CONTRACT OR IF YOU ANNUITIZE AT
THE END OF THE STATED PERIOD.
- ----------------------------------------------------------------------------------------------------------------------------
DIVISION INVESTING IN: 1 3 5 10 1 3 5 10
Year Years Years Years Year Years Years Years
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AIM VI FUNDS, INC.
AIM Variable Insurance Government Securities 95 126 160 276 25 76 130 276
THE ALGER AMERICAN FUND
Alger American Growth Portfolio 94 124 156 269 24 74 126 269
Alger American Leveraged AllCap Portfolio 96 130 166 289 26 80 136 289
Alger American MidCap Growth Portfolio 95 125 159 274 25 75 129 274
Alger American Small Capitalization Portfolio 95 127 161 278 25 77 131 278
FIDELITY VARIABLE INSURANCE PRODUCTS FUNDS
VIP Growth Portfolio 93 121 151 259 23 71 121 259
VIP Money Market Portfolio 89 110 133 222 19 60 103 222
VIP Overseas Portfolio 95 128 163 281 25 78 133 281
FIDELITY VARIABLE INSURANCE PRODUCTS FUNDS II
VIP II Asset Manager Portfolio 93 120 149 255 23 70 119 255
VIP II Index 500 Portfolio 89 109 131 219 19 59 101 219
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF - High Yield Portfolio 94 125 158 273 24 75 128 273
INVESCO VIF - Industrial Income Portfolio 95 127 162 280 25 77 132 280
INVESCO VIF - Total Return Portfolio 95 128 163 281 25 78 133 281
INVESCO VIF - Utilities Portfolio 96 130 166 288 26 80 136 288
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
Growth Portfolio 95 127 162 279 25 77 132 279
Limited Maturity Bond Portfolio 94 123 155 267 24 73 125 267
Partners Portfolio 95 126 160 275 25 76 130 275
VAN ECK WORLDWIDE INSURANCE TRUST
Worldwide Emerging Markets Fund 94 124 157 270 24 74 127 270
Worldwide Hard Assets Fund 98 135 174 305 28 85 144 305
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THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST
OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN
THOSE SHOWN, SUBJECT TO THE GUARANTEES UNDER THE CONTRACT.
THE ASSUMED 5% ANNUAL RATE OF RETURN IS HYPOTHETICAL AND SHOULD
NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE ANNUAL
RETURNS WHICH MAY BE GREATER OR LESS THAN THE ASSUMED RATE.
